Historic bill for the US: Middlemen to report suspicious activity to the Treasury

The US House of Representatives recently approved a historic bill requiring financial intermediaries to alert the Treasury to any suspicious activity.

However, a last-minute amendment has resulted in the withdrawal of important participants like PR agencies, art dealers, and investment advisors.


The annual Defense Act, which was passed on Thursday, included the bipartisan Establishing New Authorities for Businesses Laundering and Enabling Risks to Security (ENABLERS) Act.


According to the ICIJ, the bill would require trust companies, attorneys, and limited legal or accounting services to look into clients and alert the US Department of Treasury to any suspicious activity.

The bill, however, fell short of expectations when investment advisers, art dealers, and PR firms abruptly withdrew their support after Maxine Waters, chair of the House Financial Services Committee, proposed an amendment on July 13.


The bill would include "ccertain persons who engage in any activity that the Secretary of the Treasury determines to be… corporate and trust services, third party payment services, and very limited legal or accounting services," according to Jim Richards, Founder and Principal of RegTech Consulting, in the Bank Secrecy Act.


The US National Defense Authorization Act was amended to include the Enablers Act in June following a vote by the House Armed Services Committee.


Republican and Democratic sources agreed that including it would expedite the legislation and greatly increase the likelihood that it would become law.


Representative Tom Malinowski, a co-sponsor of the legislation, declared: "If it passes, this will be the biggest money laundering reform since the Patriot Act… It closes the biggest remaining loopholes in our laws that allow crooks and kleptocrats all over the world to hide their money and property in the United States."


"It’s way too easy to use accounting firms, lawyers and others to launder money in ways that are hard for our sanctions enforcement agencies to see. By proposing very simple, straightforward due diligence requirements, we exponentially increase the effects of the sanctions programme," he continued. "By proposing very simple, straightforward due diligence requirements, we exponentially increase the effects of the sanctions programme."


Rep. Joe Wilson stated to the Washington Post that "this brings us one step closer" to having middlemen in international transactions be subject to the same anti-money laundering checks as banks.


"Nobody should be able to hide behind blood money to exploit democratic institutions for their benefit," he continued.


The US Financial Crimes Enforcement Network (FinCEN) is required by the Enablers Act to create a task force to devise a plan for enforcing AML safeguards and requirements on particular professions.


The beneficial ownership of the entities that buy or sell residential or commercial property in transactions involving domestic title insurance companies must also be gathered, kept up to date, and reported to the Treasury.

By fLEXI tEAM