The Establishing New Authorities for Business Laundering and Enabling Risks to Security (ENABLERS) Act would make it harder for “kleptocrats” across the globe to launder money in the United States, according to Reps. Tom Malinowski (D-N.J.), Maria Elvira Salazar (R-Fla.), Steve Cohen (D-Tenn.), and Joe Wilson (R-S.C.).
The bill (pdf) would amend the 51-year-old Bank Secrecy Act by enabling the Treasury Department to impose stronger due diligence requirements on the source of funds for investment advisers, art dealers, attorneys involved in financial activity, company service providers, accountants, PR firms, and third-party payment providers.
Such a due diligence requirement could be something as simple as asking if suspicious funds are the proceeds from a crime.
It would also remove an exemption that has been in place since 2002 that means real-estate professionals, sellers of luxury cars, ships, and aircraft do not have to have anti-money laundering programs in place.
In a joint statement issued on Oct. 6, lawmakers said the act would “ensure that the United States never again facilitates the corruption and dictatorship we claim to oppose by giving kleptocrats and criminals a safe haven for the money they steal from their people.”
“In turn, it would protect Americans from inflated real estate prices, job loss, human trafficking, and influence peddling” they added.
The bill will likely be introduced on Friday and, if passed, the Treasury Department would have until Dec. 31, 2023 to ensure it has imposed stronger due diligence requirements. All enablers subject to the amendment must also have programs in place by June 30, 2024, regardless of whether or not Treasury has publicly declared the rule.
However, it is likely to face opposition from the multiple industries it affects.
In Thursday’s statement, Lawmakers pointed to the recent Pandora Papers, which highlighted how world leaders, powerful politicians, billionaires, and others have used offshore accounts to shield assets collectively worth trillions of dollars over the past quarter-century.
The papers, revealed on Oct. 4, contain nearly 12 million leaked documents revealing the offshore accounts of well-known political figures, amounting to 2.94 terabytes of data of confidential information. The data has been drawn from 14 different sources.
The more than 330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former UK Prime Minister Tony Blair, Czech Republic Prime Minister Andrej Babis, Kenyan President Uhuru Kenyatta, Ecuador’s President Guillermo Lasso, and associates of both Pakistani Prime Minister Imran Khan and Russian President Vladimir Putin.
“The Pandora Papers reveal how corruption undermines democracy. All around the world, countries are being looted and the most vulnerable people victimized by their elites,” Cohen said in the statement.
“These kleptocrats then launder that money to the West where they enjoy the high life—spending the money on luxury cars, penthouses, jets, and opulent parties. Some also spend it on intervening in our democracy, gaining influence in our politics and elites and working to undermine the rule of law. In order to fight corruption, we must curb the enablers.”
The papers also found that Chinese Communist Party (CCP) politician Feng Qiya used an offshore company and enablers to trade U.S. stocks with $2 million worth of illicit funds.
“American adversaries ranging from China to Iran to Russia have taken advantage of the U.S. enablers of kleptocracy—unscrupulous lawyers, accountants, and others, to push their dirty money into our system, attempting to undermine our republic from within,”said Wilson.
“If we are serious about fighting dictatorship, we need U.S. professionals to do the most basic due diligence—no American should be accepting money from Chinese Communist Party operatives, Iranian mullahs, Russian oligarchs, or others. The ENABLERS Act is a critical national security measure.”
The ENABLERS Act is one of several bipartisan measures being introduced by Washington to combat corruption.
Several other pieces of legislation, including the Justice for Victims of Kleptocracy Act, the Foreign Corruption Accountability Act, the Combating Global Corruption Act, and the Transnational Repression Accountability and Prevention Act, were recently added into the House’s national defense bill.
Reuters contributed to this report.