Subject: H.Res. 495 lauds FATF, i.e. unelected bureacrats waging war on our financial privacy
the Date: Mon, 19 Jun 2000 12:55:24 -0400 (14:44:17 -0400)
From: JBJ[Please be advised that H.Res. 495 will come to the House floor under a suspension of the rules today. At the urging of the {OECD's controversial} Financial Action Task Force (FATF), the US regulators proposed the now-infamous Know Your Customer rule. Why are we passing a bill lauding a group of unelected bureacrats waging war on our financial privacy?The US Treasury's FinCEN offers this guidance:
Nota bene: It was the OECD's Financial Action Task Force on Money Laundering{within and behind which IRS and other U.S. officials, acting outside the effective supervision by Congress, were conveniently pushing their hidden - and often private - agendas}that initiated and led the global push for the widely-hated "Know Your Customer" proposal that was resounding rejected by the American public last year: over 300,000 people send comments to the regulators opposing the rule--with only 72 in favor! JBJ]1997-1998 report on MONEY LAUNDERING TYPOLOGIES (12 February 1998)
http://www.treas.gov/fincen/typo97en.html
ANNEXES TO THE 1997-1998 FATF REPORT ON MONEY LAUNDERING TYPOLOGIES
Selected cases of money laundering
Lessons [Case no. 1]
1. This case shows the need to be vigilant when considering possible money laundering cases, as even transactions which initially do not appear to be particularly suspicious can involve money laundering.
2. It also shows the importance of the "know your customer principle", since the criminal past of the persons involved in this case was the only indicator which led to the discovery that the transactions in this case involved money laundering.
Lessons [Case no. 4]
1. Banks and their employees should be alert to "layered" wire transfers which utilise instructions such as "for further credit to". This may occur more frequently with correspondent accounts of "offshore banks". Suspicious transactions can then be identified and reported.
2. Banks should utilise "know your customer" requirements when issuing credit cards. In this case, the banks were issuing the credit cards to the attorney for further issuance to his clients.
3. Investigators should be aware that in a number of countries lawyer/attorney-client privilege is not applicable if the lawyer/attorney and his client were directly involved in criminal activity, and they should consult prosecutors if such an issue arises.
Selected text of H. Res. 495 (for complete text see below):Expressing the sense of the House regarding support for the Financial Action Task Force on Money Laundering, and the timely and public identification of noncooperative jurisdictions in the fight against international money laundering...
Whereas the FATF is gathering and analyzing all relevant information necessary for the publication of lists of noncooperative jurisdictions: Now, therefore, be it
Resolved, That it is the sense of the House that--
(1) the United States should continue to actively and publicly support the objectives of the FATF with regard to combating international money laundering...
H RES 495 - A resolution expressing the sense of the House regarding support for the Financial Action Task Force on Money Laundering, and the timely and public identification of noncooperative jurisdictions in the fight against international money laundering.Text of H.Res. 495:
106th CONGRESS 2d SessionIN THE HOUSE OF REPRESENTATIVES
May 4, 2000Mrs. ROUKEMA (for herself, Mr. BEREUTER, Mr. BLILEY, Mr. BORSKI, Mr. MCINNIS, Mr. GOSS, Mr. PICKETT, and Mr. MCCOLLUM) submitted the following resolution; which was referred to the Committee on Banking and Financial Services
RESOLUTION
Expressing the sense of the House regarding support for the [OECD's] Financial Action Task Force [FATF] on Money Laundering, and the timely and public identification of noncooperative jurisdictions in the fight against international money laundering.
