This report advances a number of “steps-forward” on how to more effectively combat money laundering.
- Congress should move legislation to end the abuse of anonymous shell companies by requiring beneficial ownership transparency.
- Congress should make all felonies predicate offences for money laundering.
- Congress should provide specific line item funding to the U.S. Trade Transparency Units (TTUs) so as to enhance their analytic capabilities and augment the personnel necessary to foster trade transparency in the United States and to expand the international TTU network.
- Congress should pass legislation which requires U.S. companies that engage in financial transactions to obtain a Legal Entity Identifier (LEI).
- Congress should pass legislation requiring transactional lawyers, and anyone else who forms legal entities, to carry out anti-money laundering due diligence.
- The U.S. should develop an updated anti-money laundering strategy to address new and continuing threats to the financial system.
- The U.S. should convene an inter-agency task force to adapt crime-fighting strategies to cover the use of mobile payment systems.
- The administration should require bidders for federal contracts and grants to publicly disclose their beneficial ownership information.
- The administration should adopt the Legal Entity Identifier (LEI), or a similar, non-proprietary and open system, that makes the hierarchy of entity ownership transparent, as the standard identifier in the federal procurement process.
Treasury Department and the Financial Crimes Enforcement Network (FinCEN)
- The Department of the Treasury, which leads the U.S. Financial Action Task Force (FATF) delegation, should introduce a resolution calling for members to promote trade transparency in order to combat trade-based money laundering and value transfer.
- Treasury should instigate a new rule-making process to strengthen due diligence requirements for financial institutions.
- FinCEN should be tasked with aggressive outreach to communities that rely on informal Money Service Businesses (MSBs). FinCEN should pre-empt state MSB licensing requirements and establish uniform licensing requirements that would be applicable to any company designated as an MSB/money transmitter in the United States.
- FinCEN should finalize the proposed rule to impose anti-money laundering (AML) and suspicious activity reporting requirements on registered investment advisers.
- FinCEN should re-examine each of the temporary AML exemptions to determine whether these exemptions are still warranted.
Department of Justice
- The Department of Justice should ensure that the top decision-makers at financial institutions, accounting firms, and law firms are held personally accountable for the actions of their organizations.
- Justice should change the incentives for law enforcement to encourage them to pursue complex financial crimes cases.
- Justice should provide specific funds for anti-money laundering/counter-terrorist finance (AML/CFT) training to the 93 U.S. Attorneys’ offices.
More information on the recommendations can be found in Section VII on page 19 of the full report.
The FACT Coalition would like to thank the Ford Foundation and the Wallace Global Foundation for their support for this report.
The FACT Coalition would also like to thank Clark Gascoigne (Deputy Director), Jacob Wills (Communications and Operations Associate) and Yaroslav Pustarnakov (Advocacy Intern) for their contributions to the report. FACT also appreciates the contributions of Liz Confalone and Heather Lowe (Global Financial Integrity); Mark Hays, Stefanie Ostfeld, and Eryn Schornick (Global Witness); Elise Bean; Jo Marie Griesgraber (New Rules for Global Finance); Susan Harley (Public Citizen); and Nathan Proctor (Fair Share).
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Copyright © 2017 The FACT Coalition. Some Rights Reserved.
This work by John A. Cassara and the FACT Coalition is licensed under a Creative Commons Attribution 4.0 License. To view the terms of this license, visit www.creativecommons.org/licences/by/4.0. The cover image is copyrighted, with all rights reserved.
The recommendations are those of the author and the FACT Coalition. The views expressed in this report are those of the author and the Coalition, and do not necessarily reflect the views of our funders, our members, or those who provided review.
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promotes policies to combat the harmful impacts of corrupt financial practices. More information about the coalition can be found at the back of this report or on the FACT Coalition website at www.thefactcoalition.org.