Grassley backs effort to prevent criminal exploitation of financial system

Finances 2From Press Release


Senate Judiciary Committee Chairman Chuck Grassley expressed support for a proposal to clamp down on money laundering and tighten rules designed to prevent terrorists and other criminals from exploiting America’s financial system.  Currently, financial institutions are required to verify the identities of customers, but not necessarily the identities of the individuals who control or benefit from a legal entity, such as a corporation, association or partnership.

“White Collar criminals, drug traffickers, and even terrorists can, at this very moment, exploit our financial system and shield their illicit activities behind these anonymous legal entity customers.  This [Notice of Proposed Rule Making] would close the loopholes and require banks to identify the natural person who is the beneficial owner of such an entity,” Grassley said in a letter to the Financial Crime Enforcement Network.

The rule, proposed by the Financial Crimes Enforcement Network, clarifies and strengthens provisions under the Bank Secrecy Act’s customer due diligence requirement by explicitly calling for financial institutions to identify and verify the beneficial owners of legal entity customers. The proposal also includes new requirements regarding the nature and purpose of customer relationships as well as ongoing monitoring of any suspicious transactions.

Grassley has long worked with colleagues in a bipartisan manner to increase transparency of corporate beneficiaries and strengthen laws designed to prevent money laundering and combat terrorist financing. A signed copy of Grassley’s letter can be found here.