Bipartisan Banking Committee Senators Introduce Anti-Money Laundering Reform Bill

On September 26, 2019, a bipartisan group of eight Senators introduced the Illicit Cash Act1, which, among other proposed reforms, would require certain companies to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) at incorporation and within 90 days of any change in beneficial ownership.

Led by Sen. Mark Warner (D-VA), co-sponsors to the bill include Republican Sens. Tom Cotton (R-AR), Mike Rounds (R-SD), John Kennedy (R-LA), and Jerry Moran (R-KS); and Democratic Senators Doug Jones (D-AL), Bob Menendez (D-NJ), and Catherine Cortez Masto (D-NV). This cohort of Senators - who sit on the powerful Senate Banking Committee - achieved something rarely seen in the current US political climate: bipartisanship. Though the sponsors have crossed the aisle in introducing this legislation, prospects for passage this year remain uncertain. Against the backdrop of the recently-announced House Democrats' impeachment inquiry, lawmakers have a shrinking number of legislative days to tackle complex issues like anti-money laundering (AML) reform. What's more, Congress must also come together to fund the government when the current Continuing Resolution expires on November 21. Looking ahead, the Illicit Cash Act is a step toward meaningful AML reform but it still has a long way to go. Below, we discuss what's in the bill, outside support, uncertainty for AML reform in the House, and next steps.

What's in the Illicit Cash Act?

The Illicit Cash Act has a rare combination of industry and law enforcement focused reforms aimed at addressing long-held complaints with the existing AML framework. Below is a summary of selected major changes described in the bill.

Beneficial Ownership

Importantly, this bill would require non-exempt companies2 to disclose beneficial ownership information to FinCEN at incorporation and within 90 days of any change in beneficial ownership, and would require company ownership information to be maintained in a national registry that would be accessible to federal and local law enforcement. Existing companies must report relevant information within two years of the enactment of the bill.

Foreign Evidentiary Requests

The bill would require foreign banks to produce records in a manner that establishes their authenticity and reliability for evidentiary purposes, compels foreign bank compliance with subpoenas, authorizes contempt sanctions for failure to comply, and prohibits recipients of...