President Biden has made the fight against corruption a central pillar of his administration’s national security agenda, issuing a directive that the White House said would help strengthen collaboration between government agencies on issues such as kleptocracy and illicit financing.
A note released Thursday kicks off an interagency process in which a series of departments and agencies will report to the White House within 200 days on how they can step up their efforts to fight corruption. The move could have broad implications for several anti-corruption programs, including the US Department of Justice’s enforcement of an anti-corruption law, as well as for US foreign policy.
In a call with reporters, a senior administration official highlighted several areas where the White House has already taken steps to strengthen its commitment to the fight against corruption. These efforts include steps to implement the Corporate Transparency Act, a law passed by Congress earlier this year that reforms US anti-money laundering laws.
The legislation calls on the US Treasury Department to create a corporate ownership registry that lawmakers say will prevent the use of anonymous shell companies for illicit purposes.
The Biden administration said in April it would seek to increase the budget for the Financial Crimes Enforcement Network, or FinCEN, which is building the new database. The administration requested an additional $ 64 million for FinCEN, a 50% increase over its current budget.
The Treasury will also take further steps to stop the purchase of real estate in the United States with the proceeds of corruption, administration official Biden said.
For decades, the United States has stepped up enforcement of the Foreign Corrupt Practices Act, which prohibits companies from paying bribes to officials of foreign governments. The Biden administration’s new anti-corruption campaign could cause federal prosecutors to focus more on corruption and bribery. The memo calls on the Department of Justice and other federal agencies to establish new programs, where appropriate, and increase staff and resources aimed at fighting corruption in the United States and abroad.
The FCPA specifically focuses on corruption on the supply side, i.e. companies and individuals who provide bribes. But in recent years, prosecutors have used money laundering and other federal laws to prosecute foreign public officials who accept corporate bribes and launder proceeds through the United States, what is sometimes referred to as the demand side of corruption.
In 2010, the Department of Justice launched the Kleptocracy Asset Recovery Initiative, a program in which prosecutors use civil forfeiture laws to seize and recover the proceeds of foreign bribery. One of the initiative’s biggest cases to date involved the recovery of stolen funds from Malaysian development bank 1MDB.
“What we may be seeing is a shift from enforcing corruption on the supply side, which is the FCPA, to the broader demand side,” said Nathaniel Edmonds, former prosecutor and partner at the law firm Paul Hastings LLP. “Not only bribe officials, but also banks, real estate agents, lawyers and accountants who facilitate these transactions, perhaps not knowingly. “
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