March 1, 2021
WASHINGTON D.C. – In a policy paper released today Global Financial Integrity (GFI) provides five strategic recommendations the Biden administration and Congress can use to reform FinCEN in order to better protect national security. Based on hours of in-depth conversations with anti-money laundering experts (some of whom are currently in the US government) the paper provides ideas which would reform an agency that these professionals believe is “struggling . . . to meet the nation’s emerging money laundering challenges.”
The paper, titled “Enhancing National Security by Re-imagining FinCEN,” distills varied ideas garnered from numerous conversations with 19 government (and former government), industry and academic anti-money laundering (AML) authorities who, combined, have hundreds of years of experience in the field. The discussions were held under Chatham House Rules so that all participants could speak freely.
The paper underscores the magnitude of the problem by noting that the annual value of money laundered in the US, from various sources, “could approach $1 trillion.” At the same time “mere fractions of the estimated amount of illicit money flowing through the economy” is ever recovered by law enforcement. All the while the danger to national security lurks. The paper notes that “the threat to US security [from money laundering] has been of particular concern to policy makers for years.” This was highlighted in a March 2020 statement by the Department of Homeland Security which said that money laundering, and specifically trade-based money laundering, “poses significant national security risks to the United States.”
President and CEO of GFI Tom Cardamone issued the following statement:
“For years various US government departments have drawn a line between money laundering and national security. Despite this keen understanding of the national security threat little improvement has been seen in the seizure of illicit money. Given this reality, policy makers have a unique opportunity to address a festering problem before it becomes a crisis.”
The recommendations include:
- Give the FinCEN Director a seat on the Deputies Committee of the National Security Council (NSC) to raise the agency’s stature within the national security community.
- Create in FinCEN a National Anti-Money Laundering Data Center (NALDC) for advanced data collection, synthesis, analysis and distribution to law enforcement for AML activity.
- Establish a “Manhattan Project” to identify, develop and operationalize state of the art technologies needed to fulfill the technology needs of a NALDC.
- Launch within FinCEN the National Anti-Money Laundering Training Center (NALTC) which will be an anti-money laundering knowledge and education hub for FinCEN staff, financial institution regulators, law enforcement at the federal, state and local levels and for state and federal prosecutors.
- Create a Strategic Analysis Team to examine emerging and long-term trends in money laundering methods and computer technologies to counter those threats.
GFI thanks the many experts that gave their time and expertise to assist in the writing of this briefing paper.
ABOUT GFI: Global Financial Integrity (GFI) is a Washington, DC-based think tank focused on illicit financial flows, illicit trade, trade misinvoicing and money laundering. By publishing high-calibre analyses, providing fact-based advocacy and offering a cloud-based database to curtail trade fraud, GFI aims to address the harms inflicted through corruption, transnational crime, tax evasion and kleptocracy. By working with partners to increase transparency in the global financial system and promote Trade Integrity, GFI seeks to create a more equitable and safe world.