Federal law enforcement agencies estimate that criminals and criminal syndicates smuggle $18 billion to $39 billion a year in bulk cash across the U.S.-Mexico border.
U.S. Customs and Border Protection is the lead federal agency responsible for inspecting travelers who seek to smuggle large volumes of cash -- called bulk cash -- when leaving the country through land ports of entry.
The Financial Crimes Enforcement Network (FinCEN) is responsible for reducing the risk of cross-border smuggling of funds through the use of devices called stored value, such as prepaid cards. GAO was asked to examine the extent of actions taken by CBP to stem the flow of bulk cash leaving the country and any challenges that remain, the regulatory gaps, if any, of cross-border reporting and other anti-money laundering requirements of stored value, and if gaps exist, the extent to which FinCEN has addressed them.
To conduct its work, Government Accountability Office analysts observed outbound operations at five land ports of entry. GAO staff also reviewed statutes, rules, and other information for stored value.
In March 2009, CBP created an Outbound Enforcement Program aimed at stemming the flow of bulk cash leaving the country, but further actions could be taken to address program challenges. Under the program, CBP inspects travelers leaving the country at all 25 land ports of entry along the southwest border. On the Northern border, inspections are conducted at the discretion of the Port Director.
From March 2009 through June 2010, CBP seized about $41 million in illicit bulk cash leaving the country at land ports of entry. Stemming the flow of bulk cash, however, is a difficult and challenging task. For example, CBP is unable to inspect every traveler leaving the country at land ports of entry and smugglers of illicit goods have opportunities to circumvent the inspection process.
Other challenges involve limited technology, infrastructure, and procedures to support outbound operations. CBP is in the early phases of this program and has not yet taken some actions to gain a better understanding of how well the program is working, such as gathering data for measuring program costs and benefits.
By gathering data for measuring expected program costs and benefits, CBP could be in a better position to weigh the costs of any proposed expansion of the outbound inspection program against likely outcomes. Regulatory gaps of cross-border reporting and other anti-money laundering requirements exist with the use of stored value.