[Congressional Record Volume 168, Number 158 (Thursday, September 29, 2022)]
[Senate]
[Pages S5903-S5905]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 6377. Mr. WHITEHOUSE (for himself and Mr. Wicker) submitted an 
amendment intended to be proposed to amendment SA 5499 submitted by Mr. 
Reed (for himself and Mr. Inhofe) and intended to be proposed to the 
bill H.R. 7900, to authorize appropriations for fiscal year 2023 for 
military activities of the Department of Defense, for military 
construction, and for defense activities of the Department of Energy, 
to prescribe military personnel strengths for such fiscal year, and for 
other purposes; which was ordered to lie on the table; as follows:

        At the appropriate place, insert the following:

     SEC. ___. ANTI-MONEY LAUNDERING SAFEGUARDS REGARDING 
                   GATEKEEPERS.

       (a) Short Title.--This section may be cited as the 
     ``Establishing New Authorities for Business Laundering and 
     Enabling Risks to Security Act of 2022'' or the ``ENABLERS 
     Act of 2022''.
       (b) Findings.--Congress finds the following:
       (1) Kleptocrats and other corrupt actors across the world 
     are increasingly relying on non-bank professional service 
     providers, including those operating in the United States, to 
     move, hide, and grow their ill-gotten gains.
       (2) In 2003, the Financial Action Task Force (referred to 
     in this subsection as the ``FATF''), an intergovernmental 
     body formed by the United States and other major industrial 
     nations, determined that designated non-financial businesses 
     and professions should be subject to the same anti-money 
     laundering and counter-terrorist financing rules and 
     regulations as financial institutions, including the 
     requirement to know your customer or client and to perform 
     due diligence, as well as to file suspicious transaction 
     reports, referred to as suspicious activity reports or 
     ``SARs'' in the United States.
       (3) In 2016, an FATF evaluation of the United States rated 
     the United States as noncompliant with 4 of the 40 
     recommendations of the FATF regarding combating money 
     laundering and the financing of terrorism and proliferation. 
     Of the 4 noncompliant ratings described in the preceding 
     sentence, 3 of those ratings pertained to designated non-
     financial businesses and professions, including lawyers, 
     accountants, and trust and company service providers, and the 
     fourth such rating pertained to transparency and the 
     beneficial ownership of legal entities. The United States 
     also received the lowest mark from the FATF for the 
     effectiveness of the United States in combating the misuse of 
     legal entities. The FATF evaluation listed, as a priority 
     action, applying appropriate anti-money laundering and 
     countering the financing of terrorism obligations ``to 
     lawyers, accountants, trust and company service providers 
     (other than trust companies which are already covered)'' to 
     improve the anti-money laundering and counter-terrorist 
     financing regime in the United States.
       (4) In line with the procedures of the FATF, members of the 
     FATF are expected to address deficiencies in the regimes of 
     those members not later than 3 years after adopting their 
     mutual evaluation. In March 2020, the FATF published the 
     ``3rd Enhanced Follow-up Report & Technical Compliance Re-
     Rating'' with respect to the United States, which continued 
     to score the United States noncompliant with respect to the 4 
     recommendations described in paragraph (3).
       (5) On January 1, 2021, the United States took steps to 
     address the non-compliant rating of the United States with 
     respect to the beneficial ownership of legal entities through 
     the enactment of the Corporate Transparency Act (title LXIV 
     of Public Law 116-283), but, as of the date of enactment of 
     this Act, Congress has yet to address the non-compliant 
     rating of the United States with respect to designated non-
     financial businesses and professions.
       (6) In October 2021, the ``Pandora Papers'', the largest 
     expose of global financial data in history, revealed to a 
     global audience how the United States plays host to a highly 
     specialized group of ``enablers'' that help the world's elite 
