US AML Reform Nears Congressional Approval

By Valentina Pasquali

A raft of proposals to streamline the U.S. anti-money laundering regime and create a national database of corporate ownership information is scheduled for a final vote in Congress next month after securing formal inclusion in a larger defense appropriations bill.

Bipartisan negotiators with the finance committees of the U.S. Senate and House of Representatives agreed to include the language in the latest draft of the country’s primary defense-budget bill, the National Defense Authorization Act of 2021, a senior U.S. senator and congresswoman announced last week.

The AML provisions now included in the NDAA would specifically task U.S. legal entities with disclosing the identities of their true owners to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, at the time of incorporation. U.S. authorities and financial institutions would have access to the database for investigatory and due diligence purposes.

The proposals emerge from the Corporate Transparency Act, a bill pitched by Rep. Carolyn Maloney (D-NY) in May 2019 that later integrated AML reforms Rep. Emanuel Cleaver (D-MO) sought in the COUNTER Act—including better training of federal examiners and expansion of AML rules to antiquities dealers—that cleared the House in October of last year.

House lawmakers cleared the combined legislation when they approved their version of the NDAA in July.

A companion bill championed by several senior Democratic and Republican senators, the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings Act, or ILLICIT CASH Act, failed to make it into the NDAA’s version in the Senate this summer.

Portions of the bill, however, secured consideration by Congress in the latest negotiations, Sen. Mark Warner (D-VA), who introduced the legislation in September 2019, said Friday evening while framing the proposals in terms of national security.

The bill’s provisions “couldn’t come at a more important time,” a congressional aide told ACAMS on condition of anonymity. “There’s no way to avoid an adjustment period, but hopefully the incoming administration will put the resources and priority behind it to make that period as short as possible.”

The proposals also aim to increase funds and staffing numbers for FinCEN, expand existing financial information-sharing mechanisms and foster adoption of the latest technologies by bank compliance teams.

The full Congress is scheduled to vote on the NDAA in the first half of December. President Donald Trump would then have to sign the final, approved version of the legislation for its provisions to enter into force.

Efforts to establish a beneficial ownership database in the U.S. date back at least 12 years, when then-Sen. Carl Levin (D-MI) proposed tasking state authorities with obtaining the data.

The Bank Secrecy Act, the 1970 law that underpins the nation’s AML regime, has not been the subject of a major statutory overhaul since 2001, when Congress passed the U.S. Patriot Act in the wake of the Sept. 11 terrorist attacks.

“Passing this overwhelmingly bipartisan legislation would fundamentally reform the U.S. anti-money laundering framework for the first time in decades,” Erica Hanichak, director for government affairs at a Washington, D.C.-based advocacy group, the FACT Coalition, told in an email.

Contact Valentina Pasquali at

Topics : Anti-money laundering , Counterterrorist Financing
Source: U.S.: Congress
Document Date: November 23, 2020