The rise of online vendors offering to buy bulk gift cards is drawing the attention of investigators who believe the nascent industry may serve as an avenue for money launderers.
Lobbying by the world's largest stored value payment facilitator has indefinitely delayed, and perhaps permanently blocked, a plan to give customs officials the ability to read prepaid cards, say sources.
American officials will begin field-testing prepaid card readers at U.S. border stops next month as part of the lead-up to the Treasury Department regulations governing their cross-border transport, say officials.
Disputes and confusion over which companies will be responsible for anti-money laundering rules on stored value products has delayed federal registration and oversight of the sector, say industry representatives.
Displeased with proposed regulations, federal and state law enforcement officials are asking lawmakers and the U.S. Treasury Department to strengthen controls on the cross-border movement of prepaid access products.
Several banks are asking the U.S. Treasury Department's financial crimes bureau for the unthinkable: more anti-money laundering compliance responsibilities.
Money services businesses and sellers of stored value cards will know this summer whether final rules by the U.S. Treasury Department will increase their anti-money laundering compliance duties and costs.
Concerns about drug cartel money smuggling could shape expected U.S. Treasury Department compliance rules on how companies should treat stored value cards, according to investigators.
The U.S. Treasury Department will miss a Feb. 22 deadline set by Congress to implement rules subjecting stored value cards to the Bank Secrecy Act, according to consultants and bank lobbyists.
Banks have various levels of satisfaction with their transaction monitoring systems and rely on employee referrals for the best indications of suspicious activity, according to a U.S. Treasury Department report.
Money services businesses do not need to keep separate bank accounts for their different business lines to comply with the Bank Secrecy Act, according to a U.S. Treasury Department ruling.
The European Union proposed rules Tuesday on how electronic money might be issued, a step meant to further expand the market for prepaid and stored value payment products.
Merchants and automatic teller machines that help customers reload stored value cards do not necessarily qualify as money services businesses subject to anti-money laundering regulations, the U.S. Treasury Department said.
The U.S. Treasury Department's financial intelligence unit did not meet a number of its 2007 goals, including finalizing anti-money laundering rules for investment and commodity trading advisors, a government report released Wednesday revealed.
U.S. Senator Charles Grassley, who last year proposed a bill that would expand the power of prosecutors to include money laundering charges in a criminal case, will amend the proposal to account for "new and emerging trends," in stored value and prepaid cards and other issues.
Financial institutions introducing the popular programs should review the hiring practices and other due diligence procedures of the employers seeking to participate in the programs, compliance professionals say.
Because AML regulation for cards is "unclear," they "provide an ideal laundering instrument to anonymously move monies associated with all types of illicit activity, without fear of documentation, identification, law enforcement suspicion, or seizure," according to a federal government report.
Stored value cards, which can be obtained with virtual anonymity and are emerging as a cash alternative for millions of unbanked consumers, have been identified as an emerging money laundering threat by the U.S. government in a new report.