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Government cracks down on money laundering

May 19, 1997
Web posted at: 10:23 p.m. EDT (0223 GMT)

WASHINGTON (CNN) -- In a move designed to crack down on money laundering by drug traffickers, federal officials will require firms that transmit cash outside the U.S. to report all transfers of $750 or more.

The new rules mark a dramatic change from the current requirement that Western Union, small check-cashing services and other non-banking institutions report international transfers of $10,000 or more. Officials say drug traffickers have been able to transfer billions of dollars in drug proceeds to Colombia and elsewhere by sending increments of just under $10,000.

Banks will not have to file government forms for out-of-country transfers of under $10,000 but current regulations require them to inform government officials of suspicious transactions. Officials say the regulations will take affect in 90 days, following a required public comment period.

Treasury law enforcement authorities say the new rules were tried in New York City on an experimental basis, and led to a sharp increase in federal seizures of drug money.

 
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