A member of a Washington-based conservative think tank is urging the US congress to press ahead with legislation to require disclosure of beneficial ownership of companies to crackdown on trade-based money laundering (TBML) by prominent Venezuelans.
“What’s needed is a Congressional exercise in self-reflective pragmatism: pass legislation that will end anonymous shell companies and dismantle the trade-based money laundering empires hiding in plain sight,” says Clay Fuller, a fellow at the American Enterprise Institute.
He points out that the US treasury department’s Financial Crimes Enforcement Network (FinCen) issued an advisory notice in 2017 warning that US corporates and financial institutions should beware of any involvement in TBML schemes.
The advisory said that in Venezuela these schemes are highly organised and involve corrupt senior political figures exploiting a Venezuelan government-administered food programme.
The political figures direct overvalued, non-competed contracts to co-conspirators that use over-invoicing TBML schemes.
These can involve front companies that are functioning businesses but combine illicit proceeds with earnings from legitimate operations, obscuring the source, ownership, and control of the illegal funds.
When a company is used as a front to deposit, move, or use illicit proceeds, it can be difficult for the bank holding the account to know that the company’s banking activity includes money laundering.
Categories: Trade Based Financial crimes News