US Senate hears of USA PATRIOT Act progress.

The US Senate does not like bad news. And when it is Sarbanes in the Chair, bad news is especially unwelcome. So it was that a stream of representatives of corporate America appeared before the Senate committee that has responsibility for much of the work done in connection with the US banking sector.

It is, indeed, that committee that recieved the reports of Senator Carl Levin, and it is Levin's hand that is so clearly visible in the section of the USA PATRIOT Act that deals with correspondent banking.

And it is Sarbanes and Oxley who have produced their own Act to deal with scoundrels in American business. Also on the Senate Banking Committee is Senator Gramm (of the Gramm-Leach-Bliley Act which made significant changes to the permitted structure of US financial services businesses. An appearance before this Committee is a big deal.

National Association of Security Dealers (NASD) representative Elisse B Walter made reference to a case in which structured transactions were used to avoid internal reporting systems and another where a series of cashier's cheques (all under USD700) were used to build up a credit of just under USD10,000 which was then wired overseas. She highlighted the weakness in the US system (which will change under the USA PATRIOT Act) of requiring voluntary Suspicious Transaction Reports (SARs in the USA) be saying that the company did not make any voluntary reports. Soon, that discretion will be removed.

Mr Alvin James, now of Ernst and Young, referred to his time at FinCEN - and in doing so did as is seemingly obligatory for FinCEN staff both former and current - made specific reference to "The Black Market Peso Exchange." The constant repetition of this (and it is wheeled out at conferences, in papers and in all manner of other outlets) seems to suggest that FinCEN is a one hit wonder, which is simply not true.

In interview with World Money Laundering Report in Volume 1, no. 1, James Sloan, Director of FinCEN said that he wanted FinCEN to be the central repository of information for all agencies so that they could all work together. Alvin James, before the Senate, reiterated that by saying " What is even more troubling is the spirit of competition rather than cooperation fostered by these strategies of prosecution. There is little incentive to cooperate when eventually only one agency will be credited with the prosecution."