Combating Money Laundering: Opportunities Exist to Improve the
National Strategy (26-SEP-03, GAO-03-813).
Money laundering is a serious crime, with hundreds of billions of
dollars laundered annually. Congress passed the Money Laundering
and Financial Crimes Strategy Act of 1998 to better coordinate
the efforts of law enforcement agencies and financial regulators
in combating money laundering. This act required the issuance of
an annual National Money Laundering Strategy for 5 years, ending
with the issuance of the 2003 strategy. To help with
deliberations on reauthorization, GAO determined (1) agency
perspectives on the benefit of the strategy and factors that
affected its development and implementation, (2) whether the
strategy has served as a useful mechanism for guiding the
coordination of federal law enforcement agencies' efforts, (3)
the role of the strategy in influencing the activities of federal
financial regulators, and (4) whether the strategy has reflected
key critical components.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-813
ACCNO: A08607
TITLE: Combating Money Laundering: Opportunities Exist to
Improve the National Strategy
DATE: 09/26/2003
SUBJECT: Crime prevention
Interagency relations
Law enforcement agencies
Money laundering
Program evaluation
Strategic planning
White collar crime
National Money Laundering Strategy
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GAO-03-813
United States General Accounting Office
GAO
Report to Congressional Requesters
September 2003
COMBATING MONEY LAUNDERING
Opportunities Exist to Improve the National Strategy
GAO-03-813
Highlights of GAO-03-813, a report to congressional requesters
Money laundering is a serious crime, with hundreds of billions of dollars
laundered annually. Congress passed the Money Laundering and Financial
Crimes Strategy Act of 1998 to better coordinate the efforts of law
enforcement agencies and financial regulators in combating money
laundering. This act required the issuance of an annual National Money
Laundering Strategy for 5 years, ending with the issuance of the 2003
strategy. To help with deliberations on reauthorization, as agreed with
your offices, GAO determined (1) agency perspectives on the benefit of the
strategy and factors that affected its development and implementation, (2)
whether the strategy has served as a useful mechanism for guiding the
coordination of federal law enforcement agencies' efforts, (3) the role of
the strategy in influencing the activities of federal financial
regulators, and (4) whether the strategy has reflected key critical
components.
GAO recommends that, if the requirement for a national strategy is
reauthorized, the Secretaries of the Treasury and Homeland Security and
the Attorney General strengthen the leadership structure for strategy
development and implementation, require processes to ensure key priorities
are identified, and establish accountability mechanisms. The departments
generally concurred with GAO's report.
www.gao.gov/cgi-bin/getrpt?GAO-03-813.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Rich Stana at (202) 512-8777
or Davi D'Agostino at (202) 512-8678.
September 2003
COMBATING MONEY LAUNDERING
Opportunities Exist to Improve the National Strategy
Treasury, Justice, and financial regulatory officials with whom GAO spoke
said that the National Money Laundering Strategy was initially beneficial
but that, over time, certain factors and events affected its development
and implementation. They endorsed the concept of a strategy to coordinate
the federal government's efforts to combat money laundering and related
financial crimes. They also said that the strategy initially had a
positive effect on promoting interagency planning and communication, but
different agency views emerged over the scope and commitment required, and
other events affected the strategy, such as the September 11 terrorist
attacks and the creation of the Department of Homeland Security.
The strategy generally has not served as a useful mechanism for guiding
the coordination of federal law enforcement agencies' efforts to combat
money laundering and terrorist financing. While Treasury and Justice made
progress on some strategy initiatives designed to enhance interagency
coordination of money laundering investigations, most have not achieved
the expectations called for in the annual strategies. Also, the 2002
strategy did not address agency roles in investigating terrorist
financing, thus, it did not help resolve potential duplication of efforts
and disagreements over which agency should lead investigations. In May
2003, Justice and Homeland Security reached an agreement aimed at
resolving these problems.
Most financial regulators GAO interviewed said that the strategy had some
influence on their anti-money laundering efforts because it provided a
forum for enhanced coordination, particularly with law enforcement
agencies. However, they said that it has had less influence than other
factors. They described several other influences on their efforts,
particularly their ongoing oversight responsibilities in ensuring
compliance with the Bank Secrecy Act and, more recently, the USA PATRIOT
Act, which was passed in October 2001 to fight terrorist financing and
increase anti-money laundering efforts.
GAO's work reviewing national strategies has identified several critical
components needed for development and implementation; however, key
components have not been well reflected in the strategy. The first is
clearly defined leadership, with the ability to marshal necessary
resources. However, the leadership for the strategy has not agreed on the
strategy's
scope or ensured that target dates for completing initiatives were met.
The second is clear priorities, as identified by threat and risk
assessments, to help focus resources on the greatest needs. Each strategy
contained more priorities than could be realistically achieved and none of
the strategies was linked to a threat and risk assessment. The third is
that established accountability mechanisms provide a basis for monitoring
and assessing program performance. While later strategies contained
several initiatives designed to establish performance measures, as of July
2003, none had yet been completed. Officials attributed this to the
difficulty in establishing such measures for combating money laundering.
Contents
Letter
Results in Brief
Background
Early Benefit of the NMLS Was Affected by Certain Factors and
Events
NMLS Generally Has Not Been as Useful as Envisioned for Guiding
the Coordination of Law Enforcement Efforts
NMLS Has Had Some Influence on Financial Regulators' Efforts,
but Other Factors Played a Larger Role
The Annual NMLS Has Not Reflected Critical Components
Identified by GAO as Key to Developing and Implementing
National Strategies
Conclusions
Recommendations for Executive Action
Agency Comments and Our Evaluation
1
4 7
15
16
31
37 46 47 47
Appendix I Scope and Methodology
Appendix II Legislation Has Expanded the Responsibility to Combat Money
Laundering
Appendix III Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix IV Comments from the Department of the Treasury
Appendix V Comments from the Department of Justice 68
Appendix VI Comments from the Department of Homeland
Security 70
Appendix VII GAO Contacts and Staff Acknowledgments
74
GAO Contacts 74 Acknowledgments 74
Related GAO Products
Tables
Table 1: NMLS Goals, Objectives, and Priorities, 1999 through 2002
Table 2: Status of HIFCA Task Forces as of May 2003
Table 3: Status of NMLS Initiatives Related to HIFCA Oversight
Table 4: NMLS Initiatives to Review Bank Examination Procedures,
as of July 2003 Table 5: Annual NMLS-Dates Submitted to Congress Table 6:
Status of 2002 NMLS Initiatives Designed to Measure
Performance
13 18 22
36 38
43
Figures
Figure 1: The Three Stages of Money Laundering 8 Figure 2: Principal
Agencies Responsible for NMLS before the Creation of DHS 10 Figure 3:
Principal Agencies Responsible for NMLS after the Creation of DHS 11
Abbreviations
AFMLS Asset Forfeiture and Money Laundering Section
BSA Bank Secrecy Act
CFTC Commodity Futures Trading Commission
DEA Drug Enforcement Administration
DHS Department of Homeland Security
EOUSA Executive Office for U.S. Attorneys
FBI Federal Bureau of Investigation
FDIC Federal Deposit Insurance Corporation
FinCEN Financial Crimes Enforcement Network
FRB Federal Reserve Board
HIFCA High Intensity Money Laundering and Related
Financial Crime Area ICE Bureau of Immigration and Customs Enforcement
IRS-CI Internal Revenue Service-Criminal Investigation JTTF Joint
Terrorism Task Force MLCA Money Laundering Control Act of 1986 NCUA
National Credit Union Administration NMLS National Money Laundering
Strategy OCC Office of the Comptroller of the Currency OGQ Operation Green
Quest OTS Office of Thrift Supervision SAR Suspicious Activity Report SEC
Securities and Exchange Commission TFOS Terrorist Financing Operations
Section USA PATRIOT Act Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States General Accounting Office Washington, DC 20548
September 26, 2003
The Honorable Charles E. Grassley
Chairman, Caucus on International Narcotics Control
United States Senate
The Honorable Carl Levin
Ranking Minority Member
Permanent Subcommittee on Investigations
Committee on Governmental Affairs
United States Senate
Money laundering-the process of disguising or concealing illicit funds to
make them appear legitimate-is a serious issue, with an estimated
$500 billion to $1 trillion laundered worldwide annually, according to the
United Nations Office of Drug Control and Prevention. Money laundering
provides the fuel for drug dealers, arms traffickers, terrorists, and
other
criminals to operate and expand their activities, which can have
devastating social and economic consequences.
Although the U.S. government had been working to combat money
laundering for many years, efforts by law enforcement and regulatory
agencies took on particular urgency, as the operations of large-scale
criminal organizations grew increasingly sophisticated. To better
coordinate the anti-money laundering efforts of federal, state, and local
law enforcement agencies and financial regulators, Congress enacted the
Money Laundering and Financial Crimes Strategy Act of 1998 (Strategy
Act).1 This act called for the annual issuance of a strategy to combat
money laundering-the National Money Laundering Strategy (NMLS). This
requirement will end with the issuance of the 2003 strategy unless
reauthorized by Congress. In anticipation of reauthorization discussions,
Congress is interested in knowing how the strategy has affected
coordination and whether improvements could be made to increase its
benefits.
1Pub. L. 105-310, 112 Stat. 2941 codified as 31 U.S.C. S:S: 5340-42,
5351-55 (1998).
While money laundering first became a federal crime in 1986 with the
passage of the Money Laundering Control Act,2 law enforcement and the
federal financial regulators had sought to protect the U.S. financial
system from certain types of criminal activity since the passage of the
Bank Secrecy Act (BSA) in 1970, which instituted currency reporting
requirements.3 By periodically amending the BSA, Congress has added
anti-money laundering requirements for many types of financial
institutions and transactions. Such amendments and the resulting
regulations have increased the number of federal agencies with
responsibility for ensuring compliance with anti-money laundering
requirements, thereby creating a need to coordinate the efforts of
numerous financial regulatory and law enforcement agencies. Appendix II
describes major anti-money laundering legislation since 1970.
The Strategy Act requires the President-acting through the Secretary of
the Treasury and in consultation with the Attorney General and other
relevant federal, state, and local law enforcement and regulatory
officials-to develop and submit the annual NMLS to Congress by February 1
of each year from 1999 through 2003. The goal of the Strategy Act is to
increase coordination and cooperation among the various regulatory and
enforcement agencies and to effectively distribute resources to combat
money laundering. The Strategy Act requires the NMLS to define
comprehensive, research-based goals, objectives, and priorities for
reducing money laundering and related financial crime in the United
States. The NMLS has generally included multiple priorities to combat
money laundering to guide federal agencies' activities. Additionally, the
Strategy Act authorizes the Secretary of the Treasury to designate High
Intensity Money Laundering and Related Financial Crime Areas (HIFCA), in
which federal, state, and local law enforcement would work cooperatively
to develop a focused and comprehensive approach to targeting money
laundering activity.4
In the wake of the September 11, 2001, terrorist attacks, Congress passed
the Uniting and Strengthening America by Providing Appropriate Tools
218 U.S.C. S: 1956-57 (1994).
3Currency and Foreign Transactions Reporting Act (commonly referred to as
the Bank
Secrecy Act), Pub. L. No. 91-508, 84 Stat. 1114 (1970) (codified as
amended in 12 U.S.C. S:S: 1829(b), 1951-1959; 31 U.S.C. S:S: 5311-5330.
4Such an "area" could be a geographic area, financial system, industry
sector, or financial institution.
Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)
to, among other things, both fight terrorist financing and increase
anti-money laundering efforts through further expansion of the types of
financial institutions and transactions that are subject to anti-money
laundering record keeping and reporting requirements.5 The NMLS has also
changed to reflect new federal priorities in the aftermath of September
11, 2001, including a goal to combat terrorist financing in 2002.
To assist in congressional deliberations on whether there is a continuing
need for an annual NMLS, this report discusses the results of our review
of the development and implementation of the 1999 through 2002 strategies.
Specifically, as agreed with your offices, our objectives were to
determine (1) agency perspectives on the benefit of the NMLS and factors
that affected its development and implementation, (2) whether the strategy
has served as a useful mechanism for guiding the coordination of federal
law enforcement agencies' efforts to combat money laundering and terrorist
financing, (3) the role of the NMLS in influencing the anti-money
laundering and antiterrorist financing activities of the federal financial
regulators, and (4) whether the NMLS has reflected the critical components
we have found to be necessary for the development and implementation of
such a strategy.
To determine agency perspectives on the benefit of the NMLS, we
interviewed responsible officials at and reviewed relevant documentation
obtained from the principal law enforcement components with anti-money
laundering responsibilities at the Departments of the Treasury, Justice,
and Homeland Security and the federal financial regulatory agencies.6 In
general, our work reviewing the strategy's usefulness for guiding the
coordination of law enforcement agencies' efforts consisted of (1)
examining the structure and operation of HIFCA task forces, (2) analyzing
the implementation of NMLS initiatives to enhance interagency
coordination, and (3) assessing the extent to which the 2002 NMLS
addressed agency roles in combating terrorist financing. We did this by
interviewing relevant agency officials, reviewing agency policies for
5The anti-money laundering provisions are contained in Title III of the
USA PATRIOT Act, Pub. L. No. 107-56, 115 Stat. 272 (2001).
6The federal financial regulators include the Federal Reserve Board,
Federal Deposit Insurance Corporation, Office of the Comptroller of the
Currency, Office of Thrift Supervision, the National Credit Union
Administration, the Securities and Exchange Commission, and the Commodity
Futures Trading Commission.
coordination, evaluating staffing levels and other resources devoted to
NMLS initiatives, and reviewing the NMLS. Our work determining the role of
the NMLS in influencing the efforts of the federal financial regulators
focused primarily on the NMLS goal that sought to coordinate their
efforts. In 2002, the goal was, "Prevent Money Laundering Through
Cooperative Public-Private Efforts and Necessary Regulatory Measures."
This goal had similar titles in earlier strategies (see table 1). We also
examined the role the financial regulators played in supporting Treasury's
efforts under the NMLS goal to strengthen international cooperation to
fight money laundering. To do this, we interviewed financial regulatory,
Treasury, and law enforcement agency officials. We also reviewed
regulatory examination guidelines, policies, and training information. To
determine whether the NMLS reflected components we have found necessary
for national strategies, we reviewed drafts of the strategies from 1999 to
2002, interviewed officials that had been involved in the development and
implementation of the strategies, and compared the results from this work
with findings from our past work reviewing national strategies and their
implementation.
We conducted our work from June 2002 to August 2003 in accordance with
generally accepted government auditing standards. Additional information
on our scope and methodology is discussed in appendix I.
Results in Brief
The Treasury, Justice, and financial regulatory agency officials we
interviewed generally agreed that the NMLS was initially beneficial but
that, over time, certain factors and events affected its development and
implementation. The officials endorsed the concept of a strategy to
coordinate the federal government's efforts to combat money laundering and
related financial crimes. Generally, the officials commented that the
annual NMLS probably was more beneficial in the first 2 years (1999 and
2000) than in the subsequent years (2001 and 2002). For example, Treasury
officials said that the NMLS was initially instrumental in focusing on the
need to combat money laundering systemically and not solely on a
case-by-case basis. However, different agency views emerged about the
appropriate scope of the NMLS and the level of agency commitment to the
strategy that was required. Thus, the officials said the strategy did not
reach its potential for integrating and harmonizing the nation's efforts
to combat money laundering and related financial crimes. In addition,
other events affected or delayed the strategy's implementation. For
example, changes in the administration and senior agency officials led to
major revisions to the NMLS in 2001 and 2002. In addition, the 2001
strategy was issued on September 12, 2001. Subsequent to the attacks of
September 11,
the government's focus changed to terrorist financing, making money
laundering less of a priority. More recently, the 2003 strategy was
delayed, in part, because the creation of the Department of Homeland
Security (DHS) brought a new player into the mix with the transfer of
Treasury's enforcement functions and staff to the new department.
