FreedomWorks strongly opposes the discussion draft entitled “The Counter Terrorism and Illicit Finance Act,” which is slated for discussion at a November 29, 2017 joint hearing between the Financial Institutions and Consumer Credit and the Terrorism and Illicit Finance subcommittees.
This draft detonates due process and the right to privacy. Among its most dreadful offenses is expanding Section 314 of the Patriot Act, to coerce businesses to spy on their own customers. Currently Section 314 allows businesses to investigate only suspected terrorism or money laundering offenses. As bad as that system is, this draft destroys privacy at another level, and encourages spying in the hopes of detecting information concerning nearly any domestic offenses. Some of these crimes include controlled substances abuses, copyright infringement, and water pollution.
Under this broad expansion, financial institutions would be forced to report suspicious activities detected in private client transactions and share anything that might indicate wrongdoing with the Financial Crimes Enforcement Network (FinCEN) through suspicious activity reports. The government would gain warrantless access to even more sensitive financial records protected by the Fourth Amendment. Asset freezes and service refusals for small businesses that have nothing to do with money laundering or terrorism could result.
Essentially, this draft places financial regulations on crimes that have nothing to do with financial regulations.
The draft also convolutes and over-criminalizes the regulatory process used to establish corporations and limited liability companies. It strips mens rea protections from applicants seeking to establish businesses that might lack resources to navigate regulatory compliance, and charges them with crimes. Applicants will be required to list all “beneficial owners” of their potential business. The draft does not clearly define what a beneficial owner is; but failing to identify them could result in multiple years in prison for an applicant. It’s also not even clear who the government treats as an applicant.
Put simply, if this draft becomes law, the government would begin snooping through the financial records of law-abiding businesses like it does for terrorists. Aspiring business owners could be jailed for misunderstanding a vague and confusing law.
There’s nothing good in this draft. Should the Counter Terrorism and Illicit Finance Act come to the floor in its current form, FreedomWorks will key vote against it.
Jason Pye, Vice President of Legislative Affairs, FreedomWorks