Popular Question - What does the Patriot Act mean to me?
The Patriot Act: Banks, pharmacies and other businesses are using the Patriot Act to demand my social security number and other private financial or medical information, At the same time, I hear about identity theft in the media. What's going on, and what should I do? What does the Patriot Act mean to me?
Background: The Patriot Act was passed into law on October 24, 2001, just six weeks after the events of 9/11. The Act was recently extended and updated. You can read the Patriot Act online at this site: www.epic.org.
Background: The Patriot Act was passed into law on October 24, 2001, just six weeks after the events of 9/11. The Act was recently extended and updated. You can read the Patriot Act online at this site: www.epic.org.
- For: The US Department of Justice provides the argument in favor of the Patriot Act at a site: www.lifeandliberty.gov that also gives the history of the act and updates to it.
- Against: For the other side of the picture, read analysis from the Electronic Freedom Foundation at: www.eff.org. This site also tracks new developments with the Patriot Act. National Public Radio maintains a page with current news and updates on the USA Patriot Act.
Financial Transactions
The sections of the Patriot Act that deal with financial transactions fall under Title III, which is also known as the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001. It stands on its own as a separate act of Congress as well as being part of the Patriot Act, and is an amended version of the 1986 Money Laundering Control Act and the 1970 Bank Secrecy Act. The earlier acts tended to focus on preventing money laundering and international cash flow as it related to the drug trade, or to gambling, smuggling, and other types of criminal activity. In the 2001 version, the focus has shifted towards money laundering as a means of financing international terrorism.
The current act encourages financial institutions to collect certain data to identify customers and their transactions in case any of the activity should be flagged as “suspicious” by a government agency. “Suspicious” in most cases means involving any foreign nationals or corporations. The Patriot Act considers any such accounts or transactions worthy of intense scrutiny. (Although the scrutiny will, of course, be more severe for certain nationalities than for others.)
What if you are a US-born, US citizen, do not have any offshore accounts, and are not involved in any type of criminal activity? If you’d just like to open a bank account or engage in another banking transaction, can a bank force you to provide your social security number? How about fingerprinting you? Are either of these strictly required by law? Not exactly – although if you do not wish to provide your social security number you will have to obtain an alternate taxpayer identification number. This information (along with your name, address, and date of birth) is used as part of the required Customer Identification Program (CIP) used to verify customer identity (and to compare customer information with lists of known terrorism suspects). Such information may also be required by other money service businesses such as currency exchanges.
Fingerprints are not a requirement of the Patriot Act, and they are certainly not required by all financial institutions – so if your bank insists on this procedure, you may wish to take your business elsewhere.
Cash Transactions
Cash transactions are certainly not prohibited, but they bring more government scrutiny, and they are now more inconvenient for certain vendors to process. If you deposit, withdraw, or make a purchase involving more than $10,000 in cash in one day, the other agency involved has to file a Currency Transaction Report (CTR) with the IRS that reports details such as your name, address, and taxpayer identification number. If you purchase over $3,000 of traveler’s checks, money orders, or cashier’s checks, such a transaction will also be reported to the IRS via a Monetary Instrument Log (MIL). And should you engage in any activity that indicates you may be engaged in money laundering or otherwise violating the law, your transaction may even trigger a Suspicious Activity Report (SAR). The SAR will be filed without your knowledge – it is, in fact, against the law for you to be informed of the SAR as your knowledge would compromise the subsequent investigation.
Resource: http://www.askquestions.org
The sections of the Patriot Act that deal with financial transactions fall under Title III, which is also known as the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001. It stands on its own as a separate act of Congress as well as being part of the Patriot Act, and is an amended version of the 1986 Money Laundering Control Act and the 1970 Bank Secrecy Act. The earlier acts tended to focus on preventing money laundering and international cash flow as it related to the drug trade, or to gambling, smuggling, and other types of criminal activity. In the 2001 version, the focus has shifted towards money laundering as a means of financing international terrorism.
The current act encourages financial institutions to collect certain data to identify customers and their transactions in case any of the activity should be flagged as “suspicious” by a government agency. “Suspicious” in most cases means involving any foreign nationals or corporations. The Patriot Act considers any such accounts or transactions worthy of intense scrutiny. (Although the scrutiny will, of course, be more severe for certain nationalities than for others.)
What if you are a US-born, US citizen, do not have any offshore accounts, and are not involved in any type of criminal activity? If you’d just like to open a bank account or engage in another banking transaction, can a bank force you to provide your social security number? How about fingerprinting you? Are either of these strictly required by law? Not exactly – although if you do not wish to provide your social security number you will have to obtain an alternate taxpayer identification number. This information (along with your name, address, and date of birth) is used as part of the required Customer Identification Program (CIP) used to verify customer identity (and to compare customer information with lists of known terrorism suspects). Such information may also be required by other money service businesses such as currency exchanges.
Fingerprints are not a requirement of the Patriot Act, and they are certainly not required by all financial institutions – so if your bank insists on this procedure, you may wish to take your business elsewhere.
Cash Transactions
Cash transactions are certainly not prohibited, but they bring more government scrutiny, and they are now more inconvenient for certain vendors to process. If you deposit, withdraw, or make a purchase involving more than $10,000 in cash in one day, the other agency involved has to file a Currency Transaction Report (CTR) with the IRS that reports details such as your name, address, and taxpayer identification number. If you purchase over $3,000 of traveler’s checks, money orders, or cashier’s checks, such a transaction will also be reported to the IRS via a Monetary Instrument Log (MIL). And should you engage in any activity that indicates you may be engaged in money laundering or otherwise violating the law, your transaction may even trigger a Suspicious Activity Report (SAR). The SAR will be filed without your knowledge – it is, in fact, against the law for you to be informed of the SAR as your knowledge would compromise the subsequent investigation.
Resource: http://www.askquestions.org
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