As a mechanism for guiding the coordination of federal law enforcement
agencies' efforts to combat money laundering and related financial crimes,
the NMLS has had mixed results but generally has not been as useful as
envisioned by the Strategy Act. For example, although expected to have a
central role in coordinating law enforcement agencies' efforts to combat
money laundering, HIFCA task forces generally had not yet been structured
and operating as intended and had not reached their expectations for
leveraging investigative resources or creating investigative synergies. In
some cases, federal law enforcement agencies had not provided the levels
of commitment and staffing to the task forces called for by the strategy.
Further, while Treasury and Justice made progress on some NMLS initiatives
designed to enhance interagency coordination of money laundering
investigations, most had not achieved the expectations called for in the
annual strategies, including plans to (1) use a centralized system to
coordinate investigations and (2) develop uniform guidelines for
undercover investigations. Headquarters officials cited differences in the
various agencies' anti-money laundering priorities as a primary reason why
initiatives had not achieved their expectations. Moreover, due to
difficulties in reaching agreement over which agency should lead
investigations, the 2002 NMLS did not address agency and task force roles
and interagency coordination procedures for investigating terrorist
financing. Law enforcement officials told us that the lack of clearly
defined roles and coordination procedures contributed to duplication of
efforts and disagreements over which agency should lead investigations. To
help resolve these long-standing jurisdictional issues, in May 2003, the
Attorney General and the Secretary of Homeland Security signed a
memorandum of agreement regarding roles and responsibilities in
investigating terrorist financing. It is too soon to determine whether the
agreement will be successful in resolving these issues.
Most financial regulators we interviewed said that the NMLS had some
influence on their anti-money laundering efforts because it provided a
forum for enhanced coordination, particularly with law enforcement
agencies. Law enforcement agency officials said the level of coordination
between their agencies and the financial regulators was good. However, the
financial regulators also said that other factors had more influence on
them than the strategy. For example, the financial regulators cited their
ongoing oversight responsibilities in ensuring compliance with the BSA as
a primary influence on them. Another influence has been anti-money
laundering working groups, some of which were initiated by the financial
regulators or law enforcement agencies prior to enactment of the Strategy
Act. The officials said that the U.S. government's reaction to September
11, which included a change in government perspective and new regulatory
requirements placed on financial institutions by the USA PATRIOT Act, has
driven their recent anti-money laundering and antiterrorist financing
efforts. Although the financial regulators said that the NMLS had less
influence on their anti-money laundering activities than other factors,
they have completed the tasks for which the NMLS designated them as lead
agencies over the years, as well as most of the tasks for which they were
to provide support to Treasury.
In recent years, our work in reviewing national strategies for various
crosscutting issues has identified several critical components needed for
their development and implementation, including effective leadership,
clear priorities, and accountability mechanisms.7 For a variety of
reasons, these critical components generally have not been fully reflected
in the development and implementation of the annual NMLS. For example, the
joint Treasury-Justice leadership structure that was established to
oversee NMLS-related activities generally has not resulted in (1) reaching
agreement on the appropriate scope of the strategy; (2) ensuring that
target dates for completing strategy initiatives were met; and (3) issuing
the annual NMLS by February 1 of each year, as required by the Strategy
Act. Although Treasury generally took the lead role in strategy-related
activities, the department had no incentives or authority to get other
departments and agencies to provide necessary resources and participation.
Also, the annual strategies have not identified and prioritized issues
that required the most immediate attention. Each strategy has contained
more priorities than could be realistically achieved, the priorities have
not been ranked in order of importance, and no priority has been
explicitly linked to a threat and risk assessment. Further, although the
2001 and 2002 strategies contained initiatives to measure program
performance, none had been used to ensure accountability for results.
Officials attributed this to the difficulty in establishing such measures
for combating money laundering. In addition, Treasury has not provided
annual reports to Congress on the effectiveness of policies to combat
7GAO continues to develop critical success factors for evaluating national
strategies and will report on this work later this year.
money laundering and related financial crimes, as required by the Strategy
Act.
If Congress reauthorizes the requirement for an annual NMLS, this report
provides recommendations for the Secretary of the Treasury, working with
the Attorney General and the Secretary of Homeland Security, to (1)
strengthen the leadership structure responsible for strategy development
and implementation, (2) ensure that clear priorities are identified, and
(3) establish accountability mechanisms, so that the NMLS better meets its
interagency coordination and cooperation expectations.
In commenting on a draft of this report, Treasury said that our
recommendations are important, should Congress reauthorize the legislation
requiring future strategies; Justice said that our observations and
conclusions will be helpful in assessing the role that the strategy
process has played in the federal government's efforts to combat money
laundering; and DHS said that it agreed with our recommendations. The
seven federal financial regulatory agencies did not address our
recommendations, although the Federal Deposit Insurance Corporation (FDIC)
noted that should a national money laundering strategy continue, annual
goals should be achievable and roles and responsibilities clearly defined.
The National Security Council did not respond to our request for comments.
Money laundering is the process used to transform monetary proceeds
derived from criminal activities into funds and assets that appear to have
come from legitimate sources. Although the magnitude of global money
laundering is unknown, many estimates suggest annual ranges in the
hundreds of billions of dollars. The process of money laundering generally
takes place in three stages: placement, layering, and integration. In the
placement stage, cash is converted into monetary instruments, such as
money orders or traveler's checks, or deposited into financial institution
accounts. In the layering stage, these funds are transferred or moved into
other accounts or other financial institutions to further obscure their
illicit origin. In the integration stage, the funds are used to purchase
assets in the legitimate economy or to fund further activities. All
financial sectors and certain commercial businesses can be targeted during
one or more of these stages. Many of these entities are required to report
transactions with certain characteristics to law enforcement if they
appear to be potentially suspicious. The transactions would generally fall
within either the placement or layering stage if they proved to be
involved in money
Background
laundering. Transaction reporting requirements are discussed further later
in this report. Figure 1 shows the three stages of money laundering.
Figure 1: The Three Stages of Money Laundering
Source: Financial Crimes Enforcement Network, FinCEN Related Series: An
Assessment of Narcotics Related Money Laundering, July 1992.
Terrorist financing is generally characterized by different motives than
money laundering and the funds involved often originate from legitimate
sources. However, the techniques for hiding the movement of funds intended
to be used to finance terrorist activity-techniques to obscure
the origin of funds and the ultimate destination-are often similar to
those used to launder money. Therefore, Treasury, law enforcement
agencies, and the federal financial regulators often employ similar
approaches and techniques in trying to detect and prevent both money
laundering and terrorist financing.
Many Agencies Are Responsible for Combating Money Laundering and Terrorist
Financing
Agencies under the Departments of the Treasury, Justice, and Homeland
Security are to coordinate with each other and with financial regulators
in combating money laundering. Within Treasury, the Financial Crimes
Enforcement Network (FinCEN) was established in 1990 to support law
enforcement agencies by collecting, analyzing, and coordinating financial
intelligence information to combat money laundering. In addition to
FinCEN, Treasury components actively involved in anti-money laundering and
antiterrorist financing efforts include the Executive Office for Terrorist
Financing and Financial Crimes, the Office of International Affairs, and
the Internal Revenue Service and its Criminal Investigation unit
(IRS-CI).8
Department of Justice components involved in efforts to combat money
laundering and terrorist financing include the Criminal Division's Asset
Forfeiture and Money Laundering Section (AFMLS) and Counterterrorism
Section, the Federal Bureau of Investigation (FBI), the Drug Enforcement
Administration (DEA), and the Executive Office for U.S. Attorneys (EOUSA)
and U.S. Attorneys Offices.9 With the creation of DHS in March 2003,
anti-money laundering activities of the Customs Service were transferred
from Treasury to DHS's Bureau of Immigration and Customs Enforcement
(ICE).
The financial regulators who oversee financial institutions' anti-money
laundering efforts include the depository institution financial
regulators- the Federal Reserve Board (FRB), FDIC, Office of the
Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), and
the National Credit Union Administration (NCUA)-and also the Securities
and
8Among other duties, Treasury's Executive Office for Terrorist Financing
and Financial Crimes is charged with developing and implementing the NMLS
and U.S. government strategies to combat terrorist financing. These duties
were previously conducted by Treasury's Office of Enforcement, which was
disbanded in March 2003.
9Justice's Asset Forfeiture and Money Laundering Section (AFMLS) is the
department's focal point for NMLS issues.
Exchange Commission (SEC), which regulates the securities markets, and the
Commodity Futures Trading Commission (CFTC), which regulates commodity
futures and options markets. While OCC and OTS are bureaus within
Treasury, the FRB, FDIC, NCUA, SEC, and CFTC are independent agencies that
are not part of the executive branch. Figure 2 shows the primary agencies
responsible for combating money laundering and terrorist financing before
the creation of DHS. Figure 3 shows the primary agencies responsible for
combating money laundering and terrorist financing after the creation of
DHS.
Figure 2: Principal Agencies Responsible for NMLS before the Creation of DHS
Source: GAO.
Figure 3: Principal Agencies Responsible for NMLS after the Creation of DHS
Source: GAO.
NMLS Was Intended to Coordinate the U.S. Government's Anti-Money
Laundering Efforts
Given law enforcement's mixed history of both productive partnerships and
turf-protection battles, proponents of the Strategy Act envisioned that
the implementation of an annual NMLS would inaugurate a new level of
coordination and cooperation between law enforcement agencies. The NMLS
also sought to coordinate the efforts of law enforcement agencies and
financial regulators to ensure that financial institutions were
sufficiently vigilant to detect possible money laundering and that they
reported any suspicious activity to law enforcement agencies to assist in
their efforts to investigate money laundering and, more recently,
terrorist financing.
The process for developing the NMLS has varied slightly from year to year,
but it has generally involved Treasury working with other agencies to
develop a draft. Treasury officials said that they have sometimes asked
officials from other agencies to take the lead in drafting certain
sections that pertain particularly to their efforts. In other instances,
Treasury has drafted the sections and asked for participating agencies'
review and comments on the sections relevant to them. Upon completion of
the draft NMLS, the relevant agencies are given the opportunity to clear
the final document through the Office of Management and Budget's clearance
process, which requires that the agencies approve the document, that is,
signify their agreement with its contents. Treasury officials told us that
by approving the NMLS through this process, the agencies have agreed to it
and should be held accountable to Congress and the public to complete
their assigned responsibilities.
The drafting process has generally resulted in a document that lists four
to six broad goals, each containing objectives, which in turn contain a
list of priorities. Over time, the goals have changed, sometimes in their
wording or order, and other times to cover new threats. For example, in
the wake of September 11, the 2002 NMLS added the goal, "Focus Law
Enforcement and Regulatory Resources on Identifying, Disrupting, and
Dismantling Terrorist Financing Networks." As of September 24, the 2003
NMLS had not yet been issued. Table 1 shows the NMLS goals from 1999
through 2002 and the number of objectives and priorities.
Table 1: NMLS Goals, Objectives, and Priorities, 1999 through 2002 NMLS year
NMLS goals Objectives Prioritiesa
1999 1. Strengthening domestic enforcement to disrupt the flow of illicit
money. 8
2. Enhancing regulatory and cooperative public-private efforts to prevent
money laundering.
7
3. Strengthening partnerships with state and local governments to fight
money 5 laundering throughout the United States.
4. Strengthening international cooperation to disrupt the global flow of
illicit money. 6
Total 26
2000 1. Strengthening domestic enforcement to disrupt the flow of illicit
money. 9
2. Enhancing regulatory and cooperative public-private efforts to prevent
money 7 laundering.
3. Strengthening partnerships with state and local governments to fight
money 4 laundering throughout the United States.
4. Strengthening international cooperation to disrupt the global flow of
illicit money. 7
Total 27
2001 5. Focus law enforcement efforts on the prosecution of major money
laundering 5 organizations and systems.
6. Measure the effectiveness of anti-money laundering efforts. 1
7. Prevent money laundering through cooperative public-private efforts
and necessary 4 regulatory measures.
8. Coordinate law enforcement efforts with state and local governments to
fight money 3 laundering throughout the United States.
9. Strengthening international cooperation to combat the global problem
of money 5 laundering.
Total 18
2002 10. Measure the effectiveness of anti-money laundering efforts. 2
11. Focus law enforcement and regulatory resources on identifying,
disrupting, and 3 11 dismantling terrorist financing networks.
12. Increase the investigation and prosecution of major money laundering
organizations 4 11 and systems.
13. Prevent money laundering through cooperative public-private efforts
and necessary 2 7 regulatory measures.
14. Coordinate law enforcement efforts with state and local governments
to fight money 3 5 laundering throughout the United States.
15. Strengthen international anti-money laundering regimes. 5 10 Total 19
50
Source: NMLS 1999 to 2002.
aThe NMLS for 1999 and 2000 used the term "Action Item," and the NMLS for
2001 and 2002 used the term "Priority."
The Strategy Act also created an operating mechanism within which to
enhance interagency coordination of law enforcement investigations-
HIFCAs. In accordance with the Strategy Act and the 1999 NMLS:
o HIFCA designations would allow law enforcement to concentrate its
resources in areas where money laundering or related financial crimes
appeared to be occurring at a higher rate than average.10 An interagency
HIFCA Designation Working Group would review requests for such
designations and provide advice for selections to be made by the Secretary
of the Treasury, in consultation with the Attorney General.11
o A money laundering action team, where appropriate, would be created
when a HIFCA was designated to spearhead a coordinated federal, state, and
local anti-money laundering effort in the area, or an existing task force
already on the ground would be mobilized.
The 2001 NMLS specified that HIFCAs were to be operational and conduct
investigations designed to result in indictments, convictions, and
seizures, rather than focusing principally on intelligence gathering.
Also, the 2001 NMLS reinforced the expectations that HIFCA task forces
"will be composed of, and draw upon, all relevant federal, state, and
local agencies, and will serve as the model of our anti-money laundering
efforts" and that the Departments of the Treasury and Justice were to
jointly oversee the HIFCA task forces.
The Strategy Act mandated that the NMLS be submitted to Congress by
February 1 of each year, 1999 to 2003. The Strategy Act also required
that-at the time each NMLS was transmitted to the Congress (other than the
first transmission of any such strategy)-the Secretary of the Treasury
must submit a report containing an evaluation of the effectiveness of
policies to combat money laundering and related financial crimes.
10According to the Strategy Act, several factors are to be considered in
making HIFCA designations, including the population of the area, the
number of bank and nonbank financial institution transactions, and
observed changes in trends and patterns of money laundering activity.
11Generally, the Secretary and the Attorney General can make designations
on their own initiative, at the suggestion of other federal agencies, or
at the formal request of a state or local official involved in money
laundering detection, prevention, or enforcement.