     move, hide, and grow their money.
       (7) The Pandora Papers described how an adviser to the 
     former Prime Minister of Malaysia reportedly used affiliates 
     of a United States law firm to assemble and consult a network 
     of companies, despite the adviser fitting the ``textbook 
     definition'' of a high-risk client. The adviser went on to 
     use his companies to help steal $4,500,000,000 from 
     Malaysia's public investment fund in one of ``the world's 
     biggest-ever financial frauds'', known as 1MDB.
       (8) Russian oligarchs have used gatekeepers to move their 
     money into the United States. For example, a gatekeeper 
     formed a company in Delaware that reportedly owns a 
     $15,000,000 mansion in Washington, D.C., that is linked to 
     one of Vladimir Putin's closest allies. Also reportedly 
     connected to the oligarch is a $14,000,000 townhouse in New 
     York City owned by a separate Delaware company.
       (9) On May 8, 2022, the Office of Foreign Assets Control of 
     the Department of the Treasury (referred to in this 
     subsection as ``OFAC''), pursuant to Executive Order 14071 
     (87 Fed. Reg. 20999; relating to prohibiting new investment 
     in and certain services to the Russian Federation in response 
     to continued Russian Federation aggression), prohibited ``the 
     exportation, reexportation, sale, or supply, directly or 
     indirectly, from the United States, or by a United States 
     person, wherever located, of accounting, trust and corporate 
     formation, or management consulting services to any person 
     located in the Russian Federation.''.
       (10) On June 30, 2022, OFAC blocked a trust holding more 
     than $1,000,000,000 linked to designated Russian oligarch 
     Suleiman Kerimov. These efforts revealed that Kerimov used a 
     complex series of legal structures and front persons to 
     obscure his interest in Heritage Trust, the funds of which 
     first entered the financial system of the United States 
     through 2 foreign, Kerimov-controlled entities before the 
     imposition of sanctions against him. The funds were 
     subsequently invested in large public and private companies 
     in the United States and managed by a series of investment 
     firms and facilitators in the United States.
       (11) The Pandora Papers uncovered more than 200 United 
     States-based trusts across 15 States that held assets of more 
     than $1,000,000,000, ``including nearly 30 trusts that held 
     assets linked to people or companies accused of fraud, 
     bribery, or human rights abuses''. In particular, South 
     Dakota, Nevada, Delaware, Florida, Wyoming, and New Hampshire 
     have emerged as global hotspots for those seeking to hide 
     their assets and minimize their tax burdens.
       (12) In 2016, an investigator with the nonprofit 
     organization Global Witness posed as an adviser to a corrupt 
     African official and set up meetings with 13 New York City 
     law firms to discuss how to move suspect funds into the 
     United States. Lawyers from all but 1 of the firms provided 
     advice to the faux adviser, including advice on how to 
     utilize anonymous companies to obscure the true owner of the 
     assets. Other suggestions included naming the lawyer as a 
     trustee of an offshore trust in order to open a bank account 
     and using the law firm's escrow account to receive payments.
       (13) The autocratic Prime Minister of Iraqi Kurdistan, 
     reportedly known for torturing and killing journalists and 
     critics, allegedly purchased a retail store valued at more 
     than $18,000,000 in Miami, Florida, with the assistance of a 
     Pennsylvania-based law firm.
       (14) Teodoro Obiang, the Vice President of Equatorial 
     Guinea and son of the country's authoritarian President, 
     embezzled millions of dollars from his home country, which 
     was then used to purchase luxury assets in the United States. 
     Obiang relied on the assistance of 2 lawyers in the United 
     States to move millions of dollars of suspect funds through 
     United States banks. The lawyers incorporated 5 shell 
     companies in California and opened bank accounts associated 
     with the companies for Obiang's personal use. The suspect 
     funds were first wired to the lawyers' attorney-client and 
     firm accounts, then transferred to the accounts of the shell 
     companies.

