[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 206 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. RES. 206
Acknowledging that the lack of sunlight and transparency in financial
transactions and corporate formation poses a threat to our national
security and our economy's security and supporting efforts to close
related loopholes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 8, 2019
Ms. Waters submitted the following resolution; which was referred to
the Committee on Financial Services
_______________________________________________________________________
RESOLUTION
Acknowledging that the lack of sunlight and transparency in financial
transactions and corporate formation poses a threat to our national
security and our economy's security and supporting efforts to close
related loopholes.
Whereas money laundering and other financial crimes are serious threats to our
national and economic security;
Whereas the United Nations Office on Drugs and Crime has reported ``The
estimated amount of money laundered globally in one year is 2-5% of
global GDP, or $800 billion-$2 trillion in current US dollars'';
Whereas the scale, efficiency, and complexity of the U.S. financial system make
it a prime target for those who seek to conceal, launder, and move the
proceeds of illicit activity;
Whereas money launderers, terrorist financiers, corrupt individuals and
organizations, and their facilitators have proven to adapt quickly in
order to avoid detection;
Whereas given the global nature of money laundering and terrorist financing, and
the increasing interrelatedness within the financial system, a secure
national and multilateral framework is essential to the integrity of the
U.S. financial system;
Whereas extensive collaboration among financial regulators, the Department of
the Treasury, law enforcement, and the private sector is required to
curtail the illicit flow of money throughout the United States;
Whereas despite how extensive and effective these efforts are in the United
States, there is still substantial room for improvement;
Whereas financial compliance, reporting, investigation, and collaboration, as
well as courageous whistleblowers and investigative reporting (such as
the Panama Papers) have had significant impact in shining sunlight on
the people and institutions behind dark money and markets;
Whereas in 2016, the Financial Action Task Force (FATF), the international
standards setting body, evaluated the United States anti-money-
laundering/combating the financing of terrorism measures and determined
the United States has significant gaps in its framework;
Whereas in 2016, the FATF found that in the United States, ``Minimal measures
are imposed on designated non-financial businesses and professions
(DNFBPs), other than casinos and dealers in precious metals and
stones'';
Whereas in 2016, the FATF recommended, ``The U.S. should conduct a vulnerability
analysis of the minimally covered DNFBP sectors to address the higher
risks to which these sectors are exposed, and consider what measures
could be introduced to address them'';
Whereas dealers in arts and antiquities are not, by definition, covered
``financial institutions'' required to comply with the Bank Secrecy Act;
Whereas Federal authorities have cautioned that art collectors and dealers to be
particularly careful trading Near Eastern antiquities, warning that
artifacts plundered by terrorist organizations such as the Islamic State
of Iraq and the Levant are entering the marketplace;
Whereas, according to the Antiquities Coalition, ``because the United States is
the largest destination for archaeological and ethnological objects from
around the world, the discovery of recently looted and trafficked
artifacts in our country not only makes Americans and our institutions
accessories to crimes, but also threatens our relations with other
countries'';
Whereas the real estate industry, both commercial and residential, is exempt
from having to develop and implement a four-pillar anti-money-laundering
program pursuant to the Bank Secrecy Act;
Whereas it was asserted in a 2018 Conference Report by the Terrorism,
Transnational Crime and Corruption Center at the Schar School of Policy
and Government of George Mason University, money laundering in real
estate (MLRE) has damaging effects on local economies by negatively
impacting property prices and dislocating residents;
Whereas in 2017, in response to evidence about significant money laundering
through real estate in the United States, the Financial Crimes
Enforcement Network (FinCEN) issued Geographic Targeting Orders (GTOs)
requiring limited beneficial ownership disclosure in certain
transactions involving high-end luxury real estate and ``found that
about 30 percent of the transactions covered by the GTOs involve a
beneficial owner or purchaser representative that is also the subject of
a previous suspicious activity report'';
Whereas the influx of illicit money, including from Russian oligarchs, has
flowed largely unimpeded into the United States through these anonymous
shell companies and into U.S. investments, including luxury high-end
real estate;
Whereas in a Conference Report by the Terrorism, Transnational Crime and
Corruption Center at the Schar School of Policy and Government of George
Mason University, stated ``The lack of beneficial ownership transparency
is the most important single factor facilitating MLRE in the U.S.'';
Whereas the lack of beneficial ownership disclosure has been found in several
reports, such as those by the FACT Coalition and Polaris, to facilitate
human trafficking, corruption, terrorism, sanctions evasions, and
numerous other financial crimes;
Whereas the establishment of national-level beneficial ownership registers has
been adopted by other developed nations, including those of the European
Union;
Whereas in 2016, the FATF found that ``Lack of timely access to adequate,
accurate and current beneficial ownership information remains one of the
fundamental gaps in the U.S. context'';
Whereas the FATF recommended the United States ``Take steps to ensure that
beneficial ownership information of U.S. legal persons is available to
competent authorities in a timely manner, by requiring that such
information is obtained at the Federal level'';
Whereas the United States has not fulfilled the recommended steps to address the
money-laundering loopholes that the FATF has identified with DNFBP
sectors and the lack of beneficial ownership disclosure;
Whereas high-profile enforcement actions against some of the largest and most
sophisticated financial institutions raise troubling questions about the
effectiveness of U.S. domestic anti-money-laundering and
counterterrorism financing regulatory, compliance, and enforcement
efforts;
Whereas there are financial institutions and individuals employed therein which
continue to engage in egregious violations of the Bank Secrecy Act and
enter into deferred prosecution agreements and non-prosecution
agreements rather than facing convictions and sentences corresponding to
the severity of their violations;
Whereas effective anti-money-laundering programs must emphasize sound corporate
governance, including business-line accountability and clear lines of
legal responsibility for individuals, including board members and chief
executive officers; and
Whereas anti-money-laundering examinations in recent years at times failed to
recognize the cumulative effect of the violations they cited, instead
narrowly focusing their attention on individual banking units, thus
permitting national banks to avoid and delay correcting problems, which
allowed massive problems to occur before serious enforcement actions
were taken: Now, therefore, be it
Resolved, That the House of Representatives--
(1) acknowledges that the lack of sunlight and transparency
in financial transactions poses a threat to our national
security and our economy's security;
(2) supports efforts to close loopholes that allow
corruption, terrorism, and money laundering to infiltrate our
country's financial system;
(3) encourages corporate transparency to detect, deter, and
interdict individuals, entities, and networks engaged in money
laundering and other financial crimes;
(4) urges financial institutions to comply with the Bank
Secrecy Act and anti-money laws and regulations; and
(5) affirms that financial institutions and individuals
should be held accountable for money-laundering and terror-
financing crimes and violations.
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