Early Benefit of the NMLS Was Affected by Certain Factors and Events
The Treasury, Justice, and regulatory agency officials we interviewed said
that the NMLS was initially beneficial but, over time, certain factors and
events affected its development and implementation. Officials from each of
the agencies endorsed the concept of having a national strategy for
combating money laundering and related financial crimes. Generally, the
officials said that the annual NMLS probably was more beneficial in the
first 2 years (1999 and 2000) than in the subsequent years (2001 and
2002). As an initial benefit, for example, Treasury officials said that
the NMLS was instrumental in focusing on the need to combat money
laundering systemically and not solely on a case-by-case basis,
encouraging multiple law enforcement agencies to work together, and
raising general awareness of the importance of combating financial crimes.
The NMLS enhanced their planning and communication when it was new because
it served to formalize interagency communication in a way that had not
existed before. Similarly, the officials noted that the early strategies
were instrumental in expanding the perspectives of the regulatory agencies
by refocusing them on the purposes underlying their BSA responsibilities.
The early strategies renewed attention on the fight against money
laundering that supports particular reporting or record keeping
obligations. That is, due partly to the strategies, the financial
regulators became more focused regarding ways in which criminals could be
using financial institutions for money laundering activities.
However, after the first couple of years, the benefit of the annual NMLS
was affected by a number of factors and events, according to the Treasury,
Justice, and regulatory agency officials we interviewed. One factor cited
was that the principal agencies had significantly differing views about
the appropriate purpose and structure of the strategy. For instance,
Treasury preferred a document that covered the full breadth and scope of
the federal government's planned anti-money laundering efforts, while
Justice preferred a more concise document that included only those
priorities that realistically could be addressed during the year.
Likewise, the regulatory agencies generally favored a more concise
document. Several officials said that this fundamental difference in views
resulted in less-than-full commitment or buy-in from some agencies, which
lessened the overall benefit of the recent strategies.
An event that affected the 2001 NMLS was the change in presidential
administrations prior to the strategy's issuance. Treasury and Justice
officials explained that with the arrival of a new administration, it was
necessary to revise a nearly complete NMLS to match the new
administration's vision for combating money laundering. This redrafting
process caused the NMLS to be issued very late, leaving little time to
implement any goals or objectives before drafting the 2002 NMLS.
The officials said that the implementation of the recent strategies has
been affected most significantly by external events-particularly September
11, 2001, and its aftermath, which included passage of the USA PATRIOT Act
and the creation of DHS. Treasury and Justice officials said that the 2001
NMLS, which was issued on September 12, 2001, was virtually obsolete at
issuance because the nature of the issues they faced had just changed
dramatically. After September 11, combating terrorist financing became a
major element of the federal government's anti-money laundering efforts,
but it was not part of the 2001 NMLS.
The passage of the USA PATRIOT Act increased the requirements on many
financial institutions for conducting due diligence, record keeping,
reporting, and sharing information. Because implementing the USA PATRIOT
Act became the main focus for the financial regulators in the 2002 NMLS,
financial regulators attributed their efforts to the USA PATRIOT Act
rather than the NMLS. The creation of DHS required the transfer of most of
the law enforcement functions and staff from agencies formerly under
Treasury to the new agency. Justice anti-money laundering components
remained in Justice. Treasury and Justice officials said that the
implementation of some 2002 NMLS priorities was delayed pending formation
of the new department. They also said that issuance of the 2003 NMLS has
been delayed by the same disruptions.
As a mechanism for guiding the coordination of federal law enforcement
agencies' efforts to combat money laundering and related financial crimes,
the NMLS has had mixed results and-according to the evidence we reviewed
and the officials we contacted-generally has not been as useful as
envisioned by the Strategy Act. For example, although expected to have a
key role in the federal government's efforts to disrupt and dismantle
large-scale money laundering organizations, HIFCA task forces generally
were not yet structured and operating as intended and had not reached
their expectations for leveraging investigative resources or creating
investigative synergies. Further, while Treasury and Justice made progress
on some NMLS initiatives designed to enhance interagency coordination of
money laundering investigations, most had not achieved the expectations
called for in the annual strategies. Moreover, the 2002 NMLS did not
address agency roles and interagency coordination procedures for
conducting terrorist financing investigations.
NMLS Generally Has Not Been as Useful as Envisioned for Guiding the
Coordination of Law Enforcement Efforts
HIFCA Task Forces Generally Had Not Yet Been Structured and Operating as
Intended
Status of HIFCA Task Forces
As envisioned by the Strategy Act, HIFCAs represent a major NMLS
initiative and were expected to have a flagship role in the U.S.
government's efforts to disrupt and dismantle large-scale money laundering
operations. They were intended to improve the coordination and quality of
federal money laundering investigations by concentrating the investigative
expertise of federal, state, and local agencies in unified task forces,
thereby leveraging resources and creating investigative synergies. While
neither the Strategy Act nor the annual NMLS specified a time frame for
when designated HIFCAs were to become fully operational, we found that the
task forces had made some progress but generally had not yet been
structured and operating as intended. As of July 2003, Treasury and
Justice were in the process of reviewing the HIFCA task forces to remove
obstacles to their effective operations. The results of this review could
provide useful input for an evaluation report on the HIFCA program, which
the Strategy Act requires Treasury to submit to the Congress in 2004.
In May 2003, we contacted each of the seven designated HIFCAs to obtain
information on the status of their task forces (see table 2). At that
time, two of the seven HIFCAs (the Southwest Border and Miami) had not
started operations. Law enforcement officials in the Southwest Border area
cited several reasons for the HIFCA's nonoperational status, including (1)
difficulty in coordinating activities in such a large area and (2) lack of
funds to persuade state and local officials to participate.12 In Miami,
federal law enforcement officials had met but had not reached agreement on
how the HIFCA should be structured or how it should operate. For example,
the officials had not agreed on whether the Miami HIFCA should conduct
investigations or focus principally on intelligence gathering.
12The Southwest Border HIFCA was designated to focus on a specific money
laundering system-i.e., the smuggling of bulk cash between the United
States and Mexico-rather than a specific geographic area. It was to
include three U.S. judicial districts-the Southern District of Texas, the
Western District of Texas, and the District of Arizona.
Table 2: Status of HIFCA Task Forces as of May 2003
Number of participating law enforcement agencies
Lead
agency Federal State Local Total
Shared office space?b
Date designated HIFCA Start datea
March 2000 Los Angeles September IRS-CI 10 2 4 16 No
2001
New York/New March 2000 ICE and 10 6 21 37 Yes
Jersey IRS-CI
Puerto Rico March 2000 ICE and 6 3 1 10 Yes
IRS-CI
Southwest Not yet
Border operating
September Chicago September IRS-CI 3 1 0 4 Yes
2001 2002
San Francisco September ICE and 7 0 0 7 No
2002
IRS-CI
January 2003 Miami Not yet operating
Source: Representatives from the seven designated HIFCAs and federal
agency data.
aThe start date is the date local HIFCA officials considered the task
force to be conducting either investigations or intelligence gathering
activities.
bAccording to Treasury and Justice officials, a key to the success of the
HIFCA program is the ability to promote interagency cooperation by
locating task force participants together in the same office space.
In September 2003, in commenting on a draft of this report, Justice said
that while the Southwest Border HIFCA has not worked out as intended, the
participants in Texas and Arizona met on numerous occasions over the past
4 years in an attempt to find an organizational structure that could meet
the needs of all of the participants. Justice also said that headquarters
officials and participants in the Southwest Border area recently decided
that the dual-state HIFCA was too ambitious and that the HIFCA should be
limited to Texas and relocated to augment an existing task force.
Although the 2001 NMLS specified that HIFCAs were to conduct
investigations rather than principally gather intelligence, we found that
two of the five operating task forces (Los Angeles and San Francisco) were
primarily focusing on intelligence gathering activities-such as reviews of
Suspicious Activity Reports (SAR) and other information required by the
BSA-and had not established multiagency investigative
units to act on the intelligence.13 HIFCA officials in Los Angeles told us
they planned to locate task force participants together in the same area
in mid- or late-2003, at which time multiagency investigative units would
be established. In San Francisco, a HIFCA official told us their proposal
to become a HIFCA specified that the task force would focus on
intelligence and that there were no plans to establish multiagency
investigative units within the HIFCA. Treasury and Justice officials
responsible for overseeing the HIFCAs told us that headquarters was
reluctant to require the task forces to establish multiagency
investigative units, primarily because the Strategy Act did not provide
additional funds or personnel to establish such units. The officials noted
that even though the 2001 NMLS specified that HIFCAs were to conduct
investigations, task forces that focus on intelligence gathering
activities but do not conduct investigations do enhance interagency
efforts to combat money laundering.
Also, because the investigative activities of the three HIFCAs that had
multiagency investigative units (Chicago, New York/New Jersey, and Puerto
Rico) were based on task force structures already in place before the
HIFCA designation, the overall effect of the NMLS on these task forces is
unclear. For example, the New York/New Jersey HIFCA essentially
represented a renaming of the well-established El Dorado Money Laundering
Task Force, which had existed since 1992. As mentioned previously, a HIFCA
task force could be (1) created when a HIFCA was designated or (2) based
on an existing task force.
Further, in some cases, federal law enforcement agencies had not provided
the levels of commitment and staffing to the HIFCA task forces called for
by the strategy. As shown in table 2, ICE and/or IRS-CI were designated
the lead agency in each of the five operational task forces. We found that
most of the HIFCAs did not have DEA or FBI agents assigned full-time to
the task forces. For example, regarding the three HIFCAs with multiagency
investigative units, DEA and the FBI were not members of the Chicago
HIFCA, DEA was not a member of the New York/New Jersey HIFCA, and both DEA
and the FBI had only part-time representation on the Puerto Rico HIFCA. As
also shown in table 2, four of the five operating
13Pursuant to regulations issued by Treasury as authorized by the BSA and
each of the bank regulators, certain financial institutions are required
to file SARs with FinCEN to report transactions involving $5,000 or more
that they suspect involve funds derived from illegal activity. These
reports provide information that can enable law enforcement agencies to
generate investigative leads, understand financial relationships in
ongoing investigations, and identify forfeitable assets.
Oversight of HIFCA Task Forces Has Not Met Expectations
HIFCAs had little or no participation from state and local law enforcement
agencies, with the notable exception being the New York/New Jersey HIFCA.
The NMLS called for each HIFCA to include participation from all relevant
federal, state, and local agencies.
Justice headquarters officials said the main problem with supporting the
HIFCA task forces was the absence of additional funds or personnel to
offer law enforcement agencies in return for their participation. A DEA
official told us that, because of differences in agencies' guidelines for
conducting undercover money laundering investigations, DEA will not
dedicate staff to HIFCA task force investigative units but will support
intelligence-related activities.14 FBI officials cited resource
constraints as the primary reason why the bureau does not fully
participate. Various task force officials mentioned lack of funding to
compensate or reimburse participating state and local law enforcement
agencies as a barrier to their participation in HIFCA operations. Further,
Treasury and Justice officials noted that a key to the success of the
HIFCA program is the ability to promote interagency cooperation by
locating task force participants together in the same office space.
Accordingly, the 2002 NMLS called for headquarters to examine how to fund
the colocation of HIFCA task force participants absent funds appropriated
specifically for that purpose.
While we recognize that federal law enforcement agencies have resource
constraints and competing priorities, we note that HIFCA task forces were
expected to make more effective use of existing resources or of such
additional resources as may be available. Without commitment and staffing
from relevant federal, state, and local agencies, the task forces cannot
fully leverage resources and create investigative synergies, as envisioned
by the Strategy Act.
Treasury and Justice have not provided the level of oversight of the HIFCA
task forces called for by the NMLS. For example, in response to our
initial inquiries and formal requests for information, Treasury and
Justice officials responsible for overseeing the HIFCA task forces could
not readily provide basic information, such as names of participating
agencies
14As discussed later in this report, the 2002 NMLS called for Treasury and
Justice to develop uniform guidelines for undercover money laundering
investigations.
and contact persons or the results of task force operations.15 Also, as
shown in table 3, Treasury and Justice had not addressed various NMLS
initiatives designed to oversee HIFCA operations, and many of the
initiatives were still ongoing well past expected completion dates. Fully
addressing these initiatives could help ensure accountability within the
HIFCAs, as well as refine the operational mission, structure, and
composition of the task forces.
15Treasury and Justice were to jointly oversee the HIFCA task forces. To
assist their efforts, the departments created an interagency HIFCA working
group. Regarding the 2002 NMLS, the group was to include representatives
from the Customs Service, DEA, EOUSA, the Executive Office for Organized
Crime Drug Enforcement Task Forces, FBI, Federal Law Enforcement Training
Center, FinCEN, IRS-CI, Justice's Asset Forfeiture and Money Laundering
Section, Office of National Drug Control Policy, U.S. Postal Inspection
Service, Secret Service, and Treasury's Office of Enforcement.
Table 3: Status of NMLS Initiatives Related to HIFCA Oversight
Annual Status (as of
Target date for July
NMLS NMLS initiative completion Target date 2003)a
met?
2000 Oversee newly designated
HIFCA task forces:
NMLS
16. Report on the progress of the HIFCA task forces. (1) December 2000 No
Not addressed
17. Formulate a reporting system so that the impact of (2) During the
year No Ongoing the HIFCAs can be evaluated.
2001 Design the organizational structure of HIFCA task forces October 2001
No Not addressed NMLS and designate regional task force directors.
HIFCA representatives will brief Treasury and Justice officials on:
18. HIFCA activities and coordination efforts. (1) March 2002 No Not
addressed
19. The progress of investigations and the involvement (2) Quarterly No
Not addressed of federal, state, and local law enforcement and regulatory
agencies.
Establish a new asset forfeiture reporting system for March 2002 No
Ongoing HIFCA task forces and implement its usage.
2002 Review HIFCA task forces to remove obstacles to their NMLS effective
operation:
20. Review the progress of each HIFCA and assess (1) December 2002 (1) No
(1) Ongoing how well the HIFCA concept is working.
21. Recommend what changes to make so that the (2) February 2003 (2) No
(2) Ongoing HIFCAs can achieve their mission objectives.
Each HIFCA will report on participation of state November 2002 No Ongoing
and local
enforcement, regulatory, and prosecution
agencies, and
identify steps needed to include participation of
all
relevant agencies.
Provide advanced money laundering training in each of November 2002 Yes
Completedb the six HIFCA locations.
Source: GAO analysis of the NMLS (2000 through 2002) and interviews with
Treasury and Justice headquarters officials.
a
"Not addressed" indicates that Treasury and Justice took little or no
action on the NMLS initiative and that no future action is planned.
"Ongoing" indicates that Treasury and Justice had not completed the
initiative by its target date, but there was ongoing or planned future
work related to the initiative.
bAdvanced money laundering training was not provided to the Southwest
Border HIFCA, because the HIFCA did not have an operational task force.
Treasury and Justice officials told us the primary reasons for not
addressing or not yet completing the HIFCA initiatives were that
headquarters (1) was reluctant to impose a structure or reporting
requirement on the field without offering any new resources and (2) did
not believe that a single structure could fit every HIFCA. The officials
also said that the individual HIFCAs were in the best position to address
their
Money Laundering Training Was Provided to HIFCAs
specific needs and problems. Further, the officials told us that, while
most of the HIFCA initiatives had not been addressed or were not yet
completed, the HIFCA structure at headquarters has provided a framework
for regular interagency meetings to discuss money laundering trends and
ways to improve interagency cooperation.
As shown in table 3, although only one of the HIFCA initiatives was
completed by the specified milestone or goal date, many of the initiatives
were still ongoing. For example, the 2002 NMLS called for a review of
HIFCA task forces to remove obstacles to their effective operation.
