"Information Technology for Control of Money Laundering"

["Michael Pierson" <wfgodot@iquest.com>]

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I've just finished perusing the Office of Technology Assessment's
"Information Technology for Control of Money Laundering"
<ftp://otabbs.ota.gov/pub/pdf/money.laundering/*.pdf>.  It's an
informative and fascinating document for anyone interested in the
issues of money laundering and its implications for the future of
digital currency, as well as its increasing role as an important
rationale in promoting government surveillance agendas. 

Broken into seven chapters, this document provides a valuable overview
of the subject from the government's perspective.

1. "Electronic Money Laundering" covers the ABCs of money
laundering and its connection to drug trafficking, terrorism and the
global underground economy.  It traces the relevant statutory history
from the Bank Secrecy Act of 1970 onward. 

2. "Mechanisms of Wire Transfer" examines the basics of wire transfers
and the details of the FEDWIRE, CHIPS and SWIFT systems.

3. "Money Laundering and Law Enforcement" examines the laws and 
regulations involved and the various Federal and State Agency roles
and responsibilities.

4. "Technologies for Detecting Money Laundering" is particularly
interesting.   It discusses the FinCEN Artificial Intelligence System
(FAIS), and AI approaches including Expert Systems, Link Analysis,
Neural Network techniques, Machine Learning and various statistical
modeling methods.

5. "Privacy and Confidentiality" covers different investigative
prerogatives, the legal history and case law of privacy jurisprudence,
aspects of individual and corporate confidentiality, etc...

6. "International Issues" explores off-shore banking, international
law enforcement efforts like the Financial Action Task Force (FATF)
and the subject of bilateral and multilateral cooperative agreements
and conventions.

7. "Conclusions and Policy Options" discusses money laundering and the
world economy, and various policy directions for the future as well as
the type of monitoring regimes that might be established.  It pays
particular attention to the subject of the future impact of digital
money, observing: 

 "As alternative modes of electronic payment, e.g., "digital cash",
 develop, whatever precedents are set for access to wire transfers
 might also be applied to these alternatives.  If not, digital cash,
 or "the electronic purse" may provide another channel for dirty
 money, so that monitoring of wire transfers will no longer be
 effective."

I noticed that major network news reports on the "growing threat" of
money laundering were particularly evident in close temporal
conjunction to the wide public coverage of the latest FBI CALEA
revelations.  Just coincidence, I guess...


Bonus: While your there you might want to (if you haven't yet) pick up
another OTA document entitled "Electronic Surveillance in a Digital
Age"  which provides some useful additional government position
tracking data on the legal and technical aspects of CALEA.  It's
available in both text <ftp://otabbs.ota.gov/pub/elec.surveil/*.txt>
and PDF <ftp://otabbs.ota.gov/pub/pdf/elec.surveil/*.pdf> formats. 


- -Michael


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