Last week, the Biden Administration released the first-ever US Strategy on Countering Corruption (the Strategy). The publication stems from President Biden's June Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest, which outlines a "comprehensive approach" to address corruption in coordination with governmental and non-governmental partners in the United States and abroad.
The Strategy does not announce any specific legislative proposals or new programs. It does, however, highlight areas of focus and existing legal tools the administration plans to use to fight corruption The Strategy's five main pillars are:
- Modernizing, Coordinating, and Resourcing US Government Efforts to Better Fight Corruption
- Curbing Illicit Finance
- Holding Corrupt Actors Accountable
- Preserving and Strengthening the Multilateral Anti-Corruption Architecture
- Improving Diplomatic Engagement and Leveraging Foreign Assistance Resources to Advance Policy Objectives
More specifically, the Strategy discusses enforcement of and rulemaking under the following statutes:
- Foreign Corrupt Practices Act
- Anti-Money Laundering Act: Including the implementation of section 6110 of the Anti-Money Laundering Act of 2020 (AMLA), by finalizing rules, which expands the definition of "financial institution" in the Bank Secrecy Act, 31 USC § 5312, to include antiquities dealers, and formulating AML policy priorities that will be incorporated into FinCEN regulations.
- Bank Secrecy Act: Enforcing the changes to the BSA, as enacted in January 2021, that expand the power of the Treasury Department and FinCEN to enforce the country's anti-money laundering laws through the enhancement of the AML whistleblower program, the expansion of the DOJ's and Treasury's subpoena power, and increased penalties for violations.
- Corporate Transparency Act: Issuing regulations under the newly enacted Corporate Transparency Act, 31 USC. § 5336 that require corporate entities to report beneficial ownership information to FinCEN, including identifying natural persons who form or register reporting companies.
- Sherman Act: Enforcing the Sherman Act by breaking up bid-rigging schemes through the DOJ's Procurement Collusion Strike Force, a multi-agency collaborative started during the Trump Administration that investigates and prosecutes procurement fraud at the local, state, federal, and international level.
The Strategy also lays out how the administration plans to require disclosures about real estate transactions, and it updates the minimum standards for anti-money laundering and suspicious activity reporting for investment advisors. The administration further plans to address the role that "gatekeepers"-lawyers, accountants, trust and company service providers, and incorporators-play in facilitating the movement of illicit funds. In addition, the Strategy notes that the administration will focus its efforts on preventing the use of offshore financial centers, digital assets, and artwork in facilitating corruption.
The Strategy sheds further light on the Biden Administration's general approach to anti-corruption efforts-an interagency, multilateral approach that seeks to leverage data and resources from inside and outside the government and prioritizes curbing illicit finance. Given the Strategy's focus on illicit finance, it seems clear that the Treasury Department will play a significant role in carrying out the administration's anti-corruption national security strategy through rulemaking, enforcement, and asset recovery. Moreover, the Strategy aims to empower "civil society, media, and private sector actors to safely detect and expose corruption, increase public awareness, and pursue accountability." The Strategy seeks not only to enforce the current laws and promulgate new regulations, but also to create a culture where partners identify, investigate, and crack down on corrupt operations. Although the Strategy does not single out particular geographies or regions as a focus, in October DOJ formed an Anticorruption Task Force to target corruption in Latin America, bringing together the resources of multiple DOJ offices, the FBI, the DEA, and the Department of Homeland Security.
We will be following the Administration's new rulemaking and enforcement efforts here on Enforcement Edge. If you have questions, reach out to any of the authors or your trusted Arnold & Porter contact.
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