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Draft US Money Laundering Act continues to show basic ignorance of subject

Editorial Staff

It's frustrating just how fundamentally stupid some people can be.

In the aftermath of 11 September, 2001, the blame machine was hunting for excuses and part of it rightly fixated on funds transfers and, rightly, fixated on the unlicensed transfer systems which were lumped together under the Farsi name "hawala." Then stupid, ignorant people started trying to sound clever and instead of standing up to them and correcting them, others started to adopt their nonsensical, made up terminology. Now they want to include it in law.

At section 9 of the "Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017" (Bill S.1241) (the USA calls it an Act even though it's not yet been passed) the heading says "Prohibiting money laundering through hawalas, other informal value transfer systems, and closely related transactions."

The section says "The matter following section 1956(a)(1)(B)(ii) of title 18, United States Code, is amended by striking “For purposes of this paragraph, a financial transaction” and inserting “For purposes of this paragraph and section 1957, a financial transaction or a monetary transaction, as applicable,”

Section 1956(a)(1)(B)(ii) of title 18 of the United States Code says

(a)
(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity—

(B) knowing that the transaction is designed in whole or in part—

(ii) to avoid a transaction reporting requirement under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both. For purposes of this paragraph, a financial transaction shall be considered to be one involving the proceeds of specified unlawful activity if it is part of a set of parallel or dependent transactions, any one of which involves the proceeds of specified unlawful activity, and all of which are part of a single plan or arrangement.

There is no such word as "hawalas." See the further reading below.

Fortunately, this use of the false term "hawalas" is limited to the section heading and, therefore, if someone in the US Congress is alert, it can be easily corrected.

So that begs the question: is anyone awake, paying attention and if so do they have the balls to tell the stupid people they've got it wrong and it needs to be fixed?

The BIll was introduced on 25th May by Sen Chuck Grassley, a Republican senator from Iowa. He's not an idiot: he has introduced and supported some very important legislation. But whoever is drafting for him needs a lesson in the subject matter they purport to be addressing. And he needs to get stuff produced in his name examined by people who actually know what they are talking about.

Further reading:
http://www.countermoneylaunder...
https://www.pleasebeinformed.c...
https://www.congress.gov/bill/...
https://www.law.cornell.edu/us...

The Bill will be examined in detail in World Money Laundering Report shortly.

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