Money Laundering

The Financial Crimes Enforcement Network (FinCEN) was established in 1990 to support law enforcement agencies by analyzing and coordinating financial intelligence information to combat money laundering. FinCEN has issued fewer analytical products in recent years. A primary reason that FinCEN officials gave for this change is that FinCEN's staffing levels have remained fairly constant, while its overall mission has expanded. Also, FinCEN has been encouraging and training other federal, state, and local law enforcement agencies to assess and analyze source data directly either through FinCEN resources or their own. Federal and state officials generally seemed satisfied with FinCEN's products and service. However, FinCEN needs to better communicate its regulatory priorities and time lines, particularly concerning regulations authorized or required by the Money Laundering Suppression Act of 1994. FinCEN did not meet any of the three statutory deadlines imposed by the act, and final regulations for several of the act's provisions are still pending. In 1992, GAO reported that the Treasury Department was taking about 21 months, on average, to process civil penalty referrals for Bank Secrecy Act violations. Since then, the average has grown to about three years, according to FinCEN data. GAO is working with FinCEN to identify reasons for the increase in processing times.

GAO noted that: (1) FinCEN was established in 1990 to support law enforcement agencies by analyzing and coordinating financial intelligence information to combat money laundering; (2) in supporting law enforcement, FinCEN has issued fewer analytical products in fewer years; (3) a primary reason FinCEN officials gave for this change is that FinCEN's staffing levels have remained fairly constant, while its overall mission has expanded; (4) also, FinCEN has been encouraging and training other federal, state, and local law enforcement agencies to access and analyze source data directly either through FinCEN resources or their own; (5) federal and state officials GAO interviewed indicated general satisfaction with FinCEN's products and services; (6) most nonusers told GAO that they rely on in-house capabilities or use intelligence or analytical support centers other than FinCEN; (7) GAO's recent report on FinCEN's regulatory role concluded that FinCEN needs to better communicate its regulatory priorities and time lines, particularly regarding regulations authorized or required by the Money Laundering Suppression Act (MLSA) of 1994; (8) FinCEN did not meet any of the three statutory deadlines imposed by the 1994 act, and final regulations for several provisions of the act are still pending; (9) the intended law enforcement benefits of the MLSA amendments cannot be fully achieved until all of the regulations are implemented; (10) in 1992, GAO reported that Treasury was taking about 21 months, on average, to process civil penalty referrals for Bank Security Act violations; (11) since then, the average has grown to about 3 years, according to FinCEN data; (12) GAO is working with FinCEN to identify reasons for the increase in processing time; (13) FinCEN's principal international efforts include: (a) working with international organizations to promote the development of effective anti-money laundering controls; and (b) helping other nations establish financial intelligence units, which serve as the central focal points for these countries' anti-money laundering efforts; and (14) FinCEN's Office of International Programs is the agency's second largest organizational component.