The Corporate Transparency Act (CTA) refers to the regulations being added as part of the Anti-Money Laundering Act of 2020 (AML Act). By disclosing Beneficial Ownership information to FinCEN, officials can better monitor and investigate issues where money laundering is suspected to be present. Any international efforts to combat money laundering may also become more efficient due to this type of record keeping being implemented. This may also work as a significant deterrent for anyone who may have been thinking or planning to commit such criminal acts.
Which US Agency is in Charge of Organizing These Regulations?
The Financial Crimes Enforcement Network (FinCEN) is organizing and putting forth this new regulation. This is a major development following the post-9/11 efforts toward anti-money laundering (AML). Which was previously meant to target al-Qaida, but will now shift towards the development of artificial intelligence powered by the digital storing of our nation’s information.
Is the US developing AI to Detect and Predict Money Laundering?
By using Machine Learning techniques, it could be possible to develop a deep understanding of our nation’s business endeavors. Potentially to then be used for large-scale, thorough risk analysis. By assembling such massive amounts of personal details from every business in the nation, US officials would be able to attempt to predict money-laundering acts to then perhaps intercept them in the process.
It is worth mentioning that this is possible AI development is not the only goal for the CTA. Other, less technical, changes can also be made. Such as the addition of other regulatory measures like the Jan 2022 draft that seeks comments for a pilot program that would require financial institutions to share suspicious activity reports (SARs) with their foreign affiliates.
Is the Corporate Transparency Act Influenced by The War in Ukraine?
Although the CTA was being developed before the ongoing situation in Russia/Ukraine, there are many ways this regulation could help assist officials in the ongoing efforts to combat the laundering of corrupt proceeds from foreign elites. Russian oligarchs that form shell companies to launder funds are among the first set of suspicious groups to be found going up against the newly forming regulations from the Corporate Transparency Act.