Only 80 foreign-based money services businesses have registered with the U.S. Treasury Department since a July 2011 rule brought them under the umbrella of U.S. banking regulations, according to data released Wednesday.
The data, contained in a report by the Financial Crimes Enforcement Network, or FinCEN, appeared to underscore the difficulty of bringing these non-bank, foreign financial institutions at the heart of a crack down on money laundering into the U.S. regulatory system.
The findings come on the heels of a scathing Senate report that concluded the Mexican unit of HSBC Holdings PLC had violated anti-money laundering laws by continuing to do business with money-changing operations known as casas de cambio, cited by U.S. authorities as fronts for drug-cartel money laundering.
FinCEN said in a July 2011 rule that the U.S. Bank Secrecy Act covers foreign-based money services businesses offering services in the U.S., in effect requiring them to comply with U.S. anti-money laundering regulations and file reports with FinCEN on suspicious transactions. The designation covers an array of businesses including currency dealers and exchangers, like casas de cambio, check cashers, money transmitters and others.
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