Financial Institutions Take Major Steps to Combat Corruption in the US

The United States Department of the Treasury has made significant progress in preventing illicit actors from exploiting the US financial system and equipping law enforcement and national security agencies with vital information to hold them accountable.

Implementing Anti-Money Laundering Act

The initiatives aim to strengthen the US anti-money laundering (AML) and countering the financing of terrorism (CFT) framework, which is a critical step in ensuring the safety of American lives and advancing the interests of the United States. The measures will help disrupt terrorist groups, hostile states, criminal organizations, and corrupt foreign officials from accessing, exploiting, and operating across the US financial system.

Corporate Transparency Act

One major step is the implementation of the Corporate Transparency Act, which requires companies doing business or registered in the US to report information about who ultimately owns or controls them to the Financial Crimes Enforcement Network (FinCEN). This information will help law enforcement and national security officials untangle opaque corporate structures, hold criminals accountable, and protect national security.

Increasing Transparency in Residential Real Estate

Another initiative is aimed at increasing transparency in the residential real estate market. FinCEN has proposed a rule requiring 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. This will help combat money laundering and protect the integrity of the US housing market.

Strengthening Investment Adviser Requirements

Additionally, FinCEN has issued a notice of proposed rulemaking to require certain investment advisers to apply AML/CFT requirements, including implementing risk-based programs, reporting suspicious activity, and maintaining relevant records. This will increase transparency in the US financial system and assist law enforcement in identifying illicit proceeds entering the US economy.

Supporting Businesses

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

Risk Assessment and National Risk Assessments

In addition, the Treasury Department has published a risk assessment of the investment adviser sector, which identified several illicit finance and national security risks. It has also published its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, which highlight the most significant illicit finance threats facing the US.

Conclusion

These efforts demonstrate the Treasury Department’s commitment to combating corruption and protecting the integrity of the US financial system. By strengthening AML/CFT measures and increasing transparency in key sectors, the department is helping to ensure that the US remains a safe and secure place for individuals and businesses to invest and do business.