With the passage of the US National Defense Authorization Act (NDAA), which includes the Anti-Money Laundering Act (AML Act) and the Corporate Transparency Act (CTA), the AML wants to update its systems and operational parameters to support those obliged to better and more readily identify AML/CFT risks and more.
This act reinforces the study and methodological importance of money laundering, i.e., the nature of the predicate offense of certain economic crimes that resort to money laundering to "clean up," transfer, and conceal their illicit criminal origin.
The anti-money laundering reform introduced by the National Defense Authorization Act introduced several new features, chief among them the role of FinCEN in establishing national "priorities" for combating money laundering and terrorist financing. As such, on 30 June 2021, the Financial Crimes Enforcement Network published the "Anti-Money Laundering and Countering the Financing of Terrorism National Priorities," a plan for the four-year period 2021/2024 of all actions to curb the current national and international threats.
This forecast consolidates strategies, digital resources, and competencies towards already known risks such as corruption, cybercrime and criminal use of virtual currencies, financing of domestic (also called domestic) and foreign terrorism, fraud, transnational criminal organizations, drug trafficking, trafficking, and human beings trafficking, and finally financing the proliferation of weapons of mass destruction.
In particular, the text lists the threats and countermeasures that government agencies and the private sector can take to reduce the occurrence of such criminal phenomena. In particular, the economic damage caused by corruption is emphasized. also confirmed by the recent issuance of the "Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest" approved on 3 June 2021. The United States considers domestic and foreign corruption to be a strategic threat to national security because it fuels instability, undermines economic growth, reducing global GDP by between 2 and 5 percent, and undermines public trust in governments by weakening democratic institutions. In addition, corruption threatens the global financial system, and combating it is a crucial objective that cannot be separated from strengthening the anti-money laundering system, which is essential to prevent the concealment of illicit proceeds. Another major issue involving the AML/CFT plan of measures and the fight against cybercrime is the fight against fraud in general, and in particular in the banking and financial sector, which generates proceeds that are estimated to be around $100 billion per year in criminal profits. Criminal activity is generally caused by the use of cyber ransomware against key state infrastructures for the provision of goods and services at the national level.
The proceeds of such crimes are often laundered through the internet system (known as cyberlaundering) using cryptocurrencies and money mules.
FinCEN pays attention to Suspicious Activity Reports (SARs) by focusing on the transfer of small sums of money - also as donations -, foreign accounts and in cryptocurrencies to finance or self-finance attacks by 'lone wolves, as well as more complex concealment schemes aimed at logistical support and supply of materials to national and international terrorist organizations.
Transnational organized crime in the United States involves a wide range of criminal activities such as cybercrime, drug trafficking, fraud, wildlife trafficking, human trafficking, intellectual property theft, arms trafficking, and bribery and, given the volume of income from these crimes, there is an increasingly important role for 'professional' organized structures that provide a 'global' service for laundering, concealing and reusing illicit money.
A New Agency in Europe to Combat Money Laundering
In the last week, the European Parliament has passed a very interesting legislative proposal to set up a central agency to deal with the crime of money laundering in Europe. This is not the first time that such an initiative has been discussed, as back in 2020, the Ministers of Economy and Finance of the various European countries unanimously asked the European Parliament to designate an authority that would be more vigilant in matters concerning the fight against AML/CFT. In theory and in practice, the authority designated for this role already exists: the EBA (Europe Bank Authority), which not only has economic policy functions in all European countries, but can also issue AML/CFT enforcement measures and administrative, financial, and criminal sanctions. Recent banking scandals, such as Danske Bank, have highlighted the EBA's operational and investigative inactivity to such an extent that the European Parliament has been asked to take ad hoc legislative action. Accusations have also been made by the European Court of Auditors (ECA), the EU's auditing body for economic expenditure, that insufficient legislative and operational steps have been taken to reduce AML/CFT risks. Banking scandals involving countries such as Denmark, Estonia, Germany and the lack of due diligence and KYC of bank customers.
Accusations have also been made against the EBA itself for not intervening quickly and promptly in what was happening to European banks.
The new agency will be called the Anti-Money Laundering Agency (AMLA) and will be directly attached to the nation-states in the transposition of legislation, enforcement, and sanctions. It will enter into force no earlier than 2024/2026 with operational monitoring periods from its establishment. It will be constituted by a single constitutive act which will constitute its core (composition) and operational competencies. Its governance will be autonomous; its appointments will not depend in any way on any European State. The agency will interact efficiently with the national FIUs (Financial Intelligence Units) of the individual states through a constant automated exchange of data and suspicious transactions.
The other proposal under consideration is also not excluded: to make the section of the EBA that already deals with AML/CFT risks and issues more autonomous, giving it greater supervisory and sanctioning powers. (One thing is to build from scratch, another thing is when you have to build 50%).
Initial accusations have already been made against the establishment of this new agency: the anti-money laundering measures in Europe and for some States are heavy, both from a bureaucratic and operational point of view, e.g., the constant issuing of Anti-Money Laundering Directives and the obligations towards obliged parties are heavily felt in the economic circuit. According to some, the inefficiency is to be found in the States and not in the authorities; perhaps the enactment of another authority would not change the real problem.
Written by Dimitri Barberini