Enablers Act expands anti-money laundering requirements

A bipartisan group of US lawmakers has cleared a major hurdle in their attempt to make the largest change to America’s anti-money laundering laws in more than two decades.

What will the Enablers Act achieve?

Their bill, known as the Enablers Act, amends the 52-year-old Bank Secrecy Act. It requires trust companies, lawyers, and art dealers to investigate their clients when they seek to move money and assets into the American financial system. Those covered by the law will also be required to report suspicious activities to the Treasury Department.

At present, financial institutions such as banks are required to investigate their clients and their sources of wealth or funds. But, until now, many other financial gatekeepers have been exempted from so-called ‘due diligence rules’.

However, the Enablers Act will change this and eliminate the loophole entirely. “Middlemen in foreign transactions should be subject to the same anti-money laundering checks as banks, and this brings us one step closer,” said Rep. Joe Wilson (R-S.C.), who co-led the push to enact the Enablers Act, along with Rep. Tom Malinowski (D-N.J.). He added that “nobody should be able to hide behind blood money to exploit democratic institutions for their benefit.”

At the close of June 2022, The House Armed Services Committee voted to include the Enablers Act in the National Defense Authorization Act, a broad national defense policy bill that is traditionally passed by Congress every year. The vote fast-tracks the bill and significantly increases the likelihood it will become law, Democrat and Republican backers say.

Enablers Act gets Biden’s approval and will target Russian oligarchs

Although President Biden’s administration was not involved with the bill, a White House spokesperson said “we applaud the bipartisan push within the Congress to work with the administration to limit the ways in which proceeds of corruption and other ill-gotten gains are moved through the US financial system.”

Supporters of the Enablers Act say that it will also help US law enforcement officials identify and freeze assets held by sanctioned Russian oligarchs. The US Treasury Department has sanctioned hundreds of Russians believed to be close to Russian President Vladimir Putin since the start of the war in Ukraine. However, many experts believe that Russian elites are routinely able to hide their ownership of luxury homes, yachts, jets, and other assets through complex offshore arrangements put in place by lawyers, accountants, and other advisers. However, by closing the loophole surrounding obliged entities, it’s hoped that the Enablers Act will make it impossible for these arrangements to occur. 

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