U.S. wants international bank record access.

According to reports, the Bush administration is developing a plan to give the government access to hundreds of millions of international banking records in an effort to trace and deter terrorist financing.

The initiative, led by the Treasury Department's Financial Crimes Enforcement Network (Fincen), would vastly expand the government's database of financial transactions by gaining access to logs of international wire transfers into and out of U.S. banks. Such overseas transactions were used by the 9/11 hijackers to wire more than $130,000, officials said, and are still thought to be vulnerable to terrorist financiers.

According to government officials, the effort grew out of a little-noticed provision in the intelligence reform bill passed by Congress in December, and it would give them the tools to track leads on specific suspects and, more broadly, to analyze patterns in terrorist financing and other financial crimes. The provision authorized the Treasury Department to pursue regulations requiring financial institutions to turn over "certain cross-border electronic transmittals of funds" that may be needed to fight money laundering and terrorist financing.

The federal government has taken many aggressive steps since the 9/11 attacks to disrupt terrorist financing. It has expanded its list of terrorist-related groups banned from financial dealings with the United States, set up new investigative offices to track terrorist financing, and required more financial data and tighter compliance from financial industries as part of the USA PATRIOT Act.

As a result, banking officials say many banks are sending the government more reports than ever before on "suspicious activities" by their customers and may be clogging the system with irrelevant data for fear of being penalized if they fail to file the reports as required.

Many say they feel besieged by what they consider overly burdensome government antiterrorism rules, and industry officials say this plan for tracking overseas wire transfers may intensify pressure on them to comply with the growing base of provisions to fight money laundering.

The New York Times reported that the government's aggressive tactics since the 9/11 attacks have already caused something of a backlash among banking compliance officers and even some federal officials, who say the effort has gone too far in penalizing the financial sector for lapses and has effectively criminalized what were once considered mere technical violations.

Of particular concern to banking officials are five criminal enforcement actions in the last few years against banks for failing to comply with laws to combat money laundering. None of the cases involved terrorist financing, but prosecutors say most centered on egregious lapses by banks in turning a blind eye toward possible money laundering, for instance, by accepting duffel bags from drug dealers with hundreds of thousands of dollars in cash.

The Federal Reserve System has met with Justice Department officials to resolve friction over the enforcement actions, and it is seeking changes that would require such prosecutions to be overseen by Justice Department officials in Washington rather than by federal prosecutors in the field, officials said.

Fincen, which is leading the effort to gain access to international wire transfers, has created a working group with about 20 employees, has begun meetings with the Federal Bureau of Investigation, the Department of Homeland Security, and other agencies, and it has developed a general concept for how to proceed. Officials are also looking at similar models in Canada and Australia.

A final plan is not expected before the end of the year, and officials say many logistical and legal issues must still be resolved. For instance, although some estimates cited by Fincen suggest that there are at least a half-billion international wire transfers a year totaling trillions of dollars, officials want clearer data. The financial data demanded by Fincen may total several hundred million records, and the agency says it wants to minimize the logistical and financial disruption to banks.

Officials are looking at whether to give higher priority to wire transfers from the Middle East or other regions considered high-risk, but they said they want to avoid provoking a public outcry over charges of ethnic profiling or driving terrorist financiers out of banks and into underground markets. Officials also say they are considering privacy concerns that may arise and want to include safeguards to prevent the misuse of the enormous cache of financial records that would be collected.

Advocates see the international transfers as an important tool in tracking terrorist financing.

"The idea is for the government to make it more difficult and more risky for terrorists to move money, and right now international wire transfers provide the fastest, cheapest and most reliable way for the terrorists to do that," John Roth, a former staff member for the 9/11 commission and a coauthor of its terrorist financing report, told the Times.