Specifically, the initiative called for an interagency HIFCA team to (1)
review the accomplishments of the HIFCA task forces to date; (2) examine
structural and operational issues, including how to fund the colocation of
participants in HIFCA task forces absent funds appropriated for that
purpose; and (3) examine existing operations and make recommendations to
ensure that each HIFCA is composed of all relevant federal, state, and
local enforcement authorities, prosecutors, and financial supervisory
agencies as needed. As of July 2003, the HIFCA review team was still in
the process of assessing the HIFCAs. When completed, the team's review
could provide useful input for an evaluation report on the effectiveness
of and the continued need for HIFCA designations, which is required by the
Strategy Act to be submitted to the Congress in 2004.
According to the 2002 NMLS, Treasury and Justice have conducted a
substantial amount of fundamental, advanced, and specialized money
laundering training to task forces, agencies, investigators, and
prosecutors. For example, as included in the 2002 NMLS (see table 3), the
Federal Law Enforcement Training Center, in cooperation with Treasury and
Justice, have provided an advanced money laundering training course in six
HIFCA locations. According to a Federal Law Enforcement Training Center
official, approximately 900 to 1,000 agency representatives have
participated in the 3-day training seminar. The official said that the
training focused on numerous issues, including money laundering statutes,
the impact of the USA PATRIOT Act, basic and international banking, asset
forfeiture issues, and specific money laundering schemes and
organizations.
NMLS Initiatives to Enhance Coordination of Law Enforcement Investigations
Generally Were Not Addressed or Were Still Ongoing
Progress Was Made on Some Law Enforcement Coordination Initiatives
Most Law Enforcement Coordination Initiatives Were Not Addressed or Were
Still Ongoing
While Treasury and Justice made progress on some NMLS initiatives that
were specifically designed to enhance coordination of federal law
enforcement agencies' money laundering investigations, most of the
initiatives were not addressed or were still ongoing.16 In general, the
failure to address or complete the initiatives indicates that interagency
coordination was falling short of expectations.
Treasury and Justice made progress in implementing some of the NMLS law
enforcement coordination initiatives. For example, as called for in the
1999 and 2000 strategies, the departments took steps to (1) enhance the
money laundering focus of interagency counter-drug task forces and (2)
collect and analyze information on the money laundering aspects of the
task forces' investigations. More recently, the 2002 NMLS called for an
interagency team to identify money laundering-related targets for
coordinated enforcement action. The strategy noted that targets could be
particular organizations or systems used or exploited by money launderers,
such as the smuggling of bulk cash and unlicensed money transmitters. In
August 2002, Treasury and Justice created an interagency team and
identified a money laundering-related target and four cities in which to
conduct investigations. In July 2003, Justice officials told us that U.S.
Attorneys Office officials had agreed to participate in the targeting
initiative and that the initiative was ongoing.
Most of the annual strategy initiatives designed to enhance interagency
coordination of law enforcement investigations were not addressed or were
still ongoing. Three examples are as follows. First, the Customs Service
created a Money Laundering Coordination Center in 1997 to (1) serve as the
repository for all intelligence information gathered through undercover
money laundering investigations and (2) function as the coordination and
"deconfliction" center for both domestic and international undercover
money laundering investigations.17 Both the
16Each of the four published annual strategies (1999 through 2002)
presented one or more initiatives to enhance interagency coordination of
money laundering investigations. Collectively, the four strategies
presented 14 such initiatives.
17Deconfliction is a process that law enforcement agencies use to help
ensure officer safety during tactical activities such as drug stings. For
example, by logging each planned activity into a central location or
deconfliction unit, officers try to ensure that they are not targeting
another investigation's subjects or otherwise compromising an ongoing
investigation.
1999 and the 2000 NMLS contained an initiative to encourage all applicable
federal law enforcement agencies to participate in the Money Laundering
Coordination Center. During our review, Customs Service officials (before
the agency was transferred to DHS) told us that, although Justice agencies
(including DEA and FBI) were invited to use the center, these agencies
were only occasional users and did not contribute information to the
center.18
DEA and FBI officials told us that their agencies did not use the Money
Laundering Coordination Center because they could not reach a satisfactory
memorandum of understanding regarding participation, including controls
over the dissemination of information. DEA officials added that the center
does not meet DEA's needs because it is used for deconfliction only. In
August 2003, the DEA officials said that DEA had created and was testing a
new database that is designed to be a single source for information on
money laundering investigations related to drug money. The officials added
that DEA has briefed Treasury and DHS about the new database, but as of
August 2003, no other agencies were participating.
Second, federal law enforcement agencies do not have uniform guidelines
applicable to undercover money laundering investigations. According to the
2002 NMLS and our discussions with law enforcement officials, the lack of
uniform guidelines inhibits some agencies from participating in
investigations that have an international component. For example, a DEA
official told us that DEA guidelines generally are more restrictive than
guidelines used by Customs (as part of ICE) in regard to (1) obtaining
approval to initiate and continue undercover investigations and (2)
coordinating activities with foreign counterparts. Therefore, the
officials noted that DEA generally could not participate in international
undercover money laundering investigations led by Customs. The 2002 NMLS
called for Treasury and Justice to develop uniform undercover guidelines
by September 2002 to ensure the full participation of all applicable
federal law enforcement agencies in undercover money laundering
investigations. Treasury officials told us the initiative is still ongoing
but has been put on hold, pending reorganizations associated with the
creation of DHS.
18In March 2003, the Customs Service and the Money Laundering Coordination
Center were transferred from Treasury to DHS's ICE.
Third, Treasury and Justice have not yet fully implemented NMLS
initiatives designed to establish SAR review teams in federal judicial
districts. The 2001 NMLS contained an initiative that called for the
creation of a SAR review team in each federal judicial district.
Generally, each team-to be comprised of an Assistant U.S. Attorney and
representatives from federal, state, and local law enforcement
agencies-was expected to evaluate all SARs filed in their respective
federal judicial district.
The 2001 SAR initiative has been partially implemented. Treasury officials
noted that Justice has primary responsibility for implementation because
Justice provides guidance and direction to EOUSA and the U.S. Attorneys
Offices. According to EOUSA officials, Justice, EOUSA, and the U.S.
Attorneys Offices have actively encouraged the creation of SAR review
teams and these efforts remain ongoing. At our request, in July 2003,
EOUSA conducted an informal survey of U.S. Attorneys Offices and reported
that at least 33 of the 94 federal judicial districts were actively using
interagency SAR review teams.
The 2002 NMLS had a more conservative SAR-related initiative, calling for
the establishment of five additional review teams. Specifically, the 2002
NMLS initiative called for Treasury and Justice-by August 2002-to (1)
identify a priority list of five federal judicial districts that do not
have a SAR review team but could benefit from one and (2) work with EOUSA
and the respective U.S. Attorneys Offices to encourage the creation of
interagency review teams.19 As of July 2003, this initiative had not yet
been completed, but efforts were still ongoing.
Further, although not called for by the NMLS, the IRS has had a related
initiative to create interagency SAR review teams. Specifically, IRS-CI
data show that IRS has established 41 SAR review teams nationwide-with all
35 IRS field offices having at least one functioning team-and that most of
the review teams had participation from other agencies. According to IRSCI
officials, collectively, the 41 teams are to review every SAR filed in the
94 federal judicial districts. The officials said that at least 4 of the
districts in which a HIFCA task force is located were using an interagency
SAR review team. The officials noted that IRS review teams are not to
duplicate
19According to the 2002 NMLS, SAR review teams also can review selected
wire transfers. The strategy noted that expanding the work of the teams to
include the selective review of wire transfers could help law enforcement
agencies coordinate their efforts to investigate and prosecute money
laundering organizations.
Reasons for Not Fully Implementing Interagency Coordination Initiatives
SAR reviews already performed by existing task forces in federal judicial
districts.
Treasury officials told us that resource constraints and competing
priorities were the primary reasons why many of the law enforcement
coordination initiatives were not yet fully implemented. Also, the
officials said that, over the past few years, Treasury has given higher
priority to other parts of the annual strategy-such as international,
regulatory, and terrorism-related initiatives-than to domestic law
enforcement initiatives. Further, the officials said that Treasury
generally took the lead in implementing the annual strategy but could not
require other agencies to focus on specific initiatives or activities. In
this regard, the officials said that other agencies frequently had their
own priorities.
Justice officials also said that the annual strategies have contained more
initiatives than realistically could be pursued. The officials added that
to the extent NMLS initiatives were not completed or target dates were
missed, it was because of competing priorities or the lack of resources
available for proper implementation of the strategy. The officials noted
that there are complex issues involved in attempting to coordinate the
resources, practices, and priorities of two (and sometimes more)
departments and several law enforcement agencies, as well as U.S.
Attorneys Offices throughout the country. Further, Justice officials told
us that while NMLS initiatives to institutionalize coordination may not
have been fully implemented, the efforts to do so and regular meetings
have been continuing.
NMLS Did Not Address Agency Roles and Task Force Coordination in Terrorist
Financing Investigations, but a Recent Interagency Agreement May Help
Clarify Roles
In developing the 2002 NMLS, Treasury and Justice officials met to discuss
the roles of the various investigative agencies involved in combating
terrorist financing. However, the two departments could not reach
agreement, and the 2002 strategy was published without addressing the
agencies' roles. In general, Justice's position was that it had exclusive
statutory authority to lead all terrorist financing investigations, while
Treasury maintained that it also had the authority and the needed
expertise to lead such investigations.20 In commenting on a draft of the
2002 strategy, the FBI noted the following:
o The strategy does not address the various agencies' duplication of
efforts to combat terrorist financing.
o By not specifically addressing and delineating the roles of the
respective agencies, the strategy creates more confusion than it resolves
and wastes limited resources.
Moreover, the strategy section on U.S. government efforts to identify,
disrupt, and dismantle terrorist financing networks did not mention or
clarify roles of the three primary law enforcement task forces involved in
investigating terrorist financing-Customs' Operation Green Quest (OGQ) and
the FBI's Terrorist Financing Operations Section (TFOS) and Joint
Terrorism Task Forces (JTTF).21
According to Treasury officials, the NMLS drafting process realistically
could not have been expected to resolve the long-standing, highly
challenging issues associated with the interagency jurisdictional dispute.
While we agree that it may have been unrealistic to expect the drafting
process to resolve the long-standing issues, we note that a primary role
of the NMLS is to enhance interagency coordination and help resolve
turf-protection battles. Because the issue was not addressed in the 2002
NMLS, the problem remained, thus leaving unresolved possible duplication
of efforts and disagreements over which agency should lead investigations.
In our view, any way the NMLS could have advanced resolution of the matter
would have been beneficial.
20In commenting on a draft of this report, Justice said that, in summary,
18 U.S.C. S: 2332b(f) assigned to the Attorney General primary
investigative responsibility for all federal crimes of terrorism
generally, and that 18 U.S.C. S: 2339B(e) directed the Attorney General
specifically to conduct any investigation of a possible violation of the
federal terrorism financing statutes.
21In March 2003, Customs and OGQ were transferred from Treasury to DHS's
ICE.
Agencies Did Not Fully Coordinate Terrorist Financing Investigations
To help avoid overlapping investigations and duplication of efforts, it is
important that agencies investigating terrorist financing have
coordination mechanisms. At the policy level, a National Security Council
policy coordination committee on terrorist financing is responsible for
coordinating antiterrorist financing activities.22 This committee is to
consider evidence of terrorist financing networks and coordinate
strategies for targeting terrorists, their financiers, and supporters. At
the operational level, we found that some interagency coordination of
terrorist financing investigations existed between agency headquarters'
components. For example, OGQ and TFOS had assigned one agent to each
other's headquarters in Washington, D.C. The FBI also was to provide
information on its activities to OGQ through daily downloads from the
FBI's terrorist financial database. Further, OGQ and FBI officials told us
that local mechanisms existed around the country to deconflict
investigations.
While OGQ and the FBI task forces took steps to inform each other about
the targets of their investigations, we found that the task forces did not
fully coordinate their activities. For example, at the three locations we
visited (Los Angeles, Miami, and New York City), OGQ and JTTF officials
told us they generally were not aware of each other's financial
investigations and that the task forces generally did not share
investigative information. Several officials indicated that there were
problems with conflicting or competing investigations, including
disagreements over which task force should lead investigations. Officials
at all three locations noted that the government's antiterrorist financing
efforts could be improved if the task forces worked more closely with each
other or were combined.
Further, at the three locations we visited, IRS-CI officials who had
agents assigned to the local OGQ and JTTF also indicated that the task
forces were not fully operating in a coordinated and integrated manner.
Specifically, in Miami and New York City, IRS-CI officials told us that
having both OGQ and the JTTF doing the same type of antiterrorist
financing work was a duplication of effort. IRS-CI officials in Los
Angeles noted that communication between the two task forces could be
better. Also, in response to our inquiry about interagency coordination,
U.S.
22Committee participants include representatives from the Departments of
the Treasury, Justice, and State; the National Security Council; and the
intelligence community.
May 2003 Interagency Agreement Defined Agency Roles
Attorneys Office officials in the Southern District of Florida provided
the following response in February 2003:
"With respect to the FBI's Joint Terrorism Task Force (FBI-JTTF) and
Customs' Operation Green Quest, we would like to see increased cooperation
and coordination between the agencies. Too often agents of the FBI and
Customs are investigating terrorist financing independent of each other or
overlapping in the targets of their investigations. Some of the barriers
to greater interagency participation may be conflicting priorities of each
of the agencies. Ongoing battles as to which agency is the `lead' agency
continues to be a problem..."
In commenting on a draft of this report, Treasury said that it continues
to believe that the dispute over who took the lead in investigating the
financing of terrorism did not necessarily result in duplication of
efforts. Treasury said that the issue was largely definitional, with the
FBI leading terrorist investigations with an ancillary financial component
versus Customs financial investigations that might have a
terrorist-related connection.
On May 13, 2003, the Attorney General and the Secretary of Homeland
Security signed a memorandum of agreement regarding the antiterrorist
financing roles of the respective departments and component agencies. In
general, the agreement gives the FBI the lead role in investigating
terrorist financing and specifies that DHS is to pursue terrorist
financing investigations solely through its participation in FBI-led task
forces, except as expressly approved by the FBI. Some excerpts from the
May 2003 agreement are paraphrased substantially as follows:
o The FBI is to lead terrorist financing investigations and operations,
utilizing the intergovernmental and intra-agency National JTTF at FBI
headquarters and the JTTFs in the field. Through TFOS, the FBI is to
provide overall operational command to the national JTTF and the field
JTTFs.
o After June 30, 2003, DHS is to pursue terrorist financing
investigations and operations solely through its participation in the
National JTTF, the field JTTFs, and TFOS, except as expressly approved by
TFOS.
o The Secretary of Homeland Security agreed that, no later than June 30,
2003, OGQ was to no longer exist as a program name. The Secretary agreed
to ensure that any future DHS initiative or program to investigate crimes
affecting the integrity and lawful operation of U.S. financial
infrastructures would be performed through the financial crimes division
at ICE.
The May 2003 agreement also contained several provisions designed to
enhance the coordination and integration of FBI and ICE financial
investigations. For example, the agreement calls for the FBI and ICE to
(1) detail appropriate personnel to each other's task forces, (2) take
steps to ensure that the detailees have full and timely access to data and
other information, and (3) develop procedures to ensure effective
operational coordination of FBI and ICE investigations. Further, the FBI
Director and the Assistant Secretary for ICE were to provide a joint
written report on the implementation status of the agreement 4 months
after its effective date to the Attorney General, the Secretary of
Homeland Security, and the Assistant to the President for Homeland
Security. However, as of September 24, 2003, the report had not yet been
issued.
