GOVERNMENT REQUIRING MONEY TRANSMITTERS TO REGISTER

WASHINGTON (AP) -- Big money transmitters like Western Union and thousands
of storefront operations -- all part of a $200 billion-a-year business
sometimes used by drug traffickers to launder money -- now will be required
to register with the government.

With the new rule, the Treasury Department is aiming to stanch illicit drug
profits flowing to Colombia and other trafficking centers.

The regulation announced by Treasury officials Wednesday stems from
legislation enacted in 1994 as lawmakers became aware that some
money-services businesses have been used by drug traffickers to illegally
transfer large amounts of cash.

A key lawmaker today called the new rule an important step in fighting this
form of money laundering but said the government took too long to act.

"It has been more than four years since Congress passed the Money Laundering
Suppression Act," said Rep. Marge Roukema, R-N.J., who heads the House
Banking subcommittee on financial institutions. "This is an important first
step but I am dismayed that it has taken this long."

Ms. Roukema noted that Treasury still must issue new rules for
money-services businesses to report suspicious activities by customers to
law enforcement authorities.

Treasury officials view the new rule as a strike at an Achilles' heel of
organized crime -- the need to convert illegal and unusable proceeds into
usable funds. An estimated $57 billion in drug money is laundered every year.

Elisabeth Bresee, assistant Treasury secretary for enforcement, noted that
some drug traffickers have moved their money laundering from banks to
money-services businesses as banking regulations have been tightened.

"The money launderers are creative," she told reporters in a conference
call. "That's why we're trying to cut off all avenues."

The money-services businesses will have more than two years to register with
Treasury's Financial Crimes Enforcement Network, known as FinCen. The
requirement will take effect on Dec. 31, 2001.

Failure to register will be considered a crime, punishable by fines of
$5,000 a day and up to five years in prison.

"The great majority of money-services businesses in the United States are
law-abiding," said FinCen Director James F. Sloan.

The officials estimate the rule will apply to 5,000 to 8,000 businesses
nationwide, including big corporations such as Western Union, American
Express and Travelers Express/MoneyGram as well as independent storefront
operations.

The businesses, which transmit money, sell and redeem money orders and
traveler's checks, cash checks and exchange foreign currency, account for an
estimated $200 billion a year in transactions.

By requiring the businesses to register with the government every two years,
the officials said they will get the first comprehensive look at the
money-services industry -- where the companies are, who owns them and what
services they provide.

That will help law enforcement authorities discover where money laundering
may be occurring and the risk of prosecution could drive "underground"
businesses into the open, they said.

The businesses also will be required to provide lists of their authorized
agents starting Jan. 1, 2002.

The new rule builds on a special emergency order that Treasury put into
effect in 1996 after evidence showed that some money transmitting businesses
and their agents in New York had engaged in a scheme to move drug money to
Colombia. The temporary order required some money transmitters in the New
York area and Puerto Rico to report information about all transmissions to
Colombia and the Dominican Republic of $750 or more.

A dozen transmitting businesses were discovered to be sending $800 million a
year to Colombia, far more than would be normal for people to send home to
relatives, Ms. Bresee said.

Wire transfers from immigrants to their families abroad usually range
between $200 and $500.

Under existing law, money-services businesses must report any currency
transactions exceeding $10,000. Treasury postponed a decision on a proposal
that would lower that threshold.

Ezra Levine, counsel to the Nonbank Funds Transmitters Group, which
represents the large money-transmitting companies, called the new
registration requirement "a very positive development."

The money-services industry, which had been in discussions with Treasury
officials on the rule since May 1997, believes it will help "reduce burdens
on the industry while protecting the public interest," Levine said.

Peter Ziverts, a spokesman for Western Union, said the rule was "not too
onerous" for the company and its 26,000 agents in the United States.