Money Moves, India Tax Evaders, Credit Suisse: Compliance

The U.S. Treasury Department said it sets limits while giving the nation’s intelligence agencies access to reports that banks file on suspicious or large money moves by customers, including information about Americans.

The Treasury, saying it was responding to a public records request, released the protocol at the end of last week, describing how it provides some information in bulk to the National Counterterrorism Center, the hub of the government’s anti-terrorism intelligence efforts. The document, partially redacted, also sets conditions for searching the database.

The 2010 memorandum of understanding between the Treasury’s Financial Crimes Enforcement Network and the counterterrorism center requires intelligence agencies to make “best efforts” to tap information valuable only to specific cases and immediately destroy data obtained in error. Redistribution is limited.

The Obama administration has been seeking to assure the U.S. public and allies that they’re not subject to continual surveillance, while defending intelligence collection as vital to stopping terrorism.

Compliance Policy

Tax Evaders Who Stashed $2 Trillion Are Targeted by India’s Modi

India’s Prime Minister Narendra Modi is making it a high priority of his new government to recover billions of dollars stashed overseas to avoid taxes.

Modi has created an investigative team of regulators and ex-judges to find the concealed assets, known as black money, and bring them back. At stake is an estimated $2 trillion, more than India’s annual gross domestic product.

India is joining countries including the U.S. and Britain in cracking down on rich people who haven’t reported offshore funds. The nation ranked third in the world for money illegally moved overseas in 2011, behind China and Russia, according to a 2013 report by Global Financial Integrity, a Washington-based group researching cross-border money transfers.

India will proactively engage with overseas governments to hunt black money, President Pranab Mukherjee told lawmakers yesterday while outlining goals of the two-week-old government, which is also seeking to stimulate economic growth and simplify investment rules.

EU Delays Implementing Act on Power, Gas Trade Data Reporting

The implementing act for Remit rules on publishing trade data for power and natural gas markets is delayed until “after summer,” European Commission spokeswoman Nicole Bockstaller said by e-mail.

Remit refers to European Union rules on wholesale energy market integrity and transparency. The rules were scheduled to be approved this month.

Trade reporting will start six months after the rules are approved.

Compliance Action

Credit Suisse Said to Mull Selling More of Fixed-Income Unit

Credit Suisse Group AG is considering selling additional stakes in Wake USA LLC, an electronic interest-rates trading unit it set up last year, according to a person briefed on the plan.

Wake USA is a joint venture with high-frequency trading firm Tower Research Capital LLC for U.S. Treasuries and other fixed-income products, according to a regulatory filing. Credit Suisse is moving clients to that unit and may sell part of its majority stake to reduce capital requirements, said the person, who requested anonymity because the sale talks are preliminary.

Credit Suisse, like many of its biggest rivals, is seeking to adjust its fixed-income trading operations as more of that business is conducted electronically and new capital rules limit the leverage banks can have in those units.

The plan was reported earlier by the Financial Times.

Credit Suisse has held preliminary talks with investors such as Voltaire Capital, the person said.

Mark Gorton, managing partner at Tower Research, and Krishan Rattan, managing partner at Voltaire Capital, didn’t respond to messages seeking comment on Wake USA outside business hours.


Big Push to Come in Fatca Registration, Hintzke Says

The Foreign Account Tax Compliance Act has triggered the registration of 77,000 foreign financial institutions, or FFIs, with the Internal Revenue Service, according to information made public by the agency June 2.

“There are quite a few more out there,” Denise Hintzke, director at Deloitte Tax LLP, said in an interview. She expects to see a “big push” in registration toward year-end from FFIs in so-called Model 1 countries, which have until Dec. 22 to register.

Model 1 nations have intergovernmental agreements with the IRS for Fatca enforcement, which will become effective June 30.

“The big surprise in talking to clients is when they see this is not just for banks,” Hintzke said. “It’s professionally managed trusts, specified insurance companies, broker dealers, credit associations, hedge funds, mutual funds, securitization funds and private equity.”

The 77,000 firms already registered are from countries that haven’t signed agreements as well as countries with agreements.

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