Sunday, March 14, 2010
Guest Blogger Todd Foster (Cohen, Foster, Romine P.A.)
On 2/10/10, the Financial Crimes Enforcement Network (Fincen) announced a final rule amending the Bank Secrecy Act information sharing rules to allow certain foreign, state, and local law enforcement agencies to submit confidential requests for information to American financial institutions. [See 31 CFR 103.100]
Under the new Rule, foreign, state and local law agencies may petition Fincen to require financial institutions to disclose if they maintained an account or conducted a transaction with a person certified by that law enforcement agency to be "reasonably suspected" of engaging in terrorist or significant money laundering activities. The requesting agency must also certify that they have been unable to locate the information being sought through traditional methods of investigation. The financial institution is prohibited from disclosing Fincen's request to the client.
This means, that upon proper certification (which is not to be confused with a proffer of admissible evidence, an independent finding of probable cause or a grand jury subpoena), agencies can secretly receive account and transaction information on depositor accounts.
While the motivation for this Rule is good, the means of achieving its purpose are far too broad. Some greater standard of proof should be required before any of the multitude of qualifying agencies can receive this private information.
Even George Orwell did not see this coming.