Congress Closer to Passing Major Money Laundering Rule

U.S. legislators say they are getting closer to adopting what could be the biggest anti-money laundering (AML) reforms in decades.

As the International Consortium for Investigative Journalists reported Thursday (June 23), the bill, known as the Enablers Act, would amend the Bank Secrecy Act by requiring trust companies, lawyers, art dealers, financial advisers and real estate agents to investigate clients and their sources of funds coming into the U.S. financial system.

The law also requires these people to support suspicious activities to the U.S. Treasury. Lawmakers say the measure would close a loophole used by criminals to get around existing rules that require banks — but not other financial professionals — to vet their clients and the sources of their wealth.

“Middlemen in foreign transactions should be subject to the same anti-money laundering checks as banks, and this brings us one step closer,” said Rep. Joe Wilson (R-S.C.), one of the key champions of the bill.  “Nobody should be able to hide behind blood money to exploit democratic institutions for their benefit.”

Rep. Tom Malinowski, a New Jersey Democrat who joined Wilson in backing the legislation, called it the biggest change to money-laundering laws since the Patriot Act.

“It closes the biggest remaining loopholes in our laws that allow crooks and kleptocrats all over the world to hide their money and property in the United States,” he said.

See also: US, UK Encourage Privacy-Enhancing Innovation to Combat Money Laundering

Earlier this month, the U.S. and the U.K. announced a joint initiative to encourage the creation of privacy-enhancing technology (PET) that could fight money laundering.

While both countries require financial institutions to seek out and report suspicious activity, the amount of data is so large government officials will sometimes struggle to analyze it. And privacy laws prevent agencies from sharing data with each other.

The two countries say they want to bolster technology that lets machine learning models focus on data from multiple sources without it leaving a safe environment. Officials from both countries say PET could play an import role in fostering this technology.