Breaking news: The U.S. Department of Treasury and Federal Reserve
announced a joint rule Wednesday to implement and enforce the Unlawful
Internet Gambling Enforcement Act. The rule relies on financial
institutions performing due diligence on corporate customers to ensure
they're not processing online gambling transactions.
American financial institutions have been given until Dec. 1, 2009 to
comply with the regulations designed to block online gambling
transactions, including those made through credit cards, electronic
funds transfers and checks. The rule goes into effect Jan. 19,
"For purposes of the rule, unlawful Internet gambling generally would
cover the making of a bet or wager that involves use of the Internet
and that is unlawful under any applicable federal or state law in the
jurisdiction where the bet or wager is initiated, received, or
otherwise made," the Treasury Department said in a statement.
According to the final rule published by the Treasury Department,
during the public comment period of the proposed UIGEA rule, "about 20
commenters, almost all of them depository institutions, noted that
notwithstanding the Agencies' efforts to craft a reasonable rule, the
proposed regulation would be unduly burdensome and would result in
compliance costs greater than any offsetting societal benefits.
"Several of these commenters stated that the rule would adversely
affect the competitiveness of the U.S. payments system, and that the
Agencies should be cognizant of the potential for the Act and similar
laws to cumulatively cause capital flight and erode the U.S. dollar's
status as the world's reserve currency."
The Treasury Department says the comments were taken into
consideration, but says it believes "that flexible, risk-based due
diligence procedures at account opening, such as those set out in the
final rule, present the best option for balancing these two interests."