Guest Post: The Long Arm Of Uncle Sam Just Got Longer

Tyler Durden's picture


Submitted by Simon Black of Sovereign Man

The Long Arm Of Uncle Sam Just Got Longer

This one's hot off the presses. Just yesterday, our friends at the Financial Crimes Enforcement Network (FinCEN) issued a press release on its latest ruling related to foreign 'money service businesses (MSBs).'

An MSB is a private company that provides certain financial services like check cashing, money orders, title pawn, payday loans, travelers' checks, prepaid stored value cards, tax refund payments, etc.

Frequently, traditional MSB clients tended to be individuals without bank accounts or access to credit.  But increasingly, the US government is looking at companies engaged in electronic payments, crowdsourced funding, and even microcredit finance as money service businesses.
The implication? They should all be regulated. Even if they're not even US companies.

That's right. FinCEN's latest ruling suggests a foreign MSB may now be subject to US regulations AND CRIMINAL PENALTIES "even if none of its agents, agencies, branches or offices are physically located in the United States."

FinCEN goes on to say that foreign-located MSBs must also comply with US anti-money laundering regulations and submit 'suspicious activity reports', i.e. assimilate into the US financial system and become yet another unpaid spy of the US government.

Further, foreign MSBs must register with FinCEN AND appoint a person residing in the United States as a legal representative in matters of compliance. If not, foreign MSBs risk severe civil and criminal penalties.

Needless to say, FinCEN came up with this 'rule' all on its own. There was no legislative process, no Congressional debate. Quite simply, a bunch of bureaucrats decided to create a new rule that, amazingly enough, has the same weight and gravitas as a law.

This is the way society is ordered today. There's one set of rules that Congress creates-- the laws.  Then there's another set of rules that the President creates in his sole discretion-- executive orders and the occasional treaty.  Then there's a third set of rules that are created by enforcement agencies like FinCEN-- regulations and policies.

This is the part that's truly extraordinary. Despite the 'free and democratic society' that most of us live in, these agencies are accountable to no one. They are not elected officials, they have no checks and balances, and there is little (if any) judicial oversight.

From the FBI's "administrative subpoenas" that gives the agency nearly totalitarian authority to commandeer the information of private companies, to the Justice Department's "policies" on civil asset forfeiture, to FinCEN's "rules" subjecting foreign companies to US criminal penalties, this is getting completely out of control.

With nearly 100% certainty, as you read this sentence right now, you are in violation of probably several such rules and regulations that you've never heard of. Even if you're not in the United States, as the FinCEN case clearly demonstrates.

Each of these rules has been conjured without your knowledge, put into effect without your consent, and tied to the most ridiculous civil and criminal penalties imaginable. You can't even fill out a passport application anymore without being threatened with a $10,000 fine.

In his comprehensive annals of the reigns of Tiberius and Nero, Roman historian Tacitus wrote, "corruptissima re publica plurimae leges." This is most often mistranslated as "the more corrupt a society, the more numerous its laws."

In truth, Tacitus was referring to Rome's history, and a more accurate translation is "laws were most numerous when the commonwealth was most corrupt."

Future historians will likely look back and say the same thing about our society. Except that we're not talking about laws. We're talking about the 'rules' of autonomous enforcement agencies that have extensive (and growing) police powers.

A better quote comes from a 1969 speech from William T. Gossett, then president of the American Bar Association:

"The rule of law can be wiped out in one misguided, however well-intentioned generation. And if that should happen, it could take a century of striving and ordeal to restore it, and then only at the cost of the lives of many good men and women."

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Thu, 02/16/2012 - 14:02 | 2166433 maxw3st
maxw3st's picture

Ok, so your running an MSB in Crete. Does FinCen actually think they can enforce their control over your foreign business? LMAO

Thu, 02/16/2012 - 14:04 | 2166439 Seize Mars
Seize Mars's picture

Who's going to stop them? You? How?

Thu, 02/16/2012 - 14:14 | 2166496 idea_hamster
idea_hamster's picture

Two words:  Drone.  Bomb.

