When you attempt to execute a financial transaction
at your local bank, you will likely at some point or another encounter
a situation where you will be told that your bank is required by federal
law to report your transaction to the federal government because it
exceeds $3,000 in value. The bank will tell you that this is a
requirement imposed by the Bank Secrecy Act (BSA). This article
will clearly show that the Bank Secrecy Act, like the Internal Revenue
Code, only applies on federal property and inside the federal zone and
only to those engaged in a "trade or business" which in all cases is
synonymous ONLY with a public office. This article will give you
facts and cites to provide to your bank to refute their erroneous claim
that the federal government has a right within the sovereign 50 states
to invade your privacy and require you to be a witness against yourself
(in violation of the Fifth Amendment) by reporting your financial transactions
to the federal government.
Article 1, Section 8 of the U.S. Constitution gives the federal
government two specific powers relating to money. The Congress
shall have the Power...:
The statutes which derive from the above powers
related to transaction reporting by financial institutions are summarized
below. You will note that these reporting requirements exceed
the powers granted explicitly in the constitution to the U.S. government
and are therefore questionable in their delegated authority from the
beginning:
With all of the above in mind, now lets examine the
jurisdiction
of the federal courts to enforce these laws. We will start
with a now outdated statute at 40 U.S.C.
§255, which says in effect that the U.S. government only has jurisdiction
to enforce federal laws within the sovereign 50 states on land that
was ceded in writing by the state to the federal government. This statute has since been replaced with 40 U.S.C. §3112 which accomplishes the same result. Since
most banks inside the states do not occupy federal land, then they aren't
under the jurisdiction of the federal government. Here is that
section:
TITLE
40 >
CHAPTER
3 > Sec. 255.
Sec. 255. - Approval of title prior to Federal land purchases;
payment of title expenses; application to Tennessee Valley Authority;
Federal jurisdiction over acquisitions
Unless the Attorney General gives prior written approval of
the sufficiency of the title to land for the purpose for which the
property is being acquired by the United States, public money may
not be expended for the purchase of the land or any interest therein.
The Attorney General may delegate his responsibility under
this section to other departments and agencies, subject to his general
supervision and in accordance with regulations promulgated by him.
Any Federal department or agency which has been delegated
the responsibility to approve land titles under this section may
request the Attorney General to render his opinion as to the validity
of the title to any real property or interest therein, or may request
the advice or assistance of the Attorney General in connection with
determinations as to the sufficiency of titles.
Except where otherwise authorized by law or provided by contract,
the expenses of procuring certificates of titles or other evidences
of title as the Attorney General may require may be paid out of
the appropriations for the acquisition of land or out of the appropriations
made for the contingencies of the acquiring department or agency.
The foregoing provisions of this section shall not be construed
to affect in any manner any existing provisions of law which are
applicable to the acquisition of lands or interests in land by the
Tennessee Valley Authority.
Notwithstanding any other provision of law, the obtaining
of exclusive jurisdiction in the United States over lands or interests
therein which have been or shall hereafter be acquired by it shall
not be required; but the head or other authorized officer of any
department or independent establishment or agency of the Government
may, in such cases and at such times as he may deem desirable, accept
or secure from the State in which any lands or interests therein
under his immediate jurisdiction, custody, or control are situated,
consent to or cession of such jurisdiction, exclusive or partial,
not theretofore obtained, over any such lands or interests as he
may deem desirable and indicate acceptance of such jurisdiction
on behalf of the United States by filing a notice of such acceptance
with the Governor of such State or in such other manner as may be
prescribed by the laws of the State where such lands are situated.
Unless and until the United States
has accepted jurisdiction over lands hereafter to be acquired as
aforesaid, it shall be conclusively presumed that no such jurisdiction
has been accepted
Now if we look at the definition of "State" within the context of
the jurisdiction
of the federal courts, we find the following in
28 U.S.C.
§1332(d):
TITLE
28 >
PART IV
>
CHAPTER
85 > Sec. 1332.
Sec. 1332. - Diversity of citizenship; amount in controversy;
costs
(a) The district courts shall have original jurisdiction
of all civil actions where the matter in controversy exceeds the
sum or value of $75,000, exclusive of interest and costs, and is
between -
(1) citizens of
different States;
(2) citizens of
a State and citizens or subjects of a foreign state;
(3) citizens of
different States and in which citizens or subjects of a foreign
state are additional parties; and
(4) a foreign state, defined
in section
1603(a)
of this title, as plaintiff and citizens of a State or of different
States.
For the purposes of this section, section 1335, and section
1441, an alien admitted to the United States for permanent residence
shall be deemed a citizen of the State in which such alien is domiciled.
(b) Except when express provision therefor is
otherwise made in a statute of the United States, where the plaintiff
who files the case originally in the Federal courts is finally adjudged
to be entitled to recover less than the sum or value of $75,000,
computed without regard to any setoff or counterclaim to which the
defendant may be adjudged to be entitled, and exclusive of interest
and costs, the district court may deny costs to the plaintiff and,
in addition, may impose costs on the plaintiff.
(c)
For the purposes of this section and section
1441
of this title -
(1) a corporation
shall be deemed to be a citizen of any State by which it has been
incorporated and of the State where it has its principal place of
business, except that in any direct action against the insurer of
a policy or contract of liability insurance, whether incorporated
or unincorporated, to which action the insured is not joined as
a party-defendant, such insurer shall be deemed a citizen of the
State of which the insured is a citizen, as well as of any State
by which the insurer has been incorporated and of the State where
it has its principal place of business; and
(2) the legal
representative of the estate of a decedent shall be deemed to be
a citizen only of the same State as the decedent, and the legal
representative of an infant or incompetent shall be deemed to be
a citizen only of the same State as the infant or incompetent.
