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" because of its lack of controls over money flows and financial accounts in his recent article in The New Republic.  

Stone describes some of the most notorious examples, such as the "Russian Laundromat" case, in which Vladimir Putin's cousin succeeded in laundering roughly $20 billion through Moldova into U.S. accounts at well-heeled institutions like HSBC, Deutsche Bank, Barclays, Standard Chartered, CitiBank, 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.  The Corporate Transparency Act was adopted by Congress at the end of 2020 and will require nearly 20 million U.S. corporations, limited liability companies and other entities to file beneficial ownership reports that disclose the true owners of those companies. 

The Act is being implemented by FinCEN - the U.S. Treasury Financial Crimes Enforcement Network. FinCEN recently completed an Advance Notice of Proposed Rule Making in which it sought comments from the public on the regulations that will implement the new law. 

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 their initial beneficial ownership reports at the time of formation.