Thu, 02/16/2012 - 14:39 | 2166589 Arthor Bearing
Arthor Bearing's picture

Unambiguous power grab with minimal use for enforcing laws. If financial crimes is your concern then existing jurisdiction and laws should be more than enough!

Thu, 02/16/2012 - 14:54 | 2166648 economics1996
economics1996's picture

There is a date stamp on the mother fuckers heads in Washington DC, 2018.

Thu, 02/16/2012 - 14:21 | 2166526 WhiteNight123129
WhiteNight123129's picture

THe laws of physics.

Thu, 02/16/2012 - 14:23 | 2166533 Richard Chesler
Richard Chesler's picture

The globalist puppet-in-chief.


Thu, 02/16/2012 - 14:53 | 2166643 Cadavre
Cadavre's picture

I note you too lag the shift key, thusly;  printing "THe" instead of "The". Thank Budda on a stack of tikis - i thought a DHS key stroke logger "infection" was making me do that!

Thu, 02/16/2012 - 14:07 | 2166448 blu
blu's picture

No. But it gives them a good excuse the put you on a watch list with the TSA, to detain you at the airport, and to extort you for 50% of your net worth to get out of the country again without a 2 year lay-over at Hotel Gitmo.

We live in a police state. And that's how they roll.

Thu, 02/16/2012 - 14:07 | 2166458 EscapeKey
EscapeKey's picture

We need to take your freedom away to protect you from the fascists.

Thu, 02/16/2012 - 14:37 | 2166581 Yen Cross
Yen Cross's picture

Are you a (Barrister or a Trader)? Give me some Vulture Bond ADVICE! I'll never junk you though. To each his/her own.

Thu, 02/16/2012 - 15:05 | 2166689 EscapeKey
EscapeKey's picture

Buy high, sell low. Or is it the other way around? I forget.

Thu, 02/16/2012 - 15:07 | 2166700 Yen Cross
Yen Cross's picture

 Quit " teasing the hair due", and give your mind a chance! +1

Thu, 02/16/2012 - 15:27 | 2166777 SamuelMaverick
SamuelMaverick's picture

Capital controls never work, the tighter they squeeze, the more will slip thru their fat fingers. TPTB are unbelieveable, all they are doing is creating a larger and larger underground economy.

Thu, 02/16/2012 - 17:42 | 2167327 sethstorm
sethstorm's picture

Not if a larger monitoring apparatus is constructed, especially if it accomodates the unemployed into it.

Fri, 02/17/2012 - 02:56 | 2168668 Problem Is
Problem Is's picture

"We need to take your freedom away to protect you from the fascists."

Let me fix that...

"...protect you from the terrorists."

As fascism is the word that can never be uttered by the ruling elite and their operating model of the merger of state and corporate (aka Bankster) power...

Obviously this is the kind of regulation setting up the seizure of customer accounts any time, any where...

Get ready dear Amerikan public to be JPMed... or MF Globaled... or Corzed....

Thu, 02/16/2012 - 14:08 | 2166469 SheepDog-One
SheepDog-One's picture

The sooner it sinks in to everyone that its a tyranny and a police state, the better.

Thu, 02/16/2012 - 14:15 | 2166498 blu
blu's picture

Certainly, but right now the fat freaks think they are being protected from terrorism by all this.

They'll be harnessed to wagons and pulling their jack-booted oppressors around in fine style and they'll still think it was all about protecting democracy from terrorism.

Not much to work with, right there.

Thu, 02/16/2012 - 15:47 | 2166834 CH1
CH1's picture

A lot of them know better (and calling them names helps nothing), but they fear to look at it.

Thu, 02/16/2012 - 14:22 | 2166528 slaughterer
slaughterer's picture

OT: can Tyler get the "OMG cat" video out again today?   I need some cheering up.  

Thu, 02/16/2012 - 14:23 | 2166537 smlbizman
smlbizman's picture

yea what he said.....


swiss bankers

Thu, 02/16/2012 - 14:25 | 2166540 ilion
ilion's picture

Price predictions for gold / silver nicely put on one page:  

Thu, 02/16/2012 - 14:39 | 2166590 TheFourthStooge-ing
TheFourthStooge-ing's picture

ilion, is spamming all you're capable of?