(d) The word ''States'',
as used in this section, includes the Territories, the District
of Columbia, and the Commonwealth of Puerto Rico
Note in the above that the sovereign 50 states
of the union of states are not "States" as defined above, they are "foreign
states". Let's examine this "foreign state" concept further.
What follows is a definition of the term "foreign state" right out of
Title 28, which is the title that regulates the authority of the Judiciary.
We have boldface underlined the portion of the cite that shows that
sovereign states of the union of states are "foreign states":
TITLE
28 >
PART IV
>
CHAPTER
97 > Sec. 1603.
Sec. 1603. - Definitions
For purposes of this chapter -
(a)
A ''foreign state'', except as used
in section
1608
of this title, includes a political subdivision of a foreign state
or an agency or instrumentality of a foreign state as defined in
subsection (b).
(b)
An ''agency or instrumentality of a
foreign state'' means any entity -
(1) which is a separate legal
person, corporate or otherwise, and
(2) which is an organ of a foreign
state or political subdivision thereof, or a majority of whose shares
or other ownership interest is owned by a foreign state or political
subdivision thereof, and
(3)
which is neither a citizen of a State
of the United States as defined in section
1332
(c) and (d) of this title, nor created under the laws of any third
country.
(c)
The ''United States'' includes all
territory and waters, continental or insular, subject to the
jurisdiction
of the United States.
The federal courts therefore
have no
jurisdiction inside of "foreign states" defined above, which means
in the 50 states and outside the federal zone, unless the parties on
both sides of the dispute meet the jurisdictional requirements of
28 U.S.C.
§1332. These conclusions are consistent with Article 1, Section
8, Clause 17 of the Constitution, which gives exclusive legislative
jurisdiction to the federal government only within the District of Columbia
and areas within the "foreign states", that is the 50 states, specifically
ceded by the respective state government to the federal government.
Once we understand the jurisdictional
limitations of the federal government, then we can examine all federal
legislation it passes with the assumption that it only applies within
this limited jurisdiction, unless a contrary intent is clearly communicated:
“A canon of construction which teaches that of Congress, unless
a contrary intent appears, is meant to apply
only within the territorial
jurisdiction of the United States.”
[U.S. v. Spelar,
338 U.S. 217 at 222 (1949)]
If all that isn't enough for you, consider
that there are only two types of currency transactions that are reportable
under Title 31 of the United States Code are for those people engaged
in a "trade or business" in the United States. The term "trade
or business" as used in Title 31 of the U.S. Code has
exactly
the same meaning as that used in the Internal Revenue Code (IRC):
Title 31: Money and Finance:
Treasury
PART 103—FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN
TRANSACTIONS
Subpart B—Reports Required To Be Made
§ 103.30 Reports relating to currency in excess of $10,000
received in a trade or business.
(11)
Trade or business.
The term trade or business has the same
meaning as under
section 162 of title 26, United States Code.
The Internal Revenue Code,
26 U.S.C. §162 then defines "trade or business" by building on the
definition found in 26 U.S.C. 7701(a)(26), which is
only the "functions
of a public office":
26 U.S.C.
§7701(a)(26)
"The term 'trade or business'
includes the performance of the functions of a
public office."
Below are the only two types of currency transactions that require
reporting under Title 31 of the U.S. Code:
-
Transactions involving a person engaged in a "trade
or business". See
31 C.F.R. §103.30(d)(2). Which says:
31 C.F.R. §103.30(d)(2) General
(2) Receipt
of currency not in the course of the recipient's
trade or business.
The receipt of currency in excess
of $10,000 by a person other than in the course of the person's
trade or
business is not reportable
under 31 U.S.C. 5331.
-
Transactions involving a person engaged in a "non-financial
trade
or business". These transactions are a subset of those
involving a "trade
or business" above. See
31 U.S.C.
§5331 below for the only types of reportable "nonfinancial trade
or business" activity. Notice that financial activity not
associated with a "trade or business" is not included:
TITLE 31 >
SUBTITLE IV >
CHAPTER 53 >
SUBCHAPTER II > § 5331
§
5331. Reports relating to coins and currency received in nonfinancial
trade or business
(a) Coin and Currency Receipts of
More Than $10,000.—Any person—
(1) who is engaged in a trade or business; and
(2) who, in the course of such trade or business, receives more
than $10,000 in coins or currency in 1 transaction (or 2 or
more related transactions),
shall file a report described in subsection (b) with respect
to such transaction (or related transactions) with the Financial
Crimes Enforcement Network at such time and in such manner as
the Secretary may, by regulation, prescribe.
Both of the above have as a prerequisite
a "trade or business". The term "nonfinancial trade or business"
is based on the term "trade or business" defined earlier as follows:
TITLE 31 >
SUBTITLE IV >
CHAPTER 53 >
SUBCHAPTER II > § 5312
§ 5312. Definitions and application
(4) Nonfinancial
trade or business.— The term “nonfinancial
trade
or business” means any
trade
or business other than a financial institution that
is subject to the reporting requirements of section
5313 and regulations prescribed under such section.
Consequently, the only people who any financial institutions WITHIN
the federal
zone must make any kind of currency report for is an elected or
appointed officer of the United States Government, which is what a "public
office" is. Financial institutions not within the federal zone
need not make any currency transaction reports at all, even if they
are dealing with elected or appointed officers of the United States
government!
As a result of the analysis above, if you are conducting a transaction
that your financial institution thinks needs to be reported, please
demand proof from them that you are engaged in a "trade or business"
FIRST, and show them the definition of "trade or business" before they
answer the question. As a matter of fact, show them this article
and ask them to rebut it!