Home WORLD FinCEN file investigation leads to new banking law

FinCEN file investigation leads to new banking law



From the perspective of government regulators, exposing a large amount of dirty funds in the world’s most powerful bank transactions, FinCEN file Since the Great Depression, investigations have made the financial industry turbulent, with few stories, and have spawned tough actions in the United States and elsewhere.

In the weeks after BuzzFeed News, the International Association of Investigative Journalists and 108 newsrooms around the world began publishing news based on a large number of secret records, British lawmakers launched a Formally investigate British supervision of banks, Members of the European Parliament advocate The whole continent reacted more strongly, And the survey ranged from Thailand to Liberia.

Importantly, the FinCEN archives provided the final impetus for Washington’s final blow. New law Target one of the most effective money laundering tools cited in the story: anonymous shell companies. The legislation passed last week with overwhelming bipartisan support requires many of these secretive American companies to disclose who owns these companies and who benefits from them.

The “Corporate Transparency Act” marks the most substantial amendment to anti-money laundering laws since the 2001 Patriot Act.

Stipulate The legislative package included in the annual defense expenditure bill also addresses many other systemic issues identified in the FinCEN document, which expose the ineffectiveness of government oversight and the many ways in which banks cannot curb the flow of dirty funds.

Among these reforms: the Ministry of Justice will have to submit an annual report to justify its use of deferred prosecution agreements-sweetheart transactions, allowing banks that violate anti-money laundering laws to avoid trials and criminal convictions. The U.S. Treasury Department will also seek new technologies to better identify criminal capital flows and strengthen communication between the private sector and federal agencies. Those who whistle for misbehavior will receive new protections.

Although President Donald Trump vowed to veto the general bill because it did not revoke a series of unrelated protections against social media companies, legislators can override the veto power.

Public officials cited the BuzzFeed News-ICIJ investigation as the reason for the support for reform after years of inaction. “The BuzzFeed story clearly shows that we need to strengthen, reform and update our country’s anti-money laundering laws,” said Sherrod Brown, the top Democrat on the Senate Banking Committee. “This action should have started long ago.”

Senator Ron Wyden, a Democrat on the Senate Finance Committee, also mentioned the FinCEN file on the day the legislation was passed. Finish line. “(Wyden supports reform, but voted against broader legislation for reasons unrelated to financial regulation.)

In order to conduct the FinCEN file investigation, reporters on six continents were selected from suspicious activity reports of the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury or Special Administrative Regions (SAR). The SAR has detailed records of suspicious transactions worth more than $2 trillion in almost every corner of the world, and reporters have linked the flow of funds to terrorist organizations, drug kings, and thieves. The 16-month investigation determined how banks helped large-scale money laundering and how national regulators failed to rule criminals or suppress banks.

A few weeks before publication, journalists working on the FinCEN archives informed government leaders of their findings and asked for comment.The official is we The United Kingdom announced that it will change the anti-money laundering rules-the exact rules shown in the FinCEN document are no longer valid and invalid.

After BuzzFeed News contacted the U.S. Treasury Department, the agency announced that it would begin accepting suggestions from the public and insiders to update the Bank Secrecy Act of 1970, which has long ruled the country’s anti-money laundering policies. Lobbyists, banks, financial services companies, and academics submitted 110 comments, many of which confirmed what the FinCEN document showed: the urgent need for a thorough reform of US anti-money laundering protection measures.

At the same time, on September 18, two days before the publication of the first FinCEN File story, officials in London Announced plan Improve the way the UK collects information about companies registered here.

“It’s hard to believe that the upcoming FinCEN document will force them to do this,” said Tom Kittinger, director of the Financial Crime and Security Research Center of the Royal United Services Institute.

Once these stories were made public, there was an increasing call for reform.

British Member of Parliament Fired A formal investigation will be conducted on the “deeply troubled” issues raised in the FinCEN document.Congressional Treasury Committee swear Study the progress made by government regulatory agencies and law enforcement agencies in preventing money laundering.

Politicians speak at the European Parliament Require uniform regulations And strengthen supervision in the form of new supervisory agencies or greater powers over existing institutions in European banking supervision.

