THE NEW US ANTI-MONEY LAUNDERING ACT
R&C: How would you characterise the problem of money laundering in the US? What affect does it have on companies, the financial system, government and society in general?
Zimiles: Money laundering is both a domestic and global issue for the US. Globally, the United Nations estimates the amount of money laundered in one year is between 2 and 5 percent of global GDP, or $800bn to $2 trillion. In the US alone, domestic financial crime, excluding tax evasion, generates approximately $300bn of proceeds for potential laundering. Money laundering is not a victimless crime, and often involves the proceeds of drug trafficking, human trafficking and fraud, among other illicit activities, resulting in a significant social impact. In 2019, there were nearly 50,000 overdose deaths involving any opioid, and the US State Department estimates that 14,500 to 17,500 people are trafficked into the US each year.
Vasi: Money laundering is one of the greatest concerns for companies, the financial system and government in the US. It can hamper economic growth and, of course, is a source of criminal activity. The cost of compliance with anti-money laundering (AML) requirements, procedures and systems for financial services firms is significant. Fines for failures to comply with AML requirements are, year-over-year, the highest category of regulatory fines. Government and law enforcement also expend a lot of resources combatting money laundering. Criminals continue to find new and different ways to launder money and it appears the regulators, financial services firms, lawmakers and advocates believe that updating and adding to AML requirements and regulation will improve general AML efforts and reduce money laundering.
Jul-Sep 2021 Issue
Guidehouse
Seward & Kissel LLP