Whereas the International Monetary Fund has estimated the amount of international money laundering to be at least $600,000,000,000 annually representing 2 to 5 percent of the world's gross domestic product;
Whereas money laundering is a crucial adjunct to the underlying crimes that generate money, including drug trafficking, kidnapping, murder, international terrorism, and other forms of violent crime;
Whereas money laundering and foreign corruption facilitate each other, undermining the efforts of the United States to promote democratic institutions and economic development around the world;
Whereas, in today's open and global financial markets, which are characterized by a high mobility of funds and the rapid development of new payment technologies, the tools for laundering the proceeds of serious crimes have become more sophisticated and readily available;
Whereas recent years have witnessed a sharp increase in the number of jurisdictions offering financial services without appropriate controls or regulation and which are protected by strict banking secrecy legislation which facilitates the anonymous protection for illegal assets in certain countries or territories making them even more attractive for money laundering;
Whereas the proliferation of such noncooperative countries or territories which do not, or only marginally, participate in international cooperation against financial crime, also exacerbates competition between these centers and so contributes to worsen existing practices and makes more difficult the maintenance of anti-money laundering standards in other countries;
Whereas, in order to ensure the stability of the international financial system and effective prevention of money laundering, all financial centers in the world should have comprehensive control, regulation, and supervision systems, and that all financial intermediaries and agents be subject to strict obligations, notably as regards the prevention, detection, and punishment of money laundering;
Whereas the Financial Action Task Force on Money Laundering (FATF), of which the United States is a founding member, was established for the purpose of developing and promoting policies to combat international money laundering;
Whereas the FATF, consisting of 26 jurisdictions including the United States and 2 international organizations, originally issued in 1990 and revised in 1996 40 recommendations designed for universal application that set out the basic framework for antimoney laundering efforts covering the criminal justice system and law enforcement, the financial system and its regulation, and international cooperation;
Whereas the FATF has determined the criteria for defining noncooperative countries or territories consistent with the 40 recommendations, and FATF members have agreed on a process for identifying noncooperative jurisdictions to include all countries and territories, both inside and outside FATF membership, whose detrimental practices seriously and unjustifiably hamper the fight against international money laundering;
Whereas the FATF has reported that the list of noncooperative countries or territories should include several subcategories of noncooperative countries or territories which could be as follows: clearly noncooperative with severe deficiencies in many areas, partly noncooperative with impediments in various areas, and de facto noncooperative with no significant impediments in laws and regulations but ineffective regime in practice; and
Whereas the FATF is gathering and analyzing all relevant information necessary for the publication of lists of noncooperative jurisdictions: Now, therefore, be it
Resolved, That it is the sense of the House that--
(1) the United States should continue to actively and publicly support the objectives of the FATF with regard to combating international money laundering;
(2) the FATF should identify noncooperative jurisdictions in as expeditious a manner as possible and publicly release a list directly naming those jurisdictions identified;
(3) the United States should support the public release of the list naming noncooperative jurisdictions identified by the FATF;
(4) the United States should encourage the adoption of the necessary international action to encourage compliance by the identified noncooperative jurisdictions; and
(5) the United States should take the necessary countermeasures to protect the United States economy against money of unlawful origin and encourage other nations to do the same.
END
Other Concerns: H.Res. 495 does not make any mention of financial privacy, though it encourages the US to take" necessary countermeasures" to protect against money laundering. Last year, the FDIC issued a regulation called "Know Your Customer." This regulation was proposed to deal with international and domestic money laundering. On Mar 23, 1999 the FDIC withdrew its Know Your Customer regulation after receiving more than 300,000 negative public comments. The majority of the complaints focused on the regulation as spying on the private financial affairs of law-abiding Americans, in the name of monitoring money laundering.Each bank would be required to determine the identity of all its customers, determine each customer's sources of funds; determine each customer's normal and expected bank transactions; monitor the activity of each account, looking for deposits and withdrawals that are inconsistent with the expected pattern of financial transactions. The bank would then make up a profile of all financial transactions on a database. If the customer deviated significantly from this pattern, the "suspicious" transactions to a huge database in Detroit called the Suspicious Activity Reporting System, which is administered by FinCEN (Financial Crimes Enforcement Network) and shared with a dozen other agencies.
In response to this Know Your Customer regulation, Rep. Ron Paul (R-TX) introduced three bills: the Financial Privacy Protection Package H.R.516, H.R.517, and H.R.518 to sunset the Bank Secrecy Act that has encouraged such overreaching regulations.
+++++++++++++++++++++++++++++++++
FREEDOM Watch
A look at what's new on "Project FREEDOM." ( http://www.house.gov/paul/ )
+++++++++++++++++++++++++++++++++
Issued: Friday, June 16, 2000
+++++++++++++++++++++++++++++++++A Big Win for Medical Privacy in Congress
by US Rep. Ron PaulOn Tuesday, the House of Representatives passed an amendment I proposed to an appropriations bill that will prohibit the federal government from imposing a "uniform standard health identifier" on the American people. This legislation will give Americans the peace of mind that comes from knowing that every detail of their lives is not being filed away. It restores and protects the fundamental privacy and due process rights that are the foundation of our system of government. As a doctor, I know how crucial it is to insure people's privacy when speaking to their physicians. Unless Congress permanently forbids the development of a medical ID, Americans may not be able to talk to their doctors about matters that are of an utmost private nature without fear of having this information accessed by government agencies! As an OB/GYN with more than 30 years experience in private practice, I know better than most the importance of preserving the sanctity of the physician-patient relationship. What happens to that trust when patients know any and all information given to their doctor will be placed in a database accessible by anyone who knows the patient's 'unique personal identifier? Some members of Congress will claim that the federal government needs the power to monitor Americans in order to allow the government to operate more efficiently. I would remind my colleagues that, in a constitutional republic, the people are never asked to sacrifice their liberties to make the job of government officials a little bit easier. We are here to protect the freedom of the American people, not to make privacy invasion more efficient....
