Financial Crime World

Financial Crime Prevention Efforts Gain Momentum in US Industry

Washington D.C., USA - The United States Department of the Treasury has made significant strides in recent months to prevent illicit actors from exploiting the country’s financial system and equip law enforcement agencies with vital information to hold criminals accountable.

Strengthening Anti-Money Laundering and Countering the Financing of Terrorism Framework

The efforts, which include implementing the Anti-Money Laundering Act and supporting the Administration’s Strategy to Counter Corruption, mark a major overhaul of the US anti-money laundering and countering the financing of terrorism (AML/CFT) framework since its establishment following the 9/11 attacks.

Disrupting Illicit Finance

The drive to root out illicit finance is crucial to ensuring the safety of American lives and advancing national interests. The initiatives aim to disrupt terrorist groups, hostile states, criminal organizations, and corrupt foreign officials from accessing, exploiting, and operating across the US financial system.

Increasing Corporate Transparency

A key component of this effort is increasing corporate transparency through beneficial ownership information reporting. Anonymous shell companies have long been a tool for criminals and corrupt officials to conceal and launder funds.

  • The bipartisan Corporate Transparency Act, enacted in 2021, requires many companies doing business or registered in the United States to report information about who ultimately owns or controls them.
  • On January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) began accepting beneficial ownership information reports. This data will help law enforcement and national security officials untangle opaque corporate structures, hold criminals accountable, and protect national security.

Proposed Rules to Combat Money Laundering

Additionally, FinCEN has proposed a rule to combat money laundering in the US residential real estate sector by increasing transparency. The proposed rule would require certain professionals involved in real estate closings and settlements to report information about non-financed transfers of residential real estate to legal entities or trusts.

  • FinCEN has also proposed a new rule requiring certain investment advisers to apply anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements. The move aims to increase transparency in the sector and assist law enforcement in identifying illicit proceeds entering the US economy.

National Risk Assessments

Treasury has published its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, highlighting the most significant illicit finance threats facing the United States. The reports identify risks associated with fentanyl trafficking, foreign and domestic terrorist attacks, ransomware attacks, and other criminal activities.

Collaboration with Businesses

The Department of the Treasury has committed to working closely with businesses to ensure regulatory obligations are clear, efficient, and reasonable. This year, it plans to propose updated rules to help certain private sector firms focus on mitigating their biggest risks.

Conclusion

Overall, these efforts aim to strengthen the US financial system, protect national security, and promote fairness and opportunity in the economy.