1st March 2021
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A “Manhattan Project” set-up should be established to tackle the US$1 trillion annual money laundering market draining the US economy of vital state funds, a leading think-tank has reported.
In a report published on 1 March, Washington-based Global Financial Integrity (GFI) produced five recommendations designed to put tackling money laundering at the centre of President Joe Biden’s anti-organised crime initiatives.
The study focuses on ways to strengthen the role of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and to join-up anti-laundering activity to improve the chances of tackling the illicit finance flows which not only sustain drugs cartels, but also serve as revenue-raising activities for terror networks, arms dealers and large-scale fraudsters.
GFI’s study draws on detailed interviews with illicit finance experts, held under the Chatham House Rule (and therefore often anonymised in the report), and recommends:
- Giving FinCEN’s director a place on the National Security Council’s powerful deputies committee to raise the profile of anti-laundering work.
- Creating a National Anti-Money Laundering Data Centre within FinCEN designed to collect data on illicit finance and disseminate it to law enforcement.
- Establish a “Manhattan Project”-style brains trust to work alongside the data centre to identify, develop and utilise new technologies designed to tackle money laundering.
- Launch within FinCEN a training centre and knowledge hub for staff, law enforcement, prosecutors and finance institutions.
- Create a strategic analysis team to examine emerging and long-term trends.
The report, Enhancing National Security by Re-Imagining FinCEN can be found here and contains several eminently sensible – and easily delivered – reforms to the US’s growing arsenal of weapons designed to tackle money laundering and illicit finance more generally. Long gone are the days when anti-money laundering initiatives were the preserve of a few dry state employees inside the Beltway.
In particular, I’m sure many experts will share GFIs call for FinCEN to be handed a key role on the NSC’s deputies committee – not least because it will take one of the key voices on anti-laundering closer to decision-makers in the crucial US economy. And, as those of us in Britain can attest, where the US leads on illicit finance issues, the UK may well be tempted to follow.
While it remains to be seen whether GFI’s recommendations will be pursued by President Biden’s team, or others, the report again reflects the rapidly escalating priority now given to tackling illicit finance inside the world’s biggest economy. Last year saw the US adopt the powerful Anti-Money Laundering Act 2020 – the most important piece of anti-laundering legislation passed by Congress for decades.
For the first time, the new law requires the ultimate beneficial owners of most companies to supply their personal information to a national FinCEN-administered registry – a move designed to severely limit the use of shell companies established in states such as Delaware.
I’m regularly impressed by GFI’s rational, deliverable and well-informed proposals on tackling illicit finance – and this is another carefully-considered set of recommendations that, if adopted, would boost AML work in the US and beyond.
Please read the full GFI report if you get a chance.
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