Mr. Sloan is sure about his aims for FinCEN during his tenure: it is to make FinCEN the central hub of information about financial crime and to make that information available to the network of domestic enforcement agencies that make up the web of the American anti-crime effort.

Interview by Nigel Morris-Cotterill

WMLR: FIUs are a kind of toothless wonder that collect analyse and report on information but have no control over what happens to that information and whether a prosecution results. Are there times that you look at results and say "we could have done that better if only we had the power to prosecute?"

JS: We do not have that power and we are not seeking it. It is our purpose to collect information and to provide support to those agencies that have to enforce the law. I do not want FinCEN to be seen as being in competition with those agencies.

WMLR: So you don't see FinCEN as a sort of super-agency, collecting all the information and doling out cases to other agencies, as it sees fit?

JS: No. It is not our place to decide who investigates what. Often, there are already cases and our job is to add to the intelligence that the investigators have.

WMLR: Do you think there remains a case for transaction based reporting?

JS. Yes, I think it is a very useful guide as to who is doing what with cash.

WMLR: The limit of US $10,000 was set a long time ago. How valid is that limit today? For example, in Europe, the equivalent of US$10,000 is a very small amount of money.

JS: It is not a lot of money but it is a lot of cash. We want to know who is using large amounts of cash on a regular basis. We are not interested in isolated transaction, we are looking for patterns.

WMLR: Given that there are no currency exchange controls, why maintain Currency Transaction Reporting on international transactions for a sum as small as US $10,000?

JS: We need consistency otherwise data is more complex to interpret. It is a small amount for international transfers, but if it were larger, it would make reporting easier to circumvent.

WMLR: There is an argument that cash transaction reporting of such small sums (and I recognise that you do not necessarily consider this to be a small amount) takes no account of cultural differences - for example, Americans are dependent on plastic money and so have far less use for cash. But amongst those of Middle Eastern, Asian and Oriental origins, cash is the commonly used means of payment. In fact, there is an argument that cash transaction reporting is inherently racially divisive.

JS. I have heard this argument, and want to make it clear that FinCEN does not undertake any form of "profiling". Nothing in the CTRs or SARs identifies the ethnic origin of any person who makes or is the subject of a report. We do not link data by ethnic origin.

WMLR: But surely the fact that certain ethnic groups use cash more than others means that there will be a higher proportion of reports made about them than about those who use non-cash. The fact is that the results will be skewed.

JS: We look at links and information. If a person is linked to an investigation, it is because of the transactions he has performed, because of where he performed them or because of whom he performed them with. We do not assume that a person from a particular area is more likely to be involved in a crime because of where he lives, and we do not assume that a person is more likely to be involved in a crime because of his name or ethnic background. The fact that data about a person is recorded does not mean they are subject to any investigation. I am glad of the chance to make it plain that ethnic origin has no bearing on any data analysis we do and that I am totally against profiling, especially on any basis such as race.

WMLR: The State Department's Bureau for International Narcotics Law Enforcement Affairs published a report in March 1999. In that report, they list many threats where money laundering was seemingly central. But that report seems to take little account of parallel banking, the creation of banks, the use of asset and currency trading. Basically, that report seems to be stuck with the notion that money laundering is little more than getting banknotes into the system and withdrawing it at will. How much importance does FinCEN place on the expanded methods of laundering?

JS: The placement stage of laundering is the point at which we get most of our information so it remains the most important issue for us. But layering and integration are something we need to pay more attention to. Non-regulated funds transfer, parallel banking, is something we need to examine carefully. We have had some success in understanding, identifying, and devising ways to combat transfers of value through international trade financed by illicit currency exchanges - such as the Colombian Black Market Peso Exchange system.

WMLR: So you were a supporter of the proposed "Know your Customer" rules?

JS: That all happened before I became Director. My focus is on enabling the banks to report suspicious transactions - we focus on transactions. At the same time, it's our responsibility to ensure that law enforcement has access to that information.

WMLR: Is the failure of the Know your Customer Regulations a sign that the anti-money laundering bubble has burst and that America is prepared to put up with some money laundering, rather than aiming for zero tolerance?

JS: I think there were lessons to be learned from the withdrawal of the Know Your Customer Rules. First, we need to better educate people about the value of the information we collect under the Bank Secrecy Act. It is an incredibly valuable source of information that is used - along with other investigative methods - to prosecute drug traffickers, arms dealers, and many other criminals. Second, law enforcement needs to give better feedback to the banks, which work very diligently to provide the information. We need to show how the information is used - again prove its value. We're working on programmes now to address just these issues.

WMLR: If the bubble has burst, does this mean there will be calls for less money to be spent on money laundering activities such as FinCEN.

JS: We have to make a case for our funding based on the contributions we make to other agencies. It is difficult for us to point to a particular case and say that we provided all the information that resulted in the conviction. And we have another problem because our work is so long term. When a case is prosecuted, the information we have provided may be two or more years old. That is not to say it is out of date, but when we look at patterns, the patterns emerge over a long period. So, we cannot point to an instant hit and a prompt conviction because that is not how we work. But government spending allocations are often results-driven. We just have to be able to show that we offer value for money as an inter-agency resource, providing back-up and investigative reporting that, if it were to be performed by each other agency in isolation, would be less effective and more expensive.

WMLR: FinCEN has had, since 1992, a duty to maintain anti-money laundering training teams to assist foreign governments (1). Where do you place this in your list of priorities?

JS: FinCEN has never had a legal obligation to train foreign governments. The single most important priority is to make FinCEN as effective as it can be in its primary function of supporting law enforcement efforts-providing analytical information to the investigators who are pursuing cases against financial criminals. This has both domestic and international aspects. I intend to place a continuing priority on providing assistance to foreign governments working to establish or improve the effectiveness of FinCEN-style organisations. We call them financial intelligence units--FIUs. These efforts are motivated in large part by self-interest: we believe an effective network of FIUs will pay dividends for our core mission, supporting law enforcement efforts.

WMLR: Do you find much co-operation with enforcement agencies outside the USA?

JS: We have a good working relationship with many agencies outside the USA, particularly with FIUs through the Egmont Group. But we are always looking for ways to improve that relationship.

WMLR: Given the fierce anti-corruption stance of government in the USA, I was puzzled to see that there are substantial rewards made available to those who make reports that result in successful fines or forfeiture, except for employees of government or local government. I can understand this where nature of a person's job requires him to investigate or otherwise deal with information, but it seems to me that a dustman would be doing something outside his usual terms of
employment if he identified and reported something. Surely, this prohibition might lead that dustman, or other lowly worker, to approach the criminal and try to earn out of it rather than to report it for no reward?

JS: Anyone helping the criminal in those circumstances would be committing an offence. He might not get a reward for making a report, but he will not be running the risk of prosecution.

WMLR: When you leave, what would you like to look back on as your greatest achievement?

JS: That FinCEN has become the centre of an information network that every enforcement agency in the USA can work with in confidence.

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(1) “The Secretary of State for the Treasury and the Attorney General shall jointly establish a team of experts to assist and provide training to foreign governments and agencies thereof in developing and expanding their capabilities for investigating and prosecuting violations of money laundering and related laws.”

US Federal Code, Chapter 53.
The Financial Crimes Enforcement Network (FinCEN) is a key component of the U.S. international strategy to combat organized crime. The Department of the Treasury has designated FinCEN as one of the primary agencies to formulate, oversee and implement policies to prevent and detect money laundering, serving as the link between the law enforcement, financial and regulatory communities. Its mission: to provide world leadership in the prevention and detection of the movement of illegally derived money and to empower others by providing them with the tools and the expertise needed to combat financial crime
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