First you were spamming for armadamarkets, and now you're spamming for realmoneytracker.

Do you have anything to contribute other than shilling for Estonian and Swedish scammers?


Thu, 02/16/2012 - 15:25 | 2166772 Lost My Shorts
Lost My Shorts's picture

Sometimes Mr. Black does exaggerate a fair bit for effect.  You might even call him a bullshitter.

If you actually read the regulations, they cover only "activities within the United States" and "arose in part from recognition that the Internet and other technological advances make it increasingly possible for persons to offer MSB services in the United States from foreign locations."

It was always true that foreigners are subject to US law while in the USA.  Now it seems that foreigners who run internet businesses that provide services to Americans in the USA are considered to be in the USA for law enforcement purposes, regardless of where they actually sit.  OK, that's interesting, but somewhat less than what Mr. Black implies.  Services provided by foreigners to other foreigners overseas are not covered.  (Though of course the CIA might blow you up on a purely extra-legal basis if they heard a rumor that you are financing terrorists.)  Even services to Americans on foreign soil don't seem to be covered by these particular regulations.  So calm down a little.

It's similar to saying that if you are caught hacking American computers from Elbonia, and you are ever reckless enough to come to the USA where the G-men can get you, you might spend some time in Club Fed.

Fri, 02/17/2012 - 00:12 | 2168405 pvzh
pvzh's picture



"Even services to Americans on foreign soil don't seem to be covered by these particular regulations.  So calm down a little."

Do not worry! It is the next step. Soon to follow.

Thu, 02/16/2012 - 17:28 | 2167280 ConfederateH
ConfederateH's picture

The IRS just destroyed the oldest private bank in Switzerland, Wegelin.  It was over 200 years old.   And don't forget, it isn't just FINcen, it is every tax revenue office in the western world working together to fleece you and make sure there is now where you can hide.

Thu, 02/16/2012 - 14:03 | 2166435 ThisIsBob
ThisIsBob's picture

Oh for Christ's sake, they are predators.

Thu, 02/16/2012 - 14:07 | 2166454 Cognitive Dissonance
Cognitive Dissonance's picture

And the TBTF banks aren't predators?

All I ask for is even treatment, with the TBTF's getting the once over as rigorously as the small guys.....predators or not. Fat chance.

Thu, 02/16/2012 - 14:15 | 2166499 pods
pods's picture

Nah, if you read into this it is the same continuation of the policies against the check cashing places stateside.  Banks (Banksters) were worried about losing market share to them.  

Remember the terms "unbanked" and "underbanked?"

Now with this microcredit stuff it would allow more people to function outside of their reach.  

Same thing that was going on before the FED came online.  Companies were saving and expanding through their own capital.  Outside of the banking sphere.

You must stay in line, it is for your own protection.

The TBTFs=government.  Public-private partnerships.

Fucking shame.


Thu, 02/16/2012 - 14:33 | 2166566 blu
blu's picture

I was thinking the same thing. I was also imagining that the microcredit stuff could/would eventually become parent to an entire underground banking system serving the needs of real people in a real underground economy. A bit like the Greek model that everyone laughs at. Well there is a reason they do it that way, and we're about to find out what that reason is. And when we do these microcredit services and underground economies will make infinitely more sense.

Thu, 02/16/2012 - 16:58 | 2167169 NotApplicable
NotApplicable's picture

Microcredit is a globalist enterprise promoted by all of the globalist financial entities. The idea that allows the little guy to escape detection is just the bait in the trap. The only people who will use it successfully in that fashion will be connected to its owners/political supporters, and other CIA type scams.

If there is an occasional "little guy" who gets ahead, they will become the poster child for further regulation of microcredit industry. Global regulation, that is.

Thu, 02/16/2012 - 19:46 | 2167701 kill switch
kill switch's picture

That's what a friend said to me about my wife,,,Why don't you giver her a treat, instead of the treatment??

Thu, 02/16/2012 - 14:08 | 2166468 AgShaman
AgShaman's picture

If you have enough extra cash to make your Kiva must be a Domestic ******ist....and worthy of investigation

Thu, 02/16/2012 - 14:17 | 2166508 tradebot
tradebot's picture

Which one?  The goobermint or the loan sharks?

