Only just a start

Congress starts on a bipartisan basis

There have been a few posts and stories (to say the least) about how the change in power in the US congress in 2019 can impact the financial community. With the potential for investigations on everything from consumer abuse to compliance deficiencies and any other scandals, the AML community ignores the legislative branch at their peril. For several previous sessions, it was easy to avoid focusing in what were only occasional hearings but, frankly, very political and in some cases, one sided.

From what we have seen early with Chairwoman Maxine Waters (D-CA), the House Financial Services Committee will, if possible, be bipartisan in their challenge to address a whole host of issues and that can only be a strong positive for those of us hoping for improvement in the AML/Financial crime prevention infrastructure.



Sanctions are there for a reason

The first example is the reaction to the recent decision by the Treasury Department to “delist” companies owned by Russian oligarch Oleg Deripaska. While Congress tried but failed to overturn the decision, the Senate Intelligence Committee issued a bipartisan statement warning Treasury that they would continue to monitor the situation and added:

“Today’s announcement, which comes as a result of negotiated changes to the En+ corporate structure, does not change the fact that Mr. Deripaska, his employees, and his companies work at Vladimir Putin’s behest and operate as de facto representatives of the Russian government - a government that has occupied and intimidated its neighbors, sought to disrupt free and fair elections, violated nuclear treaties, and continued to wage influence campaigns to undermine western democracies, including our own.”

Chairwoman Waters, acknowledging the overwhelming vote in the House to reverse the lifting of the sanctions said:

“I believe the Administration’s approach to Russia sanctions has been haphazard and weak, as well as inconsistent with its approach to sanctions imposed on other countries, such as Iran.”

The AML/Sanctions community should expect continued and bipartisan focus on sanctions. (Note: the addition of global sanctions expert Tim White to our team at AML RightSource will put us in the forefront of the place to go for sanctions advice and counsel).

In fact, since the first draft of this post, Chairwoman Waters and two other committee chairs sent this letter to the Treasury Department.


Everyone talks technology but…

Conferences, articles, webinars and podcasts all trumpet the advent of technology but have we learned all we need to know yet---clearly no. The positive news is that the banking agencies issued an important statement in December on technology in AML and the new Congress just added to that encouragement with a measure (H.R. 56), that Ms. Waters pointed out “would strengthen and expand efforts to deter terrorist and illicit abuses of financial technology through interagency coordination and research, and through collaboration with private institutions and citizens.”

Specifically, and a key value item for those of us in the AML community, the bill includes a public-private sector task force and a grant program to encourage the development of largely open-source tracking technology. This measure passed by voice vote.



Human Trafficking efforts need bipartisanship to be successful

We will continue to report on private-public sector anti-human trafficking efforts throughout 2019 and one of the first actions make it clear that there are so many areas that need oversight to combat this horrific crime. On the same day as the passage of the technology bill, the House overwhelmingly passed H.R. 502, the FIND Trafficking Act, which attempts to address the use of virtual currencies and marketplaces in drug trafficking and sex trafficking. The measure requires the Government Accountability Office (GAO) to study those areas and the Chairwoman acknowledged again the bipartisan nature of the effort and potentially a glimpse into what the committee will continue to oversee when she added “[o]nline marketplaces and cryptocurrencies facilitate this abuse, not just abroad but in our own communities, where victims are exploited by bad actors forcing men, women and children into horrifying situations from which it’s difficult to escape.”

The results of the study will bear watching as it will also “examine the participants in these trafficking supply chains and how they cash in and out of their digital marketplaces, returning their illicitly gained proceeds to the formal banking system.”

To the AML community, get engaged with the legislative process in this congress, especially one that is working together.

It’s January so it’s only the beginning, only just a start…


*Beginnings was released by Chicago Transit Authority in 1969 before they became Chicago and was rereleased in 1971.