On April 21, 2015 – after months of speculation by those in the Bank Secrecy Act/anti-money laundering compliance community – the Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) in coordination with U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HIS) and Miami-Dade State Attorney's Office South Florida Money Laundering Strike Force. The GTO elevates reporting obligations for several Miami-based businesses in an effort to shed light on cash transactions that may be tied to trade-based money laundering schemes.
Specifically, the GTO focuses on exporters of electronics (including cell phones) located in five Miami-Dade county zip codes: 33172, 33178, 33166, 33122 and 33126. According to the FinCEN press release, the GTO stems from law enforcement investigations which revealed that many of these businesses are exploited as part of sophisticated trade-based money laundering schemes in which drug proceeds in the United States are converted into goods that are shipped to South America and sold for local currency, which is ultimately transferred to drug cartels, including the Sinaloa and Los Zetas.
The GTO, which will be in effect for 180 days beginning on April 28, 2015, lowers the $10,000 reporting threshold to $3,000 for covered businesses when filing Form 8300 with FinCEN. Businesses covered by the GTO have been served a copy of the order and must begin complying on April 28, 2015.
The GTO's impact goes well beyond the businesses that are specifically subject to the covered geographic area referenced in the GTO; it has significant implications for the financial institutions that bank or provide other financial services to these businesses. As a result of the GTO, financial institutions will need to revisit their internal policies, procedures and controls to determine whether they are adequate to address the risks associated with these businesses that have now been heightened by the GTO.
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