TOPEKA – (June 30, 2020) – Congress should pass legislation to help state law enforcement officials prevent terrorist groups and other criminal enterprises from using American financial institutions for money laundering, Kansas Attorney General Derek Schmidt told the U.S. Senate in a letter today.
Schmidt, along with a bipartisan coalition of 41 other state and territory attorneys general, today sent a letter to Senate Banking Committee Chairman Mike Crapo, R-Idaho, and Ranking Member Sherrod Brown, D-Ohio, urging the passage of the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act, legislation that updates the federal framework for fighting money laundering and terrorism financing. The law has not been comprehensively reassessed since its inception in the 1970s.
“Over the past several decades as commerce has modernized and expanded across the globe, so too has crime,” Schmidt said. “We’re long overdue for an update to our federal money laundering framework to bring it into the 21st Century so state officials can access better tools to crack down on the use of our own American institutions to further criminal activity by terrorists and drug traffickers.”
The attorneys general note in the letter that many states currently do not have the ability to track information on the actual individuals who control or benefit from corporations and other entities doing business with them. Without that information, states cannot determine whether an entity is a shell company used to conceal the illicit proceeds of criminal activity conducted by drug traffickers, terrorist financiers, tax evaders and corrupt government officials.
The ILLICIT CASH Act creates new tools for information sharing between financial institutions and law enforcement to bridge this gap. The legislation would require certain business entities to disclose a “beneficial owner” to the federal government. A beneficial owner is a “natural person” who controls an entity, owns at least 25% of it or receives economic benefits from it. The Financial Crimes Enforcement Network of the U.S. Department of Treasury (FinCEN) will then keep all the disclosed beneficial ownership information in a federal registry. The Act requires FinCEN to release beneficial ownership information to law enforcement agencies, including at the local and state levels.
A copy of the letter is available at https://bit.ly/3dQsXbr.