.... SNIP .... Read the rest of this column at http://www.house.gov/paul/tst/tst2000/tst061900.htm
+++++++++++++++++++++++
American Enterprise Institute upcoming events:
"Cyber Attacks and Critical Infrastructure: Where National Security and Business Converge"
Speakers include Richard A. Clarke, Stash R. Jarocki, Richard N. Perle, and Elizabeth Rindskopf-Parker
Conference, June 19, 1:30-3:15 p.m. http://www.aei.org/inv0619.htm (information and registration)American Enterprise Institute 1150 Seventeenth Street, N.W. Washington, DC 20036
t: (202) 862-5800 f: (202) 862-7177 e: kburrows@aei.org I: http://www.aei.org+++++++++++++++++++++++
Coalition for Constitutional Liberties (abridged) Update for 6/15/00 Volume 3, Number 24
Brought to you by the Center for Technology Policy of the Free Congress Foundation
Lisa S. Dean, Julie McIntire, t: (202) 546-3000 http://www.FreeCongress.org
LAW ENFORCEMENT IS BEING TRAINED TO KILL VS. PROTECT
- Endangered Liberties Commentary, FCF Vice President for Technology Policy
Lisa DeanA reliable colleague and friend, Larry Pratt, who is the executive director of Gun Owners of America in Northern Virginia, has said that the greatest problem with law enforcement at all levels is that new recruits are being trained at military installations such as Quantico rather than at law enforcement training facilities. He pointed out that this is significant insofar as that the military is trained to kill, while law enforcement is trained to protect. The result is that law enforcement agents are putting into practice those Rambo-style tactics they learn in training in their dealings with local citizens.
This is consistent with the various reports in U.S. cities, such as Los Angeles and New York, about abusive tactics used by local law enforcement agents. It is also consistent with a recently published article in Insight magazine by Timothy Maier who tells the story of a 25 year-old man in Prince George's County, Maryland who, while asleep in his apartment, had his door kicked in by the county's Special Weapons and Tactics team who proceeded to brutally beat him within an inch of his life and accuse him of murdering a fellow police officer.
Maier reports that the man nearly died after the ordeal with police and that medical reports indicated "multiple contusions, swollen eyes and welts covering his body. Boot marks imprinted in [the victim's] back and chest" were visible in photographs taken after the incident. The victim also suffered "a near fatal brain injury." One officer in Prince George's County responded to the incident saying "This is what I call justice - street justice. It's like sharks when they hit a piece of meat on a feeding frenzy. He's a walking billboard."
This from our upstanding men in blue whose job is to protect the public rather than use them as guinea pigs to reenact their favorite scenes in First Blood? Aside from the Rambo-style tactics and attitudes of the police officers in this case, there was another "little" problem. When the case went to trial, the man they nearly killed turned out to be innocent of the crime of which he was accused, or of any crime for that matter.
This case and others like it has angered Janet Reno and her Justice Department and the Attorney General is launching a federal investigation into the activities and tactics that local police departments are using to capture the accused.
After having heard stories such as the one mentioned today, this investigation may on its face, sound reasonable but, to use a cliche, "beauty is only skin deep." When you look a little deeper, you will find the usual stench and festering boils accompanying anything related to the Clinton Administration and the dismantling of upstanding American institutions. This issue of law enforcement is no different.
While the police officer whom I quoted undoubtedly sounded bitter and wanted justice, there is a reason for that. No Administration in our nation's history has treated law enforcement so badly. It has created a litigious and regulatory climate that favors the criminal rather than the law enforcement officer. At the state and local levels, law enforcement's hands are tied in many cases because federal agents enter the scene of a crime traditionally handled by local officials but because the Clinton Administration has federalized yet another crime, local law enforcement is out of the picture. If that isn't bad enough, criminals outgun law enforcement in the majority of cases and while the Administration claims to want to "get guns off the street", I think it's fair to say that it really only wants to strip the law-abiding citizens of their right to keep and bear arms and does very little to punish the criminal. This creates an atmosphere of frustration within the law enforcement community because it's their lives that are at stake and the regulations which are supposed to favor them, in fact, favor the criminal element.
