February 24th, 2012 - Drew Phillips-Declan McCullagh (Video and MP3 Loaded)

Webpage: McCullagh.Org
TOPIC: Computer Security Issues

Declan McCullagh is the chief political correspondent for CNET, which is part of CBS Corporation. Previously he was a senior correspondent for CBS News' Web site. He became the chief political correspondent for CNET News in 2002 and lives in the San Francisco area after spending over a decade in Washington, DC.

An award-winning journalist, McCullagh writes and speaks frequently about technology, law, and politics. From 1998 to 2002, he was Wired's Washington bureau chief. Previously he was a reporter for Time Magazine, Time Digital Daily, and The Netly News, as well as a correspondent for HotWired. McCullagh previously wrote for the Taking Liberties section of CBS News' Web site, the successor to a weekly column he started in October 2008 titled Other People's Money.

McCullagh's articles have appeared in scores of publications including The Wall Street Journal, The New York Times Magazine, Playboy magazine, George magazine, The New Republic, Communications of the ACM, and the Harvard Journal of Law and Public Policy. He has appeared on NPR's All Things Considered, ABC News' Good Morning America, NBC Evening News, Court TV, and CNN. He has taught as an Adjunct Professor of Law at Case Western Reserve University in Cleveland, Ohio. He also has been a lecturer at American University in Washington, DC where he has taught a graduate journalism class (COMM-710).

McCullagh moderates Politech, a well-known mailing list looking broadly at politics and technology that he founded in 1994, and has been online since 1988. He was the first online reporter to join the National Press Club; he participated in the first White House dot com press pool; and was one of the first online journalists to receive credentials from the press gallery of the U.S. Congress. McCullagh has spoken at schools including Stanford University, MIT, Harvard University, Georgetown University, the University of Chicago, and Duke University, and has testified twice before the Federal Trade Commission.

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Department of the Treasury
Financial Crimes Enforcement Network - PDF
or see article below:

FIN-2012-A001
Issued:	February 15, 2012
Subject:	Foreign-Located Money Services Businesses

On July 21, 2011, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register a final rule on definitions and other regulations relating to money services businesses (Final Rule).1 The Final Rule amended the definition of "money services business" at 31 CFR 1010.100(ff). An entity may now qualify as a money services business (MSB) under the Bank Secrecy Act (BSA) regulations based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States. The Final Rule arose in part from the recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations.2 FinCEN seeks to ensure that the BSA rules apply to all persons engaging in covered activities within the United States, regardless of the person's physical location.

FinCEN is issuing this Advisory to advise financial institutions of their obligations under the BSA when providing financial services to foreign-located MSBs. Financial institutions should note the following:

To qualify as an MSB, a person, wherever located, must do business, wholly or in substantial part within the United States , in one or more of the capacities listed in 31 CFR 1010.100(ff).3 Relevant factors include whether the foreign-located person, whether or not on a regular basis or as an organized or licensed business concern, is providing services to customers located in the United States. Foreign-located MSBs are financial institutions under the BSA. With respect to their activities in the United States, foreign-located MSBs must comply with recordkeeping, reporting, and anti-money laundering (AML) program requirements under the BSA. They must also register with FinCEN.4 Foreign-located MSBs are subject to the same civil and criminal penalties for violations of the BSA and its implementing regulations as MSBs with a physical presence in the United States. The Final Rule requires each foreign-located MSB to appoint a person residing in the United States as an agent for service of legal process with respect to compliance with the BSA and its implementing regulations. The Final Rule became effective on September 19, 2011. Reporting, recordkeeping and AML program requirements under the BSA now apply to foreign-located MSBs. However, registration and the appointment of an agent for service of legal process will not be required until the revised registration form is available, which is currently planned for release in early March 2012.

Guidance

Financial institutions may find it necessary to update their AML programs if they provide financial services to foreign-located MSBs or engage in financial transactions with these entities.5 Financial institutions may find previously issued Guidance and Advisories helpful when incorporating foreign-located MSBs into their AML policies and procedures. In 2005, FinCEN and the federal banking agencies issued guidance (Joint Guidance) on providing financial services to MSBs operating in the United States.6 Additionally, financial institutions may find FinCEN's 2010 Advisory on informal value transfer systems (IVTS) to be useful in determining if their customers are operating as unregistered money transmitters.7

Suspicious Activity Reporting

Consistent with the standard for reporting suspicious activity under the BSA, if a financial institution knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution involves funds derived from illegal activity or appears to be indicative of money laundering, terrorist financing, or other violation of law or regulation, the financial institution should file a suspicious activity report (SAR).8 As noted in the Joint Guidance, financial institutions that provide banking services to MSBs should file a SAR if they become aware that their customers are operating as unregistered or unlicensed MSBs.9

Questions or comments regarding the contents of this Advisory should be addressed to the FinCEN Regulatory Helpline at 800-949-2732. Financial institutions wanting to report suspicious transactions that may relate to terrorist activity should call the Financial Institutions Toll-Free Hotline at (866) 556-3974 (7 days a week, 24 hours a day). The purpose of the hotline is to expedite the delivery of this information to law enforcement. Financial institutions should immediately report any imminent threat to local-area law enforcement officials.

1 Definitions and Other Regulations Relating to Money Services Businesses, 76 FR 43585 (July 21, 2011). http://www.gpo.gov/fdsys/pkg/FR-2011-07-21/pdf/2011-18309.pdf.
2 Id. at 43588.
3 See 31 CFR 1010.100(ff)(1)-(7) for a full description of these activities.
4 See 31 CFR 1022.380 et seq.
5 See, Federal Financial Institutions Examination Council (FFIEC) Exam Manual, pp. 307-313 (April 29, 2010). Although the FFIEC Exam Manual is issued by the federal banking regulators regarding AML requirements applicable to banks, it contains guidance that may be of interest to other financial institution types that provide financial services to foreign-located MSBs.
6 Advisory - Interagency Interpretive Guidance on Providing Banking Services to Money Services Businesses Operating in the United States (April 26, 2005). http://www.fincen.gov/statutes_regs/guidance/html/guidance04262005.html
7 FIN-2010-A011, Advisory - Informal Value Transfer Systems (September 1, 2010). http://www.fincen.gov/statutes_regs/guidance/html/FIN-2010-A011.html.
8 See e.g. 31 CFR 1020.320.
9 Supra at note 6.

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