The Currency and Foreign Transactions Reporting Act, commonly known as the Bank Secrecy Act, was enacted in 1970. The Act requires individuals and financial institutions to report certain foreign and domestic financial transactions to the federal government. Through its reporting and recordkeeping requirements, the Act aims at providing an audit trail of large flows of currency and those persons, companies, and financial institutions responsible for that flow. This audit trail is meant to be used by law enforcement agencies in their detecting and investigating criminal activities. Failure to comply with the Act's requirements may lead to civil and/or criminal penalties.
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