Veriff
Blog

Enablers Act expands anti-money laundering requirements

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’.

July 29th, 2022

Share

Share

Love this blog? Why not share it with the world?

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. 

Ensure end-to-end AML compliance with Veriff

Around the world, regulators are enacting new bills and laws that place further restrictions on financial services providers and gatekeepers to the financial system. Thankfully, our AI-powered AML and KYC compliance solution can help you stay compliant and show regulators that you take financial crime and compliance seriously.

To discover exactly how our solution can help your business, talk to our experienced team today and arrange a personalized demo. 

Stay up to date on Veriff news, product updates, and more

Veriff will only use the information you provide to share blog updates. You can unsubscribe any time. For more details, check out our privacy policy.

Related articles

A new expression for Veriff: the story behind our enhanced brand identity  

Blog

A new expression for Veriff: the story behind our enhanced brand identity  

We are thrilled to unveil Veriff’s new brand identity, reflecting our next stage of growth and our mission to bring real safety, protection and transparency to the internet. Here’s more on why we did it.

EU lawmakers say NFT platforms should be subjected to money laundering regulations

KYC news

EU lawmakers say NFT platforms should be subjected to money laundering regulations

If new legislation passes, it will mean that all NFT marketplaces will have to assess the risk of illicit finance flowing through their systems and carry out identity checks on new customers and suspicious transactions.

Crypto KYC and blockchain

Blog

Crypto KYC and blockchain

Crypto KYC is the first step in the anti-money laundering (AML) due diligence process. When a financial institution such as a crypto exchange onboards a new customer, they must use KYC processes in order to identify and verify the customer’s identity.