US lawmakers call for a ‘war foot’ on corruption


In a letter to Janet Yellen, two lawmakers called for LBC’s obligations to be extended to hedge funds, private equity and other professional enablers.

US lawmakers Tom Malinowski and Sheldon Whitehouse wrote to Treasury Secretary Janet Yellen asking him to put a “war footing” on the US Treasury Department to fight money laundering, corruption and kleptocracy.

The letter notes that the Treasury has the power to rapidly expand AML obligations, which has been recommended for decades by law enforcement, anti-corruption watchdogs and the FATF (Financial Action Task Force). .

“With beneficial ownership reform underway, the top policy priority in the fight against dirty money should now become the expansion of AML obligations to cover financial facilitators and professional service providers who may promote corruption. “

The letter notes that more than $ 13 trillion is believed to be invested in US-based private equity and hedge funds, which are subject to very little property control or money laundering.

“In other words, foreign kleptocrats could launder millions in our communities through hedge fund advisers and no one would know,” he says.

Letter urges Yellen to extend AML and suspicious activity reporting requirements to investment advisers, including private equity and hedge fund advisers, and potentially family offices, venture capital firms and funds with less than USD 100 million under management.

It also calls for the revocation of exemptions from the AML rules of the Patriot Act for ten sectors, to cover, among others, real estate professionals and sellers of yachts and planes.

The Treasury must also consider whether lawyers, accountants, business creation agents and art dealers should also be subject to the same obligations as financial institutions, he says.

The letter also calls for the newly mandated register of beneficial owners to be implemented in a way that limits exemptions and broadens reporting requirements.

“At the international level, the Treasury should lead a historic international agreement to end offshore financial secrecy and illicit tax havens once and for all,” he said, calling for international agreements around public registers of beneficial owners.

The letter also calls for harmonization of the US and OECD regimes for exchanging tax information (FATCA and AEOI, respectively), as well as steps towards a global register of assets and tax. ” a database on cross-border payments.

A national corruption risk assessment should be published and incorporated into the first national anti-money laundering strategic priorities which are statutorily mandated by FinCEN by 30 June.

The full letter is available here.


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