The trouble with the Bank Secrecy Act is not limited to regulatory burdens, ineffective reporting, and expansionary surveillance. There’s also the problem with how this system is abused by people in power: namely, authoritarians.
Human rights activists have been increasingly attacked through the system created under the Bank Secrecy Act in what has come to be known as transnational repression. Authoritarians in Russia, Nicaragua, and elsewhere recognize that the Bank Secrecy Act regime has created the perfect system to surveil and control their opposition—even when they flee to other countries like the United States.
Consider one example. The Anti-Corruption Foundation has been repeatedly targeted by the Russian government. Most recently, the Russian government named the think tank a terrorist organization and named its members extremists. By using this tactic, the Putin regime was able to reach across national borders and debank Anti-Corruption Foundation employee Anna Checkhovich here in the United States.
In another example, Félix Maradiaga paid the price for organizing peaceful protests against the Ortega regime in Nicaragua. Maradiaga was debanked, had his assets frozen, and was put on an international watch list despite being a celebrated human rights defender.
Maradiaga described his experience, saying, “[D]emocratic governments are being made unwitting accomplices to dictatorships, as such regimes cynically manipulate financial-surveillance systems set up to fight crime and terrorism, misusing these powerful instruments to harass, spy on, and hamper dissidents at home and abroad.” Since then, Maradiaga has seen these tools “used to close thousands of civil society organizations and expropriate their assets.”
Congress should not let this abuse go on. It’s time to face the truth: the Bank Secrecy Act costs too much and provides too little in return.