“Just the FACTs” is a round-up of news stories and information regarding efforts to combat corrupt financial practices, including offshore tax haven abuses, corporate secrecy, and the laundering of money through the financial system.
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Here’s the State of Play
Fight Against Kleptocracy Gets a Big Boost as ENABLERS Act Moves Forward
The United States could be moving one step closer to freedom from its role as an enabler of global kleptocracy. Two weeks ago, lawmakers in the House Armed Services Committee voted to include the ENABLERS Act in this year’s National Defense Authorization Act (NDAA). The bipartisan reforms in the Act would enlist certain professional service providers – the financial gatekeepers on the front lines of the U.S.’ anti-money laundering defense – into the fight against kleptocracy by instituting common sense procedures to detect, flag, and prevent the laundering of corrupt and criminal funds. The advancement of the ENABLERS Act marks a huge win for Congress’ anti-kleptocracy champions and their work during this year’s #KleptoMonth. Now, the Senate must do its part by including complementary reforms in their own version of the NDAA.
In keeping with FACT’s prior advocacy, the Coalition applauded the move as a key step toward bringing the U.S. in line with international anti-money laundering recommendations. Since 2003, the Financial Action Task Force has recommended that key financial gatekeepers like transactional attorneys and trust service providers, among others, do their part to keep illicit funds out of clean financial markets. The United States is one of only two democracies that have failed to incorporate these recommendations into law. The ENABLERS Act could remedy this longstanding gap, and in doing so help the United States address its abysmal ranking as the greatest contributor to global financial secrecy.
Bringing financial gatekeepers to bear in the fight against kleptocracy is only one part of holistic anti-corruption defense the U.S. needs to build. As the Russian invasion of Ukraine and subsequent sanctions have shown, illicit funds are pervasive in western financial markets, exploiting, among others, transparency gaps in the private equity industry. In other words, an anti-money laundering regime is only as strong as its weakest link. The time is now for the Biden Administration to implement the landmark Corporate Transparency Act, which bans the use of U.S. anonymous shell companies, among other needed anti-money laundering protections for real estate and private equity.
Oliver Bullough, Lawmakers from U.S. and U.K. Call for Transatlantic Competition against Kleptocracy
Acclaimed author Oliver Bullough joined FACT last month for the launch of his new book, Butler to the World: How Britain Helps the World’s Worst People Launder Money, Commit Crimes, and Get Away with Anything. In a panel discussion with U.S. Representative Abigail Spanberger (D-VA), U.K. MP Kevin Hollinrake, and anti-corruption advocates from both sides of the Atlantic, Bullough hailed the historic opportunity following the Russian invasion of Ukraine to combat financial secrecy.
Lawmakers agreed. Hollinrake, the co-chair for the All-Party Parliamentary Group on Fair Business Banking, noted that “it’s becoming clear that every tyrant, every terrorist, every kleptocrat….needs to move thier money through the U.S or the U.K.” and that measures like the U.K.’s “Economic Crimes Bill is an important start,” but not the end, of cleaning up financial markets. Spanberger, a member of Congress’ Caucus Against Foreign Corruption and Kleptocracy, saw the opportunity for “friendly competition” between the U.K. and U.S. in implementing needed transparency reforms like those advocated by FACT.
Latest from FACT
|PRESS RELEASE: Congress Takes Bold Step to Crack Down on Money Laundering and Global Corruption
June 23: FACT applauds the inclusion of bipartisan legislation to regulate certain financial “enablers” in the House NDAA.
Recent and Upcoming Events
|Beneficial Ownership Leadership Group High-Level Panel Discussion “New global horizons: raising ambitions for beneficial ownership transparency”
July 13: Open Ownership and the Open Government Partnership will convene experts from civil society and senior officials from multilateral institutions at this panel discussion on the global need for, and growing momentum behind, beneficial ownership.
Social Media Shoutouts
@SenWhitehouse: Putin’s oligarchs hid their stolen wealth in shell companies, but that shouldn’t stop us from seizing it. I pushed to secure important funding for Treasury and DOJ programs to go after this dirty money – it’s the least we can do for the Ukrainian people.
@RepMalinowski: It’s too easy to use accounting firms, lawyers & others to launder money in ways that are hard for our sanctions enforcement agencies to see. By proposing simple requirements, we exponentially increase the effects of the sanctions program. -TM
@RepJoeWilson: Grateful to have led this amendment to keep blood money out of our democracy.
About the FACT Coalition