Regulation

US House Zeroes In On Money Laundering Loopholes

An anti-money laundering resolution presented by Congresswoman Maxine Waters (D-CA) passed by a voice vote on Thursday (March 14).

The resolution — H. Res. 206 — was presented as part of Sunshine Week and aims to shed light on money laundering and terrorism finance.

“I rise in strong support of H. Res. 206, a resolution I have introduced to inform the Congress and the American people about the persistent money laundering loopholes and problems that continue to plague the American financial system,” said Waters, who is the Chairwoman of the House Financial Services Committee. “Criminals like drug traffickers, human traffickers, fraudsters, kleptocrats, rogue governments, and other corrupt individuals and organizations know our financial system well and work hard to find ways to circumvent our anti-money laundering laws.”

The resolution specifically tackles two significant loopholes in current anti-money laundering legislation, including the lack of transparency in the arts and antiquities industry.

“According to the Antiquities Coalition, ‘the United States is the largest destination for archaeological and ethnological objects from around the world,’” explained Waters. “We know, too, that terror groups like ISIS have looted and sold these treasures to fund their operations.”

“However, today, dealers in arts and antiquities are exempt from the Bank Secrecy Act, creating a huge loophole for bad actors to launder funds,” she added.

In addition, the Congresswoman said there are also significant loopholes in the real estate industry, with data showing that about 30 percent of transactions covered by the GTOs involve a beneficiary involved in a previous suspicious activity report.

“Congress must close these loopholes, and financial institutions, including the biggest banks, also must do their part and fully comply with our BSA-AML laws. Although most do, we continue to see not only failures in compliance but also egregious acts where money laundering and terror finance are facilitated,” said Waters. “This must stop. In passing this resolution today, we also remind our colleagues in the banking industry of their responsibilities.”

 

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