"Moving Illegal Proceeds: Opportunities Exist for Strengthening the Federal Government's Efforts to Stem Cross-Border Currency Smuggling."

On March 9, 2011, the Government Accountability Office issued a report detailing the challenges posed to US Customs and Border Protection with its Outbound Inspection Program; essentially, the process by which it attempts to stop bulk cash shipments to both Mexico - which accounts for 97 percent of shipments - and Canada.

Here are a few excerpts from the executive summary:

"The National Drug Intelligence Center (NDIC) has stated that proceeds from drug trafficking generated in this country are smuggled across the southwest border and it estimates that the proceeds total from $18 billion to $39 billion a year."

"This testimony is based on our October 2010 report on cross-border currency smuggling and updated information on bulk cash seizures and the status of one our recommendations. Like the report, it will cover the following three issues: (1) the actions CBP has taken to stem the flow of bulk cash leaving the country through land ports of entry and the challenges that remain, (2) the regulatory gaps that exist for cross-border reporting and other anti-money laundering requirements involving the use of stored value, and (3) the extent to which FinCEN has taken action to address these regulatory gaps."

"In March 2009, CBP reestablished the Outbound Enforcement Program within its Office of Field Operations. As a result of its outbound enforcement activities, CBP seized about $67 million in illicit bulk cash leaving the country at land ports of entry--97 percent of which was seized along the southwest border-- from March 2009 through February 22, 2011. Total seizures account for a small percentage of the estimated $18 billion to $39 billion in illicit proceeds being smuggled across the southwest border annually. CBP has succeeded in establishing an Outbound Enforcement Program, but the program is in its early phases and there is a general recognition by CBP managers and officers that the agency's ability to stem the flow of bulk cash is limited because of the inherent difficulty in identifying travelers who attempt to smuggle cash. Beyond this inherent difficulty, in our October 2010 report we identified management challenges in three main areas. First, addressing limitations in staffing, infrastructure, and technology, among other things, could require substantial capital investments at all ports of entry."

Analysis: If you don't have time to read the whole report, I think it's very helpful to go through the full executive summary, which you can read HERE. I won't go into a full analysis here because the GAO has a good track record for nailing problems with government agencies on the head, and I don't believe this is an exception. One statement in particular that really resonates - at least with me, anyway - is "addressing limitations...could require substantial capital investments at ALL ports of entry." We know DHS has allocated some money towards the expansion and renovation of some POEs. While some of those were in dire need of updating, there was some controversy when this money was initially being doled out (at some point in 2009, I believe) because a considerable amount was going to some POEs on the northern border that don't really get that much cross-border traffic. The GAO report says that ALL POEs could require a significant influx of cash, which is something I've been saying for quite some time.

As always, I like that (it seems on the surface, anyway) CBP is taking the recommendations to heart. But given that CBP is only one cog in the huge bureaucratic wheel that is DHS, it's unlikely that we'll see any major changes occur very quickly.

Comments

[P]

I wonder if they should create a special task force that works for the Treasury - and is dedicated to making intercepts and getting some of this drug money back. As a taxpayer, I'd rather see some US agents go out there and hunt down some of these dollars that are being funneled across the border. In this day and age, when state and federal budgets are overspent, doesn't it make sense to recoup this money? Hit the cartels in their pocketbook.

P.

[Bill]

Sylvia,
You might want to check my math but I think $39 billion in cash ($100 denomination)is about 430 tons of cash. I think 430 tons of anything crossing the border would be pretty easy to see, no?
I think in your initial post about the killing of Agent Zapata you mentioned that he was part of a detail of ICE agents sent to assist in the interdiction of transborder cash transfers. Let us hope Washington sees fit to step up these interdiction activities in concert with their counterpart Mexican authorities. If the cartels can't get their $$$, then they aren't going to ship the drugs! Always follow the money!
Bill

[Billy-Bob]

If it doesn't involve fences, CBP is not interested. They have become an agency interested only in the theater aspects of security, not the real thing. Note the report says "officers conducted inspections of the underside of vehicles by lying on the ground with their legs exposed while traffic moved by in neighboring lanes at speeds up to approximately 25 miles per hour." They have no plan, no concern for us and no concern for the safety of their own officers.

[Jim F. from Rio Grande Valley]

That 67 million seized from Mar. '09 to Feb. '11 would pay for many miles of the Israeli type double fence with a road for the border patrol to constantly patrol. Ideally, it would be nice to put the illegals caught by Joe Arpiao and BP to work BUILDING the fence, though that would never actually happen. Secondly, if the places like Western Union, Bank of America, etc. that send remittances from the U.S. had to hold out maybe 25% of the amount sent until the sender proved they were a legal citizen. That amount ranges in the 20 plus BILLION dollar area, to pay for completion of the 1900 or more total miles of the fence, plus pay for a lot more BP personnel to patrol it 24/7. The stupid three strand barbed wire fence they have along much of the border is a JOKE. A ten dollar bolt cutter goes through that like nothing.