[[Page S5904]]

       (15) A consulting company in the United States reportedly 
     made millions of dollars working for companies owned or 
     partly owned by Isabel dos Santos, the eldest child of a 
     former President of Angola. This included working with 
     Angola's state oil company when it was run by Isabel dos 
     Santos and helping to ``run a failing jewelry business 
     acquired with Angolan money''. In 2021, a Dutch tribunal 
     found that Isabel dos Santos and her husband obtained a 
     $500,000,000 stake in the oil company through ``grand 
     corruption''.
       (16) In December 2021, the United States Government issued 
     a first-ever ``United States Strategy on Countering 
     Corruption'', which includes ``Curbing Illicit Finance'' as a 
     strategic pillar. An express line of effort to advance this 
     strategic pillar states that: ``Deficiencies in the U.S. 
     regulatory framework mean various professionals and service 
     providers--including lawyers, accountants, trust and company 
     service providers, incorporators, and others willing to be 
     hired as registered agents or who act as nominees to open and 
     move funds through bank accounts--are not required to 
     understand the nature or source of income of their clients or 
     prospective clients. . .While U.S. law enforcement has 
     increased its focus on such facilitators, it is both 
     difficult to prove `intent and knowledge' that a facilitator 
     was dealing with illicit funds or bad actors, or that they 
     should have known the same. Cognizant of such constraints, 
     the Administration will consider additional authorities to 
     cover key gatekeepers, working with the Congress as necessary 
     to secure additional authorities''.
       (17) This section, and the amendments made by this section, 
     provide the authorities needed to require that professional 
     service providers that serve as key gatekeepers to the 
     financial system of the United States adopt anti-money 
     laundering procedures that can help detect and prevent the 
     laundering of corrupt and other criminal funds into the 
     United States. Absent such authorities, the United States 
     Government will be unable to adequately protect the financial 
     system of the United States, identify funds and assets that 
     are the proceeds of corruption and other crimes, support 
     foreign states in their efforts to combat corruption and 
     promote good governance, or maintain the role of the United 
     States as a leader in international bodies that are committed 
     to combating money laundering and corruption.
       (c) Requirements for Gatekeepers.--
       (1) In general.--Section 5312(a)(2) of title 31, United 
     States Code, as amended by section 6110(a) of the William M. 
     (Mac) Thornberry National Defense Authorization Act for 
     Fiscal Year 2021 (Public Law 116-283), is amended--
       (A) by redesignating subparagraphs (Z) and (AA) as 
     subparagraphs (AA) and (BB), respectively; and
       (B) by inserting after subparagraph (Y) the following:
       ``(Z) any person, excluding any governmental entity, 
     employee, or agent, that provides to a third party--
       ``(i) a service described in section 5337(a)(2);
       ``(ii) corporate or other legal entity arrangement, 
     association, or formation services;
       ``(iii) trust services;
       ``(iv) third party payment services; or
       ``(v) legal or accounting services that--

       ``(I) involve financial activities that facilitate a 
     service described in any of clauses (i) through (iv); and
       ``(II) are not provided in exchange for direct compensation 
     for civil or criminal defense matters;''.

       (2) Requirements for gatekeepers.--Subchapter II of chapter 
     53 of title 31, United States Code, is amended by adding at 
     the end the following:

