As the United States and its global partners begin the much-anticipated Democracy Summit of the Weekthere is a unique opportunity for cooperation to combat the illicit financial flows that contribute to the erosion of democracies around the world. and act as a trusted partner to help fight corruption.
President Biden and his team are off to a strong start to their first year in office, announcing the first-ever government-wide “U.S. Strategy on Anti-Corruption,” highlighting interest in tackling corruption as part of diplomacy and foreign aid. increased. Treasury Secretary Janet Yellen at the first Democracy Summit in late 2021 boldly admitted The United States has emerged as the easiest country to hide ill-gotten wealth, pointing out that “the United States has too many financial shadows to hide corruption.” Last year, the United States worked with allies to Locate and seize assets of Russian oligarchs.
But after a strong start, progress has slowed on the structural reforms needed to reduce their role as an enabler of global corruption and illicit financial flows. There are even alarming signs that the United States may lose the world’s trust in this battle. So what would be the US actions to solve the dirty money problem?
First, the United States must prioritize full implementation. Corporate Transparency Actis a landmark anti-corruption and anti-money laundering law enacted in early 2021. This important law requires companies to file reports with the U.S. government as to who ultimately owns or controls them.So-called anonymous paper company It has become a getaway vehicle for criminals and thieves to hide stolen assets in the United States. With this law, U.S. and international law enforcement agencies have a real chance to track dirty money flows and stop international criminals from endangering our communities.
Unfortunately, implementation has been delayed and recent proposals from the U.S. Department of the Treasury unnecessarily complicate access to this critical information for law enforcement and financial institutions in the United States and abroad. Notably, the US Treasury Department is proposing a form of reporting entity that would effectively make the Corporate Transparency Act an option exercise.
Second, the United States also has to deal with dirty money flowing into the massive $50 trillion US real estate sector. Surprisingly, the United States is her only G7 country that has yet to impose anti-money laundering requirements on real estate professionals. In a recent report, Global Financial Integrity $2.3 billion was laundered through US real estate From 2015 to 2020. The United States seems less serious about supporting democracy when it allows authoritarian and bandit regimes to easily store stolen funds in the United States.
To address this challenge, the U.S. Treasury Department urgently needs to impose strong anti-money laundering requirements on real estate professionals covering both the residential and commercial sectors. By enforcing strong requirements, the US Treasury can show the world that the US is serious about dirty money.
Curbing the flow of illegal funds into the United States should be a top priority for the U.S. government. Russian oligarchs, traffickers, drug cartels and other international criminals hide funds in the US financial system, putting US families, communities and wallets at risk. For example, the influx of illicit funds into the US real estate market is exacerbating the ongoing housing crisis in the US.
To become a trusted leader and partner, the United States must act urgently to clean up the dirty money that flows into its financial system.
Ian Gary is Executive Director of the Financial Accountability and Corporate Transparency (FACT) Coalition.
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