Anti-Money Laundering:

Improved Communication Could Enhance the Support FinCEN Provides to Law Enforcement

GAO-10-141: Published: Dec 14, 2009. Publicly Released: Dec 14, 2009.

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Financial investigations are used to combat money laundering and terrorism financing, crimes that can destabilize national economies and threaten global security. The Financial Crimes Enforcement Network (FinCEN) within the Department of the Treasury supports law enforcement agencies (LEAs) in their efforts to investigate financial crimes by providing them with services and products, such as access to financial data, analysis, and case support. As requested, GAO examined the extent to which the law enforcement community finds FinCEN's support useful in its efforts to investigate and prosecute financial crimes. GAO analyzed statutes governing FinCEN's mission and documentation describing the support it provides to LEAs, such as annual reports. Using FinCEN data, GAO selected a sample of 29 LEAs, including primary users of FinCEN's services and products, and obtained their opinions through a survey and interviews. While the results of the survey and interviews are not generalizable, they provide insights about the usefulness of FinCEN's support.

The majority of LEAs GAO surveyed reported finding FinCEN's support useful in their efforts to investigate and prosecute financial crimes, but FinCEN could enhance its support by better informing LEAs about its services and products and actively soliciting their input. Of the 20 LEAs that responded to a question GAO posed about which FinCEN services they found most useful, 16 LEAs cited direct access to Bank Secrecy Act data--records of financial transactions possibly indicative of money laundering that FinCEN collects--as the most valuable service FinCEN provides. Additionally, 11 federal LEAs cited a tool that allows federal LEAs to reach out, through FinCEN, to financial institutions nationwide to locate financial information related to ongoing investigations as a key service offered by FinCEN. To further enhance the value and relevance of its analytic work to LEAs, FinCEN has sought to increase development of complex analytic products, such as reports identifying trends and patterns in money laundering. Sixteen law enforcement agencies GAO surveyed reported that they generally found these complex analytic products useful. However, three of five LEAs that FinCEN identified as its primary federal customers reported that FinCEN does not provide detailed information about the various types of products it can provide. They also stated that they would like more information about when completed products become available. Communicating more detailed information to LEAs could help FinCEN ensure that it is effectively carrying out its mission to support the investigation and prosecution of financial crimes. Moreover, two of these LEAs reported that FinCEN does not communicate to LEAs why it accepts some requests for support and rejects others. Furthermore, FinCEN does not actively seek LEAs' input about ongoing or planned analytic work, though doing so could improve the quality and relevance of its products to its LEA customers. Actively soliciting stakeholder input and providing transparency with regard to decision making are GAO-identified best practices for effectively meeting stakeholder needs. Incorporating these best practices could help FinCEN maximize the usefulness of its support. In October 2009, senior officials in one of the divisions that provides support to LEAs reorganized the division in order to realign resources to better serve law enforcement. The division also developed a planning guide to improve communication with LEAs which includes general descriptions of the types of processes to be implemented. While the development of this guide is a step in the right direction, it does not include detailed information on the specific actions FinCEN plans to take to become more transparent to their law enforcement customers about the division's operations. Completing the plan, including identifying the specific actions FinCEN plans to take to better assess law enforcement's needs, could help FinCEN ensure that its operations are designed in a way so as to maximize their usefulness to its law enforcement customers.

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help ensure that FinCEN maximizes the relevance and usefulness of the support it provides, the Director of FinCEN should work in conjunction with its law enforcement customers to establish a systematic process for actively soliciting input from law enforcement agencies and incorporating this input into the selection and development of its analytic products.

