What is the ENABLERS Act?

The ENABLERS Act is a proposed law in the United States that closes loopholes which allow “enablers” to launder illicit funds in the US. The law was prompted by scandals, including the Panama Papers, which showed the extensive role played by US attorneys, investment advisors and company service providers in helping move illicit funds through and into the US. The Act is likely to become law within the next six months and will require the below professionals to follow stringent compliance procedures similar to those already in place in banking. The act affects eight professions:

1. Attorneys, law firms and notaries

2. Trusts and company service providers

3. Third party payment service providers

4. Investment advisors

5. Sellers of art, antiques and collectibles

6. Domestic title insurance companies

7. PR, marketing and communications professionals providing clients with anonymity

8. Certified public accountants and public accounting firms;

By expanding the scope of highly regulated professions that are subject to anti-money laundering (AML) requirements, new industries will suddenly be obligated to report suspicious transactions, use AML tools, keep audit records, and maintain compliance policies, or face fines, loss of licenses and even jail time.

Timeline

The ENABLERS Act was first introduced to the House of Representatives in October 2021 and a revised version was approved by the US House of Representatives in July 2022. The Act has bipartisan support and will be voted on by the Senate within the next six months, at which point it will become law.

What is the Purpose of the ENABLERS Act? 

ENABLERS stands for “Establishing New Authorities for Businesses Laundering and Enabling Risks to Security.” The act targets “enablers” who, by providing professional services, allow kleptocrats and corrupt actors access to the United States’ financial system to move, hide, launder and grow their illegal assets. The reason the eight professions fall into the Act is because they are part of a kleptocrats playbook, which follow these steps:

1. Hire a U.S. lawyer to obtain a golden visa (invest $900,000 in a U.S. business)

2. Use an American company service provider to create multiple, clean companies in the U.S.

3. Move the money with the help of U.S. lawyers and third party payment service providers

4. Obtain the services of an investment advisor to purchase expensive art and real estate

5. Hire a PR firm to write about the amazing new museum paid for by kleptocrat donations

6. Hire an accounting firm to write donations off as “losses” to avoid paying tax on income

7. Now the kleptocrat is a “respectable” job creator photographed at charity galas 

This exact playbook was used by Ukrainian oligarch Ihor Kolomoisky, who stole money from the Ukrainian public and then laundered it through Cleveland with the help of all of the groups above, as detailed in this article. Congressional findings in the Act’s text mention individuals from countries including Angola, Russia, and Malaysia laundering assets in America through enablers. 

Interested in learning more?

What Do Businesses Have To Do To Comply With The Enablers Act?

The eight professions described above will have to complete the following five tasks to avoid fines, jail time and losing their licenses:

1. Conduct AML checks any new clients at onboarding

2. Conduct daily AML sanctions checks on existing clients

3. Keep an audit record of all of these checks

4. Have a written policy that describes the businesses’ AML process

5. Report suspicious activity to the US Treasury Department

How Do Businesses Meet These New Compliance Requirements?

The best way to accomplish the above five tasks with AML and compliance screening software. While one could try doing this by checking a dozen or so US government websites, keeping records in excel or a workbook, and then exporting this into a document to send to regulators, many companies including Castellum.AI already consolidate this entire process into one easy to use, simple platform. When purchasing a platform, you should see whether:

1. It has global sanctions and AML coverage

2. Allows you to automate the work of doing daily AML checks

3. Retains audit records automatically

4. Allows you to export reports with a single click

Run free global sanctions checks

Why Buy Software? Because This Is Not The Time To Do It Yourself

The ENABLERS Act places a significant burden on attorneys, accountants, art dealers and others to do extremely complicated AML work in which they generally have little experience and training.

Searching through poorly maintained government AML databases is a time and capital-intensive process that can confuse even the smartest and most motivated person. Castellum.AI provides advanced screening tools that automatically gather, sort and enrich data from over 1,000 lists and put them in one easy to use and easy to search database.

Our users save time and money by efficiently searching for entries, creating audit trails, automating their daily AML checks and generating reports demonstrating compliance.