Thu, 02/16/2012 - 14:03 | 2166436 Yen Cross
Yen Cross's picture

 Thank Uncle Sam I'm half way EX-Patriated.

Thu, 02/16/2012 - 15:04 | 2166684 economics1996
economics1996's picture

If you have the money, leave.

Thu, 02/16/2012 - 14:03 | 2166437 blu
blu's picture

If my kids have an allowance does that make me a MSB?

Imma need to hire a lawyer.

Thu, 02/16/2012 - 14:07 | 2166462 mayhem_korner
mayhem_korner's picture



Do you withhold taxes?

Thu, 02/16/2012 - 14:11 | 2166484 blu
blu's picture

Um -- well you see --- oh snap

Thu, 02/16/2012 - 14:15 | 2166504 DogSlime
DogSlime's picture

If my kids have an allowance does that make me a MSB?

As long as you do it via bank transfer from your account to theirs, you should be fine.

If you give them cash, you're carrying out an un-monitored transaction.  This must NOT happen.  That kind of thing has to stop, to protect us from terrorists.

If you give them gold or silver coins then you ARE a terrorist - you're (at the very least) trying to undermine the official US currency.

Why would ANYONE legitimately need to use cash or PM's these days?  The government and financial institutions have provided you with a whole range of properly monitored cashless transaction mechanisms.  PM's and cash are for people with something to HIDE.  If you have nothing to hide, you have nothing to fear.  Embrace the system - it's there for your (and every other LEGITIMATE person's) protection.


Imma need to hire a lawyer.

You won't need a lawyer because you will be detained without charge, let alone trial.  NDAA FTW.


Thu, 02/16/2012 - 14:26 | 2166542 Conrad Murray
Conrad Murray's picture

This makes me think I should "see something, say something" about all these damn places that have signs up saying $10 minimum transaction for credit cards. They are obviously trying to keep terrorism alive.

Thu, 02/16/2012 - 14:33 | 2166564 DogSlime
DogSlime's picture

...or they want you to use a debit card instead.

...or they just want you to spend at least $10.

Thu, 02/16/2012 - 15:12 | 2166695 Zero Govt
Zero Govt's picture

Yes the US Govts ever more lunatic fringe group, the FBI, by branding Gold Bugs terrorists have set themselves on a (collision) course with a number of US States currently progressing their own Gold and Silver coins as legal tender

so the US Govt goon squad have branded civilians, commercial companies and now US States a 'national security threat' which makes you wonder who this ever more extremist minority group in Washington thinks they represent given they're 'at War' with ever greater numbers of (sane) Americans

Stop Paying Your Taxes

(don't feed the morons of Govt)

Thu, 02/16/2012 - 14:05 | 2166447 punxsutawney phil
punxsutawney phil's picture

AAPL div announcement coming tonight.  Should be good to get spx to 1380


Thu, 02/16/2012 - 14:08 | 2166464 DavidC
DavidC's picture

punxsutawney phil
Thanks for posting that. It explains a lot about some of the price movements today.


Thu, 02/16/2012 - 14:06 | 2166449 DavidC
DavidC's picture

The US as an entity (not its people) is out of control.


Thu, 02/16/2012 - 14:13 | 2166487 GeneMarchbanks
GeneMarchbanks's picture

Agreed. The people are in control. Or they're being controlled, not sure which one.

Thu, 02/16/2012 - 14:17 | 2166511 pods
pods's picture

Don't beat around the bush.

The corporation named THE UNITED STATES OF AMERICA is out of control.


Thu, 02/16/2012 - 15:12 | 2166724 Archon7
Archon7's picture

I wonder how long before they start naming countries like they do football stadiums, and just slap the corporate logo on...


The Goldman Sachs United States of America

The Deutsche Bank German Repulic

The UBS United Kingdom

Thu, 02/16/2012 - 19:28 | 2167651 boattrash
boattrash's picture

And today we have a great match-up, as the submarine zeros in its crosshairs on the oil rig! But first, our Global Anthem! (credit to Roger Waters)

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