According to Treasury  Department officials, the U.S. interagency community has been acting to  accomplish the goals articulated in section 330 through its interactions  with FATF and the FATF-style regional bodies to ensure global  compliance with international standards for combating money laundering  and terrorist financing. Subsequently, at its most recent plenary meeting  (October 12 to 14, 2005), FATF noted that “formal endorsement of the  FATF standards by the U.N. Security Council is a major step toward  effective implementation of the Recommendations throughout the world.”
Regarding the U.S. government’s continuing efforts to actively engage and  negotiate with foreign jurisdictions as encouraged by section 330,  Treasury’s Office of Terrorist Finance and Financial Crime said that  outreach to the international community to enhance global best practices  to combat money laundering and terrorist financing involves various  challenges. In sum, the Treasury officials stressed that enactment of  section 330 provided a welcomed congressional endorsement of long- standing U.S. government policy and also provided a stimulus for  continued efforts in negotiating with foreign jurisdictions. Given the significant growth in the number of FIUs  recognized by the Egmont Group, which now totals 101, more attention is  being focused on improving the capabilities of existing units, especially in  reference to combating terrorist financing—an operational task now  included in the Egmont Group’s definition of an FIU. 1). Further, the growth in the number of FIUs is attributable partly to federal  interagency efforts, including training and technical support provided by  FinCEN and Treasury’s Office of Technical Assistance, as well as funding  provided by the State Department. As a member of the Egmont Group  since 1995, FinCEN in particular has focused its global efforts on assisting  jurisdictions establish new FIUs and improving existing units. In January 2006, to enhance its  support role, FinCEN assigned an analyst to the FBI’s Terrorist Financing  Operations Section. Further, FinCEN is allocating additional staff  resources to facilitate responding to foreign requests for assistance and is  developing a new case management system. Future surveys would need to be more inclusive and  incorporate better survey development and administration practices, such  as follow-up efforts to achieve higher response rates, if the surveys are to  serve as a useful management information tool for monitoring and  enhancing performance. Such tools are particularly  relevant for FinCEN, a networking organization that has a significant role  and responsibilities in combating international financial crime. One management priority of FinCEN is to periodically conduct customer  satisfaction surveys. Under section 361, how has FinCEN contributed to establishing FIUs in  foreign countries and enhancing the capabilities of these units to  combat money laundering and terrorist financing? What actions is FinCEN taking to maximize its performance as a global  partner in combating money laundering and terrorist financing? Treasury Department Efforts to Accomplish Goals Articulated under Section 330 of the USA PATRIOT Act

Regarding section 330 of the USA PATRIOT Act, to determine how the  Department of the Treasury has interacted or negotiated with foreign  jurisdictions to promote cooperative efforts to combat money laundering  and terrorist financing, we interviewed responsible officials at and  reviewed relevant documentation obtained from the departments of the  Treasury, Justice, and State and the Federal Reserve Board. Actions FinCEN Is Taking to Maximize Its Performance as a Global Partner in Combating Money Laundering and Terrorist Financing

We inquired about FinCEN’s efforts to update or modernize the Egmont  Secure Web, which is the Internet-based communications system  developed and maintained by FinCEN and used by FIUs worldwide to  share or exchange information.
Why GAO Did This Study

Money laundering and terrorist financing can severely affect the nation's economy and also result in loss of lives. To combat these transnational crimes, the Treasury Department (Treasury) and its component bureau, the Financial Crimes Enforcement Network (FinCEN), have key roles. Section 330 of the USA PATRIOT Act encourages the federal government to engage foreign jurisdictions in negotiations to ensure that foreign banks and financial institutions maintain adequate records to combat international financial crime. Treasury plays a lead role in facilitating such efforts. In accordance with its various responsibilities codified by section 361, FinCEN is to coordinate with its foreign counterparts--financial intelligence units (FIU). This report describes (1) Treasury's approach for negotiating with foreign jurisdictions, (2) how FinCEN has contributed to establishing FIUs in foreign countries and enhancing the capabilities of these units, and (3) what actions FinCEN is taking to maximize its performance as a global partner.

What GAO Found

With Treasury's leadership, the U.S. interagency community has been acting to accomplish the goals articulated in section 330 of the USA PATRIOT Act. In particular, according to Treasury, negotiations with foreign jurisdictions are being accomplished through U.S. interactions with the Financial Action Task Force on Money Laundering (FATF), an intergovernmental entity that has developed international standards for combating money laundering and terrorist financing. Treasury emphasized that enactment of section 330 provided a welcomed congressional endorsement of long-standing U.S. policy to combat international financial crime by negotiating with foreign jurisdictions through multilateral organizations, such as FATF. Since its formation in 1995, FinCEN has helped foreign jurisdictions establish new FIUs and improve the capabilities of existing units. The number of FIUs has jumped from 14 in 1995 to 101 currently, partly because of training and technical support provided by FinCEN and Treasury's Office of Technical Assistance and funding provided by the Department of State. Given the growth in the number of FIUs, future efforts likely will involve giving more attention to improving the capabilities of existing units, especially in reference to combating terrorist financing--an operational task now included in the formal definition of an FIU. To maximize performance as a global partner, FinCEN is taking various actions, such as assigning an analyst to the Federal Bureau of Investigation's Terrorist Financing Operations Section. Also, FinCEN is modernizing the Egmont Secure Web, which is used by FIUs worldwide to exchange sensitive case information. To enhance its responsiveness to FIUs that request case assistance, FinCEN is allocating additional staff to its Office of Global Support and also is developing a new case management system. However, in the most recent customer satisfaction survey, FinCEN invited less than one-half of FIUs to participate and received only two responses. Future surveys would need to be more inclusive and incorporate better survey development and administration practices, such as follow-up efforts to achieve higher response rates, if the surveys are to serve as a useful management information tool for monitoring and enhancing performance.