WASHINGTON, DC – Last night, Congress unveiled its long-negotiated omnibus spending bill to fund the federal government for fiscal year 2023, which includes $190.2 million for the Financial Crimes Enforcement Network (FinCEN). This figure represents an 18 percent boost to FinCEN, the bureau of the Treasury Department that serves as the nation’s financial intelligence unit and is responsible for crafting, implementing, and enforcing U.S. anti-money laundering reforms.
Chief among these reforms is the timely implementation of the Corporate Transparency Act (CTA), which would end the abuse of anonymous U.S. shell companies. FinCEN published the draft second rule for the CTA last week, but at least one additional rulemaking remains before the law can be fully implemented. The agency is also considering landmark reforms – prioritized by the White House in the first ever U.S. Strategy on Countering Corruption – to tackle money laundering in the $50 trillion real estate and $11 trillion private investment markets. Congress is slated to vote on the omnibus legislation later this week.
Erica Hanichak, Government Affairs Director of the FACT Coalition, said in a statement:
“In including these overdue resources for FinCEN in a year-end spending bill, Congress is finally reinvesting in our nation’s financial defenses to deny criminal and kleptocratic funds safe haven in the United States. The funding boost further marks Congress’ bipartisan recognition of the critical role FinCEN plays in safeguarding the integrity of the U.S. financial system. Long woefully underfunded, Congress must move quickly to pass the omnibus spending bill to give FinCEN the tools it needs to carry out an ambitious agenda to close the gates to those that would continue to weaponize U.S. financial systems against U.S. national security and democracy worldwide.
“Our nation’s financial crime fighters need resources and reinforcements to block a flood of illicit money that’s finding its way into the United States – by Treasury estimates, as much as 2 percent of U.S. GDP, or hundreds of billions of dollars each year.
“FinCEN needs these funds to turn the tide. New resources can be used to hire additional staff, to modernize the bureau’s technology, and to move swiftly to finalize landmark anti-money laundering rules preventing the abuse of shell entities in the U.S., real estate, and private investment to hide ill-gotten gains. New appropriations will further empower FinCEN to continue its important contributions to the global effort to block Russian oligarch assets in light of Russia’s illegal invasion of Ukraine.
“These funds can make a difference in real-time. Just last week, FinCEN released a new draft rule to implement the Corporate Transparency Act, which establishes a secure directory at FinCEN to which certain entities will report their true, beneficial owner. While FACT is still reviewing the rule, it’s clear that FinCEN will need substantial resources to build a modern directory that employs real-time data verification, along with other data, information-sharing, and security best practices. This funding increase is a good first step in that direction.
“Nevertheless, Congress’ work isn’t done. FinCEN will need multi-year increases to its budget to keep us safe and allow it to serve as the vanguard of U.S. financial integrity. This December marks the one year anniversary of the release of the Administration’s inaugural Strategy on Countering Corruption, and FinCEN still has a lot on its plate to meet the ambitious but necessary agenda laid out in the strategy. We urge Congress to be a partner in funding these initiatives.
“We thank Senators Van Hollen, Hyde-Smith, Leahy, and Shelby as well as Representatives Quigley, Womack, DeLauro, and Granger for negotiating these much-needed funds for FinCEN. We’re also grateful to Senators Whitehouse and Grassley, as well as Representative Spanberger, for championing increased FinCEN funding to protect U.S. national security.”
Notes to the Editor:
- Click here for the consensus Fiscal Year 2023 spending bill, released last night.
- Click here for the President’s discretionary spending request from February this year, which pressed for $210.3 million for FinCEN, or a 31 percent increase over last year’s enacted levels, for the bureau (p. 98).
- Bipartisan members have publicly supported significant funding increases for FinCEN. See bipartisan letters in the House led by Rep. Spanberger (D-VA) and the Senate by Sen. Whitehouse (D-RI) and Sen. Grassley (R-IA).
- FinCEN received one-time emergency appropriations as part of two Ukraine packages earlier this year, as a means to backstop efforts to “freeze and seize” Russian oligarch assets.
- A 2022 Transparency International report, “Up to the Task?: State of Play in Countries Committed to Freezing and Seizing Russian Dirty Money,” demonstrates how U.S. funding for FinCEN stacks up against that of U.S. allies.
- FACT Sheet for Congress on Emergency Treasury Funding Needs re: Ukraine Crisis and FY2023.