IIF Applauds Passage of Beneficial Ownership and AML/CFT Reform in the U.S.

Washington, D.C. – Today the Institute of International Finance (IIF) released the following statement upon the passage of the National Defense Authorization Act for Fiscal Year 2021 (NDAA) which includes important reforms concerning beneficial ownership, transparency and AML/CFT effectiveness:

“The creation of a secure beneficial ownership registry is a key step towards preventing the abuse of anonymous shell companies in the United States,” said Tim Adams, IIF President and CEO. “Insightful, actionable data has the power to be transformative in combating financial crime, and the reforms included in the NDAA will help provide law enforcement and financial institutions with needed information to assist in identifying criminals looking to exploit the financial system.

“I applaud this step alongside further provisions in the legislation intended to help modernize the US AML/CFT regime and increase its effectiveness. Financial crime poses a grave threat to financial stability and financial inclusion, and the provisions in the NDAA are key components of the systemic reforms needed to tackle the issue.”

The IIF and our global membership have long supported commonsense anti-money laundering policies to better combat illicit financial flows. In addition to beneficial ownership reforms, the IIF has urged policymakers to place greater emphasis on expanding intelligence sharing across jurisdictions, as well as improving the legal and regulatory framework and risk management toolkit.

Co-authored with Deloitte, our 2019 white paper, “The Global Framework for Fighting Financial Crime,” provides a core set of recommendations to improve the effectiveness of the global financial crime system:

1. Systemic architectural improvements for financial crime risk management
2. Advancing public/private sector cooperation
3. Improving cross-border and domestic information sharing
4. Improving the use and quality of data
5. Reforming Suspicious Activity Reporting regimes
6. Mitigating the inconsistent or incoherent implementation of financial crime compliance standards/guidance and providing regulatory clarity
7. Increasing and improving the use of technology to combat illicit finance.

For more on this topic, you can read the full white paper here, or a subsequent IIF Staff Paper on information sharing here.

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The Institute of International Finance is the global association of the financial industry, with more than 450 members from more than 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.