     ``Sec. 5337. Requirements for gatekeepers

       ``(a) In General.--
       ``(1) In general.--The Secretary of the Treasury (referred 
     to in this section as the `Secretary') shall, not later than 
     4 years after the date of enactment of this section, issue 
     regulations to--
       ``(A) determine what persons fall within the class of 
     persons acting as described in section 5312(a)(2)(Z); and
       ``(B) prescribe appropriate requirements under this 
     subchapter for the persons described in subparagraph (A).
       ``(2) Identification of persons.--When determining what 
     persons fall within the class of persons acting as described 
     in section 5312(a)(2)(Z), the Secretary of the Treasury shall 
     consider, on a risk basis--
       ``(A) any person involved in the provision of services to a 
     third party regarding--
       ``(i) the formation or registration of a corporation, 
     limited liability company, trust, foundation, limited 
     liability partnership, partnership, or other similar entity;
       ``(ii) the acquisition or disposition of an interest in a 
     corporation, limited liability company, trust, foundation, 
     limited liability partnership, partnership, or other similar 
     entity;
       ``(iii) the provision of a registered office, an address or 
     accommodation, correspondence, or an administrative address 
     for a corporation, limited liability company, trust, 
     foundation, limited liability partnership, partnership, or 
     other similar entity;
       ``(iv) managing, advising, or consulting with respect to 
     money or other assets;
       ``(v) the processing of payments;
       ``(vi) the provision of cash vault services;
       ``(vii) the wiring of money;
       ``(viii) the exchange of foreign currency;
       ``(ix) the exchange of any digital currency, digital asset, 
     or other value that substitutes for currency; or
       ``(x) the sourcing, pooling, organization, or management of 
     capital in association with the formation, operation, or 
     management of, or investment in, a corporation, limited 
     liability company, trust, foundation, limited liability 
     partnership, partnership, or other similar entity;
       ``(B) any person that, in connection with filing any 
     return, directly or indirectly, on behalf of a foreign 
     individual, trust, or fiduciary with respect to direct or 
     indirect United States investment, transaction, trade or 
     business, or similar activities--
       ``(i) obtains or uses a preparer tax identification number; 
     or
       ``(ii) would be required to use or obtain a preparer tax 
     identification number, if that person were compensated for 
     services rendered;
       ``(C) any person providing a service to a third party by 
     acting as, or arranging for another person to act as, a 
     registered agent, trustee, director, secretary, nominee 
     shareholder, partner of a company, partner of a partnership, 
     or similar position with respect to a corporation, limited 
     liability company, trust, foundation, limited liability 
     partnership, or other similar activity; and
       ``(D) any service provider described in subparagraph (A), 
     (B), or (C), wherever organized or doing business, that--
       ``(i) is owned or controlled by a person described in any 
     such subparagraph;
       ``(ii) acts as an agent of a person described in any such 
     subparagraph; or
       ``(iii) is an instrumentality of a person described in any 
     such subparagraph.
       ``(3) Sense of congress.--It is the sense of Congress that, 
     when issuing regulations under this subsection, the Secretary 
     shall design those regulations to--
       ``(A) minimize the burden of those regulations and maximize 
     the intended outcomes of those regulations, as determined by 
     the Secretary; and
       ``(B) avoid applying additional requirements for persons 
     that may fall within the class of persons described in 
     section 5312(a)(2)(Z) but that are already, as determined by 
     the Secretary, appropriately regulated under this subchapter.
       ``(b) Enforcement.--
       ``(1) Random audits.--Not later than 1 year after the date 
     on which the Secretary issues the regulations required under 
     subsection (a), and on an ongoing basis thereafter, the 
     Secretary shall conduct random audits of persons that fall 
     within the class of persons described in section 
     5312(a)(2)(Z), including persons described in subsection 
     (a)(2), in a manner that the Secretary determines 
     appropriate, to assess compliance with the requirements of 
     this section.
       ``(2) Reports.--The Secretary shall, not later than 180 
     days after the conclusion of any calendar year that begins 
     after the date that is 1 year after the date on which the 
     Secretary issues regulations pursuant to subsection (a), 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report that--
       ``(A) describes the results of any random audits conducted 
     pursuant to paragraph (1) during such calendar year; and
       ``(B) includes recommendations for improving the 
     effectiveness of the requirements imposed under this section 
     on persons described in section 5312(a)(2)(Z), including 
     persons described in subsection (a)(2).''.
       (3) Conforming amendment.--The table of sections for 
     subchapter II of chapter 53 of title 31, United States Code, 
     is amended by inserting after the item relating to section 
     5336 the following:

``5337. Requirements for gatekeepers.''.
       (4) Use of technology to increase efficiency and accuracy 
     of information.--The Secretary of the Treasury shall 
     promote--
       (A) the integrity of information collected under this 
     section and the amendments made by this section; and
       (B) if applicable, the timely and efficient collection of 
     information by persons described in section 5312(a)(2)(Z) of 
     title 31, United States Code, as so redesignated by this 
     subsection, including persons described in subsection (a)(2) 
     of section 5337 of that title, as added by this subsection, 
     by exploring the use of technologies to--
       (i) effectuate the collection, standardization, 
     transmission, and sharing of information that the Secretary 
     may require under such section 5337; and
       (ii) minimize the burdens associated with the collection, 
     standardization, transmission, and sharing of information 
     that the Secretary may require under such section 5337.
       (5) Effective date.--This subsection, and the amendments 
     made by this subsection, shall take effect on the effective 
     date of the regulations issued by the Secretary of the 
     Treasury pursuant to section 5337(a) of title 31, United 
     States Code, as added by this subsection.
       (d) Gatekeepers Strategy.--Section 262 of the Countering 
     Russian Influence in Europe and Eurasia Act of 2017 (title II 
     of Public Law 115-44) is amended by adding at the end the 
     following:
       ``(11) Gatekeeper strategy.--
       ``(A) In general.--A description of efforts to impose 
     sufficient anti-money laundering safeguards on designated 
     non-financial businesses and professions, as that term is 
     defined by the Financial Action Task Force.

