Are There Any Checks and Balances on the Government's Power to Check Our Balances? The Fate of Financial Privacy in the War on Terror

Abstract:     
In the years since the terrorist attacks of September 11th, 2001, the laws affecting money laundering and financial privacy in the United States have been changed to give law enforcement agencies easier access to financial information. Although the changes to the law were passed with the claim that they were needed to intercept terrorist financing, the anti-money laundering provisions enacted by the USA PATRIOT Act are being used routinely against non-terrorist criminal suspects as part of regular law enforcement processes. Although the apprehension of ordinary criminals by any means available will sound perfectly acceptable to many, it is at odds with our traditional approach to financial privacy. This paper concludes that Congress ought to revisit the money laundering regime to make sure it strikes the appropriate balance between the legitimate desire for financial privacy and the legitimate need for law enforcement access to suspicious accounts. After review, lawmakers may find that procedural adjustments to provide protection from law enforcement abuse of the system are called for.

Number of Pages in PDF File: 25

Keywords: USA PATRIOT Act, money laundering, privacy

JEL Classification: K23

Accepted Paper Series