Homeland Terrorism Security - Essay Example

The major Federal legislation on terrorist financing includes The Bank Secrecy Act, the International Emergency Economic Powers Act, The Money Laundering Control Act, The Annunzio-Wylie Anti-Money Laundering Act, the Money Laundering Suppression Act, The Money Laundering and Financial Crimes Strategy Act, Title III of the USA Patriot Act, The Suppression of the Financing of Terrorism Convention Implementation Act and The Intelligence Reform and Terrorism Prevention Act of 2004 (GAO, 2004).

Passed in 1970, BSA has the major money laundering provisions focusing on financial institutions’ record keeping thereby enabling federal officials to apprehend criminals by tracing money trails. The legislation makes it mandatory for financial institutions to file reports for cash transactions that exceed the amount set by the Secretary of the Treasury which is $10,000 (GAO, 2004).

Under the IEEPA enacted in 1977, the president has the power to declare a national emergency in cases of threats to the US national security, economy or foreign policy. These powers include; the ability to prohibit any transaction in foreign exchange, the ability to seize foreign assets under US jurisdiction, to prohibit the import or export of foreign currency and to prohibit transactions which involve foreign currency between financial institutions (GAO, 2004).

Passed by Congress in 1986, the Money Laundering Control Act criminalizes any activities related to money laundering defined as carrying out financial transactions with property that is known to be derived from unlawful activities or attempts to conceal such activity.  The legislation prescribes three specific types which include; domestic, international and attempted money laundering uncovered as a part of a larger sting operation (GAO, 2004).

The legislation passed in 1992 increased the penalties for depository institutions that are found to have violated any of the anti-money laundering laws. The legislation also authorizes the Secretary of the Treasury to require filings of Suspicious Activity Reports (SARs) from financial institutions. It also gives the Federal Deposit Insurance Corporation (FDIC) authority to terminate federal insurance for any banks and financial institutions found guilty (GAO, 2004).

Passed in 1994, the legislation mandated certain exemptions from reporting requirements to reduce the number of CTR filings by 30%. This was a result of excess filings in the early 1990s when the number of currency transaction reports filed greatly surpassed the ability of regulators to analyze them. The statute provides for all money-transmitting businesses to register with the treasury secretary (GAO, 2004).

The legislation was initiated by Congress to develop a national strategy for combating money laundering. The legislation stipulates that the Treasury Secretary in consultation with the Attorney General must prioritize money laundering enforcement areas by identifying certain areas as high-risk money laundering and related financial crime areas (GAO, 2004).

Passed following the September 11, 2001, terrorist attack, title III of the act enables the Treasury Secretary to require at certain times, financial institutions to take special measures should the secretary conclude that specific regions, transactions or financial institutions are primary money laundering concern (Kaplan, 2006). The act empowers the Treasury Secretary to prohibit or restrict the opening of payable through and correspondent accounts besides; it requires U.S financial institutions to establish internal procedures to detect money laundering through the accounts (GAO, 2004).

The act which came into effect in 2002 made it a crime to provide or collect funds to support terrorist activities or even to conceal such efforts. This was in an attempt to implement the International Convention for the Suppression of the Financing of Terrorism (GAO, 2004). The legislation applies regardless of whether the offence is committed in the United States or whether the accused is an American Citizen.

Finally, the Intelligence Reform and Terrorism Prevention Act of 2004 established a highly secure network under the watch of the Treasury Secretary (GAO, 2004). The network’s purpose is to provide information to financial institutions about patterns of suspicious activities gathered from the reports. The legislation requires the treasury secretary to issue regulations that mandate reporting of cross-border money financial transmittals by selected financial institutions.

Although adequate legislation has been passed, there is a need for improvement. A more legal framework which targets the Internal Revenue Service (IRS), the primary body responsible for administering all taxes and fees needs to be developed (Kaplan, 2006). This would increase the Federal government’s capacity to uncover, staunch or disrupt the flow of funds to terrorist groups. Local law enforcement agencies must also play a critical role in helping the federal government, especially in counterterrorism and counterintelligence. The Federal government should improve their working relationship with local law enforcement by providing them with more information about terrorist suspects and their financial infrastructure within the locality. They can also work hand in hand carrying out joint participation, liaison and outreach programs with the local officials (Kaplan, 2006). The FBI is the primary agency that leads most domestic and international groups to coordinate activities related to terrorist financing. More information sharing and inter-agency coordination would ensure better results are achieved.