In a significant shift in the United States, the Biden administration is spearheading a comprehensive effort to combat money laundering, signalling a departure from the United States’ historical status as a leading hub for such illicit activities.
The Biden administration’s commitment materialised last month with the launch of the Beneficial Ownership Registry, a crucial development in the fight against corruption. This registry is designed to expose the web of anonymous shell companies that have proliferated in the U.S., particularly in states like Delaware and Nevada.
Lawtech Software Group CEO, Rudi Kesic, offered his thoughts on this news, stating, “This news in regard to requiring identification of beneficial owners, is a vital step in curbing money laundering and a positive step for law firms and legal professionals across the United States.”
Closing the Real Estate Loophole as the US Tackles Money Laundering
In another significant move, the Treasury department’s Financial Crimes Enforcement Network recently announced transparency requirements for the American residential real estate sector. Historically a haven for questionable finance, the real estate industry will no longer be exempt from basic anti-money laundering checks.
Professionals involved in real estate deals, including attorneys, must now disclose the individuals behind previously anonymous property purchases.
Targeting Illicit Wealth in the Private Investment Sector
Extending the crackdown to the private investment sector, FinCEN proposed a new rule addressing long-standing loopholes that facilitated the flow of illicit wealth.
Private equity, hedge funds, and venture capital markets, collectively worth trillions of dollars, have historically evaded fundamental anti-money laundering checks. The proposed rule mandates that all SEC-registered funds conduct due diligence checks on clients, aligning them with the scrutiny faced by traditional banks.
Remaining Challenges and Future Considerations
While these measures mark significant progress, challenges persist. Enforcement of the shell company registry is paramount, drawing lessons from the UK’s experiences. The real estate rules, although a crucial step, currently focus solely on residential transactions, leaving commercial real estate untouched. Additionally, concerns linger about the sustainability of these efforts under a potential future Trump administration, which might not share the same enthusiasm for these anti-money laundering initiatives.
FinCEN’s Announcements a Boost for Legal Professionals in the US
The announcements made by FinCEN are a major positive for the US legal sector who regularly dealing with money laundering challenges particularly when attempting to confirm the identity of their client.
Those challenges can be tedious, time consuming and a long battle to not only confirm the identity of a potential client but also to practice compliantly within the regulatory guidelines. But there are solutions which are elevating the legal sector and allowing firms to streamline their processes, increase efficiency, save time and practice compliantly.
Innovative technology products like Verify 365 are doing just that, providing an AML and compliance solution for law firms. Verify 365 is the client onboarding platform allowing lawyers, solicitors and conveyancers to complete compliant identity checks within minutes using our award winning, government graded Dynamic ID biometric identification software.
Verify 365 also allows law firms to complete full client due diligence with firms able to complete company checks so they can find out who the beneficial owner is or who oversees business and analyse source of funds data using our source of funds questionnaire to ensure there is no illicit activity or suspensions around the funds of the business.
In addition to this, Verify 365 is also making document signing and digital payments smoother for firms. Our innovative platform allows you to send documents across to your clients and receive a signed signature within seconds through eSign 365. You can secure digital payments in one secure workflow by sending across billing information digitally through the platform to your client.
Verify 365 and Lawtech Software Group CEO Rudi Kesic, whose recently been on a trade mission to North America in partnership with the UK Department for Business & Trade to showcase Verify 365 to a brand new, receptive audience noted “Verify 365 was crafted by lawyers for lawyers. Our innovative onboarding platform is making a significant difference within law firms across the UK and beyond. Lawyers can streamline their processes and focus on their core legal work. Crucially, we are helping them combat the ongoing challenges AML and compliance present with our technology built around the regulatory framework to ensure firms are not in fear or at risk of breaking compliance rules”.
