House Dems Propose Pair of AML Measures (Oct. 28, 2013)
Two House Democrats have proposed measures to crack down on money laundering by deterring the use of shell corporations and giving regulators the authority to hold bank executives accountable for misconduct taking place on their watch.
The first bill, proposed by Rep. Maxine Waters (D-Calif.), would strengthen the government’s ability to charge individuals with violations of the Bank Secrecy Act, which requires U.S. financial institutions to cooperate with government agencies to detect and prevent money laundering. The bill would make financial executives personally responsible for misconduct at their banks, giving regulators the tool to remove or permanently ban from the industry those who are found to be in violation. Though heavy fines recently have been levied against some financial institutions, no bank executives have been held personally responsible, said Waters, the top Democrat on the House Financial Services Committee.
Meanwhile, legislation proposed by Rep. Carolyn Maloney (D-N.Y.) aims to combat financial misconduct by making it easier to identify the true ownership of corporations and deter the use of shell companies for illegal activities. “[U]ntraceable shell companies are often the vehicles of choice for money launderers, drug dealers, tax evaders and financiers of terrorism,” Maloney said, adding that her bill would require the true ownership of a corporation be disclosed when the incorporation papers are filed. Maloney is a ranking member on the Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises.
In August, the Senate introduced a companion measure to crack down on the use of shell corporations. International efforts to curb shell corporations also are under way, with G-8 leaders recently agreeing to tighten corporate ownership transparency requirements.