The U.S. Senate passed the National Defense Authorization Act (NDAA), which includes anti-money laundering and corporate transparency reforms. The bill is now cleared for presidential action.
The anti-money laundering and corporate transparency provisions were put forth by Sen. Sherrod Brown (D-Ohio). He said the bill is a product of years of bipartisan negotiations and helps protect communities from money laundering, drugs and human trafficking, fraud and other illicit financial crimes. It requires expanded reporting to Congress on banks that abuse prosecution agreements with the U.S. Department of Justice, provides for greater information exchange with law enforcement so banks can better track and report suspicious activity, and bolsters penalties on bankers who violate the law.
The bill includes a beneficial ownership amendment designated to help limit money laundering and other criminal activities. It would require companies and LLCs to file beneficial ownership information with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) at the time the entity is created and update the information yearly.
“These anti-money laundering and corporate transparency reforms were long overdue,” Brown said. “The Anti-Money Laundering Act and the Corporate Transparency Act, which passed the Senate and are on the way to the president, provide new tools to crack down on anonymous shell companies and on big banks that enable criminals or have lax anti-money laundering compliance programs. We know that criminals have long been adjusting their tactics to get around our laws. This bill will enable us to get ahead of them and stay ahead of them.”
Brown added, “I hope my Republican colleagues who voted for this bill stand up to President Trump’s threatened veto and vote to override it if necessary so that our federal, state and local officials will finally have the modern tools they need to protect our communities and bring these criminals to justice.”
The American Land Title Association (ALTA) applauded the bill’s passage.
“A requirement for companies to report their beneficial ownership to a national repository will help law enforcement identify and combat the use of real estate in money laundering without creating new compliance burdens,” said Diane Tomb, chief executive officer of ALTA. “This is integral for efforts to modernize the United States anti-money laundering rules and to help countering the financing of terrorist activity. Financial institutions with customer due diligence obligations will be able to access the FinCEN data with their customers' permission. This could help streamline reporting burdens of title insurance companies and give them more assurance that the information they report under geographic targeting orders is accurate.”