The Biden Administration announced a new, comprehensive anti-corruption program, the United States Strategy on Countering Corruption. The new anti-corruption policy is the follow on to the earlier announcement elevating the global anti-corruption battle to a national security concern. After that announcement, the Biden Administration conducted a 200-day inter-agency examination to develop a comprehensive government-wide anti-corruption initiative.
The Biden Administration released the new United States Strategy on Countering Corruption as a prelude to the Democracy Summit consisting of over 100 countries designed to promote democratic governments, policies and commitments.
The Biden Administration estimated that corruption costs between 2 and 5 percent of the global gross domestic product. The 38-page plan released last week outlines steps for cracking down on criminal actors and their networks while improving cooperation among federal agencies and law enforcement. The Biden Administration announced plans to increase financial transparency and new regulations on U.S. real-estate purchases to prevent money laundering.
The new anti-corruption initiative identified several significant policy changes and proposals. The headline issues identified by the anti-corruption initiative included the expansion of targeted sanctions programs against corrupt individuals and governments, aggressive enforcement of illicit finance schemes by targeting enablers of such money laundering activities, including lawyers, accountants, art dealers, investment advisers, and increased disclosure requirements for beneficial ownership of corporations to minimize use of shell companies to further illicit finance schemes.
A key portion of the Democracy Summit was to build support among member nations to follow U.S. sanctions and agree to implement comparable sanctions against targeted individuals and governments. On the issue of sanctions, the United States has been building support for a comprehensive set of anti-corruption sanctions, akin to those identified as part of the Magnitsky Act, and enhanced export restrictions surrounding surveillance technologies and other dual-use items used by authoritarian governments. The possibility of coordinated multilateral export regimes would significantly increase the impact of those sanctions programs.
The new anti-corruption initiative pushes the Treasury, State and Commerce Departments to focus on shoring up the international financial systems and illicit finance loopholes and activities. The objective of this effort is to take “meaningful steps” to stop corrupt actors from using the United States financial system to hide or disguise proceeds from corrupt activities. The agencies are charged with enhancing anti-corruption work as a priority through the designation of new senior positions and coordinating bodies at various enforcement agencies. The Treasury Department has been charged with taking a number of actions on “individuals who are engaged in malign activities that undermine democracy and democratic institutions around the world.”
The Democracy Summit gathered more than 100 democratic nations to discuss threats to democracy, including the importance of coordinated and enhanced measures against corrupt actors and illicit finance used to move corrupt funds in the international finance system.
An interesting announcement centered on the Treasury Department’s commitment to use “new resources like beneficial ownership data” to “enhance the targeting and efficacy of sanctions actions.” The Treasury Department is also working within the inter-governmental Financial Action Task force to “bolster global standards for beneficial ownership transparency.”