    Agency Affected: Department of the Treasury: Financial Crimes Enforcement Network

    Status: Closed - Implemented

    Comments: In December 2009, we reported that while FinCEN communicates with its law enforcement customers about a variety of issues, the agency could enhance the value of its complex analytic products by more actively soliciting law enforcement's input about ongoing or planned analytic work. We also found that, beyond ad hoc communication with law enforcement agencies (LEAs), FinCEN does not have a systematic process designed to solicit detailed input from LEAs on the development of its complex analytic products. To help ensure that FinCEN maximizes the relevance and usefulness of the support it provides, we recommended that the Director of FinCEN establish a systematic process for actively soliciting input from LEAs and incorporating this input into the selection and development of its analytic products. FinCEN agreed with this recommendation and, in October 2010, reported that it had taken a number or steps to better assess LEA needs and more routinely solicit input from its law enforcement customers on its complex analytical products. Specifically, FinCEN instituted bi-weekly teleconferences with field representatives co-located with law enforcement liaisons to obtain and provide improved understanding of LEA partners. FinCEN also developed a process for receipt and evaluation of analytical support requests to ensure a consistent, predictable, and transparent process for considering requests for support. Further, FinCEN instituted a number of outreach mechanisms to routinely solicit LEA input such as recurring inclusion in, among other things, FinCEN's Law Enforcement Roundtable meeting agendas and in the inspection process conducted by FinCEN personnel of agencies that have entered into a memorandum of understanding with the agency. Finally, FinCEN's Customer Satisfaction Survey instrument and Gateway publication have also both been modified to solicit input on the development of analytic products. These steps are consistent with our recommendation and should help FinCEN to better assess law enforcement's needs when selecting and developing analytic products to pursue.

    Recommendation: To help ensure that FinCEN maximizes the relevance and usefulness of the support it provides, the Director of FinCEN should work in conjunction with its law enforcement customers to complete a plan, including identifying the specific actions FinCEN will take, to better assess law enforcement needs, and make the division's operations more transparent to FinCEN's law enforcement customers. This plan should include a mechanism for FinCEN to communicate to law enforcement agencies its decision-making process for selecting complex analytic products to pursue and why FinCEN rejects a request.

    Agency Affected: Department of the Treasury: Financial Crimes Enforcement Network

    Status: Closed - Implemented

    Comments: In December 2009, we reported that FinCEN informed law enforcement agencies (LEAs) that it is focusing the support it provides predominantly on those requests that it considers to be for complex analytic support. However, we also found that FinCEN could better inform LEAs about its decision-making process regarding what requests it will accept or reject so that law enforcement can determine which requests may warrant FinCEN's involvement. As a result, we recommended that the Director of FinCEN should complete a plan to better assess law enforcement needs and make the division's operations more transparent to FinCEN's law enforcement customers. FinCEN agreed with this recommendation and, in September 2010, reported that the agency has developed workflow processes and outreach efforts to better assess law enforcement needs and provide more insight into FinCEN decision-making on complex analytic products. FinCEN has developed, in consultation with LEA representatives, a new data collection form to be used by FinCEN personnel to obtain and document required information in discussing requests for analytical support with LEA representatives. This required information is intended to ensure that every request for analytical support consistently includes information necessary to inform FinCEN's decision-making process. This process has also been revised to include a subsequent professional assessment of each LEA request to determine, among other things, the best methods for servicing the request, the resources needed, and a recommendation on how and whether to proceed. This record is then captured in FinCEN?s case management system and provides the basis for work planning decisions as well as more transparent communication of FinCEN's decision to its law enforcement partners. This revised protocol is consistent with our recommendation.

    Recommendation: To help ensure that FinCEN maximizes the relevance and usefulness of the support it provides, the Director of FinCEN should work in conjunction with its law enforcement customers to clarify and communicate to law enforcement agencies the various types of complex analytic products FinCEN can provide and establish a process for informing law enforcement agencies about the availability of these products.

