Dealers can expect tougher reporting and record-keeping requirements on cash purchases by year end as part of a federal effort to combat money laundering.
Restrictions passed by Congress last October, as part of a bill meant to fight terrorism, were supposed to take effect in April but were postponed to give the U.S. Department of the Treasury time to flesh out the requirements.
The law requires financial institutions and businesses such as car dealerships to
Dealers already must report cash transactions over $10,000 to comply with cash reporting requirements designed to trace money laundered from drug trafficking.
Paul Minnis, a lawyer for the National Automobile Dealers Association, doesn't know how the changes will affect dealerships, but he believes that record-keeping requirements likely will be more stringent.
The Treasury Department is expected to establish detailed rules for dealers and other businesses when its review is complete in October.
Joe Martini, a Fairfield, Conn., lawyer and former assistant U.S. attorney who has prosecuted dealers for money laundering, said dealers can expect greater scrutiny when the new rules take effect. He predicted businesses will have to keep more detailed records on their customers.
Said Martini: "You have got to limit your exposure" to liability.