There is insufficient emphasis on trade-based financial crime in current proposals for new US anti-money laundering (AML) legislation a congressional hearing has been told.
The hearing garnered the views of senior officials at federal law enforcement agencies, including the US treasury and the department of justice and homeland security about the proposed Combatting Money Laundering, Terrorist Financing, and Counterfeiting Act.
Insufficiently addressed
Trade-based money laundering is one of several considerations not sufficiently addressed by the current proposals according to the Association of Certified Financial Crime Specialists.
Commenting on the hearing, the association said the bill was also remiss in not contemplating other US financial crime defences, including AML requirements for attorneys, accountants, certain real estate professionals, and hedge and private equity funds.
Beneficial ownership
The lack of beneficial ownership data was the main concern for Kenneth Blanco, deputy assistant attorney general of the US department of justice’s criminal division and the incoming head of the treasury’s Financial Crimes Enforcement Network.
“The failure to collect beneficial ownership information also undermines financial institutions’ ability to determine which of their clients pose compliance risks, which in turn harms banks’ ability to comply with their legal obligation to guard against money laundering,” he said.
Chinese goods
Other major concerns for Banco include trade-based money laundering and difficulties with foreign banks not responding to law enforcement requests for information.
Transnational criminal organisations “are able to convert cash drug proceeds to virtual currencies through both licensed and unlicensed exchangers, and then transfer the virtual currencies to China to purchase Chinese goods,” he said.
On uncooperative foreign banks he said law enforcement “can’t even close the correspondent account or a foreign bank when the foreign bank has brought proceedings to challenge enforcement of a subpoena.”
Categories: Trade Based Financial crimes News
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