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Revealing the huge amount of dirty money that the world’s most powerful banks make in the eyes of the world’s governing governments FinCEN files research has established the financial industry as a few stories after the great recession and has catalyzed strong actions in the US and beyond.
In the weeks following BuzzFeed News, the International Consortium of Investigative Journalists and 108 newsrooms around the world, UK lawmakers began publishing stories based on a cache of secret records. Formal investigation into the supervision of British banks, Defended by members of the European Parliament a stronger response across the continent, and investigations were opened in countries from Thailand to Liberia.
It is significant that FinCEN Files gave the final push to Washington (DC) to go through an important moment new law aimed at one of the most effective money laundering tools mentioned in the stories: shell joint-stock companies. The legislation passed last week with tremendous support for bipartisanship must disclose many of these secretive U.S. companies whose owners and their benefits.
The Business Transparency Act is the most important revision of the anti-money laundering laws since the Abertzale Act came into force in 2001.
Provisions the legislative package, which includes the annual defense spending bill, also addresses many other systemic issues identified in the FinCEN files, which reveal the ineffectiveness of government oversight and the many ways banks do not stop the flow of dirty money.
These reforms include: The Department of Justice should submit annual reports justifying the use of delayed prosecution agreements. It allows banks that have complied with money laundering laws to avoid trial and criminal convictions. The U.S. Treasury Department would look for new technologies to better identify criminal cash flows and increase communication between the private sector and federal agencies. And those who behave badly would get new protections.
Although President Donald Trump has promised to veto the general bill – because it does not repeal the set of protections that are unrelated to social media companies – lawmakers can overcome the veto.
Public officials cited the BuzzFeed News – ICIJ study as a reason for reforms to help them after years of inactivity. “The BuzzFeed story makes it clear that we need to strengthen, reform, and update our nation’s money laundering laws,” said Sen. Sherrod Brown, a senior Democrat on the Senate Banking Committee. “This action has been around for a long time.”
Senator Ron Wyden, a senior Democrat on the Senate Treasury Committee, also cited FinCEN files on the day the law was passed, saying: “Reporting the investigation has shed light on money laundering and the ongoing public interest has certainly helped achieve those supplies. (Wyden favored the reforms, but voted against broader legislation for reasons unrelated to financial regulation.)
To further the investigation of the FinCEN Files file, journalists from six continents released reports of suspicious activity or SARs conducted by the U.S. Department of the Treasury’s Financial Crimes Financing Network (FinCEN). The SAR determined more than $ 2 trillion in suspicious transactions in almost every corner of the world, with journalists linking money flows to terrorist groups, drug kings and kleptocrats. The 16-month study has determined how banks have helped facilitate money laundering and how national regulators do not reign supreme in criminals or squeeze banks.
A few weeks before it was published, journalists working on FinCEN Files reported their findings to government leaders and asked for comments. Officials USA and the UK announced that it would change the anti-money laundering rules – the specific rules shown in the FinCEN Files were broken and ineffective.
After contacting the U.S. Treasury Department at BuzzFeed News, the agency announced that it would begin taking suggestions from people and insiders about the 1970 Bank Confidentiality Act, which has long regulated anti-money laundering policies. Lobbyists, banks, financial services companies, and academics submitted 110 comments, and many confirmed what FinCEN Files showed: Protections against money laundering in the U.S. need to be misrepresented.
Meanwhile, on September 18, two days before the first FinCEN Files stories were published, officials were in London announced plans To improve the way the UK collects information about companies registered there.
“It’s hard not to believe that the immediate release of FinCEN files forced a hand,” said Tom Keatinge, director of the Center for Financial Crime and Security Investigations at the Royal United Services Institute.
When the stories came to the public’s attention, the calls for reform were louder.
British MPs was launched Formal analysis of the “very worrying” questions raised in the FinCEN files. Parliamentary Finance Committee he swore to review the progress made by government regulators and law enforcement agencies in preventing money laundering.
Speaking in the European Parliament, politicians he demanded uniform regulations and stronger supervision as a new supervisory agency or for an existing body, the European Banking Authority, with greater powers.
