Department Of Homeland Security To Scan Payment Cards At Borders And Airports

Travelers leaving or entering the United States have long had to declare aggregated cash and other monetary instruments exceeding $10,000. Now, under a proposed amendment to the Bank Secrecy Act, FinCEN (Financial Crimes Enforcement Network) will also require travelers to declare the value of prepaid cards that they are carrying, known now as "tangible prepaid access devices."

Expected to be finalized by the end of this year, the cross-border reporting modifications stem from a broader October 2011 definition of payment methods and form factors that replaced the term "stored value" with the term "prepaid access" in an effort to more accurately describe the process of accessing funds held by a payment provider.

Enforceability falls to U.S. Immigration and Customs Enforcement and U.S. Customs and Border Protection both within the Department of Homeland Security, which is already developing advanced handheld card readers that can ascertain whether a traveler is carrying a credit card, debit card, or prepaid card. This differentiation is important because only prepaid card balances will need to be added to declaration report forms.

Acknowledging that many questions still remain and that enforcement may not be straightforward, Cynthia Merritt, assistant director of the Retail Payments Risk Forum at the Federal Reserve Bank of Atlanta, had this to say about the handheld readers.

"Furthermore, according to the comments, the enforcement challenge is not new, nor is the concept of a device or document that can be used to access value. The current challenges are similar to those presented in the past with other monetary instruments such as checks, money orders, and traveler checks."

Merritt also stated that, "When law enforcement takes possession of a cash or monetary instrument at the border, they are effectively holding the funds, but not so with a prepaid card or other device. Holding the card does not provide access to the underlying funds."

Other questions to be settled include how to determine mobile phone wallet and key fob balances that can function in a manner similar to card swiping, how to distinguish between reloadable and non-reloadable prepaid cards, how to distinguish between bank-issued and non-bank-issued prepaid cards, should closed loop gift cards be included in the cross-border reporting requirements, what to do about cards that clear customs with a minimal balance but are then subsequently reloaded with an amount in violation of the reportable limits, and what to do about a large number of nonpersonalized, unembossed cards.

Also, would a traveler have legal recourse for damages if agents seized a proper debit card in the mistaken belief that it was a reportable prepaid card?

These complications and others imply that FinCEN's NPRM [Notice of Proposed Rule Making] may yet undergo some revisions in order to bring the regulations in sync with the realities of the prepaid card industry.

In the meantime, travelers with a memorized Bitcoin private key can breathe a sigh of relief, because according to an important April 9th, 2012 letter to FinCEN Director James Freis from Homeland Security Investigations it appears that intangible brainwallets are safe for the moment:

"Should the border declaration apply to codes, passwords and other intangibles as well as to any tangible object that is dedicated to accessing prepaid funds?"

"HSI believes that border declaration should not apply to codes, passwords and other intangibles. Identification and verification of intangibles in the context of border enforcement poses logistical and potential legal issues that are not contemplated by currency and monetary instrument declaration regulations. The structure of the currency and monetary instruments declaration regime, hinges on the existence of a physical object. The language requires something that can be passed from one individual to another in order to be presented to a third party for execution/payment."

Source: Forbes

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America Is George Orwell's 1984

"The language requires something that can be passed from one individual to another in order to be presented to a third party for execution/payment."

Blank checks in a check book?

I want to see our liberal friends defend this one.

Enforceability falls to U.S. Immigration and Customs Enforcement and U.S. Customs and Border Protection both within the Department of Homeland Security, which is already developing advanced handheld card readers that can ascertain whether a traveler is carrying a credit card, debit card, or prepaid card. This differentiation is important because only prepaid card balances will need to be added to declaration report forms.

I want to see our liberal friends defend this one. Originally Posted by camouflage

They are exempt, so they don't have to defend it.

Hello, police state! Good-bye, Liberty!

Nothing new here, just more control over the population.

It's nothing to do with that. It is all about taxes and avoidance thereof.

I saw a tv program in the UK recently, they have dogs which can smell bank notes as passengers leave a country.

It found somebody about to board a flight to Dubai with tens of thousands of pounds.

They found out he had paid no taxes in the UK for several years, so he was asked where the money came from and how much profit his shop made and why he didn;t pay tax.

He let the customs officers keep the cash until he returned, and ran to catch his flight.

Same way, if I turn up in the US with 50,000 usd in cash or pre paid cards, it will ring a bell with tax authorities.

In contrast, credit or debit card transactions can be eaily traced if somebody goes to court for tax evasion.

No conspiracy or loss of rights here. Unless you reject the concept of taxes.

That makes a lot of sense. When the government takes away your right to bear arms, you'll say no liberties lost here. The government is just trying to make us safer.

Hate America boys ... I hear the weathers nice this time if year in Uganda! Or Damascus. Please!

I know Assup can't see this, but seriously? Exposing government intrusion on our right to privacy, as defined in the 4th and 14th amendments to the Constitution is hating America? Assup's idea of being an American is to accept and applaud whatever government wants to do to us. I think that qualifies as a "dipshit".

<<<Assup // COG>>>

Come Yassup, you aren't really defending this are you?

They'll never take away guns. They know thats unconstitutional. Ammo might be a different story though.