The United States has launched new anti-money laundering policies in an effort to prevent illicit and corrupt finances – or dirty money and illegal activity or dealings – from entering the American economy. The new measures are vital to ensure that law enforcement, the private sector, and national security agencies are given the necessary information and resources to block existing loopholes that nefarious actors exploit to access the U.S. financial system.
Why This Matters
Every year, more than $300 billion of laundered money flows through the U.S. economy, representing between 15 to 38% of the estimated $800 billion to $2 trillion that is laundered around the world in the same time frame. This alarming statistic is no surprise considering the U.S. is regarded as the most secretive financial haven for dirty money.
Details
The new anti-corruption policies were launched by the Financial Crimes Enforcement Network, or FinCEN, the regulatory body within the U.S. Department of Treasury responsible for protecting the country against illicit finance. FinCEN’s recent push for more transparency is a positive move towards closing policy gaps that nefarious actors use to harbor ill-gotten finances. These advancements include:
- A beneficial ownership registry that collects information on the owners of companies created in the U.S.;
- A proposed rule that will require professionals in the residential real estate market to disclose information on non-financed transactions that include trusts and legal entities; and
- A proposed rule that will require investment advisers to comply with certain anti-money laundering obligations.
Of note: All three initiatives either have been or are in the process of being reviewed by members of the private sector and civil society, which will provide valuable insight on how to strengthen these policies and maintain the integrity of the U.S. economy.
Bottom Line
Shortly after his inauguration, President Joe Biden launched his strategy on countering corruption, which emphasizes policies that combat illicit money entering the U.S. These welcomed advancements will address some of the more pressing challenges to confronting corruption and dirty money in the U.S.
Though more can be done to strengthen these policies, they should be viewed as a productive step towards a more transparent U.S. economy.
