Will New Congressional Money Laundering Bill Make A Difference?

February 4, 2016

A pair of congressional bills were introduced on Wednesday (Feb. 3) with the stated goal of trying to make money laundering slightly more difficult. The tact of the bills simultaneously introduced in the U.S. House and U.S. Senate? To force people filing papers of incorporation to disclose all beneficial owners–and to hand over U.S. passport or state driver\’s license numbers for all of those beneficial owners.

“Criminals are taking advantage of state laws by establishing firms – often without a physical presence or business activity – to access our banking system,” Rep. Peter King said. “This simple requirement would enable law enforcement to stop money from flowing across our borders to terrorist organizations.” Well, not quite. There is no money allocated in the bill to provide investigative funds to authenticate the submissions. If the intent is to launder criminal–even terrorist–financing, then making up bogus names of the owners and giving them fake passport or driver\’s license numbers is not especially burdensome. According to one Capitol Hill staffer familiar with the legislation–and who insisted on anonymity–the online application process does not seek a picture of the passport or the driver\’s license, but merely a number. Although those numbers are easy to verify, it\’s unlikely many states would bother unless they had a reason to do so. And it\’s the money launderer\’s job to make sure that the state clerks are given no such reason.


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