If successful, the May 2003 agreement could prove to be a significant step
toward establishing a coordinated interagency framework for conducting
terrorist financing investigations. At the time of our review, it was too
early to assess the implementation of the agreement.
Most financial regulators we interviewed said that the NMLS had some
influence on their anti-money laundering and antiterrorist financing
efforts but that it has had less influence than other factors. Officials
said that, since September 11, a change in government perspective and
additional requirements placed on financial institutions by the USA
PATRIOT Act and its implementing regulations have been the primary
influences on their efforts. Although the financial regulators said that
the NMLS had minimal influence on establishing priorities for their
anti-money laundering and antiterrorist financing activities, they have
completed the tasks for which they were designated as lead agencies over
the years, and most of those for which they were to provide support to
Treasury. The 2002 NMLS noted that the financial regulators were
responsible for implementing the parts of the USA PATRIOT Act that applied
to the entities they regulate. Appendix III describes the anti-money
laundering requirements set forth in the USA PATRIOT Act and the rules
that have been implemented thereunder.
NMLS Has Had Some Influence on Financial Regulators' Efforts, but Other
Factors Played a Larger Role
Financial Regulators Said Factors Other Than the NMLS Exerted a Greater
Influence on Their Anti-Money Laundering Efforts
Most financial regulators we interviewed said that the NMLS had some
influence on their anti-money laundering efforts because it has provided a
forum for enhanced coordination, particularly with law enforcement
agencies, but that it has had less influence than other factors.
Similarly, law enforcement agency officials told us that the level of
coordination between the financial regulators and their agencies was good
and that they received the assistance and information they needed from the
regulators. They did not, however, attribute this to the strategy but,
rather, to legal requirements.
Financial regulators said that several other factors influenced their
anti-money laundering efforts to a greater extent than the NMLS. These
factors include working groups that had already developed as a result of
BSA implementation, the impact of September 11 on raising awareness of the
importance of fighting money laundering and terrorist financing, and the
passage of the USA PATRIOT Act. The financial regulators said that they
have been working on anti-money laundering issues for many years and
generally initiate their own anti-money laundering activities. Bank
regulators and SEC pointed out that the BSA was passed in 1970 and that
they have been concerned with ensuring banks' and broker-dealers'
compliance with its requirements ever since. The USA PATRIOT Act extended
responsibility for implementing the BSA to additional financial regulators
as well as increased anti-money laundering requirements for certain
financial institutions.23 Additionally, most financial regulators
participate in the BSA Advisory Group, in which the financial regulators
coordinate and communicate among themselves and with financial
institutions on enforcing BSA requirements. Other coordinating forums
include the Federal Financial Institutions Examination Council, Financial
Action Task Force, and USA PATRIOT Act working groups established to
develop and implement regulations resulting from the passage of the USA
PATRIOT Act.24
23Not all BSA regulations have been implemented for banks and
broker-dealers at the same time. The suspicious activity reporting
requirement for banks was adopted by Treasury in 1996. The suspicious
activity reporting requirement for most broker-dealers was adopted by
Treasury in 2002. Broker-dealers affiliated with bank holding companies
were subject to the earlier 1996 reporting requirement.
24The Financial Action Task Force is an international body with 33 member
countries, territories, and organizations that sets international
standards to assist countries in their efforts to combat money laundering
and terrorist financing. The U.S. delegation to the Financial Action Task
Force includes representatives from the Departments of the Treasury,
Justice, and State.
Although the NMLS provided a forum in which the financial regulators could
better coordinate with law enforcement agencies, other avenues for
cooperation are prescribed by law, and some existed before passage of the
Strategy Act. For example, depository institutions have been required to
file SARs since 1996. Since December 2002, securities brokers and dealers
have been required to file SARs with FinCEN as a result of the USA PATRIOT
Act and its implementing regulations. (See app. III.) Certain financial
institutions are also required to file Currency Transaction Reports with
FinCEN for transactions that involve $10,000 or more in currency. Like
SARs, these reports are supposed to be analyzed to look for suspicious
activity. Financial regulators said they oversee financial institutions'
programs for complying with these legal requirements because it is their
statutory responsibility, not because it is included in the NMLS. They
said they would do so with or without the strategy.
Most officials said that September 11 greatly affected how the
administration and Congress thought about money laundering because some of
the techniques used to launder money, illicitly moving funds to avoid
detection, are similar to those used to finance terrorist activity. Some
officials said the new administration was more concerned with the burden
anti-money laundering compliance placed on financial institutions prior to
September 11, but that the events of September 11 changed this, resulting
in more attention being paid to the importance of anti-money laundering
compliance. Congress passed the USA PATRIOT Act, which, for example,
increased the due diligence, reporting, and record keeping requirements
for some financial institutions to guard against their being used by their
customers to launder money or finance terrorist activity. Some officials
noted that USA PATRIOT Act requirements reflected topics being discussed
in the NMLS and other working group meetings that might still have been in
the discussion phase had not September 11 motivated their inclusion in the
USA PATRIOT Act, thus requiring Treasury and other agencies to issue
regulations. Reflecting this change of emphasis, the 2002 NMLS discussed
the need to adapt traditional methods of combating money laundering to
unconventional tools used by terrorist organizations to finance their
operations. According to the 2002 NMLS, the primary responsibility of the
financial regulators was to participate in the drafting and issuance of
USA PATRIOT Act regulations and to provide technical expertise on the
operations of depository institutions and other financial institutions to
Treasury. The regulators also worked to educate financial institutions and
their own staff on the new requirements.
Federal Financial Regulators Have Been Involved in the Implementation of
Many Action Items in the NMLS, but Most Have Been Led by Treasury
The federal financial regulators have participated in the implementation
of the NMLS from 1999 to 2002 in a variety of ways, including
participation in working groups established by the NMLS and, in 2002,
worked with Treasury to implement provisions of the USA PATRIOT Act. The
federal financial regulators were expected to participate in NMLS
initiatives, but Treasury, rather than the financial regulators, was
usually designated as the lead agency responsible for implementation.25
Most federal financial regulators are independent federal agencies.
Therefore, while the financial regulators have committed to work with
Treasury and Justice on NMLS initiatives, they are not required to do so
because, with the exception of OCC and OTS, they are not part of the
executive branch. Previous strategies have called for the financial
regulators to work with Treasury and Justice on several efforts, such as
(1) coordinating on establishing policies for enhanced information sharing
between law enforcement agencies and the regulatory agencies, (2) working
with the financial services industry to develop guidance for financial
institutions to enhance scrutiny of high-risk money laundering
transactions and customers, and (3) developing a SAR requirement for
broker-dealers. However, policies for enhanced information sharing were
not finalized until the USA PATRIOT Act required that they be developed.
For example, section 314 of the USA PATRIOT Act was designed to enhance
cooperation among certain entities involved in the detection of money
laundering. Section 314(a) encourages regulatory authorities and law
enforcement authorities to share with financial institutions information
regarding individuals, entities, and organizations engaged in or
reasonably suspected based on reliable evidence of engaging in terrorist
acts or money laundering activities. Section 314(b) encourages information
sharing among financial institutions themselves. In addition, rules
promulgated by FinCEN under section 314 allow law enforcement authorities
to make requests to financial institutions through FinCEN of certain
account information for individuals, entities, and organizations that may
be engaged in terrorist acts or money laundering activities. Information
is provided to FinCEN, who gives the law enforcement entities a
comprehensive product. SEC worked with FinCEN on a proposed broker-dealer
SAR requirement from 1999 to 2001. However, a final rule was not issued
until 2002, when it was required under the USA PATRIOT Act.
25The 1999 NMLS did not designate leads for priority or action items, but
the 2000, 2001, and 2002 NMLS did.
Each NMLS has called for the federal bank regulators as a group or OCC
individually to lead a review of their bank examination procedures
regarding anti-money laundering efforts and to implement the results of
these reviews. While the financial regulators have been involved in a
variety of different tasks and working groups in the NMLS, they served as
leads only in these reviews.26 Table 4 lists annual NMLS initiatives to
review bank examination procedures, the lead agency or agencies, and the
status of the initiatives.
26However, OCC, along with the Departments of the Treasury and State, was
designated as lead in the 2001 NMLS for initiating counter measures
against noncooperative countries and territories.
Table 4: NMLS Initiatives to Review Bank Examination Procedures, as of
July 2003
NMLS year NMLS initiativea Status
1999 Federal bank regulators, in cooperation with the Department of the
Treasury, will conduct Completed a review of existing bank examination
procedures relating to the prevention and detection of money laundering at
financial organizations, to be completed within 180 days.b Lead: None
designated.
2000 The federal bank supervisory agencies will implement the results of
their 180-day review of bank examinations procedures relating to the
prevention and detection of money laundering at financial organizations.
Lead: OCC. Examples of anticipated actions:
OCC will (1) update Comptroller's Handbook for Bank Examiners, including a
new (1) Completed
requirement to perform transactional testing of high-risk accounts at
every bank
examination and (2) implement a program to target for examination those
institutions that (2) Completed
are considered most vulnerable to money laundering.
FDIC will amend examination procedures on enhanced guidance to bank
examiners on Completed high-risk activities to include guidance on foreign
correspondent accounts.
FDIC and OCC will continue to develop interagency anti-money laundering
training Completed modules, which will be completed in 2000.
The Federal Reserve will: (1) implement new procedures that will
concentrate on ensuring (1) Completed
that banks implement effective operating systems and procedures to manage
operations (2) Completed
legal and reputational risks as they pertain to BSA anti-money laundering
efforts; (2)
provide guidance on appropriate levels of enhanced scrutiny for high-risk
customers and (3) Ongoing
services; and (3) increase emphasis on maintaining systems to detect and
investigate
suspicious activity throughout every business sector of a banking
organization.
OTS will assess the efficacy of its recently revised risk-focused BSA
examination Completed
procedures and will implement enhancements developed by benchmarking with
other
agencies.
2001 Continue to identify and implement enhancements to Ongoing
examination procedures where
necessary to address the ever-changing nature of money
laundering. Lead: All federal
bank regulators.
2002 Review current examination procedures of the federal
supervisory agencies to determine Ongoing
whether enhancements are necessary to address the
ever-changing nature of money
laundering, including terrorist financings. Lead: OCC and
Treasury.
Source: 1999 to 2002 NMLS and financial regulatory data.
aThe NMLS for 1999 and 2000 used the term "Action Item," and the NMLS for
2001 and 2002 used the term "Priority."
bAlthough NCUA officials said they also completed these initiatives, the
NMLS named only FRB, OCC, FDIC, and OTS as agencies responsible for these
initiatives.
The financial regulators have also worked with Treasury as the lead agency
for the U.S. government's international anti-money laundering efforts.
Over time, the NMLS has called for the United States to strengthen
international cooperation and collaboration and to work to strengthen the
anti-money laundering efforts of other countries. Much of Treasury's
effort in this area has been done as part of multinational bodies, such as
the Financial Action Task Force, and international financial institutions,
such
The Annual NMLS Has Not Reflected Critical Components Identified by GAO as
Key to Developing and Implementing National Strategies
as the World Bank and the International Monetary Fund.27 Treasury's
efforts, working with these bodies, have focused on making anti-money
laundering assessments a permanent part of the International Monetary Fund
and World Bank surveillance and oversight of financial sectors and
providing technical assistance and training to jurisdictions willing to
make the necessary changes to their anti-money laundering regimes.
Treasury officials involved in international anti-money laundering efforts
said that the NMLS has served as a useful tool to plan and coordinate
their international efforts that include the financial regulators, which
provide technical assistance and participate in international meetings of
these bodies. Officials from the FRB, OCC, FDIC, OTS, SEC, and CFTC all
said that they had worked with Treasury on international anti-money
laundering efforts, including the preparation for or participation in
meetings of the Financial Action Task Force and of international financial
institutions.
In recent years, our work in reviewing national strategies for various
crosscutting issues has identified several critical components needed for
their development and implementation; however, key components have not
been well reflected in the NMLS.28 These components include clearly
defined leadership, with the ability to marshal necessary resources;
setting clear priorities and focusing resources on the greatest areas of
need, as identified by threat and risk assessments; and established
accountability mechanisms to provide a basis for monitoring and assessing
program performance. We identified a number of ways in which these
critical components could be better reflected in the development and
implementation of the annual NMLS, should it be reauthorized.
27As mentioned previously, in addition to Treasury, the U.S. delegation to
the Financial Action Task Force includes representatives from the
Departments of Justice and State.
28See U.S. General Accounting Office, Combating Terrorism: Observations on
National Strategies Related to Terrorism, GAO-03-519T (Washington D.C.:
Mar. 3, 2003); Homeland Security: A Framework for Addressing the Nation's
Efforts, GAO-01-1158T (Washington D.C.: Sept. 21, 2001); International
Crime Control: Sustained Executive-Level Coordination of Federal Response
Needed, GAO-01-629 (Washington D.C.: Aug. 13, 2001); and Managing for
Results: Next Steps to Improve the Federal Government's Management and
Performance, GAO-02-439T (Washington D.C.: Feb. 15, 2002). In addition,
GAO continues to develop critical success factors for evaluating national
strategies related to homeland security and terrorism and will report on
this topic later this year.
NMLS Leadership Structure Generally Has Not Resulted in Consensus on the
Approach NMLS Should Take
Our past work in reviewing various national strategies has consistently
concluded that having clearly defined leadership, with the ability to
marshal necessary resources, is a critical component of any national
strategy. For instance, our work has noted the importance of establishing
a focal point or executive-level structure to provide overall leadership
that would rise above the interests of any one department or agency.
Regarding the annual NMLS, we found that the joint Treasury-Justice
leadership structure generally has not been able to reach consensus in
developing and implementing the strategies-particularly in recent years
when the structure did not include representatives from the two
departments' top leadership. This has resulted in an inability to reach
agreement on the appropriate scope of the strategy and ensure that target
dates for completing strategy initiatives were met.
The Strategy Act required the President, acting through the Secretary of
the Treasury and in consultation with the Attorney General, to produce an
annual NMLS. However, Treasury and Justice officials told us that the
Strategy Act did not provide additional funding or otherwise enhance
either department's ability to develop and implement the annual
strategies. Rather, development and implementation of the annual NMLS has
been dependent largely on consensus-building efforts between Treasury and
Justice-with Treasury having de facto lead responsibility. In this regard,
Treasury officials told us that, while the department could request
participation from other agencies, it had no incentives it could use to
marshal necessary resources or compel participation in implementing
initiatives or action items. The Treasury officials noted, for example,
that the department's inability to compel action by other agencies was a
contributing factor to delays in producing each annual NMLS. As shown in
table 5, none of the four annual strategies issued to date was submitted
to the Congress by February 1 of each year, as required by the Strategy
Act. As of September 24, the 2003 strategy had yet to be submitted.
Table 5: Annual NMLS-Dates Submitted to Congress Annual NMLS Required issue date
Date submitted Months late
1999 February 1999 September 1999 7
2000 February 2000 March 2000 1
2001 February 2001 September 2001 7
2002 February 2002 July 2002 5
2003 February 2003 Not yet issued More than 7
Source: Annual NMLS.
