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- The Bank Secrecy Act (BSA) (1970) Also known as the Currency and Foreign Transactions Reporting Act, the BSA was the first landmark legislation formed to prevent criminals from obscuring the origins of criminal proceeds through banks and other financial institutions.
- The Money Laundering Control Act (1986) The Money Laundering Control Act of 1986 made money laundering a federal crime and aimed to encourage foreign cooperation toward eradicating the drug trade.
- The Anti-Drug Abuse Act (1988) The Anti-Drug Abuse Act of 1988 was enacted as part of the U.S.’ s so-called “War on Drugs.” The Act amended the Bank Secrecy Act in expanding the definition of financial institutions to include auto dealers and real estate entities, who were thereafter required to disclose the transaction of large sums.
- The Annunzio-Wylie Anti-Money Laundering Act (1992) As a response to a large international bank being a hotbed for money laundering, the Annunzio-Wylie Anti-Money Laundering Act of 1992 (the Act) raised the stake for banks.
Money laundering is the process of making illegally-gained proceeds (i.e. "dirty money") appear legal (i.e. "clean"). Typically, it involves three steps: placement, layering and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system.
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- The Start of Us Anti-Money Laundering History: The Bank Secrecy Act, 1970
- Supreme Court Challenge
- Law Enforcement Access to Bank Records
- Suspicious Activity Reports
- USA Patriot Act
- Amla Act
- The Future of Amla
- The Next Frontier: Crypto
In 1970, Congress passed the Currency and Foreign Transactions Reporting Act – known as the Bank Secrecy Act (BSA) – introducing specificrecord-keeping and reporting obligationsfor US banks and financial institutions. The BSA was one of the world’s first pieces of dedicated AML legislationand is still the principal US lawfor preventing money launde...
President Nixon signed the BSA into law on October 26, 1970, though it faced constitutional questions and challenges for many years. The most notable challenge wasthe California Bankers Association v Schulz, which the US Supreme Court heard in 1973. The challengers claimed that sections of the BSAviolated the US Constitutionon First, Fourth, and Fi...
A second significant Supreme Court challenge occurred in 1976 – the United States vs. Miller. In the original bootlegging case, law enforcement authorities had obtained defendant Mitch Miller’s bank records without his consent to secure a conviction. After a 5th Circuit appeal ruled that Miller’s 4th Amendment rights had been violated because a man...
In 1996, reporting suspicious activity was standardized in an amendment to the BSA. Suspicious Activity Reports (SARs) have replaced the criminal referral reporting systemsince 1984. While SARs were initially filed on paper, the Financial Crimes Enforcement Network (FinCEN) – the designated administrator of the BSA – transitioned to online filing i...
The September 11, 2001 terror attacks saw the US government take steps to detect and prevent the financing of terrorism through theUSA Patriot Act. The Patriot Act strengthened and expanded the reporting and record-keeping mandate of the BSA, and the requirement for firms to implement their AML programs, with appropriate internal policies, controls...
The most recent and significant development in AML/CFT legislation in the US was the passage of the Anti-Money Laundering Act 2020(AMLA), enacted on 1 January 2021. AMLA strengthens and modernizes the BSA by addressing the money laundering threats posed by shell companies and emerging technologies such as cryptocurrencies. The key BSA provisions of...
The political discourse surrounding the BSA reflects the fundamental importance of financial information to AML/CFT compliance objectives. While it has been a long road, the BSA has not just led to the introduction of AMLA but has influenced the development of AML/CFT legislation worldwide. In particular, the regulatory principles of the BSA helped...
In March 2022, President Biden issued a long-awaited Executive Order(EO) detailing comprehensive plans to create a framework for regulating crypto assets in the US. The EO represented the first whole-of-government approach by the US to address the emerging risks and harness the potential benefits of digital assets and their underlying technology. T...
Although it lacks evidence, it is a widespread belief that the term comes from the notorious Prohibition-era gangster Al Capone, who allegedly used laundries as cover firms to hide his illegal revenues.
History of Money Laundering in the USA. 1920s – Prohibition Era; Al Capone. 1940s – Meyer Lansky and Benjamin “Bugsy” Seigel. 1970s and 1980s – Large currency deposits of illicit profits; drug trade. 1990s – Government turned its focus to Money Services Businesses (MSB)
Mar 11, 2024 · The history of money laundering traces back to over 2000 years ago when wealthy Chinese merchants, according to historian Sterling Seagrave, started to ‘clean’ their profits as a way to circumvent regional trading bans.
Nov 25, 2015 · U.S. money laundering itself dates back to the early 1920s, when members of the Mafia (organized crime) were earning huge sums of cash from illegal gambling, bootleg liquor and other underground...
