Kenneth Rijock

Kenneth Rijock

Tuesday, April 21, 2015

TRADE-BASED MONEY LAUNDERING: FINCEN ISSUES TARGETING ORDER AGAINST MIAMI EXPORTERS


The Financial Crimes Enforcement Network (FinCEN) has issued as Geographic Targeting Order, directed against the estimated seven hundred commercial exporters whose offices are in the area surrounding Miami International Airport (MIA).The purpose of the order is to identify trade-based money laundering activities in the Miami area. The identifier for these reports is DORALGTO1. Doral is the name of the area just west of MIA; it is also a municipality with a large Venezuelan population. Do the math, and you will understand who the targets are, and why.

The immediate impact of the Order, which takes effect on April 28, and remains active for 180 days:

(1) The $10,000 regulation, on filing Form 8300 on cash transactions, drops to only $3,000.
(2) Cash transactions include cashier's checks, money orders, and traveler's checks.
(3) Valid, government-issued photographic identification must be obtained from the customer.
(4)  The name, address and telephone number of the individual receiving the goods.
(5) There are civil & criminal penalties for failure to comply with this Order.

If you wanted to know whether any of your bank clients are included in the Order, it constitutes all businesses located in the ZIP codes: 33172, 33178, 33166, 33122 and 33126. The affected areas include those on the map, in beige, in the western part of Miami-Dade County(left-hand side of image).

Miami ZIP Codes
Trade-based money laundering is one of the preferred methods through which money launderers for narcotics trafficking organizations repatriate drug profits to Latin America. Until now, most US law enforcement efforts in this area have not been effective, due in part to the vast number of exporters operating in the Continental United States.

Readers who may have clients affected by this GTO are advised to review the complete text, which can be accessed here*. Clients should be notified, and urged to comply, lest their companies be assessed large civil penalties; the individuals in charge who fail to follow the GTO could be charged with a crime in Federal Court. Compliance officers should be especially alert for foreign nationals with an urgent need to open a new account, for checks from regular business accounts are not included in the definition of "Currency" requiring the filing of 8300s. Such clients would also have to "smurf" small amounts of cash, repeatedly, into those new accounts.

The last GTO, which targeted Los Angeles-area businesses, turned out to be to be an extemely successful operation; given that Miami is the epicenter of exports to Latin America and the Caribbean, one should expect that there will be a large number of civil and criminal charges filed.  
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*Miami Geographic Targeting Order




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