WASHINGTON - In an effort to mute congressional calls for more anti-money-laundering laws, financial services executives this week introduced two industry-driven alternatives to legislation.
On Wednesday, a group of bank trade groups, regulators, and law enforcement officials said that it had completed the first of what will be semiannual reports giving financial institutions feedback on suspicious activity reports, or SARs, the documents that banks must file with regulators whenever they suspect illegal activity.
And earlier in the week, a group of 12 major banking companies, led by Citigroup, said it was preparing to release anti-money-laundering guidelines for private bankers.
The first report on suspicious activity filings, which will be titled SAR Activity Review: Trends, Tips, and Issues, is to be introduced at an American Bankers Association anti-money-laundering seminar on Monday.
The reports, the group said, will be issued each October and April. They will be divided into four major sections: statistics on suspicious activity filings, identification and analysis of national trends in money laundering, samples of specific prosecutions in which SAR filings had a significant role, and updates on the kind of information regulators are seeking.
"We've been clamoring for feedback for years," said John J. Byrne, senior counsel for the American Bankers Association. "This is going to give banks some very solid feedback on where the suspicious activity reports are going and what is being done with them."
James F. Sloan, director of the Financial Crimes Enforcement Network, the Treasury Department unit that collects the SAR filings, said that the banking industry has long demanded more information on the filings. "I have recognized that one of the greatest challenges we faced was demonstrating to all the parties involved in the SAR protocols the utility and the value of the reports." In the four years since SARs were established, banks have questioned their usefulness, he said. "Institutions ask what law enforcement is doing with the reports, and are they worth the effort."
The new reports are meant to address many of these concerns, Mr. Sloan said. "We want to make certain that we get all of the input possible" from the private sector, regulators and law enforcement, "on maintaining that delicate balance between privacy and prevention."
Bankers reacted favorably to the announcement.
"It is long overdue and I think it will be very helpful, particularly on the trending data," said James R. Richards, who directs the Financial Intelligence Unit at FleetBoston Financial Corp.
Bankers have difficulty keeping up with the new and more complex money-laundering schemes that have proliferated in recent years, he said. "I think it is accepted that the bad guys are two steps ahead of us most of the time, so this should help."
The second anti-money-laundering initiative - guidelines for private bankers - was developed by a dozen major international banking organizations, including Citigroup, Chase Manhattan Corp., J.P. Morgan & Co., Deutsche Bank, Credit Suisse First Boston Corp., UBS, ABN-Amro, Banco Santander, Barclays Bank, Societe Generale, and HSBC.
Richard J. Howe, a Citigroup spokesman, said Wednesday that his institution had started the process to form guidelines nearly two years ago, bringing other banks together with the help of Transparency International, a nonprofit, anti-corruption organization based in Berlin. Transparency will release the guidelines Monday at a press conference in Zurich.
"They are clear and unambiguous and they set a very clear standard that many banks and nonbank financial institutions can accept," said Frank Vogl, vice chairman of Transparency International. "We hope the regulators will take a similar view of them."
Anti-money-laundering experts such as Stanley E. Morris, a retired Fincen director, and Mark Pieth, chairman of the anti-corruption committee of the Organization for Economic Cooperation and Development, were brought in to help draft the agreement.
Mr. Howe emphasized that Citigroup's involvement in the project predated congressional hearings on money laundering last year, at which then co-chairman and co-chief executive John S. Reed testified in response to criticism from some lawmakers that the company was casting a blind eye to money laundering.
"We believe that global standardization is a natural and necessary evolution, and we would urge banks and their regulators in every country to adopt these standards," he said.
