April 5, 2017
By Jim Daly
While President Donald J. Trump has promised to build a wall along the southern U.S. border to stop illegal immigrants and have Mexico pay for it, an Alabama Congressman’s bill would provide financial support from people in the U.S. sending funds to Mexico and 41 other countries or territories. And anyone trying to evade the bill’s 2% remittance fee could face up to 20 years in prison and a $500,000 fine.
A view of the Mexico-U.S. border wall at Tijuana, Mexico, and San Diego.
The head of the National Money Transmitters Association on Wednesday called the bill a “xenophobe’s hallucination,” and predicted it will end up in court if it becomes law.
U.S. Rep. Mike Rogers, a Republican from Alabama’s 3rd District, said his bill would impose a 2% fee “on all remittances headed south of the U.S. border,” according to a March 30 press release from his office. But the actual text of the bill, H.R. 1813, the Border Wall Funding Act of 2017, wasn’t posted on the official Congress.gov Web site until recently. The text names 42 countries or territories in Latin America and the Caribbean subject to a fee of 2% of the transferred amount if a person in one of those jurisdictions is the recipient of a U.S.-originated wire transfer. Mexico is listed first. Puerto Rico and the U.S. Virgin Islands are exempt, and the bill does not name the country of Trinidad and Tobago.
Wire-transfer providers would forward the fees they collect to the U.S. Treasury Department “to be expended for the purpose of improving border security,” the text says. The secretary of Homeland Security is to work with the Treasury Department in setting up a collection system by Sept. 30.
“President Trump has made it very clear that he intends to complete a wall along our southern border,” Rogers said in the release. “As a senior member of the Homeland Security Committee, I have long supported the border wall, which will protect Americans.”
Those who attempt to evade the fee could be subject to a fine of $500,000 or twice the value of funds involved, whichever is greater, or even imprisonment of up to 20 years. Countries that aid individuals in evading the fee could lose their U.S. foreign aid or eligibility for U.S. visa-waiver programs.
David Landsman, executive director of the Great Neck, N.Y.-based NMTA, said in a statement that the bill is “especially ham-handed.” The association opposes any wire-transfer tax.
“It looks like a xenophobe’s hallucination, in its first draft, that was scribbled feverishly on the back of an envelope,” Landsman said. “It is missing about 90% of what would need to be addressed; it would punish all the wrong people; it would be creating a vast new regulatory ‘administrative state’ apparatus, and insert government more into people’s lives.”
Landsman also said the bill “violates many civil rights and constitutional principles” and “would no doubt be subject to various court challenges.”
But Rogers said in his release that “remittances, or wire transfers, are commonly used by illegal immigrants to move money from the U.S. to their home countries.” Mexico alone in 2014 received more than $24 billion in remittances from the U.S. and some Central and South American countries get more than 15% of their gross domestic product from remittances, he said. Rogers didn’t provide any numbers on how much remittance volume comes from illegal immigrants.
“This bill is simple—anyone who sends their money to countries that benefit from our porous borders and illegal immigration should be responsible for providing some of the funds needed to complete the wall,” Rogers said. “This bill keeps money in the American economy, and most importantly, it creates a funding stream to build the wall.”
Remittance providers for five years would be permitted to retain up to 5% of the border-wall fees to cover their costs for collecting and submitting them. The bill, which has eight co-sponsors, was referred to the House Judiciary Committee.
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