“The existing anti-money laundering system Doesn’t work at all“, Eero Heinäluoma, a Finnish member of the European Parliament, said in the FinCEN archives debate. “This is Swiss cheese, with holes everywhere. “

Governments of other countries also praised the survey results. In Seychelles and Liberia, the journalists’ revelations were passed on to the anti-corruption authorities for further action.

At the same time, criminals and authoritarian regimes who have long been accustomed to keeping their financial transactions secret have lashed out at reporters. Before and after the release of the FinCEN document, journalists in African and Middle Eastern countries were screamed, intimidated and threatened by lawsuits. In Turkey, the court prevented the publication of multiple FinCEN Files stories.

At the same time, facts have proved that the FinCEN document is a powerful tool in the struggle for international transparency and accountability.

Niger’s militants filed a FinCEN Files story as part of a groundbreaking lawsuit designed to force the government to investigate a $120 million corruption investigation, which an official audit said was lost.In Thailand, the regulator Detect Four domestic banks whose transactions are based on analysis The series.Bank of Belgium suggested Create a platform to exchange information about suspicious transactions, and Bank of America also supports legislation against shell companies.

In contrast, lobbying departments in the banking industry tried to downplay the findings.

The Bank Policy Institute released statement, Supported by ads on social media, tried to put cold water on the importance of FinCEN files.

The institute disputed a major finding: Banks sometimes continue to process transactions for customers who have repeatedly been flagged as suspicious. Lobbying groups say that the government “frequently” tells banks to keep these accounts open so that law enforcement officers can monitor them.

However, in the documents in the FinCEN file, BuzzFeed News could only find information mentioning such instructions twice.

The lobby group also argued that most of the SAR has nothing to do with illegal activities. Citing investigation information from 14 banks, the organization said: “Our data shows that about 4% of the SAR will lead to any follow-up action by law enforcement agencies. A small part of it will lead to arrests and ultimately convictions.”

The organization also stated: “Ultimately, this means that 90% to 95% of individuals reported by the bank may be innocent.”

But the lack of official follow-up does not necessarily mean that the reported activity is legal. Interviews by law enforcement officials showed that federal investigators did not have the resources to pursue all leads and would not automatically notify banks when investigating SAR topics.

According to the law, banks must submit reports when they discover transactions that are characteristic of money laundering or other financial misconduct. The SAR itself is not evidence of crime, but it is considered essential for law enforcement agencies to engage in illegal activities.

In a speech to the American Bankers Association this month, FBI Director Christopher Wray (Christopher Wray) Say SAR can “capture various behaviors” and allow agents to “track financial clues, investigate specific individuals and entities, identify potential customers, connect various points and conduct investigations.” According to law enforcement officials, these records can help track down various parts of the drug network, clarify the source of funds behind terrorists, and help officials decide whether to blacklist companies or individuals involved in misconduct.

After BuzzFeed News received contact with questions about this story, the Bank Policy Institute once again cited its research on this issue and reiterated that the FinCEN document was based on a “very narrow” document scope, accounting for millions of submissions each year A small part of the file.

Soon after the FinCEN document was released, global banking stocks Sharp drop, But it’s not just shared value that caused a sensation in the industry. This series of articles also triggered a series of reflections and debates in media and industry forums. “The banking scandal was boring,” independent, A British publication, pointed out. “Reverb…will last for months or even years.”

Since September, in more than 100 opinions and columns published in trade and business publications, industry experts have pointed out the FinCEN document while advocating for change. Among the international bankers, Laurent Liotard-Vogt and Florent Palayret, who worked at the business management consulting company Chappuis Halder & Co., suggested The solution, including regulations to prevent shell companies, concluded: “The entire system is on the verge of collapse and needs to be reconsidered.”

Nine days after revealing the findings of the FinCEN document, Linda A. Lacewell was the head of the company New York State Department of Financial Services, Published her own analysis, And pointed out that this series of articles provides an opportunity to solve long-standing problems. She wrote: “Now, with this new focus, we must act.”

Senator Elizabeth Warren, member of the Banking, Housing and Urban Affairs Committee, quoted A story calling for substantial changes in regulation.

In a statement to BuzzFeed News this week, she said that the Corporate Transparency Act should only be the first step, and she will advocate for further reforms, including making Wall Street more responsible for financial crimes. “I will continue to promote my legislation When their organization circumvents the law, executives are required to bear personal and criminal liability. “


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