The initial NMLS (1999) established a joint leadership structure for
implementing the strategy. Specifically, the strategy noted that overall
implementation of the strategy would be guided by an interagency Steering
Committee chaired by the Deputy Secretary of the Treasury and the Deputy
Attorney General, with participation of relevant departments and agencies.
The Steering Committee was to be responsible for overseeing action items
and timelines and, as appropriate, making specific assignments. Also, with
respect to action items that involved international aspects of anti-money
laundering efforts, the National Security Council was to have a central
role and was to advise the Steering Committee, as necessary. The 2000 NMLS
also called for the Steering Committee to oversee implementation of
initiatives, although the strategy did not mention a specific role for the
National Security Council.
According to Treasury officials, the Steering Committee was not reconvened
to oversee the development and implementation of the 2001 NMLS, in part
because of the change in administrations and the timing in making
political appointments. Instead, overall responsibility for developing and
implementing the 2001 NMLS was assumed by two lower-level officials-a
Treasury Deputy Assistant Secretary (Money Laundering and Financial
Crimes) and a Justice Criminal Division Section Chief (Asset Forfeiture
and Money Laundering). The 2002 NMLS called for Treasury and Justice to
reconvene the Steering Committee to provide coordination and cooperation
among all the participating departments and agencies. However, according
to Treasury and Justice officials, the Steering Committee was not
reestablished. Treasury and Justice officials with responsibility for
developing the strategy and overseeing its implementation at those
departments said the benefits of the Steering Committee were that it
brought together the officials who were needed to make decisions when
those below them could not agree and that it could hold those responsible
for implementing certain priorities accountable for getting things done.
Moreover, the role of the National Security Council in overseeing
implementation of the annual NMLS remains somewhat unclear.29 On the one
hand, the National Security Council does have a designated policy
coordination committee responsible for overseeing antiterrorist financing
activities, including those related to implementation of the 2002 NMLS. On
29In response to our request, National Security Council officials declined
to meet with us to discuss the Council's role regarding the annual NMLS.
the other hand, Treasury and Justice officials told us that this policy
coordination committee has no responsibility for addressing other aspects
of the strategy. The officials said that they were unaware of any National
Security Council component responsible for overseeing all aspects of NMLS
implementation.
NMLS Initiatives Have Not Been Clearly Prioritized
Annual Strategies Have Contained More Priorities Than Could Realistically
Be Accomplished
Our past work in reviewing various national strategies has recognized the
importance of identifying and prioritizing issues that require the most
immediate attention. While each NMLS (1999 through 2002) identified some
"top" priorities, each strategy contained more priorities-of seemingly
equal importance-than could be realistically achieved. Our prior strategy
work also has shown that threat and risk assessments can be useful in
establishing priorities; however, none of the money laundering strategies
issued to date was preceded or guided by such an assessment.
The Strategy Act called for the NMLS to include comprehensive,
research-based goals, objectives, and priorities for reducing money
laundering and related financial crimes in the United States. The 1999
NMLS included a total of 66 priorities, which laid out actions to be taken
by Treasury, Justice, and the financial regulators; the number decreased
to 50 in the 2002 NMLS (see table 1). According to Treasury officials,
Treasury's vision for the annual strategies was to provide Congress and
the public with a comprehensive document identifying current and planned
anti-money laundering (and in 2002, antiterrorist financing) initiatives.
The officials also said that the strategies did identify some top
priorities for each respective year and that the most important priorities
generally were discussed in the each strategy's executive summary.
Nonetheless, the officials acknowledged that, in retrospect, each strategy
probably contained more priorities than realistically could have been
completed during the annual strategy year.
Similarly, Justice and regulatory officials told us that the annual
strategies generally have been too long and included too many initiatives
and priorities to deal with in a given year. The officials noted that the
strategies looked good on paper and contained important issues and
concepts but served more as reference documents than strategies. The
officials said that the annual strategies generally did not affect how
their agencies set policy direction or aligned resources. Also, Justice
officials told us that the strategies generally did not affect field
offices or how field agents conducted their work. Justice and regulatory
officials told us they would prefer a broader, more conceptual and focused
strategy with fewer priorities and more realistic goals that could be
achieved during the year.
Threat and Risk Assessments Have Not Been Used to Assist in Establishing
Priorities
Justice officials noted that target dates for completing strategy
priorities generally were not met, because there were too many priorities
and there was no funding or new resources provided to implement the plan.
Justice officials said that by focusing on too many priorities, the
strategy can divert resources from investigations and other law
enforcement activities.
Our past work in reviewing various national strategies has shown that
threat and risk assessments can serve to better target use of funds, set
priorities, and avoid duplication of effort.30 For example, regarding
federal efforts to combat terrorism, the importance of setting priorities
on the basis of risks was highlighted in our 1998 testimony before the
Subcommittee on National Security, International Affairs and Criminal
Justice, House Committee on Government Reform and Oversight. Our statement
emphasized that
"... a critical piece of the equation in decisions about establishing and
expanding programs
to combat terrorism is an analytically sound threat and risk assessment
using valid inputs
from the intelligence community and other agencies. Threat and risk
assessments could
help the government make decisions about how to target investments in
combating
terrorism and set priorities on the basis of risk; identify program
duplication, overlap, and gaps; and correctly size individual agencies'
levels of efforts."31
However, regarding the annual NMLS, none of the four strategies (1999
through 2002) issued to date was preceded or guided by such an assessment.
Further, in response to our inquiries, Treasury and Justice officials
indicated that the 2003 NMLS would not be based on a formal assessment of
threats and risks.
Law enforcement officials generally had favorable views on the need for
the NMLS to be driven by some consideration of a threat and risk
assessment. Justice officials noted that money laundering investigations
take a lot of expertise, money, and time, and that, in their view, a
formal assessment of threats and risks would help to set NMLS priorities
and assist law enforcement in focusing its limited resources. Justice
officials told us that they drafted a money laundering threat assessment
in late
30U.S. General Accounting Office, Combating Terrorism: Threat and Risk
Assessments Can Help Prioritize and Target Program Investments,
GAO-NSIAD-98-74 (Washington D.C.: Apr. 9, 1998).
31U.S. General Accounting Office, Combating Terrorism: Observations on
Crosscutting Issues, GAO/T-NSIAD-98-164 (Washington D.C.: Apr. 23, 1998).
2002 and circulated it to other law enforcement agencies.32 The officials
planned to use the assessment as a basis for setting 2003 NMLS priorities.
Treasury officials generally agreed with the concept of a money laundering
threat assessment to drive priorities, but told us that the assessment
prepared by Justice was not useful. The officials added that, in their
view, Justice's threat assessment mostly contained information that was
already widely known and, thus, probably was at least implicitly
considered in setting priorities while drafting the 2003 strategy.33
Accountability Mechanisms Have Recently Been Included in the NMLS, But
None Had Yet Been Completed
NMLS Initiatives to Establish Performance Measures Have Not Been Addressed
or Are Ongoing
Our past work in reviewing various national strategies has recognized the
importance of establishing accountability mechanisms to assess resource
utilization and program performance. The 2001 and 2002 strategies
presented various initiatives designed to establish performance measures
related to federal anti-money laundering efforts. As of July 2003, efforts
were ongoing on many of them, while others had not been addressed. Another
potential accountability mechanism required in the Strategy Act was annual
reports to Congress on the effectiveness of anti-money laundering
policies; however, Treasury has not provided such reports.
Establishing and implementing performance measures for the NMLS would
assist in monitoring and evaluating law enforcement and financial
regulatory agencies' anti-money laundering and antiterrorist financing
efforts. The 2001 strategy was the first annual strategy to call for the
creation of performance measures and indicators to evaluate results
against stated goals. The 2002 NMLS continued on the work started under
the 2001 strategy. Both strategies designated components of Treasury and
Justice to co-lead the initiatives. As shown in table 6, the 2002 NMLS
contained five initiatives to measure the effectiveness and results of
federal anti-money laundering activities. As of July 2003, Treasury and
Justice had not yet completed any of these initiatives, although efforts
were still ongoing to complete some of them.
32We reviewed a copy of the draft threat assessment at Justice
headquarters. However, since the document was never finalized or
published, we were not in a position to comment on it.
33As mentioned previously, the 2003 strategy had not yet been issued as of
September 24, 2003.
Table 6: Status of 2002 NMLS Initiatives Designed to Measure Performance
Status 2002 NMLS initiative Target date for completion Target date met?
(as of July 2003)a
Develop a "traffic light" (e.g., red, To be presented in Nob Not addressed
yellow, or green) 2003
system for scoring progress on NMLS NMLS
goals and
providing an indication of where the
strategy stands at
a given point in time.
Devise and implement a uniform case reporting system to measure the
results of federal law enforcement agencies' anti-money laundering
efforts.
22. Consider adapting the case reporting system (1) Not specified Not
applicable (1) Ongoing used by an existing federal agency for use by
federal law enforcement agencies.
23. Develop recommendations for how (2) November 2002 No (2) Ongoing
qualitative
factors, such as case significance, can
be
incorporated into quantitative measures
of
success.
Establish a standardized reporting Not specified Not applicable cOngoing
system for
Treasury and Justice to use to
quantify assets
forfeited or seized pursuant to
money laundering
investigations.
Analyze "cost of doing criminal business" initiatives to Not specified Not
applicable Ongoing
develop a pricing model for laundering money in non-
narcotics-related cases.d
Review the costs and resources devoted to December 2002 No Not addressed
anti-
money laundering efforts. Analyze results
from budget
data requests, and work to ensure that data
requests
relating to work against terrorist
financing are also
incorporated.e
Source: 2002 NMLS and interviews with Treasury and Justice officials.
a"Not addressed" indicates that Treasury and Justice took little or no
action on the NMLS initiative and that no future action is planned.
"Ongoing" indicates that Treasury and Justice had not completed the
initiative by its target date, but that there was ongoing or planned
future work related to the initiative.
bAccording to Treasury officials, the 2003 NMLS will not include the
traffic light scorecard.
cAccording to Treasury officials, the department has had systems in place
to measure assets forfeited or seized pursuant to Treasury's money
laundering investigations. EOUSA officials told us that Justice, EOUSA,
and the U.S. Attorneys Offices-working closely with other Justice law
enforcement agencies-have ongoing efforts to develop a reporting system to
accurately measure assets forfeited or seized. The officials noted that
developing such a system is a complicated and time-consuming process.
Also, the officials said that future efforts to develop a standardized
reporting system inevitably would have to include DHS.
dIn 2001, the Customs Service's Money Laundering Coordination Center
completed a study to determine the percentage commission charged to
launder money in narcotics cases. The study was to serve as a baseline for
tracking changes in the commission rate over time. The 2002 NMLS also
noted that another federal agency had conducted a study relating to the
cost of doing business for alien smuggling. The 2002 strategy called for
FinCEN to lead an effort to examine these business model assessments to
determine if a systematic model could be constructed to apply to all types
of money laundering cases.
eIn 2001, the Office of Management and Budget obtained budget data from
law enforcement and financial regulatory agency units that were involved
in the prevention, investigation, or prosecution of money laundering.
Generally, the purpose of the 2002 NMLS measurement initiatives was to
provide Congress and other policymakers a basis for (1) evaluating federal
agencies' anti-money laundering efforts and results and (2) deciding how
to deploy limited public resources most effectively. For example, the
traffic-light scorecard was intended to provide information on the overall
performance of the federal government's efforts to combat money laundering
and assess how well the government was executing each of the six goals
described in the 2002 strategy (and future strategies). Also, the 2002
NMLS notes that the initiative to review law enforcement and financial
regulatory costs and resources devoted to anti-money laundering activities
was designed to permit Congress and other policymakers to draw informed
conclusions about the effectiveness of those activities.
The 2002 NMLS noted that, while deceptively easy to articulate in the
abstract, the task of developing meaningful performance measures for
federal agencies engaged in combating money laundering has proven to be
quite difficult. Treasury officials also told us that (1) the 2002
strategy was not published until July 2002, which did not leave much time
for either implementation or evaluation and (2) several measurement
initiatives were put on hold pending the reorganization associated with
DHS. Further, the officials noted that Treasury generally had no plans to
report on performance progress (results and accomplishments) made under
the 2002 strategy.
The 2002 strategy did provide, for the first time in an NMLS, some
baseline facts and figures designed to help determine how well the federal
government was succeeding in its efforts to detect, prevent, and deter
money laundering. For example, the strategy published U.S. Sentencing
Commission data for fiscal year 2000 regarding defendants sentenced in
federal court for the principal offense of money laundering. The 2002
strategy noted that the Sentencing Commission data could be tracked over a
period of years and, thereby, serve as one measure for evaluating progress
in combating money laundering.
Treasury Has Not Met the The Strategy Act required that-at the time each
NMLS was transmitted to
Requirement for Annual the Congress (other than the first transmission of
any such strategy)-the
Effectiveness Reports Secretary of the Treasury submit a report
containing an evaluation of the effectiveness of policies to combat money
laundering and related financial
crimes.34 As of July 2003, Treasury had not submitted any effectiveness
reports. Treasury officials said they did not see this as a requirement to
submit a separate report and, in their view, the strategy itself has been
used to report on the effectiveness of the government's anti-money
laundering efforts. The officials explained that the "accomplishment"
sections that were added to the 2002 strategy were intended to meet the
Strategy Act's reporting requirement.
We believe that this information does not fully meet the Strategy Act's
requirement, because the accomplishment sections generally provided
descriptive information about initiatives rather than evaluations of the
effectiveness of policies to combat money laundering and related financial
crimes. For example, an accomplishment section in the 2002 strategy noted
that HIFCA task forces initiated over 100 investigations in 2001, but the
section did not address the effectiveness of the HIFCA concept or the task
forces.
Ways to Incorporate Critical Strategy Components into the NMLS
We identified a number of ways in which the critical components for
national strategies could be incorporated into the NMLS, should Congress
decide to continue the requirement. To incorporate a more clearly defined
leadership structure that has the ability to marshal resources for a
coordinated effort against money laundering and terrorist financing, a
high-level leadership mechanism could be reestablished or a single
official could be designated to carry out this responsibility. The role of
the leadership structure would be to marshal resources to ensure that the
vision laid out in the strategy is achieved, resolve disputes between
agencies, and ensure accountability for strategy implementation. This
leadership mechanism would also be in a good position to evaluate annual
progress and report such progress to Congress, as is currently required of
Treasury. This is especially critical now that there are three principal
departments with anti-money laundering and antiterrorist financing
responsibilities, in addition to the federal financial regulators.
One way to help set clear priorities and focus resources on the areas of
greatest need would be to require that the strategy be linked to a
periodic threat assessment. Such an assessment would outline what the lead
agencies see as the most significant threats. This would provide a better
3431 U.S.C. S: 5341(c).
Conclusions
basis to draft a strategy to address these threats. Performance could be
measured by the level of progress made in combating these threats.
One way to improve accountability for the agencies and regulators
following the strategy would be for the strategy to set broad policy
objectives that leave it to the principal agencies to develop
outcome-oriented performance measures that are linked to the NMLS's goals
and objectives. These performance measures would be reflected in the
agencies' annual performance plans. However, our work showed that,
throughout its history, the NMLS has tried to specify detailed priorities
for each objective, many of which were not accomplished or, in the case of
the financial regulators, would have been accomplished for statutory
reasons even without a strategy.
