The "No Questions Asked" Policy of Sending Money Home Has Changed

The country is still adjusting and changing the way it does business in the wake of the September 11 terrorist attacks. One of the latest changes is the monitoring of financial transactions to foreign countries conducted by individuals. Many immigrants living in the U.S. routinely send money to their relatives in other countries. In an attempt to try to monitor and track funds sent from the U.S. to other countries that may be financing terrorist organizations, the Treasury Department has called for a change in the way these transactions take place.

Prior to September 11, individuals would send money home using local companies specializing in sending money abroad. These companies generally did not require a great deal of paperwork to be completed before sending the money and did not ask questions regarding the transfer. Individuals were not required to present identification or explain the source of large cash transactions. The companies were not concerned about the lack of record keeping. In fact, they thrived on the lack of formal procedures because very often they were able to provide a valuable service to illegal immigrants who lacked state issued identification documents. Illegal immigrants working and sending money back to their families were attracted to companies that did not ask questions. Generally those in the U.S. without proper documentation are very concerned that the more information they release about themselves, the higher the risk of being caught and deported. For this reason, these cash transfer companies are preferred over regulated transactions conducted through banks.

In light of this, the Treasury Department now wants such companies to maintain better records of the transfers in an attempt to identify transactions that may potentially fund terrorist organizations. The money transmitting companies are now required to ask for identification for every individual that transfers money abroad. In addition, the companies must check the identification against a government list containing suspected money launderers and terrorists. In addition, the companies must undergo training on how to spot dubious money transfers. The new procedures will result in these companies sharing information with the FBI, as banks are already doing, to aid in crime prevention.

Banking officials have also pressed the government to require the collection of personal information. Requests for such additional information will potentially scare illegal immigrants from sending money using these companies for fear of their names being cross referenced in other government databases. We anticipate this may place a strain on our relations with particular countries, especially in Latin America where funds sent from the U.S. generate a great source of income for the more impoverished countries.

As the regulations concerning the transfer of money are debated and analyzed, Greenberg Traurig will provide updates.

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