Democrats call on Treasury to step up anti-money laundering reporting
Two Congressional Democrats sent a letter to Treasury Secretary Janet Yellen on Monday asking the department to strengthen anti-money laundering reporting requirements for private equity and hedge fund advisers in a bid to ” prevent foreign kleptocrats from transferring dirty money through the US and global financial systems. “
In the letter, Sen. Sheldon Whitehouse, DR.I., and Rep. Tom Malinowski, DN.J., urged the Treasury’s Financial Crimes Enforcement Network, or FinCEN, to enact a proposed rule in 2015 to expand anti-crime obligations money laundering and suspicious activity reporting obligations to private equity advisers and hedge funds.
“Middle-class Americans are frustrated with perceptions of corruption in their country, while authoritarian oligarchies use corruption as a weapon around the world,” lawmakers wrote in their letter. “While these foreign and domestic trends have fueled heated political discourse in recent years, a legacy of the Biden administration is expected to achieve real results in institutionalizing anti-corruption reforms in the US and international financial, diplomatic and legal systems.”
Lawmakers said the Biden administration should build on recent congressional efforts to tackle money laundering. At the end of the last session of Congress, Congress passed the National Defense Authorization Act 2021, which included the Business Transparency Act, a bill that cracked down on the registration of shell companies owned by anonymously in the U.S. This bill creates a national registry of beneficial ownership information for certain companies – mostly foreign-owned shell companies – according to a February blog post by Morgan attorneys Lewis & Bockius.
Lawmakers urged the Treasury to implement the recently mandated beneficial ownership registry in a way that limits exemptions and broadens reporting requirements.
“With beneficial ownership reform underway, the top policy priority in the fight against dirty money should now become the expansion of (anti-money laundering) obligations to cover financial facilitators and providers. professional services likely to promote corruption – reports indicate that more than $ 13 trillion is invested in US-based private equity and hedge funds subject to very little property control or money laundering money, ”the lawmakers wrote.
A representative from the Treasury could not be reached immediately for comment.