The US Treasury division Financial Crimes Enforcement Network (Fincen) has reported to Congress that the reporting of cross-border wire transfer data by financial institutions is "technically feasible" and may be valuable to efforts to "combat money laundering and terrorist financing".

But according to news reports the database scheme would be limited to banks that directly transmit or receive an international wire transfers. Eric Kringel, senior policy adviser at Fincen, told reporters that this would effectively limit the requirement to around a dozen large financial institutions.

Last year the American Bankers' Association (ABA) called for the US government to drop the scheme and claimed the Treasury Department didn't have the resources to administer such a programme adequately.

News that the US government had been secretly scrutinising suspect wire transfers sent over the interbank Swift network also prompted the ABA to raise objections to the database system. It was reported that the ABA preferred that the US continue with the Swift scheme over the database project because it was more targeted and allowed law enforcement officals to scan data without requiring new reporting requirements from banks.

The Fincen study states that if the database scheme went ahead banks would be required to report international wire transfers of $3,000 or more. The agency argues that banks already have to record this kind of data.

But Fincen says the proposed deadline of December 2007 is unfeasible. The Treasury department believes such a system would take three and a half years to implement and cost around $32.6 million.

The agency says it plans to spend the next year studying and resolving any remaining issues.

Read Fincen's feasibility study here: