Money Laundering Financial Laws Transactions U.S Bank Secrecy

Money laundering "presents" (represents; is) a major problem for the government, so the United States has "enacted," or created, many laws to "prevent' (not allow something to happen) money laundering.

Beginning in 1970, the U.S. Congress passed several laws known as the Bank Secrecy Act, which requires "financial institutions" (banks and related companies) to "report" (officially provide information about) certain types of financial transaction that may be involved in money laundering. For example, banks have to report cash transactions "in excess of" (that are larger than) $10,000. Financial institutions are regularly "audited" (examined in detail) to make sure they are following the Bank Secrecy Act.

Reports of "potential" (possible) money laundering activities are entered into a large "database" (an organized way of storing electronic information) operated by the Financial Crimes Enforcement Network. The database is made available to "investigators" (people who are researching something) around the world.

The Bank Secrecy Act also requires that financial institutions "conduct due diligence" (engage in appropriate and sufficient research) to know their customers, understanding their "business model" (how they do business and make money) and the types of transactions they are involved in. Any "suspicious" (making people question whether something in honest or good) transactions must be reported in a Suspicious Activity Report.

U.S. laws also "restrict" (control or limit) the movement of large amounts of "currency" (cash) across borders. People crossing international borders with more than $10,000 in cash must "complete" (fill out and submit) a Report of International Transportation of Currency or Monetary Instruments. In 1986, the Money Laundering Control Act was enacted to "prohibit" (not allow) people to participate in financial transactions dealing with funds obtained through illegal activities.