Lawmakers, inspired by the “Pandora Papers”, to advance a new anti-corruption bill
Their statement referred to the Pandora Papers, an ongoing briefing led by the International Consortium of Investigative Journalists, which deepened concerns about a growing parallel world of transactions and hidden assets.
The project, which lists a trove of millions of leaked documents, has raised questions about the business relationships of everyone from the King of Jordan to billionaire friends and an alleged mistress of Russian leader Vladimir Putin. Among its most surprising finds, South Dakota has become a major haven for people looking to hide money from tax collectors, creditors, and the like.
The ENABLERS Act sums up a key idea that analysts say is, to a large extent, already standard in most other countries. The main provision is as follows: Lawyers, investment advisers, art dealers, real estate agents, accountants, public relations firms and others would be required to engage in some form of “due diligence” to ensure that their customers do not pay with or try to move money of suspicious origin.
Such “due diligence” rules already apply to banks. They require entities covered by the law to examine whether customer money is, among other things, the proceeds of crime. The goal is to make money launderers and others, not to mention those who help them, face more pitfalls in the process.
The ENABLERS Act enjoys bipartisan support on Capitol Hill, but it is likely to see a significant setback from the various industries that could be affected, as is usually the case with any group facing additional federal regulation. . Some industry groups contacted by POLITICO on Tuesday either did not comment or refused to do so, saying they needed to see the exact wording of the bill.
Despite the potential resistance, lawmakers say it’s worth starting a conversation.
“If you are against money laundering, if you are against foreign dictators using the United States to hide the money they steal from their people, then you need to apply these rules to everyone, not just to people. banks that bad guys use to launder money, ”said Malinowski, the top Democrat on the bill.
Malinowski’s Republican co-leader on the bill is expected to be Representative Maria Salazar from Florida. Her interest in anti-corruption efforts stems in part from being the daughter of Cuban exiles and observing the malicious actions of autocrats in the Western Hemisphere, a senior congressional official said.
Most other countries already require that entities other than banks have put in place safeguards like those in the bill, according to Josh Rudolph, an Alliance for Securing Democracy corruption expert at the German Marshall Fund.
With such legislation, the United States could join the ranks of countries that require law firms, accountants and other entities to “have compliance officers, training, audits and controls. reasonably designed to detect potential money laundering by identifying customers, reviewing transactions, maintaining records. , and report suspicious activity to the government ”, Rudolph argued in a recent analysis.
Overall, anti-corruption activists have been pleased with the growing interest in their work from Congress and the Biden administration. They point to several recent pieces of legislation about to be adopted as proof of their support.
These elements were incorporated into the version of the National Defense Authorization Act approved by the House. In their Tuesday statement, Curtis and Malinowski urged the Senate to ensure the elements were included in its version of NDAA.
Among other things, the measures: force the administration to assess 35 people linked to Putin for potential sanctions; counter the efforts of other countries to abuse the tools offered by Interpol; demand reports on how other countries are tackling corruption; facilitate the publication of the names of allegedly corrupt officials facing US visa bans; regularly publish how much money stolen from other countries is recovered by US law enforcement; and re-authorize the Global Magnitsky Act, a law that authorizes economic sanctions against corrupt individuals and human rights abusers.
The Biden administration is pursuing several anti-corruption efforts. This includes drafting the rules of a law, passed under the Trump administration, that effectively prohibits the practice of registering shell companies anonymously. Such shell companies seem to be a major driver of embezzlement exhibited by the Pandora Papers.
Biden has pledged to make the fight against corruption a major item on the agenda of the upcoming Democracy Summit, a gathering of world leaders whose first session is scheduled to be held in December. One of the goals of the summit is to urge other countries to take meaningful action to fight corruption in the coming year.
President Biden is committed to addressing issues such as reducing offshore financial secrecy, fairness of tax laws and closing loopholes to make it harder for rulers who steal their people to hide their assets across the international financial system, “said a senior administration official. POLITICO, adding that the Pandora Papers “make it even more important that these issues are on the international agenda”.
Anti-corruption activists note that while it is helpful for other governments to scale up and coordinate these measures, the United States alone can have a major impact. This is in part because of the importance of the US dollar and because many financial transactions go through US institutions.
“Our financial rules are important to the global financial architecture,” said Gary Kalman, director of the US office of Transparency International.