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Bill would apply anti-money laundering rules to art dealers and lawyers



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A bipartisan group of lawmakers cleared a major hurdle this week to push forward what they call the most significant overhaul of U.S. anti-money laundering laws in 20 years.

The bill, called the Enablers Act, amends the 52-year-old Bank Secrecy Act to require for the first time that trust companies, lawyers, art dealers and others investigate clients seeking to transfer money and assets into the US financial system. Those targeted by the law, which include financial advisers and art and antique dealers, would also be required to report suspicious activity to the Treasury Department. However, real estate transactions would not be covered by the law.

Banks are already required to vet their customers and sources of wealth, but other US financial guardians have been exempted from “due diligence rules” – a loophole long criticized by financial crime experts and international watchdogs.

“Intermediaries in foreign transactions should be subject to the same anti-money laundering controls as banks, and that brings us one step closer,” said Rep. Joe Wilson (RS.C.), who co-led efforts to enact the Enablers. Act, with Rep. Tom Malinowski (DN.J.), and sponsored its inclusion in the defense bill. “No one should be able to hide behind blood money to exploit democratic institutions for their own benefit.”

Pandora Papers: HIDDEN BILLIONS BEYOND REACH

The House Armed Services Committee voted Wednesday to include the Enablers Act in the National Defense Authorization Act, a sweeping national defense policy bill that is traditionally passed by Congress each year. . Voice voting speeds up the bill and dramatically increases the likelihood of it becoming law, according to Democratic and Republican supporters.

“If passed, it will be the biggest money laundering reform since the Patriot Act,” Malinowski said, referring to legislation passed in the wake of the September 11, 2001, terrorist attacks. remaining loopholes in our laws that allow crooks and kleptocrats around the world to hide their money and property in the United States.”

Malinowski and other members of Congress introduced the Enablers Act in October following the investigation into the Pandora Papers, a broad collaboration of the International Consortium of Investigative Journalists, the Washington Post and other media organizations.

The survey showed how the global elite hide their wealth in tax havens that increasingly include the United States.

A senior White House official said that while President Biden’s administration is not involved in the bill, “we are prioritizing work to address America’s own regulatory shortcomings.”

“We applaud the bipartisan push within Congress to work with the administration to limit how proceeds of corruption and other ill-gotten gains are moved through the U.S. financial system,” the official said.

In 2020, lawmakers tied the Corporate Transparency Act, which requires companies to report their owners to the federal government, to the National Defense Authorization Bill, leading to its eventual passage. This law increased transparency requirements for business owners, but did little to dampen the many service providers in the United States, including attorneys and registered agents, who are often the entry point to America. for vast foreign fortunes.

Lawmakers push to uncover wealth protected by state secrets laws

Citing the Pandora Papers investigation, state legislators in Alaska and New York also introduced legislation requiring secret companies and trusts to report who owns them to public or state databases.

In Washington, supporters say the Enablers Act will help US law enforcement better identify and freeze assets held by sanctioned oligarchs in response to Russia’s invasion of Ukraine.

Since the start of the war, the US Treasury Department has sanctioned hundreds of Russians suspected of being close to Russian President Vladimir Putin. Law enforcement and anti-corruption experts, however, have expressed concern that the Russian elite routinely hides ownership of luxury homes, yachts, jets and other assets through ‘complex offshore arrangements put together by lawyers, accountants and other advisers.

“It’s far too easy to use accounting firms, lawyers and others to launder money in ways that are hard for our sanctions enforcement agencies to see,” Malinowski said. “By providing very simple and straightforward due diligence requirements, we exponentially increase the effects of the sanctions program.”

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