So the level of frustration and anger that is mounting within the law enforcement establishment and created by the Administration is combined with military style training. In other words, get law enforcement good and mad, and then teach them how to take that anger out on the citizenry.
This is a dangerous exercise and really can be boiled down to a simple premise - how does each traditionally view human beings? The military is trained to look at people as objects rather than as human beings in need of protection. To the military, which is trained for combat, these people are their likely attackers and therefore, their targets. To law enforcement, human beings are their responsibility to protect and keep safe from danger.
When you train law enforcement to act like the military, who's left to protect the people? The federal government? Well, that is precisely what the Clinton Justice Department is saying. Because they believe that local law enforcement is "out of control," the Administration needs to step in and "rescue" the public from the big, bad law enforcement establishments when all along, that same Administration is guilty of creating the need for such a rescue in the first place.
This has been the pattern typical of this Administration though. Data privacy is the perfect example, to illustrate the point. This Administration has shown little if any regard for the privacy of the personal information it collected about us. Agencies shared it with one another, and even shared it with the private sector and gave the green light to the private sector to continue collecting, selling and sharing our personal information with the federal government. So when privacy advocates and others complained that there is no privacy for our sensitive, personal data, the Administration began cracking down on businesses for not protecting their customers' privacy. Again, it created the situation and then played the role of "rescuer" to the public for the evil that others committed at its behest.
The legacy of this president is breathtaking. When you think about it, it really should not be the responsibility of historians to write the Clinton legacy. That job is best left for psychologists.
MICHIGAN WARNS SITES ON PRIVACY
by Chris Oakes, Wired News, June 14, 2000
>
> The state of Michigan doesn't think it needs to wait for laws governing
> online privacy before taking legal action against websites.
>
> The state attorney general's office is using a decades-old
> consumer-protection law to make a piecemeal but pointed campaign against
> what it sees as ubiquitous privacy violations online.
>
> In its notices to four websites, the state alleges that each company has
> failed to disclose information-collection practices to consumers -- behavior
> that violates Michigan's Consumer Protection Act, a law dating back to the
> 1970s.
>
> "We picked four that we thought were representative of different types of
> sites -- a medical site, a financial site, a site targeted to kids'
> products, and an adult-oriented site," said Michigan Assistant Attorney
> General Tracy Sonneborn.
>
> "We knew that (there) were third parties present at these sites and these
> sites seemed for one reason or another to (collect) somewhat more sensitive
> information," he said.
>
> The attorney general's office served "notices of intended action" Monday to
> four sites -- Stockpoint.com, Procrit.com, AmericasBaby.com, and
> iFriends.net.
>
> The notices essentially tell the companies to either start talks with the
> state about changing their ways or face a formal suit. The companies have a
> 10-day deadline to begin conferring with the attorney general's office about
> the allegations.
>
> The notices come on the heels of a February action against online ad firm
> DoubleClick, which Michigan Attorney General Jennifer Granholm pursued in an
> attempt to limit what the company could do with users' personal information.
>
> DoubleClick responded to the notice and is still in discussions with
> Granholm's office. Sonneborn said the state cannot comment further on those
> negotiations.
>
> Now Granholm is taking on additional sites for the first time in what could
> be a series of such actions. The four sites are accused of not disclosing to
> consumers the presence of third parties that exchange cookie information
> with consumers' computers.
>
> Specifically, the state complains of Web "bugs", invisible graphics files
> placed in the sites' pages that send cookie information to third-party ad
> firms such as DoubleClick.
>
> Granholm alleges that AmericasBaby contains Web bugs from DoubleClick,
> MatchLogic, and Netscape: "The privacy policy is relatively easy to find,
> but it tells users that cookies are temporary and are only used by BabyGear to provide a better shopping experience; it says nothing about third-party tracking."
>
> Cookies are small text files that sites place on users' hard drives allowing
> them to identify a user's browser when that person visits the site at a
> later time. The identifiers record user preferences, such as products
> ordered; the URLs of pages viewed; or the fact that registration information
> has been submitted.
>
> Although a user may recognize that the site itself places cookies on their
> PC, Granholm and many other privacy advocates are concerned that users often
> aren't aware of cookies placed along with ads. That's an especially
> complicated and thorny process that sites don't explain in detail and
> thereby, Granholm charges, misleads visitors.
