The U.S. Government’s New Anticorruption Proposals: A Cause for Cynicism, Optimism, or Both?

Last Thursday, two United States cabinet departments – the Department of the Treasury and the Department of Justice – issued separate but thematically related announcements (see here and here) regarding new initiatives to combat corruption, money laundering, and related malfeasance:

  • Treasury announced the finalization of a new Customer Due Diligence (CDD) rule (discussed previously on this blog), which would require that financial institutions collect and verify the personal information of the beneficial owners of accounts held at those institutions. Treasury also announced a proposal for new regulations that would require certain foreign-owned entities (single-member limited liability companies (LLC)) to obtain a tax ID number and report comply with the associated reporting requirements—a move that would close a loophole that currently allows these entities to shield the foreign owners of non-U.S. assets.
  • Treasury also announced that it plans to send draft legislation to Congress (the text of which does not yet seem to be publicly available) that would require companies to know and report accurate beneficial ownership information at the time of a company’s creation, and to file this information with the Treasury Department.
  • Justice also submitted proposed legislation to Congress that would give the Department new investigative powers (including the use of administrative subpoenas, rather than slower and less flexible grand jury subpoenas, for money laundering investigations, enhanced authority to access foreign bank and business records, and the ability to restrain property based on a request from a foreign country for 90 rather than 30 days). The draft legislation would also creating a mechanism to use and protect classified information in civil asset recovery cases, and would expand the scope of the money laundering offense to include, as a sufficient predicate offense, any violation of foreign law that would be a violation of U.S. law if committed in the United States.

I have not yet had time to review the final CCD rule or the proposed LLC rule, and as I noted above, I don’t think the full text of the legislative proposals is yet available. So I’m not yet in a position to comment on the substance, but at least on the surface, all this seems encouraging. It’s possible to take the cynical view that most of this doesn’t mean very much or represent genuine progress. And I’ll admit part of me is inclined to embrace the cynical view. But on the whole, I do think that last week’s announcements are genuinely encouraging, and signal the possibility of building greater political momentum for real progress.

First, though, the reasons for cynicism: Continue reading

Guest Post: Civil Society, Big Ideas, and the 2016 London Anticorruption Summit

Ben Cowdock of Transparency International UK (TI-UK) contributes the following guest post:

Earlier this year, UK Prime Minister David Cameron gave a speech in Singapore in which he vowed to take a stand against corruption at home and abroad, and announced that London would host an International Anticorruption Summit in 2016. We at TI-UK are optimistic that this summit will provide an expanded opportunity for civil society to contribute, and indeed we are hopeful that we may be entering a period of unprecedented involvement of the wider anticorruption community in the formulation of national and global policy. This would signify an exciting new direction for policymakers—one which the anticorruption community has long advocated. A more open and inclusive process is beneficial for society as a whole; policy is increasingly built on consensus and shared learning, resulting in choosing the right path to tackling corruption.

More concretely, in response to the Prime Minister’s announcement and in preparation for this global summit, Transparency International UK (TI-UK) has been assembling a database of the current “big ideas” on anticorruption policy from the academic, activist, business and policy communities. The database, currently contains over 100 “game-changer” policy proposals (including a number of suggestions put forward and debated on this very blog (such as truth commissions and the potential benefits of expanding UNCAC article 35). To enhance academic, public, and policy awareness of the range of current policy proposals, the database will be published in the near future with full attribution to authors and researchers. We hope this will lead to further debate on which ideas have the potential to significantly improve anti-corruption efforts and deter corruption. We also hope that the summit will provide an opportunity to showcase the growth of “anticorruption hacking”, a collective action phenomenon in which civil society generates pioneering technological approaches to fighting corruption.

The London summit represents a chance for new ideas to come to the fore and be at the heart of UK and global effort against corruption. Civil society has already made a huge contribution in the overwhelming response to TI-UK’s call for big idea policies, which we hope will be influential in shaping the agenda of the summit and demonstrating an international commitment to making a change for the better. If you have any big “game-changing” ideas that you believe would further UK or international anti-corruption efforts, we encourage you to leave an overview in the comment!