    Agency Affected: Department of the Treasury: Financial Crimes Enforcement Network

    Status: Closed - Implemented

    Comments: In December 2009, we reported that, as technology has evolved, increasing numbers of law enforcement customers have gained direct access to Bank Secrecy Act data that the Financial Crimes Enforcement Network (FinCEN), within the Department of Treasury, is responsible for managing. To further enhance the value and relevance of its analytic work to law enforcement agencies (LEAs), FinCEN has sought to increase development of its complex analytic products, such as reports identifying trends and patterns in money laundering. However, LEAs reported that FinCEN does not provide detailed information about the various types of complex analytic products it can provide and does not have a process in place for informing them about the availability of these products. To help ensure that LEAs better understand and more fully utilize FinCEN's products in support of their investigations, we recommended that the Director of FinCEN clarify and communicate the various types of complex analytic products FinCEN can provide and establish a process for informing LEAs about the availability of these products. In response to our recommendation, FinCEN compiled an inventory of analytical products historically produced, those FinCEN should produce, and those requested by LEAs, and then developed documents intended to clarify the types of products, services, and other tools available to its LEA partners. These documents were developed in part based on direct consultation with LEAs and have been distributed via multiple mechanisms, including through its FinCEN Portal and via direct contact with law enforcement liaisons, among others. Furthermore, in July 2013, FinCEN reported that it has developed a process for reviewing its closed cases on a biannual basis and providing a consolidated list of available reports to LEAs. Specifically, FinCEN reported that the bureau 1) pulls a list of FinCEN's closed complex, proactive cases, 2) has the list reviewed and vetted by appropriate management, and 3) provides a copy of the final list to law enforcement liaisons and publishes it on the FinCEN Portal. The documents provided to us, along with this revised protocol, are consistent with our recommendation and should help FinCEN to better ensure that it is effectively carrying out its mission to support the investigation and prosecution of financial crimes.

    Recommendation: To help ensure that FinCEN maximizes the relevance and usefulness of the support it provides, the Director of FinCEN should work in conjunction with its law enforcement customers to develop a mechanism to collect law enforcement sensitive information from law enforcement agencies during the public comment period of the Notice of Proposed Rulemaking (NPRM) process.

    Agency Affected: Department of the Treasury: Financial Crimes Enforcement Network

    Status: Closed - Implemented

    Comments: In December 2009, we examined the extent to which the law enforcement community finds FinCEN's support useful in its efforts to investigate and prosecute financial crimes. In the report, we noted that FinCEN has no mechanism to collect law enforcement sensitive information in a nonpublic rulemaking docket that could be pertinent to making decisions regarding proposed regulatory changes. Regulatory changes instituted by FinCEN can affect the content or structure of Bank Secrecy Act (BSA) data used in law enforcement investigations as well as law enforcement's efforts to indict and prosecute financial crimes. However, liaisons from four of FinCEN's top five federal law enforcement customers reported that the public record is not always the most appropriate venue for providing comments on proposed regulatory changes because their comments often contain law enforcement sensitive information. According to these officials, raising these concerns in a public forum may compromise key investigative techniques or strategies used in ongoing investigations. As a result, we recommended that FinCEN develop a mechanism to collect law enforcement sensitive information from law enforcement agencies during the public comment period of the notice of proposed rulemaking (NPRM) process. FinCEN agreed with this recommendation and in July 2010, FinCEN officials reported that they developed a mechanism that involves a two-pronged approach for collecting law enforcement sensitive information during the public notice and comment period of a NPRM without making the comments publicly available. According to written documents provided by FinCEN, the two-pronged approach involves: (1) providing law enforcement stakeholders with notice that a NPRM has been published in the Federal Register and advising them that they can provide law enforcement sensitive (LES) information without FinCEN making the comments publicly available and (2) using the Federal Docket Management System to ensure that LES information is not posted publicly. The revised protocol is consistent with our recommendation and should help FinCEN provide an appropriate means for law enforcement to submit law enforcement sensitive information as part of the public comment period for proposed regulatory changes and subsequently improve FinCEN's efforts to receive important information necessary to make decisions about the implementation of these changes.

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