FACT SHEET: U.S. Department of the Treasury Actions to Prevent and Disrupt Corruption

The U.S. Department of the Treasury (USDT) has published a „fact sheet“ in which it outlines its efforts in the last two years and upcoming initiatives to combat corruption and illicit finance. These efforts and initiatives focus around three key themes:
– the prevention of money laundering;
– holding individuals and firms accountable for their doing; and
– the strengthening of global anti-corruption efforts.
(1) The prevention of money laundering: The U.S. Treasury has continued its efforts to implement the Corporate Transparency Act (CTA) to tackle the exploitation of shell companies for money laundering purposes. The CTA mandates that companies operating in the U.S. disclose their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). A corresponding rule has been enacted by FinCEN and will apply from January 1, 2024 (EventID 17480). In this context, FinCEN has also launched an extensive outreach campaign to raise awareness among stakeholders over the new reporting obligations and to help firms understand the new regulatory requirements. This campaign includes the issuance of guidance and multimedia resources, the offering of webinars, and public engagements to ensure a smooth transition towards compliance with the new obligations (further information may be found at https://www.fincen.gov/boi). Moreover, the Treasury is intensifying its efforts to enhance transparency within the residential real estate sector, which has historically been vulnerable to illicit activities involving all-cash transactions. Through a proposed rulemaking process set to begin in early 2024, the Treasury aims to strengthen transparency in real estate transactions so as to prevent the use of illicit money to finance property in the U.S. Finally, the Treasury is taking steps to address the risks associated with the investment adviser sector, which currently lacks consistent anti-money laundering/counter-financing of terrorism (AML/CFT) obligations. An updated Notice of Proposed Rulemaking (NPRM), anticipated in the first quarter of 2024, seeks to apply AML/CFT requirements pursuant to the Bank Secrecy Act to specific investment advisers.
(2) Holding individuals and entities accountable for their doing: The U.S. Treasury has been actively enforcing financial sanctions to hold corrupt individuals and entities accountable worldwide. Over 300 designations across 30 countries have targeted various forms of corruption, including bribery, extortion, and misuse of public funds, with 40% related to kleptocracy which involves the use of public positions to channel away public funds and resources for personal gain or to benefit a small group of elites. Future priorities of the USDT include targeting financial facilitators aiding public corruption. Furthermore, in response to Russia’s invasion of Ukraine, Treasury has taken substantial steps against Russian corruption and kleptocracy. Collaborating with the REPO Task Force and international partners, Treasury has frozen assets exceeding $58 billion, including financial accounts, luxury real estate, yachts, and other resources owned or controlled by sanctioned Russians.
(3) Strengthening global anti-corruption efforts: The Treasury Department has conducted various activities aimed at strengthening international standards in combating illicit finance. For example, it has engaged with the Financial Action Task Force (FATF) to revise international standards on transparency and beneficial ownership to prevent misuse of corporate structures for criminal purposes. Additionally, in partnership with the Department of Justice, it has supported FATF’s revisions for improved asset recovery from criminal proceeds. Furthermore, the Department has significantly increased efforts to combat corruption globally. For instance, it has aided countries in identifying AML/CFT deficiencies, shared insights on corruption trends, raised awareness of associated risks, and fostered cooperation in anti-corruption investigations.