Mar.26, 2010, 12:00 am

Font Size: Default font size Larger font size New legislation aimed at closing a federal loophole that allows drug cartels to move large amounts of money across the border on stored-value cards was introduced to Congress Thursday.

The cards aren't currently classified under federal law as a "monetary instrument," which means holders don't have to declare them while crossing the border. By contrast, anyone carrying over $10,000 in cash across the border must declare it to customs officers.

The proposed law - dubbed the Anti-Cash Smuggling Act of 2010 - would reclassify the cards and allow border authorities to regulate them like other monetary instruments.

The legislation was introduced by Rep. Ann Kirkpatrick. The Arizona Democrat serves on the House Committee on Homeland Security.

A threat assessment by the U.S. Department of Justice National Drug Intelligence Center in 2006 dubbed the cards "an ideal money-laundering instrument," citing loose regulation; cardholder anonymity; and liberal limits on value, reloading, withdrawal and spending on some types of the cards.

Federal officials have no way of knowing how much money travels in and out of the United States on the cards because they have no way to track them. But Arizona Attorney General Terry Goddard - a vocal leader for card regulation - believes it's millions, based on conversations with law-enforcement officials.

"I can declare that I have $100,000 on the card, and they still can't do anything about it," Goddard said.

A new focus on southbound inspections by border authorities has netted record seizures at Southwest border ports. About $44 million has been seized during the inspections of vehicles and people exiting the United States over the past 1 1/2 years, compared to $43.6 million seized during the previous four years combined, U.S. Customs and Border Protection figures show.