Representatives Tom Malinowski (D-NJ), Maria Elvira Salazar (R-FL), Steve Cohen (D-TN), and Joe Wilson (R-SC) announced the introduction of the bipartisan Establishing New Authorities for Business Laundering and Enabling Risks to Security (ENABLERS) Act – a bill that closes loopholes that kleptocrats from around the world use to launder money in the United States.
As highlighted in the Pandora Papers, dictators, criminals, and terrorists continue to make the United States a destination of choice for hiding illicitly acquired wealth. Because our laws require financial institutions to report suspicious transactions, corrupt actors increasingly rely on other enablers not obligated to conduct such due diligence, including law and public relations firms, investment and real estate advisors, and art dealers to secure their wealth and disguise its origins through shell companies, trusts, and other investment vehicles. For example, the Washington Post reported this week that American trust advisors in South Dakota helped a Colombian businessman launder drug money, and two Ecuadorian brothers hide millions stolen from a government bailout in their homeland.
The ENABLERS Act would impose stronger due diligence requirements on such U.S.-based middlemen, to ensure that the United States never again facilitates the corruption and dictatorship we claim to oppose by giving kleptocrats and criminals a safe haven for the money they steal from their people. In turn, it would protect Americans from inflated real estate prices, job loss, human trafficking, and influence peddling.
Among other things, the bill would require the Treasury secretary to, within 90 days of enactment, promulgate a rule requiring domestic title insurance companies to obtain, maintain and report to the secretary information on the beneficial owners of entitles that purchase or sell residential or commercial real estate in transactions in which the domestic title insurance company is involved.
The bill would define the term beneficial owner, with respect to an entity, as the same as defined in section 5336 of subchapter II of chapter 53 of title 31, United States Code.
“The term ‘domestic title insurance company’ has the meaning given that term in regulation prescribed by the secretary,” the bill states.