The U.S. Treasury Department outlined actions it plans to take to handle illicit-finance dangers, saying Russia’s invasion of Ukraine had underscored the necessity to shut regulatory loopholes and step up the struggle in opposition to corruption.
The nationwide technique for combating illicit finance, launched Friday, is the newest iteration of a report the Treasury produces each two years. But this yr’s technique is perhaps among the many most essential it has produced, Treasury officers mentioned, given Russia’s aggression in opposition to its neighbor.
“Illicit finance is a major national-security threat and nowhere is that more apparent than in Russia’s war against Ukraine, supported by decades of corruption by Russian elites,” mentioned U.S. Treasury Assistant Secretary Elizabeth Rosenberg.
Among its priorities for addressing that risk, the Treasury mentioned Wednesday, is implementing laws that restrict the flexibility of illicit actors akin to corrupt Russian oligarchs to covertly entry the monetary system by way of shell corporations and all-cash real-estate purchases.
The report launched Friday responds to various illicit-finance dangers to the U.S. monetary system recognized by the Treasury in March. The Treasury on the time named fraud, drug trafficking and cybercrime because the crimes that generate the most important quantity of illicit proceeds. It additionally recognized rising dangers, together with the abuse of cryptocurrencies and rising home extremism.
The Biden administration tied its work on illicit finance to bigger national-security objectives even earlier than the Ukraine invasion. It has mentioned that preventing corruption must be a core national-security precedence, and extra just lately pointed to Russia’s invasion of Ukraine as one instance of how corruption destabilizes nations and poses a risk to U.S. pursuits.
The administration has imposed far-reaching financial measures in opposition to Russia, and has stepped up sanctions in opposition to people and corporations it alleges are concerned in corruption. On May 8, it introduced new measures banning Americans from offering accounting and management-consulting providers to Russian corporations. That step was according to the methods launched Wednesday, the Treasury mentioned.
For greater than a yr, the Treasury has been implementing a corporate-transparency legislation, an effort the company mentioned was its high precedence in countering the assorted illicit-finance threats it has recognized. The Anti-Money Laundering Act, handed in early 2021, requires the Treasury to create a corporate-ownership registry that lawmakers hope will restrict using nameless shell corporations.
The company can also be pushing for larger anti-money-laundering controls within the real-estate sector, together with further scrutiny of all-cash transactions.
Treasury officers on Wednesday mentioned the measures had been an essential step in countering Russian President
Vladimir Putin
and corrupt Russian oligarchs with ties to the Kremlin. Corruption tied to the Russian authorities has performed a job in funding the Ukraine invasion, they mentioned.
“Some of the most sophisticated money launderers and financial criminals in the world work on behalf of Russia,” a senior Treasury official mentioned throughout a briefing with reporters. “They take advantage of these gaps to move and hide their money, including in the United States.”
The Treasury on Wednesday mentioned it will additionally give attention to updating laws that require monetary establishments akin to banks and money-services companies to use anti-money-laundering controls to the transactions they course of on behalf of consumers.
It additionally will work to enhance the effectiveness of law-enforcement efforts to counter illicit financing, assist technological innovation and proceed to scrutinize the dangers posed by cryptocurrencies and different new monetary services, the Treasury mentioned.
Write to Dylan Tokar at [email protected]
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Appeared within the May 14, 2022, print version as ‘Treasury Tackles Illicit Finance.’
Source: www.wsj.com”