The annual NMLS has had mixed results in guiding the efforts of law
enforcement and financial regulators in the fight against money laundering
and, more recently, terrorist financing. Through our work in reviewing
other national strategies, we have identified critical components needed
for successful development and implementation; but, to date, these
components have not been well reflected in the annual NMLS. We believe
that incorporating these critical components into the NMLS would improve
its development and implementation. For example, the current NMLS
leadership structure has not reached consensus on the approach the
strategy should take or ensured that goals and objectives are met, and has
failed to issue any of the annual strategies on time. A clearly defined
high-level leadership structure could better ensure that resources are
appropriately marshaled for achieving the strategy's vision and goals.
Also, without an assessment of threats and risks, it is difficult to
determine what the highest-priority activities should be. Linking the
strategy's development to a periodic assessment of threats and risks could
help set priorities and ensure that resources are focused on the areas of
greatest need. Moreover, such assessments could be helpful in tracking
progress made in combating money laundering and terrorist financing.
Furthermore, the establishment of accountability mechanisms could help to
provide a basis for monitoring and assessing NMLS implementation. One
possible mechanism would be linking the relevant agencies' performance
plans more closely to NMLS goals and objectives. Another mechanism would
be to ensure that periodic progress reports are submitted to Congress, as
currently required by the Strategy Act.
In sum, if Congress decides to reauthorize the requirement for an annual
NMLS, adoption of these critical components in the agencies' future
efforts could help to resolve or mitigate the deficiencies we identified.
If Congress reauthorizes the requirement for an annual NMLS, we recommend
that the Secretary of the Treasury, working with the Attorney General and
the Secretary of Homeland Security, take appropriate steps to
Recommendations for
Executive Action
o strengthen the leadership structure responsible for strategy
development and implementation by establishing a mechanism that would have
the ability to marshal resources to ensure that the strategy's vision is
achieved, resolve disputes between agencies, and ensure accountability for
strategy implementation;
o link the strategy to periodic assessments of threats and risks, which
would provide a basis for ensuring that clear priorities are established
and focused on the areas of greatest need; and
o establish accountability mechanisms, such as (1) requiring the
principal agencies to develop outcome-oriented performance measures that
must be linked to the NMLS's goals and objectives and that also must be
reflected in the agencies' annual performance plans and (2) providing
Congress with periodic reports on the strategy's results.
Agency Comments
and Our Evaluation
We provided a draft of this report for review and comment to the
Departments of the Treasury, Justice, and Homeland Security; seven federal
financial regulatory agencies (FRB, FDIC, OCC, OTS, NCUA, SEC, and CFTC);
and the National Security Council.
In written comments, Treasury said that our recommendations for improving
the process for creating the NMLS and enhancing accountability of all
agencies with responsibility for combating financial crimes and the
financing of terrorism are important, should Congress reauthorize the
legislation requiring future strategies. Justice did not specifically
address our recommendations but said that our observations and conclusions
will be helpful in assessing the role that the strategy process has played
in the federal government's efforts to combat money laundering. For
example, Justice concurred with our conclusion that linking the strategy's
development to a threat assessment could help set priorities and ensure
that limited resources are focused on the areas of greatest need. DHS said
that it would work with the Secretary of the Treasury as recommended
and would do its part to implement necessary actions to address concerns
raised in the report.
Treasury, Justice, and DHS said that the lack of funds to finance NMLS
development and implementation was an impediment and that the success of
the HIFCA program in particular would be enhanced by an independent
funding source. While we did not assess the participating agencies'
funding decisions regarding the NMLS or the HIFCA program, our report
acknowledges that federal law enforcement agencies have resource
constraints and competing priorities. We also note, however, that a
primary purpose of the NMLS was to improve the coordination and quality of
federal anti-money laundering investigations by concentrating and
leveraging existing resources, including funding. Further, the report
notes that HIFCA task force officials said that the lack of funding to
compensate or reimburse participating state and local law enforcement
agencies was a barrier to their participation. The 2002 NMLS called for an
interagency team to examine how to fund the colocation of participants in
HIFCA task forces absent funds appropriated for that purpose. At the time
of our review, this initiative had not yet been completed.
Treasury also said that it has satisfied the Strategy Act requirement that
it submit a report to Congress-at the time the NMLS is submitted-on the
effectiveness of policies to combat financial crimes. Treasury said that
(1) evaluations of effectiveness have been contained in the NMLS itself
and (2) any evaluation of effectiveness logically forms a part of the
NMLS. While the annual strategies have contained some useful information
to help Congress better understand programs to combat money laundering and
terrorist financing, the strategies generally have provided descriptive
information about NMLS initiatives rather than evaluations of the
effectiveness of policies. As noted in our report, Treasury and Justice
have efforts under way to measure performance that, when completed, could
provide useful input into an overall evaluation of the effectiveness of
policies to combat financial crimes.
DHS highlighted the value of its Money Laundering Coordination Center,
stating that the center has provided information to DEA, FBI, and other
outside agencies on at least 46 occasions and that DEA was the most active
outside agency user of the center, with at least 21 requests for
assistance. While the sharing of relevant information is commendable, as
mentioned in our report, DEA officials told us that the center does not
meet DEA's needs and that DEA has created a new database for information
on money laundering investigations related to drugs. DHS also provided
additional information on (1) methods used by ICE to coordinate
terrorist financing investigations with other agencies and (2) steps taken
by ICE and the FBI to implement the May 2003 memorandum of agreement
between Justice and DHS regarding roles and responsibilities in
investigating terrorist financing.
The full text of Treasury's, Justice's, and DHS's written comments are
reprinted in appendix IV, V, and VI, respectively. The three departments
also provided technical comments and clarifications, which have been
incorporated in this report where appropriate.
Of the seven federal financial regulatory agencies, four (FRB, FDIC, NCUA,
and SEC) provided technical comments and clarifications, which have been
incorporated in this report where appropriate. The other three agencies
(OCC, OTS, and CFTC) had no comments. FDIC also said that, should a
national money laundering strategy continue, annual goals should be
achievable and roles and responsibilities clearly defined.
The National Security Council did not respond to our request for comments.
As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of this report to
interested congressional committees and subcommittees. We will also make
copies available to others on request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.
If you or your staffs have any questions about this report or wish to
discuss the matter further, please contact Richard M. Stana at (202) 512-
8777 or by e-mail at [email protected] or Davi M. D'Agostino at (202) 512-
8678 or by e-mail at [email protected]. GAO contacts and key
contributors to this report are listed in appendix VII.
Richard M. Stana, Director
Homeland Security and Justice
Davi M. D'Agostino, Director
Financial Markets and Community Investment
Appendix I: Scope and Methodology
To determine agency perspectives on the benefit of the annual National
Money Laundering Strategy (NMLS), we interviewed responsible officials at
and reviewed relevant documentation obtained from the principal law
enforcement components with anti-money laundering responsibilities at the
Departments of the Treasury, Justice, and Homeland Security and the
federal financial regulatory agencies. To determine whether the NMLS has
served as a useful mechanism for guiding law enforcement agencies'
efforts, we (1) compared the structure and operation of High Intensity
Money Laundering and Related Financial Crime Area (HIFCA) task forces to
guidance provided in the strategies, (2) assessed whether the
implementation of NMLS initiatives to enhance interagency coordination has
met strategic goals, and (3) assessed the extent to which the 2002 NMLS
addressed agency roles in combating terrorist financing. To do this, we
interviewed responsible officials and reviewed documentation from the four
primary agencies responsible for investigating money laundering and
related financial crimes-Treasury's Internal Revenue Service-Criminal
Investigation (IRS-CI), Justice's Federal Bureau of Investigation (FBI)
and Drug Enforcement Administration (DEA), and Homeland Security's Bureau
of Immigration Control and Enforcement (ICE).1 For investigations of
terrorist financing, we reviewed the roles and activities of and
interviewed officials from ICE's Operation Green Quest (OGQ) and two FBI
components-Terrorist Financing Operations Section (TFOS) and Joint
Terrorism Task Forces (JTTF).2 Our work with law enforcement agencies was
conducted at the principal federal agencies' headquarters in Washington,
D.C., and at field office locations in three major U.S. financial centers
(Los Angeles, Miami, and New York City).
To determine the role of the NMLS in influencing the anti-money laundering
activities of federal financial regulators, we reviewed their efforts to
carry out the NMLS 2002 goal, "Prevent Money Laundering Through
Cooperative Public-Private Efforts and Necessary Regulatory Measures," and
its earlier iterations. We gathered information on these agencies'
anti-money laundering and antiterrorist financing efforts- including
efforts to implement provisions of the Uniting and Strengthening
1Our work at ICE primarily involved the same Customs Service officials we
contacted at Treasury before they were transferred to Homeland Security in
March 2003.
2OGQ operated through two components-a targeting and coordination center
located in Washington, D.C., and financial investigation groups in 20 U.S.
cities. The FBI's TFOS, also located in Washington, D.C., was created to
provide a centralized component to conduct and coordinate terrorist
financing investigations. The FBI's 66 JTTFs are located throughout the
nation to investigate and prevent acts of terrorism.
Appendix I: Scope and Methodology
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (USA PATRIOT Act)-and determined the influence of
the NMLS on those efforts. We also examined the role the financial
regulators played in supporting Treasury's efforts under the NMLS goal to
strengthen international cooperation to fight money laundering. To do this
work, we interviewed responsible headquarters officials and reviewed
documentation from the Commodity Futures Trading Commission (CFTC),
Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board (FRB),
National Credit Union Administration (NCUA), Office of the Comptroller of
the Currency (OCC), Office of Thrift Supervision (OTS), Treasury, and
Securities and Exchange Commission (SEC). We also interviewed officials
from the law enforcement agencies listed above to assess coordination
between law enforcement and the financial regulators.
To compare NMLS efforts to the components we have found are necessary for
a successful strategy, we reviewed drafts of the strategies from 1999 to
2002, interviewed officials who had been involved in the development and
implementation of the strategies, and compared the results from this work
with findings from our past work reviewing national strategies and their
implementation.
We conducted our work from June 2002 to August 2003 in accordance with
generally accepted government auditing standards.
Appendix II: Legislation Has Expanded the Responsibility to Combat Money
Laundering
The U.S. government's framework for preventing, detecting, and prosecuting
money laundering has been expanded through additional pieces of
legislation since its inception in 1970 with the Bank Secrecy Act (BSA).1
The BSA required, for the first time, that financial institutions maintain
records and reports that financial regulators and law enforcement agencies
have determined have a high degree of usefulness in criminal, tax, and
regulatory matters. The BSA authorizes the Secretary of the Treasury to
issue regulations on the reporting of certain currency transactions. The
BSA had three main objectives: create an investigative audit trail through
regulatory reporting standards; impose civil and criminal penalties for
noncompliance; and improve detection of criminal, tax, and regulatory
violations.
The reporting system implemented under the BSA was by itself an
insufficient response to money laundering because, under the BSA, anybody
who satisfied the reporting requirements would not be subject to money
laundering violations. Thus, Congress enacted the Money Laundering Control
Act of 1986 (MLCA),2 which made money laundering a criminal offense
separate from any BSA reporting violations. It created criminal liability
for individuals or entities that conduct monetary transactions knowing
that the proceeds involved were obtained from unlawful activity and made
it a criminal offense to knowingly structure transactions to avoid BSA
reporting. Penalties under the MLCA include imprisonment, fines, and
forfeiture.
Congress enacted the Money Laundering Prosecution Improvements Act of 1988
to enhance the provisions of the BSA and the MLCA and amended provisions
in both statutes.3 The Improvements Act aimed to increase the cooperation
that the government receives from financial institutions by imposing
liability and fines on facilitators, such as negligent bankers. It also
expanded the definition of a financial institution under the BSA and
permitted government agencies to undertake sting operations.
1Currency and Foreign Transactions Reporting Act (commonly referred to as
the Bank Secrecy Act), Pub. L. No. 91-508, 84 Stat. 1114 (1970) (codified
as amended in 12 U.S.C. S:S: 1829(b), 1951-1959; 31 U.S.C. S:S: 5311-5330.
218 U.S.C. S:S: 1956 -1957 (1994).
3Pub. L. No. 100-690, 102 Stat. 4354-59, 4378 (1988) (codified as amended
in scattered
sections of 12 U.S.C., 18 U.S.C. and 31 U.S.C.).
Appendix II: Legislation Has Expanded the Responsibility to Combat Money
Laundering
The Annunzio-Wylie Anti-Money Laundering Act of 1992 amended the BSA in a
number of ways.4 It authorized Treasury to require financial institutions
to report any suspicious transaction relevant to a possible violation of a
law. It also authorized Treasury to require financial institutions to
carry out anti-money laundering programs and create record-keeping rules
relating to fund transfer transactions. Annunzio-Wylie also made the
operation of an illegal money transmitting business a crime.
As authorized by Annunzio-Wylie, in 1996, Treasury issued a rule requiring
that banks and other depository institutions use a Suspicious Activity
Report (SAR) form to report activities involving possible money
laundering. During the same year, bank regulators issued regulations
requiring all depository institutions to report suspected money laundering
as well as other suspicious activities using this form. The bank
regulators also placed SAR requirements on the subsidiaries, including
broker-dealer firms, of the depository institutions and their holding
companies under their jurisdiction.
The Money Laundering and Financial Crimes Strategy Act of 1998 (Strategy
Act)5 amended the BSA to require the President, acting through the
Secretary of the Treasury, in consultation with the Attorney General and
other relevant agencies, including state and local agencies, to coordinate
and implement a national strategy, produced annually for 5 years beginning
in 1999, to address money laundering. In addition, it requires the
Secretary of the Treasury to designate certain areas as high-risk areas
for money laundering and related financial crimes and to establish a
Financial Crime-Free Communities Support Program. The purpose of
demarcating areas as high risk is to designate the communities that
experience severe problems with money laundering that need more help. The
Strategy Act also authorizes federal funding of efforts by state and local
law enforcement agencies to investigate money laundering activities. In
1999, Treasury consulted with 18 federal agencies, bureaus, and offices in
developing the NMLS. By 2002, that number had increased to over 25. The
Strategy Act provides that the NMLS should include:
4Pub. L. No. 102-550, 106 Stat. 4044-47 (1992) (codified as amended in
scattered sections of 12 U.S.C., 18 U.S.C., and 22 U.S.C.).
531 U.S.C. S:S: 5340-42, 5351-55 (1998).
Appendix II: Legislation Has Expanded the Responsibility to Combat Money
Laundering
1. Goals for reducing money laundering and related financial crimes in
the United States.
2. Goals for coordinating regulatory efforts to prevent the exploitation
of financial systems in the United States through money laundering.
3. A description of operational initiatives to improve the detection and
prosecution of money laundering and related financial crimes and the
seizure and forfeiture of the proceeds derived from those crimes.
4. The enhancement of partnerships between the private financial sector
and law enforcement agencies with regard to the prevention and detection
of money laundering and related financial crimes.
5. The enhancement of cooperative efforts between the federal government
and state and local officials, including state and local prosecutors and
other law enforcement officials; and cooperative efforts among the several
states and between state and local officials, including state and local
prosecutors and other law enforcement officials.
