Proposed Changes to the Travel Rule
Just when you thought you knew when and how to fill out a CMIR, there are changes coming. The Financial Crimes Enforcement Network ("FinCEN") has proposed changes to the "Travel Rule" which requires reporting of certain instruments used to move funds out of the country.
The proposal would change the definition of "monetary instrument" to include more types of transactions. As proposed, the term "monetary instrument" would include any bank draft, bank or cashier's check, or similar instrument drawn by a foreign bank on that bank's account at a financial institution in the U.S. The form used to report these transactions is the "Report of International Transportation of Currency or Monetary Instruments", usually referred to as the CMIR. The proposal makes no changes to the CMIR. The proposal makes no changes to reporting procedures. The change or impact of the proposal is based entirely on the expanded definition of monetary instrument.
Expanding the scope of the rule is a response to the increasing creativity of money launderers.
Criminals show great initiative when designing methods for using the financial system to move funds. All that is needed for successful money laundering is one significant break in the chain. Using an ostensibly legitimate instrument drawn by a financial institution on its own account has provided that break in the reporting chain. This proposal is designed to close that loop.
In proposing the change, FinCEN has specifically solicited comments on the impact the rule would have on routine and legitimate transactions, whether any other reporting techniques would serve the purpose, and whether the rule would have an unintended but burdensome result.
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 3, 3/97
First published on 03/01/1997