Trump's Money Laundering Rollbacks Is a Boon For Criminal Organizations, Experts Say

The Trump administration has announced significant rollbacks in the enforcement of key financial crime laws, a move experts say could make it easier for criminals to engage in money laundering and bribery, InSight Crime reported.

Concretely, the administration has suspended enforcement of the Corporate Transparency Act (CTA), which aimed to curb illicit financial flows through shell companies, and paused enforcement of the Foreign Corrupt Practices Act (FCPA), which prohibits bribery in international business.

The administration has also disbanded several Justice Department units focused on fighting corruption, both at home and abroad. The justification given for these changes is reducing regulatory burdens on businesses and improve U.S. economic competitiveness. However, critics quoted by the specialized outlet argue that these rollbacks undermine efforts to combat financial crime and organized corruption.

The U.S. Treasury Department estimates that $300 billion is laundered in the United States annually, with shell companies playing a major role. Most states do not require corporations to disclose their true owners, allowing individuals to conceal unlawful financial activity. The CTA was enacted to address this issue by requiring businesses to report beneficial ownership information to federal authorities. The Trump administration announced on March 21 that it would not enforce the CTA's reporting provisions.

Critics, including the Financial Accountability and Corporate Transparency (FACT) Coalition and Global Financial Integrity, have condemned the decision. In contrast, the National Small Business Association and other opponents of the CTA argue that compliance is overly complex and burdensome, particularly for small businesses with limited resources.

The Trump administration has also paused enforcement of the FCPA, which has been a cornerstone of U.S. anti-bribery efforts since 1977. The law has been used to prosecute multinational corporations for paying bribes to secure business deals, particularly in Latin America and the Caribbean.

The administration's said it's halting FCPA enforcement for 180 days while developing new guidelines focused on "American competitiveness." A University of Chicago survey found that many economists expect the change to increase global corruption.

The Justice Department has also moved to dismantle its anti-corruption units. A February 5 memo from Attorney General Pam Bondi outlined plans to eliminate anti-kleptocracy teams that investigate corrupt foreign officials. These teams previously worked with international partners on cases that led to convictions and financial penalties for officials in Honduras, Panama, and Peru.

Legal challenges to the decisions are expected from anti-money laundering advocates but for now the administration's changes remain in effect, shifting U.S. policy away from aggressive financial crime enforcement.