>
> The state says Procrit.com, run by Johnson & Johnson subsidiary Ortho
> Biotech, receives cookies and Web bugs from DoubleClick without adequately
> disclosing the process to users.
>
> The same charges apply to adult-oriented iFriends.net. That site's privacy
> policy discusses only cookies placed by the site itself without disclosing
> that a third party also exchanges cookie information with users'
> computers.
>
> As of midday Tuesday, Granholm's office had not been officially contacted by
> the sites, but most indicated to Wired News their willingness to discuss the
> matter with the state.
>
> The companies responded to the charges with brief statements. "We support
> the privacy rights of consumers using the Internet," said a statement issued
> by Stockpoint, which promised to post a privacy policy on the site shortly.
>
> John Mckeegan, spokesman for Procrit, emphasized that his site does have a
> privacy policy and that "no personally identifiable information is collected
> from people without their knowledge and consent."
>
> Mckeegan said the advertising network that serves the site stipulates that
> the "anonymous" traffic and usage information collected is confidential.
> Tags placed with banner ads "do not collect personally identifiable
> information and are of a type in common use throughout the Internet," he
> said.
>
> AmericasBaby President Preston Bealle said the practices at his site were no
> different than those of major commerce websites. He said he'd discuss the
> matter further with the attorney general and make changes if necessary.
>
> The response from iFriends was similar. Reiterating its commitment to
> privacy, the company issued a statement saying it will fully cooperate with
> the state of Michigan "to ensure that the manner by which we use DoubleClick
> products and services is fully disclosed to users of the iFriends community."
>
> "Our downstream hope is that companies that have not developed privacy
> policies or disclosures on their websites -- or adequately informed
> consumers of what's going on -- take the process of disclosing and providing
> privacy policies more seriously," Michigan's Sonneborn said.
>
> "The industry's had years now to self-regulate," he added. But with some
> surveys showing few sites with fair information practices and clear
> disclosure, Michigan sees "indications that self-regulation is not
> working," he said.
> SAY GOODBYE TO MEDICAL PRIVACY
>
> by David Limbaugh, WorldNetDaily, Friday, June 9, 2000
>
> Aside from psychological reasons, why can't the Clintons be straightforward
> about things? It's easy to understand why Bill wouldn't want to be candid
> about his "affairs," but what about his policy proposals?
>
> If the Clintons' ideas were superior, they would have no motive to be
> deceitful about them, right? Think again. The truth is that they know that
> despite liberalism's virtual monopoly in the mainstream press, the
> universities, and most of our other cultural institutions, it is still not
> the majority philosophy among most voters. So they have to disguise many of
> their programs or, in some cases, secrete them from the public altogether.
>
>
> Remember Hillary's notorious plan to socialize American medicine? While
> pretending that it was going to be produced by the people "from the bottom
> up," she kept her task force meetings secret to the point of earning a
> rebuke by U.S. District Judge Royce Lamberth. But why? What did she have to
> hide? Well, plenty, as it turns out. Hillary's 1,300-page plan would have
> nationalized 14 percent of the nation's economy, a fact she could ill-afford
> to have disclosed.
>
> And now, she and Bill both claim to have learned their lesson from that
> fiasco. But are they honest about that lesson? What they want you to believe
> is that they are willing to compromise and abandon their goal of
> nationalized health care. Actually, the only lesson they learned is that to
> accomplish their goal of socialized medicine they must do it incrementally,
> one inconspicuous step at a time.
>
> Although Hillary Care suffered a humiliating defeat in 1994, some of its
> insidious components survived and became law in 1996 with the Health
> Insurance Portability and Accountability Act of 1996 (HIPAA), a.k.a.,
> Kennedy-Kassebaum. Hillary's plan contained a provision regarding a
> "unique health identifier" (a patient ID number) that could be used to track each
> person's medical history electronically from cradle to grave. This gem was
> resurrected and codified into law in HIPAA in 1996. So far, our Brave New
> World medical ID numbers have not been created, but soon will be if
> something isn't done.
>
> Though the provision for the creation of the medical ID numbers is already
> in the law, Texas Congressman Ron Paul has been successful so far in leading
> an effort to block appropriations for implementation of this provision. This
> week, this appropriations bill (HR 4577) will be voted on again, and if it
> passes, the unique health identifier -- the medical ID number -- will be
> created for all of us.
