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Money Laundering Rules Changed

September 21, 1998

WASHINGTON (AP) _ The Treasury Department announced changes in anti-money laundering rules Monday intended to sharply cut the frequency banks must report cash transactions.

Under the Bank Secrecy Act, financial institutions must report cash transactions in excess of $10,000 by their customers. The change makes it simpler for banks to exempt transactions by retail and other cash-intensive businesses.

The changes are aimed particularly at exempting smaller businesses whose stock isn’t publicly traded, which represented a majority of the 12 million reports filed last year.

Financial institutions can exempt a customer by filling out a form stating the business has need of large amounts of cash and has been a customer for one year. Banks still must report suspicious activity by exempt customers and must review the exemption every two years. Also, certain categories of businesses, such as real estate brokers, auto dealers and money transmitters, may not be exempted.

Banks may adopt the new procedures as soon as Oct. 21 and have until July 1, 2000 to phase in compliance. The American Bankers Association praised the changes.

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