WASHINGTON - The Treasury Department has proposed requiring that banks and other companies that process wire transfers pass on information about the people sending and receiving the money to other institutions in the chain.
The department announced the proposal Tuesday as a companion piece to sweeping new wire transfer rules issued jointly with the Federal Reserve on Aug. 13. The rules are designed to thwart money launderers.
|Travel Regulations'
The joint proposal would require banks and nonbank financial institutions to keep records of all their wire transfers for five years. Institutions would not be required to report the information to the government unless the transfer raised suspicions of illegal activity.
Often, several institutions process a wire transfer, and each passes payment instructions to the next.
The new rules would require each to forward standardized information about the sender and the recepient to the next institution.
The rules - nicknamed the "travel regulations" - are needed to ensure that a complete paper or computer trail of a tranasction exists.
They would "maximixe the ability of our law enforcement community to got to the source bank," said Peter G. Djinis, director of the Treasury's Office of
Financial Enforcement.
The Information
Under the proposed rules, the financial institution would include in the payment order the following information:
* The amount and date of the transfer.
* The name and address or account number of both the sender and the recipient.
* The name of the financial institutions that paid out the transferred money and the one that originated the transaction.
The new requirements were not included in the joint Treasury/Federal Reserve wire transfer rules because the Federal Reserve does not have the auhtority to require that specific
information appear on payment orders, Mr. Djinis said.
Domestic and International
Both of the proposed wire transfer regulations would apply to both domestic and international transfers.
The comment period for the new Treasury rules ends Oct. 4, the same day comments are due on thejoint regulation.
The joint rule would take effect Jan. 1, and the travel regulation would take effect one year after the joint rule takes effect.
As part of the joint regulation, Fed Wire, which handles domestic wire transfers, would mandate that institutions provide the same information when they use it to process transfers.
The Fed Wire changes would become effective one year after the joint rule becomes final.
