The U.S. government’s 2024 National Money Laundering Risk Assessment points to unresolved issues from previous assessments as well as changes resulting from foreign actors such as Russia.
The U.S. Department of the Treasury released its 2024 National Money Laundering Risk Assessment on February 6, 2024. The report is the primary document from the Treasury department for assessing Washington’s priorities regarding money laundering. This is the fourth assessment since 2016; the last one was published in 2022.
One notable carryover from the older assessment is the reporting on shortcomings in the government’s real-time data collection on company ownership and ultimate beneficiaries. The 2024 document points to progress made in some facets of this problem, but also to the need for further improvements in data collection. According to the report:
“Shell companies and the lack of timely access to beneficial ownership information and, transparency for certain non-financed real estate transactions, are distinct vulnerabilities in the U.S. anti-money laundering/ countering the financing of
terrorism (AML/CFT) system.”
Expanding coverage in a complex environment
The 2024 assessment totals 108 pages versus 79 in the 2022 version. The expansion reflects the increasingly complex nature of money laundering that has developed in the last two years. While the prior report reflected the effects of the COVID-19 pandemic on illicit money flows, this one points to the increasing importance of geopolitical events while the older patterns played a lessened role.
The 2024 assessment added sections related to illicit money flows taking advantage of decentralized finance (de-fi) and e-gaming and the relative lack of controls on them by governments. Such routes are increasingly used move gains from ransomware and scams as well as by state actors paying for destabilization of western institutions and societies.
One area that will come under increasing oversight during 2024 is that of financial intermediaries who currently are not currently under AML/CFT strictures. This includes financial intermediaries such as investment advisors. The Treasury department will be publishing in early 2024 proposals regarding reporting by these intermediaries.
Geopolitical concerns on the rise
While the Department of the Treasury sees that I can rein in some forms of domestic money laundering by better scrutinizing industry workers, much of the source of the Department’s woes stem from other countries. Often the distinction between government agencies and private actors is blurred. Regardless, the writers point out that in many cases, cyber gangs are supported by and in turn support the governments that back them.
The Russian Federation is the source of a particular twist in money laundering in that both the government and the oligarchs there are laundering money. The government needs money laundering to circumvent western sanctions, while the oligarchs there are attempting to circumvent both Russian and U.S. strictures to remove as much money from Russia as they can.
Illegal money flows in the case of Russia also extend to that country’s attempts to work around the sanctions imposed as a result of the broad scale invasion of Ukraine in March 2022. As a result of sanctions, the Russian government has increasingly needed to work with third party countries to keep exports going and thus maintain flows of hard currency.
