Closing the Last Loophole

Abstract

The proliferation of illegitimate capital being spent in the United States remains an economic and national security concern. The American economic system is becoming an innocuous haven for illegitimate capital as 70.6% of criminals convicted of money laundering in the U.S. were American citizens. Such individuals are assisting international criminals with laundering between $800 billion to $2 trillion USD globally. The harm caused by this activity around the world is very evident. When oppressive political leaders are able to amass large amounts of wealth illegally and undetected, citizens living under their dictatorship suffer as these leaders’ exorbitant powers go unchecked. More disturbing are the contracts secured from the U.S. Department of Defense by unnamed companies associated with the Taliban, a radical group which triggered the creation of the PATRIOT Act due to their affiliation with the September 11th attacks. Although banks have been required to have anti-money laundering (AML) provisions since 1970, those involved in money laundering continue to find new, sophisticated ways to mask their activities. A lack of transparency in large financial transactions/purchases, or transactions via virtual asset service providers (VASP), are loopholes many have taken advantage of. Developing a working group of voters, experts, and politicians to discuss the best next steps for strengthening America’s AML efforts is key, as the emphasis on the regulation of digital assets and VASPs is not meant to focus AML efforts entirely on emerging technologies. Instead, it is an example to reinforce the reason why Congress should emend the existing ENABLERS Act, ensuring the bill leaves no room for illicit funds transfers to circumvent federal investigation.