[[Page S5905]]

       ``(B) Update.--If, as of the date of enactment of this 
     paragraph, the updates to the national strategy required 
     under section 261 have been submitted to appropriate 
     congressional committees, the President, acting through the 
     Secretary of the Treasury, shall, not later than 1 year after 
     that date of enactment, submit to the appropriate 
     congressional committees an additional update to the national 
     strategy with respect to the addition of this paragraph.''.
       (e) Agency Coordination and Collaboration.--The Secretary 
     of the Treasury shall, to the greatest extent practicable--
       (1) establish relationships with State, local, territorial, 
     and Tribal governmental agencies; and
       (2) work collaboratively with the governmental agencies 
     described in paragraph (1) to implement and enforce the 
     regulations prescribed under this section, and the amendments 
     made by this section, by--
       (A) using the Domestic Liaisons appointed under section 
     310(f) of title 31, United States Code, to share information 
     regarding changes effectuated by this section and the 
     amendments made by this section;
       (B) using the Domestic Liaisons appointed under section 
     310(f) of title 31, United States Code, to advise on 
     necessary revisions to State, local, territorial, and Tribal 
     standards with respect to relevant professional licensure;
       (C) engaging with various persons described in section 
     5312(a)(2)(Z) of title 31, United States Code, as so 
     redesignated by subsection (c) (including persons described 
     in section 5337(a)(2) of that title, as added by subsection 
     (c)), as appropriate, including with respect to information 
     sharing and data sharing; and
       (D) working with State, local, territorial, and Tribal 
     governmental agencies to levy professional sanctions on 
     persons that facilitate corruption, money laundering, the 
     financing of terrorist activities, and other related crimes.
       (f) Report.--Not later than 3 years after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives a report that--
       (1) describes any findings of the Secretary with respect to 
     technologies that may effectuate the collection, 
     standardization, transmission, and sharing of information 
     that the Secretary may require under section 5337 of title 
     31, United States Code, as added by subsection (c); and
       (2) makes recommendations for implementing the technologies 
     described in paragraph (1).
       (g) Authorization of Appropriations.--In addition to 
     amounts otherwise available for such purposes, there are 
     authorized to be appropriated to the Secretary of the 
     Treasury, without fiscal year limitation, such sums as may be 
     necessary, to remain available until expended, exclusively 
     for the purpose of carrying out this section and the 
     amendments made by this section, including for--
       (1) the appointment of personnel;
       (2) the exploration and adoption of information technology 
     to effectively support enforcement activities or activities 
     described in subsection (c) and the amendments made by that 
     subsection;
       (3) audit, investigatory, and review activities, including 
     those described in subsection (c) and the amendments made by 
     that subsection;
       (4) agency coordination and collaboration efforts and 
     activities described in subsection (e);
       (5) voluntary compliance programs;
       (6) compiling the reports required under--
       (A) subsection (c);
       (B) the amendments made by subsection (c); and
       (C) subsection (f); and
       (7) allocating amounts to State, local, territorial, and 
     Tribal jurisdictions to pay reasonable costs relating to 
     compliance with, or enforcement of, the requirements of this 
     section and the amendments made by this section.
       (h) Rule of Construction.--Nothing in this section, or the 
     amendments made by this section, may be construed to be 
     limited or impeded by any obligations under State, local, 
     territorial, or Tribal laws or rules concerning privilege, 
     ethics, confidentiality, privacy, or related matters.
                                 ______