>
> It gets worse. This year, the Department of Health and Human Services
> proposed "medical privacy regulations" that will apply to all individuals,
> whether their health care is paid for privately or by the government. Those
> who love freedom and cherish privacy should be alarmed about these
> developments. Here's why:
>
> While Clinton touts the medical ID number and the proposed medical privacy
> regulations as enhancing our medical privacy, they do just the opposite. The
> assignment of these numbers is the first step toward universal health care,
> and the regulations severely undermine our privacy. The government will be
> entitled to access our private medical records without our consent and the
> government -- not you -- will decide who else will have access to our
> records. Under the regulation's health plans, providers, hospitals,
> researchers, medical students, government agents, law enforcement officials,
> and whomever else the government decides will have access. Are you nervous
> yet? If not, be aware that the regulations will also limit patients' access
> to their own records, especially in malpractice cases. And they will limit
> our right to sue others for breaching our medical confidentiality.
>
> If Ron Paul fails to convince Congress again to block funding for creating
> the ID numbers, all is not lost. He also has prepared a bill to repeal the
> HIPAA provision that requires the adoption of our ID numbers. This is a good
> start but another provision also empowers the government to adopt those
> privacy regulations that authorize the collection and sharing of our medical
> records without our consent. Congress should repeal that provision as well.
>
> Once again, the Clintons, under the guise of expanding our rights, are
> taking them away. If we don't derail this train now, our chances of
> thwarting Hillary's grandiose scheme to socialize health care may be out the window.
SECOND-RATE PRIVACY PROTECTION
Los Angeles Times, Monday, June 12, 2000
American companies have agreed to provide their European customers with a measure of personal privacy under a deal negotiated by Washington and the European Union. It's not all that European consumers wanted--nor all that they get from European businesses--but it's more than American companies offer customers at home.
The EU did not give the American companies much choice: Either they protect customers from online snooping and indiscriminate peddling of personal data or they don't do business in Europe. The new agreement is working, and the same formula should be followed by U.S. regulators.
If cyberspace is the world we increasingly inhabit, data is the currency we use. And a valuable currency it is. Banks, once discreet guardians of depositors, earn millions selling every scrap of personal information about their customers. Data can be quickly assembled to provide a starkly detailed portrait of almost any individual. For example, Acxiom, an online marketing company, keeps personal and lifestyle data on 95% of U.S. households and can arrange it according to ethnicity, race or other criteria. Profiles of all sorts are being used to make sales of products and services to some and deny them to others, a form of technology-driven redlining that excludes potential customers deemed unable to make the payments.
The issue is privacy in the Information Age, and Californians are particularly concerned about it, as witnessed by the state's high rate of unlisted phone numbers. Public concern about privacy is rising everywhere, and for good reason. "The state of Americans' data privacy is appalling," Joel R. Reidenberg of Fordham University Law School told a congressional committee recently. In lieu of privacy protection, Internet companies offer little more than notices to their customers that they are being electronically tracked and information about them is being used, sold or both. There is little that consumers can do to prevent this.
By contrast, under the "safe harbor" agreement with the 15-nation EU, Net companies have to meet more than half a dozen principles of privacy protection developed by Western governments over the years. In addition to being told that information about them is being collected, consumers must be given a chance to say no to sharing the data with others and must be given access to the data collected.
The least the companies can do is offer Americans the same level of protection. So far, industry self-regulation of privacy is a signal failure, and government agencies, Congress and even presidential candidates are taking notice. Republican George W. Bush recently described himself as a "privacy guy" who believes companies should ask customers' permission before disclosure. U.S. companies, both online and offline, have vigorously resisted exactly this.
Whether companies like it or not, the privacy issue has staying power and will grow more urgent as reports of abuses multiply. Denying minimum protection to U.S. customers while extending it to customers elsewhere only adds to the growing doubt that privacy protection can be voluntary.
================================================
> THE SOVEREIGN A-LETTER (abridged)
> A Web Publication of the Sovereign Society, Ltd.
