U.S. and European Approaches to Combating Money Laundering Through Financial Institutions

Until recently, U.S. banking regulators’ anti-money-laundering efforts relied heavily on regulations requiring financial institutions to routinely report currency transactions that exceed $10,000, primarily through filing currency transaction reports (CTR) with the IRS. U.S. Review of Some Overseas Bank Branches Faces Obstacles

According to U.S. banking regulators, bank privacy and data protection laws in some countries serve to prevent U.S. regulators from examining U.S. bank branches located within their borders. While European law enforcement officials acknowledged the important role U.S. law enforcement agencies play in criminal investigations involving money laundering, some commented about the difficulties of dealing with multiple agencies. This overlap makes it difficult, in some money-laundering inquiries, to determine which U.S. agency they should coordinate with. International Arrangements to Combat Overseas Money Laundering

The United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-money-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations.
Why GAO Did This Study

GAO discussed U.S. efforts to combat money laundering abroad.

What GAO Found

GAO noted that: (1) U.S. bank regulators rely on financial institutions' reporting currency transactions that exceed $10,000, involve known or suspected money laundering, or are inconsistent with the account holder's stated business; (2) European countries focus their anti-laundering efforts less on routine currency transaction reports and more on reports of suspicious activities; (3) host countries' anti-laundering and bank privacy and protection laws, to which overseas branches of U.S. banks must adhere, sometimes hinder U.S. bank regulators' reviews of overseas branches, and examinations of overseas banks tend to be more narrowly scoped; (4) while European law enforcement officials acknowledged the important role of several U.S. law enforcement agencies in anti-laundering activities, they also indicated that it was difficult to determine which U.S. agency they should coordinate efforts with; and (5) the United States works with other countries through multilateral and bilateral treaties and arrangements to establish global anti-laundering policies, enhance cooperation, and facilitate the exchange of information on money-laundering investigations.