In the wake of the September 11 terrorist attacks, Congress enacted the
Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) on October 25,
2001.6 The passage of the USA PATRIOT Act was prompted, in part, by the
enhanced awareness of the importance of combating terrorist financing as
part of the U.S. government's overall anti-money laundering efforts,
because terrorist financing and money laundering both involve similar
techniques. Title III of the USA PATRIOT Act, among other things, expands
Treasury's authority to regulate the activities of U.S. financial
institutions; requires the promulgation of regulations; imposes additional
due diligence requirements; establishes new customer identification
requirements; and requires financial institutions to maintain anti-money
laundering programs. In addition, title III adds activities that can be
prosecuted as money laundering crimes and increases penalties for
activities that were money laundering crimes prior to enactment of the
6Pub. L. No. 107-56, 115 Stat. 272 (2001).
Appendix II: Legislation Has Expanded the Responsibility to Combat Money
Laundering
USA PATRIOT Act. Further, title III amends various sections of the BSA,
the MLCA, and other statutes. Appendix III contains a detailed summary of
key provisions in title III of the USA PATRIOT Act.
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Revocation of designation
of Ukraine as Effective date:
jurisdiction of primary April 17, 2003
money laundering concern
Would impose special
measures against Nauru,
Proposed rule requiring U.S. financial
institutions to terminate
all correspondent accounts Issuance date:
involving Nauru. April 17, 2003
Foreign corruption (Section 315) Amends 18 U.S.C. S: 1956(c)(7) by
expanding the list of crimes that can trigger U.S. money laundering
prosecutions to include foreign corruption crimes such as bribery and
misappropriation of funds. Also, expands the list of crimes that can
trigger U.S. money laundering prosecutions to include weapons smuggling,
export control violations, certain computer crimes, bribery, and other
extraditable offenses.
Antiterrorist forfeiture protection (Section 316) Authorizes any person
whose property is confiscated as terrorist assets to contest the
confiscation through civil proceedings in the United States.
Long arm jurisdiction over foreign money launderers antiterrorist
forfeiture protection (Section 317) Amends 18 U.S.C. S: 1956(b) by giving
U.S. courts jurisdiction over persons who commit a money laundering
offense through financial transactions that take place in whole or in part
in the United States, over foreign banks with U.S. accounts, and over
foreign persons who convert to their personal use property that is the
subject of a forfeiture order. Allows U.S. prosecutors and federal and
state regulators to use court-appointed receivers in criminal and civil
money laundering proceedings to locate and take custody of a defendant's
assets wherever located. Requires U.S. banks to respond within 120 hours
to a request by a federal banking agency for money laundering information.
Laundering money through a foreign bank (Section 318) Amends 18 U.S. C. S:
1956(c) by prohibiting conducting a transaction involving a financial
institution if the transaction involves criminally derived property.
Explicitly includes foreign banks within the definition of "financial
institution."
Forfeiture of funds in United States interbank accounts (Section 319(a))
Amends 18 U.S.C. S: 981 by closing a forfeiture loophole so that
depositors' funds in a foreign bank housing a U.S. bank account are
subject to the same forfeiture rules as depositors' funds in other U.S.
bank accounts.
Proceeds of foreign crimes (Section 320) Amends 18 U.S.C. S: 981(a)(1)(B)
to authorize the forfeiture of both the proceeds of, and any property used
to facilitate, offenses listed in section 1956(c)(7)(B), if the offense
would be a felony if committed within the jurisdiction of the United
States.
Corporation represented by a fugitive (Section 322) Amends 18 U.S.C. S:
2466 by applying the fugitive disentitlement doctrine to claims filed by
corporations if any majority shareholder, or individual filing the claim
on behalf of the corporation is disqualified from contesting the
forfeiture. It clarifies that a natural person who is a fugitive may not
file, or have another person file, a claim on behalf of a corporation that
the fugitive controls.
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Enforcement of foreign judgments (Section 323) Amends 28 U.S.C. S: 2467 by
allowing the government to apply for and the court to issue a restraining
order to preserve the availability of property subject to a foreign
forfeiture or confiscation judgment.
Consideration of anti-money laundering record (Section 327) Amends 12
U.S.C. S: 1842(e) by requiring U.S. bank regulators to consider when
approving a bank merger or acquisition the anti-money laundering records
of the banks involved.
International cooperation on identification of originators of wire
transfers (Section 328) Requires Treasury to consult with the U.S.
Attorney General and the Secretary of State to take all reasonable steps
to encourage foreign governments to require the inclusion of the name of
the originator in wire transfer instructions sent to the United States.
Criminal penalties (Section 329) Any person who is an official or employee
of any federal agency who, in connection with administration of the
anti-money laundering provisions in the Patriot Act, corruptly receives
anything of value in return for being influenced in the performance of any
official act will be fined, or imprisoned for 15 years, or both.
Amendments relating to reporting of suspicious activities (Section 351)
Amends 31 U.S.C. S: 5318(g)(3) so that any financial institution that
makes a voluntary disclosure of any possible violation of a law or
regulation relating to money laundering is not liable to any other person
for such disclosure.
Penalties for violations of geographic targeting orders (Section 353)
Amends 31 U.S.C. S: 5321(a)(1), 5322, 5324(a), 5326(d). Under prior law
Treasury has had the authority to issue orders requiring any domestic
financial institution in a geographic area to perform additional record
keeping and reporting requirements if reasonable grounds exist for
concluding that additional requirements are necessary to carry out
anti-money laundering requirements. These amendments expand civil and
criminal penalties to include violations of geographic targeting orders
issued and violations of regulations.
Authorization to include suspicions of illegal activity in written
employment references (Section 355) Amends 12 U.S.C. S: 1828 to authorize
certain depository institutions to disclose in a written employment
reference information concerning a possible involvement in potentially
unlawful activity.
Banks secrecy provisions and activities of United States intelligence
agencies to fight international terrorism (Section 358) Amends the Right
to Financial Privacy Act of 1978, 12 U.S.C. S: 3412(a), to allow law
enforcement authorities to obtain financial data related to intelligence
or counterintelligence activities, investigations, or analysis in an
effort to protect against international terrorism.
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Increase in civil and criminal penalties for money laundering (Section
363) Amends 31 U.S.C. S: 5321(a) & 5322 by increasing from $100,000 to
$1,000,000 the maximum civil and criminal penalties for a violation of
provisions added to the Bank Secrecy Act by sections 311 and 312 of the
Patriot Act.
Bulk cash smuggling (Section 371) Adds section 5332 to Title 31 of the
U.S. Code, which makes smuggling large amounts of cash across U.S.,
borders a crime.
Forfeiture in currency reporting cases (Section 372) Amends 31 U.S.C. S:
5317(c), and allows forfeiture of undeclared cash whose source and
intended use cannot be established.
Illegal money transmitting businesses (Section 373) Amends 18 U.S.C. S:
1960 -- which prohibits operation of an unlicensed money transmission
business -- to abolish any requirement that the defendant be aware of the
laws requiring money transmitting licenses.
Counterfeiting domestic currency and 0bligations (Section 374) Amends 18
U.S.C. S: 470, which prohibits the use of electronic images in
counterfeiting.
Counterfeiting foreign currency and obligations (Section 375) Amends 18
U.S.C. S: 478 by providing that the penalties for counterfeiting are
increased (generally to allow a maximum term of imprisonment of 20 years).
Laundering the proceeds of terrorism (Section 376) Amends 18 U.S.C. S:
1956(c)(7)(D) which provides material support to designated foreign
terrorist organizations, as a predicate offense for a money laundering
prosecution.
Extraterritorial jurisdiction (Section 377) Amends 18 U.S.C. S: 1029.
Enhances the applicability of computer fraud by covering offenses
committed outside the United States that involves an access device issued
by a U.S. entity.
Terrorism (Sections 801 to 817) Modernizes anti-terrorism criminal
statutes by, among other provisions, making it clear the crime includes
bioterrorism, mass transit terrorist acts, cyberterrorism, harboring of
terrorists and support for terrorists; that all terrorist crimes serve as
predicate offenses for money laundering prosecutions; and that anti-money
laundering provisions apply to all terrorists assets, including legally
obtained funds, if intended for use in planning, committing or concealing
a terrorist act.
Appendix III: Summary of Key Anti-Money Laundering Provisions in Title III
of the USA PATRIOT Act and Rules
Exclusion of aliens (Section 1006) Permits the United States to exclude
any alien engaged in money laundering from the United States and requires
establishment of a money laundering watch list for officials admitting
aliens into the United States.
(3) Required Reports by Treasury
Report and recommendation (Section 324) Requires Treasury within 30 months
of enactment of the Patriot Act to make a report on operations respecting
the provisions relating to international counter-money laundering measures
and any recommendations to Congress as to advisable legislative action.
Anti-money laundering strategy (Section 354) Amends 31 U.S.C. S: 5341(b)
by directing the Secretary of the Treasury to consider data regarding the
funding of terrorism and efforts directed at the prevention, detection and
prosecution of such funding as topics for the Anti-Money Laundering
Strategy.
Special report on administration of bank secrecy provisions (Section 357)
Treasury must submit a report to Congress relating to the role of the IRS
in the administration of the records and reports on monetary instrument
transactions within 6 months of enactment of the Patriot Act. Report
submitted on April 26, 2002.
Efficient use of currency transaction report system (Section 366) Directs
Treasury to review the cash transaction reporting system to make it more
efficient, possibly by expanding the use of exemptions to reduce the
volume of reports, and to submit a report by October 25, 2002. Report
submitted on October 25, 2002.
(4) Miscellaneous Provisions
Use of authority of United States executive directors (Section 360) Allows
Treasury to instruct the United States Executive Director of each
international financial institution to use the voice and vote of the
Executive Director to support loans and use of funds of respective
institutions or public and private entities within the country if the
President determines that a foreign country has taken actions supporting
the United State's effort to combat terrorism.
Financial crimes enforcement network (Section 361) Amends 31 U.S.C. S: 310
by specifying the responsibilities of FinCEN's director, expanding the
duties of FinCEN, and, giving it statutory authority to perform its
functions.
Establishment of highly secure network (Section 362) Directs Treasury to
establish within FinCEN a highly secure electronic network through which
reports (including SARs) may be filed and information regarding suspicious
activities warranting immediate and enhanced scrutiny may be provided to
financial institutions.
Uniform protection authority for Federal Reserve facilities (Section 364)
Amends 12 U.S.C. S: 248 by allowing law enforcement officers to protect
and safeguard Federal Reserve facilities.
Source: GAO.
Appendix IV: Comments from the Department of the Treasury
Appendix IV: Comments from the Department of the Treasury
Page 68 GAO-03-813 Combating Money Laundering
Page 69 GAO-03-813 Combating Money Laundering
Appendix VI: Comments from the
Department of Homeland Security
Appendix VI: Comments from the Department of Homeland Security
Appendix VI: Comments from the Department of Homeland Security
Appendix VI: Comments from the Department of Homeland Security
Appendix VII: GAO Contacts and Staff Acknowledgments
GAO Contacts Davi M. D'Agostino, (202) 512-8678 Richard M. Stana, (202)
512-8777
Acknowledgments In addition to those named above, Allison Abrams, Thomas
Conahan, Eric Erdman, Barbara Keller, Marc Molino, Jan Montgomery, Robert
Rivas, Barbara Roesmann, and Sindy Udell made key contributions to this
report.
Related GAO Products
Internet Gambling: An Overview of the Issues. GAO-03-89. Washington, D.C.:
December 2, 2002.
Interim Report on Internet Gambling. GAO-02-1101R. Washington, D.C.:
September 23, 2002.
Money Laundering: Extent of Money Laundering through Credit Cards is
Unknown. GAO-02-670. Washington, D.C.: July 22, 2002.
Money Laundering: Oversight of Suspicious Activity Reporting at
Bank-Affiliated Broker-Dealers Ceased. GAO-01-474. Washington, D.C.: March
22, 2001.
Suspicious Banking Activities: Possible Money Laundering by U.S.
Corporations Formed for Russian Entities. GAO-01-120. Washington, D.C.:
October 31, 2000.
Money Laundering: Observations on Private Banking and Related Oversight of
Selected Offshore Jurisdictions. GAO/T-GGD-00-32. Washington, D.C.:
November 9, 1999.
Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering.
GAO/T-OSI-00-3. Washington, D.C.: November 9, 1999.
Private Banking: Raul Salinas, Citibank, and Alleged Money Laundering.
GAO/OSI-99-1. Washington, D.C.: October 30, 1998.
Money Laundering: Regulatory Oversight of Offshore Private Banking
Activities. GAO/GGD-98-154. Washington, D.C.: June 29, 1998.
Money Laundering: FinCEN's Law Enforcement Support Role Is Evolving.
GAO/GGD-98-117. Washington, D.C.: June 19, 1998.
Money Laundering: FinCEN Needs to Better Manage Bank Secrecy Act Civil
Penalties. GAO/GGD-98-108. Washington, D.C.: June 15, 1998.
Money Laundering: FinCEN's Law Enforcement Support, Regulatory, and
International Roles. GAO/T-GGD-98-83. Washington, D.C.: April 1, 1998.
Money Laundering: FinCEN Needs to Better Communicate Regulatory Priorities
and Timelines. GAO/GGD-98-18. Washington, D.C.: February 6, 1998.
Related GAO Products
Private Banking: Information on Private Banking and Its Vulnerability to
Money Laundering. GAO/GGD-98-19R. Washington, D.C.: October 30, 1997.
Money Laundering: A Framework for Understanding U.S. Efforts Overseas.
GAO/GGD-96-105. Washington, D.C.: May 24, 1996.
Money Laundering: U.S. Efforts to Combat Money Laundering Overseas.
GAO/T-GGD-96-84. Washington, D.C.: February 28, 1996.
Money Laundering: Stakeholders View Recordkeeping Requirements for
Cashier's Checks As Sufficient. GAO/GGD-95-189. Washington, D.C.: July 25,
1995.
Money Laundering: U.S. Efforts to Fight It Are Threatened by Currency
Smuggling. GAO/GGD-94-73, Washington, D.C.: March 9, 1994.
Money Laundering: Characteristics of Currency Transaction Reports Filed in
Calendar Year 1992. GAO/GGD-94-45FS. Washington, D.C.: November 10, 1993.
Money Laundering: Progress Report on Treasury's Financial Crimes
Enforcement Network. GAO/GGD-94-30. Washington, D.C.: November 8, 1993.
Money Laundering: The Use of Bank Secrecy Act Reports by Law Enforcement
Could Be Increased. GAO/T-GGD-93-31. Washington, D.C.: May 26, 1993.
Money Laundering: State Efforts to Fight It Are Increasing but More
Federal Help Is Needed. GAO/GGD-93-1. Washington, D.C.: October 15, 1992.
Money Laundering: Civil Penalty Referrals for Violations of the Bank
Secrecy Act Have Declined. GAO/T-GGD-92-57. Washington, D.C.: June 30,
1992.
Tax Administration: Money Laundering Forms Could Be Used to Detect
Nonfilers. GAO/T-GGD-92-56. Washington, D.C.: June 23, 1992.
Money Laundering: Treasury Civil Case Processing of Bank Secrecy Act
Violations. GAO/GGD-92-46. Washington, D.C.: February 6, 1992.
Related GAO Products
Money Laundering: The Use of Cash Transaction Reports by Federal Law
Enforcement Agencies. GAO/GGD-91-125. Washington, D.C.: September 25,
1991.
Money Laundering: The U.S. Government Is Responding to the Problem.
GAO/NSIAD-91-130. Washington, D.C.: May 16, 1991.
Money Laundering: Treasury's Financial Crimes Enforcement Network.
GAO/GGD-91-53. Washington D.C.: March 18, 1991.
(440144/250117)
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