How America Became the Money Laundering Capital of the World

Peter Stone, an investigative journalist, claims that America has become of the "money laundering capital of the world."Stone claims that the U.S. earned this title because it lacks controls over money flows and financial accounts in his recent article in The New Republic. Stone describes some notorious examples, such as the "Russian Laundromat" case. In this, Vladimir Putin's cousin succeeded in laundering roughly $20 billion into U.S. accounts through Moldova. The money landed at well-heeled institutions like HSBC, Deutsche Bank, Barclays, Bank of America, and JP Morgan Chase.

America's title as king of the money laundering jurisdictions may soon be coming to an end, however, with the dawn of the Corporate Transparency Act. Congress adopted the Corporate Transparency Act at the end of 2020. The new law will require nearly 20 million U.S. companies to file beneficial ownership reports that disclose their true owners.

FinCEN - the U.S. Treasury Financial Crimes Enforcement Network is implementing the new law. FinCEN recently completed an Advance Notice of Proposed Rule Making in which it sought comments from the public on its upcoming regulations.

The Act requires FinCEN to adopt regulations by the end of 2021. Once adopted, pre-existing companies will have two years in which to file an initial beneficial ownership report. New companies, formed after the regulations are adopted, will need to file reports at the time of formation.

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About The Author

Jonathan Wilson is the co-founder of FinCEN Report Company with 31 years of experience in corporate, M&A and securities matters. He is the author of The Corporate Transparency Act Compliance Guide (to be published by Lexis Nexis in the summer of 2023) and the Lexis Practical Guidance Practice Note on the Corporate Transparency Act.