Signpost 1 -- Restrictions on Taking Money out of the U.S. and on Foreign Bank Accounts

Last week I introduced the topic for my next several blog posts -- 14 Signposts to Slavery, or signs that any given society might be slipping towards tyranny.

Where does the United States stand with these 14 issues?

In this post, I will examine Signpost 1.  I am not an expert on financial and travel law, but I am a concerned citizen doing my best to gain a more complete understanding of the landscape of liberty vs. tyranny in our nation.  I welcome comments from anyone reading this who has expertise in this area.

Signpost 1 -- Restrictions on taking money out of the country and on the establishment or retention of a foreign bank account by an American citizen. 

Part A of Signpost 1 -- Restrictions on taking money out of the country.

What I Found -- Though I wasn't able to find any specific law (not even on the custom's website), I found several references online to a $10,000 limit on the amount of money one can take with them without having to declare it to customs.  Apparently this restriction was imposed by Nixon in the early 1970's.  I was unable to find a reference to what the punishment is for infringing upon this rule.

Part B of Signpost 1 -- Restrictions on the establishment or retention of a foreign bank account by an American citizen.

Fact -- 

• Here is what Wikipedia says about the U.S. PATRIOT Act restricting foreign bank account holdings (done in the name of preventing money laundering -- emphasis added) -- 

"Restrictions were placed on accounts and foreign banks. It prohibited shell banks that are not an affiliate of a bank that has a physical presence in the U.S. or that are not subject to supervision by a banking authority in a non-U.S. country. It also prohibits or restricts the use of certain accounts held at financial institutions.^[70] Financial institutions must now undertake steps to identify the owners of any privately owned bank outside the U.S. who have a correspondent account with them, along with the interests of each of the owners in the bank. It is expected that additional scrutiny will be applied by the U.S. institution to such banks to make sure they are not engaging in money laundering. Banks must identify all the nominal and beneficial owners of any private bank account opened and maintained in the U.S. by non-U.S. citizens. There is also an expectation that they must undertake enhanced scrutiny of the account if it is owned by, or is being maintained on behalf of, any senior political figure where there is reasonable suspicion of corruption.^[71] Any deposits made from within the U.S. into foreign banks are now deemed to have been deposited into any interbank account the foreign bank may have in the U.S. Thus any restraining order, seizure warrant or arrest warrant may be made against the funds in the interbank account held at a U.S. financial institution, up to the amount deposited in the account at the foreign bank.^[72] Restrictions were placed on the use of internal bank concentration accounts because such accounts do not provide an effective audit trail for transactions, and this may be used to facilitate money laundering. Financial institutions are prohibited from allowing clients to specifically direct them to move funds into, out of, or through a concentration account, and they are also prohibited from informing their clients about the existence of such accounts. Financial institutions are not allowed to provide any information to clients that may identify such internal accounts.^[73] Financial institutions are required to document and follow methods of identifying where the funds are for each customer in a concentration account that co-mingles funds belonging to one or more customers."  http://en.wikipedia.org/wiki/USA_PATRIOT_Act 

Here is a link to the IRS website regarding foreign bank accounts -- http://www.irs.gov/businesses/small/article/0,,id=148849,00.html 

In other words, the U.S. government must be privy to all financial transactions of U.S. citizens via foreign banks, as well as be aware if anyone is taking over $10,000 in cash out of the country.

The restrictions imposed on financial transactions abroad may seem reasonable in light of threats of terrorism, and drug and arms trafficking.  But remember the saying -- The road to hell is paved with good intentions.

Lastly, I would have a lot easier time swallowing these restrictions and the requirement of transparency in American citizens' finances if the government (and Federal Reserve) were required to be equally transparent in their expenditures and investments.

Signpost 1 -- CHECK

1 Signpost down, 13 more to go . . .