“The money laundering system already exists it just doesn’t work“Eero Heinäluoma, the Finnish MEP, said in a debate on FinCEN files.” It’s Swiss cheese, full of holes. “
Other national governments have also jumped on the bandwagon. In Seychelles and Liberia, journalists ’revelations were directed to anti-corruption units to take further action.
At the same time, criminals and autocratic regimes, long accustomed to keeping their financial businesses secret, turned against journalists. Before and after the release of the FinCEN files, journalists from African and Middle Eastern countries shouted in fear and were threatened with lawsuits. In Turkey, a court blocked the publication of numerous stories from FinCEN Files.
At the same time, FinCEN files have proven to be a powerful tool in the international struggle for transparency and accountability.
Nigerian activists presented the story of FinCEN Files as part of an innovative lawsuit that forced the government to open a $ 120 million corruption investigation, an official audit said was missing. In Thailand, there are regulators probing one transaction highlighted four domestic banks analysis series. And the Belgian banks proposed the creation of a platform for the exchange of information on suspicious transactions, and the adoption of legislation aimed at companies by American banks.
The banking industry’s lobbying weapon, meanwhile, has sought to underestimate the effects of the investigation.
Bank Policy Institute statement, aided by ads on social media, trying to throw cold water on the importance of FinCEN files.
The institute discussed a central finding: banks have repeatedly complained that they continue to process transactions for customers for suspicious behavior. The pressure group said the government “frequently” tells banks to keep these accounts open so law enforcement agents can follow up.
Among the documents in the FinCEN Files, however, BuzzFeed News found only two references to such instructions.
The pressure group has also argued that a large part of the SAR has nothing to do with illegal activity. Citing data from surveys by 14 banks, the group said: “Our data indicate that about 4% of SARs monitor law enforcement. A small subset of these turn into arrests and eventually convictions.”
The group also said: “In the end, this means that 90-95% of the people who are accused by the banks are probably innocent.”
But the lack of official follow-up does not necessarily mean that the marked activity was legitimate. Federal investigators do not have the resources to track all leaders and do not automatically notify banks when they investigate SAR issues, as interviews with law enforcement officials show.
By law, banks must file a report when they detect transactions that are characterized by money laundering or other financial conduct. SARs are not evidence of the crime per se, but are considered essential for the conduct of illegal law enforcement activities.
This month, the American Bankers Association gave a speech to FBI Director Christopher Wray he said SARs “capture a huge range of behaviors” and allow agents to “track financial trajectories, investigate specific individuals and entities, identify customers, connect points, and advance research. they can clarify funding and help officials decide whether to list companies or individuals who are behaving inappropriately.
In response to questions from BuzzFeed News, the Bank Policy Institute responded by citing and repeating its research on the subject that the FinCEN Files file was based on a “tremendously narrow” document, part of the millions submitted each year. .
FinCEN Files, immediately after the publication of global bank stocks he fell terribly, but it was more than sharing values that the industry was in turmoil. The set also encouraged reflection and discussion in numerous media and industry forums. “This banking scandal is a doozy one,” the Independent, A UK publication, he noted. “The reverberations … will take months, if not years.”
In more than 100 opinion articles and columns published in trade and business publications since September, industry experts have pointed to FinCEN files while advocating for change. At International Banker, Laurent Liotard-Vogt and Florent Palayret, Chappuis Halder & Co. those who work in a business management consulting firm, proposed solutions, including regulations to prevent companies from doing business, and concluded: “The whole system is on the verge of collapse and needs to be rethought.”
Nine days after the findings of the FinCEN Files study appeared, Linda A. Lacewell, New York Department of Financial Services, published his analysis, noting that the series offered an opportunity to address long-standing problems. “Now, with this new focus, we need to play,” he wrote.
Senator Elizabeth Warren, Member of the Committee on Banking, Housing and Urban Development, he mentioned when the story calls for fundamental changes in supervision.
In a statement to BuzzFeed News this week, he said the Business Transparency Act should only be a first step and advocate for additional reforms, including making Wall Street more accountable for financial crimes. “I will continue to push legislation executives have personal and criminal responsibilities when their organizations surround the law ”.
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