> Your Link to Freedom, Privacy & Prosperity in the Offshore World
> Vol. 2 No. 24 - June 17, 2000
> ================================================
> + OFFSHORE NEWS +
Caribbean Havens Fight Back [their being blacklisted by the OECD's Financial Action Task Force (FATF)]
Caribbean nations that have the world's highest concentration of offshore banks say they are being unfairly targeted in what BARBADOS Premier OWEN ARTHUR calls it "institutional imperialism.'' Referring to the OECD and the EU he said it was dangerous to accept that institutions with no standing in international law "can dictate to sovereign states." "It's the law of the jungle -- the big countries using their power against little countries,'' said acting Atty. Gen. BERNARD WILTSHIRE of DOMINICA. The leaders aired their complaints at meetings with US Atty. Gen. RENO in Puerto Rico on June 12 and later in the week before the IMF in Washington. Protests even spilled over into a meeting of the Bank for Int. Settlements in Basle. LINKS:
http://www.cananews.com/cbi/businessupdate472.htm
http://www.tax-news.com/html/oldnews/st_BISAGM_09_06_00.htm
===================================Swiss Haven Days, Not Bank Accounts, Numbered
From Zurich sources tells us the Swiss parliament has decided that money laundering, among other crimes, should in the future be prosecuted by federal, rather than cantonal, police authorities. Another 1,000 members of the Federal Police are proposed. "It looks like we are moving towards Big Brother government here as well," says our reporter. For a description of the Swiss Federal Office for Police Matters and its Money Laundering Reporting Office (MROS) LINK:
http://www.admin.ch/bap/
And the Swiss also have stepped up arrests for money laundering. For the annual report of the Swiss MROS, download the file from LINK:
http://www.admin.ch/bap/e/info/berichte/MROS.pdf
===========================Liechtenstein Faces More ML Problems
Liechtenstein, its reputation as an offshore financial center tarnished by the arrest of many citizens on money laundering charges, is now girding itself for yet more trouble ahead. Find out why at LINK:
http://www.tax-news.com/html/oldnews/st_jliFATF_13_06_00.htm
=================================Sparbuch Dead: Austria Escapes FATF Pressure
The [OECD's] Financial Action Task Force (FATF), this week is expected to lift its threat to suspend Austria from FATF membership. The move comes now that AUSTRIA has has bowed to pressure to abolish its SPARBUCH anonymous savings "passbook" accounts.
Meanwhile, a leading member of the UK House of Lords charges the EU is acting like Nazis over Austria and its coalition party head, Jorg Haider. LINK:
http://www.the-times.co.uk/news/pages/tim/2000/06/12/timopnope01003.html
=====================BVI Bends to OECD Demands [relayed by its Financial Action Task Force (FATF)]
The BRITISH VIRGIN ISLANDS, determined the territory must escape the OECD's list of so-called "uncooperative tax havens," has stepped up its "clean up" campaign with announcement of new measures aimed at curbing financial privacy. That may include an end to beneficial ownership secrecy of IBCs. LINK:
http://www.tax-news.com/html/oldnews/st_jbvONeal_09_06_00.htm
======================IRS Might Get Offshore Bank Information
US Rep. RON PAUL shared with us the written answers of US Treasury Dep. Sec. EIZENSTAT concerning on HR 3886, the "International Counter-Money Laundering Act of 2000," a Clinton proposal giving government discretionary power to cut off from the US banking system offshore banks and even entire nations that displease Washington. (See A-Letter, June 3). It also forces US banks to gather information from offshore banks about Americans with accounts abroad.
In reply to the question whether such information "will be shared with the IRS" Eizenstat says "the IRS would have access to information obtained by the Treasury Dept." He also revealed plans to use the new powers to force bank identification of offshore "beneficial owners" and to block correspondent and even pay through accounts for uncooperative offshore banks. Observers doubt the bill will become law, at least in its present form. NEWS LINK:
http://www.tax-news.com/html/oldnews/st_Laundering_12_06_00.htm
For a copy of HR 3886, go to LINK:
http://thomas.loc.gov/cgi-bin/query/z?c106:H.R.3886: (Note: This link
must be copied and pasted into your URL "Location" browser space).
============================US Money Laundering Prosecutions Rise
Don't believe false reports this week that US money laundering prosecutions are down in number. Reuters (June 2) carried such a story that was countered by US Dep. Treas. Sec. Stu Eizenstat in a letter to the Miami Herald. He claimed US "money laundering investigations and prosecutions rose substantially" from 1995-1999, when IRS cases referred for prosecution rose 32% to 1,646 from 1,243. At Customs, investigations increased to 5,312 from 4,759, while indictments went from 909 from 774. US Justice Department figures show defendants indicted under the principal ML statute rose from to 2,044 from 1,596. Eizenstat claims more "suspicious activity reports" (SARs) filed by banks account for the increases. Miami Herald LINK: http://www.herald.com/
----------------------
Meanwhile the Treasury's FinCEN admits that during 1999 the business cost of filling out various government required ML reports to be at least US$108,982,512. LINK: http://www.treas.gov/fincen
==================Ten Percent Interest Guaranteed
The Irish owned, Isle of Man based F-SHARP BANK says it's
> the first offshore online bank to allow accounts in multiple currencies
> and international cash transfer and payments from your desktop
> PC. Its new sterling account claims the best annual rate of return
> offshore - 10% on a one year deposit account of ?2500. But US
> persons need not apply. LINK:
> http://www.fsharpbank.com/index-flash.htm
> .................................................
