Financial Crime World

Title: Treasury Department’s New Initiatives to Enhance Financial Transparency and Combat Financial Crimes in the US

Subtitle: Major Steps to Increase Corporate Transparency, Target Money Laundering in Real Estate, and Regulate Investment Advisers

The U.S. Department of the Treasury has announced a series of new initiatives aimed at strengthening the American financial system against illicit activities. Under the umbrella of the Anti-Money Laundering Act and the Administration’s Strategy to Counter Corruption, these measures represent significant enhancements since the establishment of the Treasury’s Office of Terrorism and Financial Intelligence.

“Rooting out illicit finance is a matter of national security and crucial to the safety of American lives.”

  • Senior Treasury Official

Increasing Corporate Transparency

To combat anonymous shell companies’ use in illicit activities and money laundering, the Financial Crimes Enforcement Network (FinCEN) is requiring companies to report beneficial ownership information. Starting January 1, 2024, many businesses doing business or registered in the United States will be required to report this information. This move will:

  • Better equip law enforcement and national security officials to untangle complex corporate structures
  • Bring criminals to justice
  • Protect national security
  • Level the playing field for law-abiding small businesses

Combatting Money Laundering in Real Estate

To increase transparency in the residential real estate market where money laundering commonly occurs, FinCEN issued a Notice of Proposed Rulemaking. This rule would require professionals involved in real estate closings and settlements to report non-financed transfers of residential real estate to legal entities or trusts. Key benefits include:

  • Targeting high-risk transactions
  • Minimizing burden
  • Enhancing transparency

Overseeing Investment Advisers

The investment adviser sector, which plays a crucial role in the U.S. economy, is now subject to increased scrutiny. FinCEN, on February 13, 2023, issued a Notice of Proposed Rulemaking, which requires certain investment advisers to apply anti-money laundering and countering the financing of terrorism measures. This proposed rule will:

  • Increase transparency to the U.S. financial system
  • Allow law enforcement to identify illicit proceeds entering the economy

Nationwide Illicit Finance Risk Assessments

The Treasury Department published the 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing on February 7, 2023. These reports address the most significant:

  1. Fentanyl crisis
  2. Foreign and domestic terrorist attacks
  3. Growth of professional money laundering
  4. Continued digitization of payments and financial services
  5. Global peace and security threats like Russia’s illegal war in Ukraine

These moves represent the Treasury Department’s ongoing effort to work collaboratively with businesses to ensure regulatory obligations are clear, efficient, and reasonable. In 2023, Treasury intends to propose updated rules to help certain private sector firms mitigate their highest risks.

For further information, follow these links:

  • [2024 National Money Laundering Risk Assessment](February 2024)
  • [2024 National Terrorist Financing Risk Assessment](February 2024)
  • [2024 National Proliferation Financing Risk Assessment](February 2024)
  • [US Sectoral Illicit Finance Risk Assessment: Investment Advisers](February 2024)
  • [Alert on Potential U.S. Commercial Real Estate Investments by Sanctioned Russian Elites, Oligarchs, and Their Proxies](January 2023)