Prominent Senators Push Money Laundering Laws

by Mike Godfrey, Tax-News.com, Washington

07 August 2001

A bipartisan group of US Senators has introduced tough new legislation to cut down on corruption and money laundering taking place through the US financial system, it was revealed recently. The bill is supported by a number of political heavyweights, including the Chairman of the Senate Permanent Subcommittee on Investigations, Democrat Carl Levin, Co-Chairman of the Senate Drug Caucus, Republican Charles Grassley, and the Chairman of the Senate Banking Committe, Democrat Paul Sarbanes.

This latest effort follows embarrassing revelations that US banks have been used to launder billions of dollars from drug trafficking, fraud, and organised crime activities, and if passed, will add foreign corruption offenses such as bribery and theft of government funds to the list of activities that can trigger a money laundering investigation in the US, prevent American banks from setting up correspondent relationships with foreign 'shell' banks, and require closer review of private bank accounts containing $1 million or more opened for overseas customers.

Senator Levin estimated that over $500 billion was being laundered through US financial institutions each year, and called the existing anti-money laundering laws 'out-of-date and inadequate'. The standpoint of the Bush administration on this topic has been uncertain to say the least, and although it has publicly stated that it is committed to tougher enforcement of existing laws, privately, officials are said to be concerned about the return on the money which is being spent to combat the problem. Senator Levin is resolute, however. 'America can't have it both ways,' he observed. 'We can't condemn corruption abroad, be it officials taking bribes or looting their treasuries, and then tolerate American banks profiting off that corruption.'

Banking groups have strongly opposed the new bill, protesting that current laws are stringent enough, and that the implementation of new ones would be costly and burdensome to the financial services industry. However, Arizona attorney Janet Napolitano, who reviewed the bill, disagrees. '[The] burdens it places on the financial institutions are well considered, closely tailored to the problems, and reasonable in the light of the public benefits involved,' she wrote last week.

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