> For a list of European and offshore banks see LINK:
> http://www.rlwandco.com/fpg/swissbnk.htm
> Or check out the Sovereign Society's extensive bank and
> financial listings at LINK:
> http://www.sovereignsociety.com/weblinks.html
> ================================================
> + PRIVACY +
> ..........................................................................
> ..................................
> NSA: Spys-R-Us
> ...........................
> The super-secret US National Security Agency, home of the
> Echelon world electronic surveillance system, announced last week
> it plans to turn over to private industry development & management
> of most of its nonclassified information technology. A computer
> meltdown at the NSA's headquarters in January rendered the vast
> spy agency incapable of processing its global intelligence signals
> for several days. LINK:
> http://www.govexec.com/dailyfed/0600/060800k1.htm
> ===============Under the usual excuse of fighting "terrorism" a US commission is urging even more power and money for the NSA. LINK:
http://www.wired.com/news/politics/0,1283,36868,00.html
=============================UK Net Spy Plans Cause Furor of Protests
British plans to allow police to monitor all Internet communications in and out of the UK is meeting with a rising tide of protest. A bill pending in Parliament would enable Scotland Yard, MI5 and other state police agencies to intercept all Internet communications. LINK:
http://news.bbc.co.uk/hi/english/sci/tech/newsid_784000/784426.stmUK business leaders charge the Net spy plan will drive privacy-conscious businesses overseas and hurt British business. LINK:
http://news.bbc.co.uk/hi/english/sci/tech/newsid_788000/788789.stmThe Channel Islands of GUERNSEY and JERSEY, planning for e-commerce, say the bill is a disaster for them and demand its withdrawal. LINK:
http://www.tax-news.com/html/oldnews/st_jgeecom_13_06_00.htmAllowing UK's MI5 to monitor people's internet habits goes further than George Orwell's worst nightmare argues says The Manchester Guardian. LINK:
http://www.guardian.co.uk/freespeech/article/0,2763,331533,00.html
================================> Protecting Medical Privacy Passes US Congress
> .........................................................................
> The US House of Representatives this week adopted Rep. Ron Paul's
> proposal which prohibits the federal government from imposing a
> privacy destructive "uniform standard health identifier" number on
> each US citizen. LINK:
> http://www.house.gov/paul/press/press2000/pr061400.htm
> ============================
> Attack on 4th Amendment Rights Slowed
> ...............................................................
> In the US Congress a sneak attack on 4th Amendment protections
> against unwarranted search & seizure has unified liberals &
> conservatives in opposition. It would have allowed a secret police
> search of home & office files & computer hard drives. LINK:
> http://foxnews.com/fn99/elections/hill/foxhill_060500.sml
>
> Once revealed, strong public and civil liberties opposition to the
> plan appears to have sidelined the measures for now. LINK:
> http://www.worldnetdaily.com/bluesky_poole_news/20000608_xnpol_4th_amendm.
> shtml
> .............................
> Interesting publication on privacy, "Privacy Journal" can be seen at
> LINK: http://www.townonline.com/privacyjournal/
> ............................
> And a national commission to study privacy has been proposed
> in a US Congress that seems bent on destroying it. LINK:
> http://www.heritage.org/library/execmemo/em677.html
> ========================
Denmark: To Bank or Not to Bank?
......................................................
In response to a reader who is considering opening an offshore bank account in DENMARK, here's the Danish privacy (or lack thereof) story. The nation's constitution "guarantees" financial privacy, but by law all banks must report to the government each New Year's day the name, address, amount and interest paid to all account holders during the previous year -- and that includes non-Danish persons as well. The government bases income taxes on that info. No wonder Hamlet had so much on his mind. Jyske Bank, Copenhagen LINK:
http://www.jyskebank.com
===============================================
> THE SOVEREIGN A-LETTER
> * We welcome your comments. Bob Bauman, Editor. * Send E-mail
> to: sovereignsociety@compuserve.com * Don't