Source: United States Senator for New Jersey Bob Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee, joined a bipartisan group of colleagues in sending a letter to Treasury Secretary Janet Yellen and Acting Director of the Financial Crimes Enforcement Network (FinCEN) Himamauli Das, calling on the Treasury Department (Treasury) to swiftly implement the Corporate Transparency Act (CTA) and provide a timeline for doing so. Implementation of the CTA would upgrade the country’s anti-money laundering laws and help the federal government fully impose sanctions on Russian oligarchs. But FinCEN has proposed only one of three planned CTA rules, and is now four months past the statutory deadline for implementation.
“The Treasury Department has yet to finalize the implementation of the CTA—or even set a timetable for its completion… In various hearings last month, both of you could only commit to proposing the second CTA rule by the end of ‘this year.’ These delays run contrary to the clear instructions of Congress, undermine American efforts to respond to Russia’s war against Ukraine, and hinder broader efforts to protect the U.S. financial system against the threat of illicit finance,” wrote the lawmakers.
Passed by Congress last year, the CTA is landmark legislation that would upgrade the country’s anti-money laundering laws and address one of the biggest weaknesses in the United States’ anti-money laundering safeguards: anonymous shell companies that hide the true, beneficial owners of assets. Beneficial ownership disclosure, as required by the CTA, is particularly relevant amidst Russia’s invasion of Ukraine since such information is necessary to implement the United States’ historic sanctions against Russian oligarchs and to protect national security and the stability of the U.S. financial system.
The lawmakers also acknowledged that FinCEN is working with limited resources and stated that Congress is working to remedy this problem through the appropriations process.
The letter was also signed by Senators Elizabeth Warren (D-Mass.) Chuck Grassley (R-Iowa), Sheldon Whitehouse (D-R.I.), Marco Rubio (R-Fla.), Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, and Bill Cassidy (R-La.).
Sen. Menendez has long led the call for ensuring the integrity and transparency of the U.S. financial system. As Chairman of the Senate Foreign Relations Committee, Sen. Menendez has led global efforts to sanction Russia and Russian individuals in response to Putin’s unjustifiable war in Ukraine and has led calls to ensure that these sanctions are fully enforced.
In March, Sen. Menendez, a senior member of the Senate Banking Committee, joined several of his colleagues in introducing the Digital Asset Sanctions Compliance Enhancement Act to ensure that Vladimir Putin and Russian elites cannot use digital assets to undermine the international community’s economic sanctions against Russia following its unprovoked invasion of Ukraine. The senator also called for the Treasury Department to close a current loophole in the U.S. sanctions regime by denying Russian nationals the ability to continue making significant deposits at U.S. banks and significant purchases of U.S. securities.
The full text of the letter can be found HERE and below.
Dear Secretary Yellen and Director Das:
We write to urge the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to swiftly implement the Corporate Transparency Act (CTA).
Passed by Congress last year, the CTA is landmark legislation to upgrade our country’s anti-money laundering laws. “For years, experts routinely ranked anonymous shell companies—where the true, ‘beneficial’ owners are unknown—as the biggest weakness in our anti-money laundering safeguards.” The CTA directly tackled this problem by requiring FinCEN to create a national registry of beneficial owners of companies within the United States, bolstering our nation’s efforts to combat kleptocracy, transnational crime, terrorism, and other illicit activity.
Vladimir Putin’s invasion of Ukraine has only amplified the importance of the CTA. The federal government cannot properly implement sanctions against Putin and his oligarchs if it does not know the full extent of their holdings. But recent reporting suggests that the Treasury Department presently lacks this information, underscoring the urgent need for beneficial ownership disclosure as required by the CTA to protect America’s financial stability and national security.
Nevertheless, the Treasury Department has yet to finalize the implementation of the CTA—or even set a timetable for its completion. We appreciate that FinCEN is working with limited resources, and Congress is working to remedy that through the appropriations process. Still, over four months after the statutory deadline for implementation, FinCEN has only proposed one of its three CTA rules. In various hearings last month, both of you could only commit to proposing the second CTA rule by the end of “this year.” These delays run contrary to the clear instructions of Congress, undermine American efforts to respond to Russia’s war against Ukraine, and hinder broader efforts to protect the U.S. financial system against the threat of illicit finance.
For these reasons, we respectfully request that FinCEN immediately accelerate its implementation of the Corporate Transparency Act and provide an update and a detailed timeline on your efforts to do so no later than May 23, 2022. Thank you for your attention to this important matter.
###