Which act is designed to prevent financial crimes, particularly money laundering?

The Bank Secrecy Act is a key piece of legislation designed specifically to prevent financial crimes, especially focusing on the issue of money laundering. Enacted in 1970, this act requires financial institutions to assist government agencies in detecting and preventing money laundering. Institutions must report certain transactions, maintain records of cash transactions exceeding a specified amount, and monitor suspicious activities that could indicate money laundering or other financial crimes.

The requirement for banks and other financial institutions to file reports and implement compliance programs plays a crucial role in creating a framework that enhances the government's ability to track illicit financial activities. By mandating that these institutions establish internal policies and procedures to detect suspicious activities, the Bank Secrecy Act strengthens oversight and facilitates cooperation between financial institutions and law enforcement agencies, ultimately contributing to the mitigation of money laundering risks.