International efforts to crack down on bank secrecy abuse remain stymied, with few tax evaders opting to move their money out of traditional European and offshore tax havens, according to analysts.
Poorly thought out responses to law enforcement requests for additional information on suspicious activity can end up exposing banks to civil lawsuits or regulatory actions, according to compliance professionals.
As lawmakers and banking compliance professionals turn their attention to the burgeoning credit crisis, the Federal Deposit Insurance Corp. has issued a dozen Bank Secrecy Act-related enforcement actions, serving to warn institutions not to skimp on their anti-money laundering efforts.
FinCEN, which drew its conclusions from a review of filings mostly from money service businesses, said other common errors included missing or inaccurate identifications, telephone numbers, Social Security numbers and other data.
Insurers were on pace to file 280 for the year ended this month, according to a FinCEN study issued last week. That compares with 5,723 SARs submitted by money services businesses in 2002, and 4,267 by securities and futures dealers in 2003, the first years those industries had to file the reports.
The quality of suspicious activity reports targeting terrorism is improving as the volume decreases, U.S. Treasury Undersecretary Stuart Levey said.
The total number of suspicious activity reports filed since SAR reporting was mandated for U.S. banks in 1996 is nearing 1.2 million, with almost half of these reporting Bank Secrecy Act, structuring and money laundering violations.