In a memo sent to the Washington Post and published on his website, presidential candidate Donald Trump has outlined his ideas for compelling Mexico to “pay for the wall” as promised by his campaign. The first item on his list is unilateral executive tightening of banking regulations:
The provision of the Patriot Act, Section 326 – the “know your customer” provision, compelling financial institutions to demand identity documents before opening accounts or conducting financial transactions is a fundamental element of the outline below. That section authorized the executive branch to issue detailed regulations on the subject, found at 31 CFR 130.120-121. It’s an easy decision for Mexico: make a one-time payment of $5-10 billion to ensure that $24 billion continues to flow into their country year after year.
The paper goes on to describe in more detail the regulations that would be proposed, then dropped in a deal with the Mexican government in exchange for a payment.
I’ve been writing for quite a while now about how “Know Your Customer” and anti-money-laundering rules, typically adopted on a rationale of combating terrorism and major organized crime, are susceptible to being turned by government to many other objectives not discussed when regulatory authority was originally being sought.