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The long arm of Uncle Sam 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.”

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • wilburhb

    And the opportunity cost of all this unrepentant nonsense?

    “The real cost of the state is the prosperity we do not see, the jobs that don’t exist, the technologies to which we do not have access, the businesses that do not come into existence, and the bright future that is stolen from us. The state has looted us just as surely as a robber who enters our home at night and steals all that we love.” Frederick BastiatI appreciate, and look forward to what you do here.

  • algreg

    There’s an e-book that I encourage all of you to read. I’m up to Chapter 3 and my mind is completely blown. 

    We all know that there’s an agenda. But the thing is that all of this stuff is happening because they’re scared to death that we’re all going to wake up out of this thing and completely ignore them.

    It’s a heavy book. I mean that in terms of fiction and truth and what you might currently believe could be radically altered. However, when you read it without any preconceived notions, you’ll get the most out of it.

    Google this:

    the extortion system of the ruling elite ebook

    Happy trails…

  • Gene

    Another excellent article. Nobody else is really covering this, so thanks very much! I am actively making various life decisions based in part of the actions of this government. Excellent post by wilberhb above..I’m seeing that exact thing in my own life: my policies from here on out: Will never invest in US real estate; will never start a new business in US; will continue to stack gold and other PM; will only buy used cars (never new) and only if required for a particular US-based job I happen to get; no full-time US-based jobs…contract/consulting jobs only while in US; will continue studying my foreign language of choice (going on 5 years of study now!); will be un-registering to vote soon; will do my best to minimize my involvement in the domestic economy of the US; will get a few more foreign bank accounts; will get my currencies diversified a bit better. will incorporate my company..somewhere else–likely singapore.

  • Gegiloc

    I heve been an avid reader of Simon´s letters. I love them!

    But I was shocked to see him misleading us in this piece regarding MSBs. I cannot believe Simon does not know that “To qualify as an MSB, a person, wherever located, must do business, wholly or in substantial part within the United States”.

    Why did he not mention this somewhat key definition in his piece.?
    I suppose because it would weaken the basis for his rant ing. Certainly not because he is ignorant of it or thinks it unimportant.

    Simon, you lost a lot of respect on this one. A pity.

    From now on I am going to have to question your motives, sincerity and the facts on every piece you send out.  

  • Hiday_happy

    hi simon..long time no see

  • Arbiter

    To Gegiloc…
    After taking time to read the linked document myself (as you apparently did) I think you would have to admit that – even though an  MSB must do substantial business within the US in order to be affected – it could still be entirely foreign in its location. For example, a foreign company doing business in the US via internet could be deemed as subject to this ruling. This is a serious infringement of personal rights and privacy and worthy of the ‘rant’ you decry…I think you should reconsider your assessment!

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