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CongressionalRlesedrch Service
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Updated February 4, 2025
U.S. Efforts to Combat Money Laundering, Terrorist Financing,
and Other Illicit Financial Threats
The United States maintains a multifaceted policy regime
for tackling anti-money laundering (AML), combating the
financing of terrorism (CFT), and countering illicit financial
threats. The 119th Congress may focus on oversight of the
U.S. government's legal, regulatory, enforcement, and
diplomatic AML/CFT efforts-with possible emphasis on
how to mitigate potential AML/CFT threats posed by
cryptocurrencies and implementation of the Corporate
Transparency Act (CTA; Title LXIV, Division F of P.L.
116-283).
ackground
Misuse of the international financial system, including for
purposes of money laundering and terrorist financing, can
result in significant economic, political, and security
consequences at both national and international levels.
Money laundering refers to the process of disguising
financial assets so they can be used without revealing their
underlying illicit source or nature (e.g., proceeds of fraud,
corruption, and contraband trafficking). Terrorist financing
refers to the process of fundraising, through both licit and
illicit means, and financially sustaining terrorist groups.
Other illicit financial threats span a wide range of global
concerns, including proliferation finance, tax evasion,
sanctions evasion, and the financial facilitation of other
state or nonstate threat actors.
Despite ongoing AML efforts in the United States,
policymakers face challenges in their ability to counter
money laundering effectively. Challenges include the
diversity of illicit methods to move and store ill-gotten
proceeds through the international financial system (e.g.,
trade-based money laundering and misuse of anonymous
shell companies), as well as the mix of addressing both
newer money laundering concerns (e.g., cyber-enabled
financial crimes and misuse of new payment technologies)
and well-established methods (e.g., bulk cash smuggling).
Challenges also include ongoing gaps in legal, regulatory,
and enforcement regimes, as well as costs associated with
financial institution compliance with global AML laws.
Interna onal Framework
Given the global nature of the international financial system
and the transnational criminal activity that attempts to
exploit it, the United States and other countries have
engaged in a variety of international efforts designed to
improve global AML responses and build international
cooperation and information sharing on AML issues,
including through formal bilateral requests for mutual legal
assistance on financial crime investigative matters. Multiple
international organizations contribute to international AML
cooperation through global standard setting, cross-border
information sharing, AML assessment and monitoring, and
AML technical assistance.
Some entities, such as the Financial Action Task Force and
the Basel Committee on Banking Supervision, provide
standard-setting guidance relevant to AML matters. Others,
such as the Egmont Group of Financial Intelligence Units
and the International Criminal Police Organization,
contribute to the implementation of such standards through
information sharing. The United Nations Office of Drugs
and Crime, the World Bank, and the International Monetary
Fund also maintain capabilities to monitor and assess
national AML policies and provide technical assistance on
AML capacity-building priorities. Other international and
regional organizations-including the Organisation for
Economic Co-operation and Development, the G-20, and
the Organization of American States-have working groups
and initiatives focused on various AML matters.
Statutory Framework
In the United States, the legislative foundation for domestic
AML regulation originated in 1970 with the Bank Secrecy
Act (BSA; P.L. 91-508) and its major component, the
Currency and Foreign Transactions Reporting Act.
Amendments to the BSA and related provisions in the
1980s and 1990s expanded AML policy tools available to
combat crime-particularly drug trafficking-and prevent
criminals from laundering their illicitly derived profits.
Key elements to the BSA's AML framework, which are
codified in Titles 12 (Banks and Banking) and 31 (Money
and Finance) of the U.S. Code, include requirements for
customer identification, recordkeeping, reporting, and
compliance programs intended to identify and prevent
money laundering. Substantive criminal statutes in Titles 31
and 18 (Crimes and Criminal Procedures) of the U.S. Code
prohibit money laundering and related activities and
establish civil and criminal penalties and forfeiture
provisions. Federal authorities have also applied
administrative forfeiture, nonconviction-based forfeiture,
and criminal forfeiture tools to combat money laundering.
In response to the September 11, 2001, terrorist attacks,
Congress expanded the BSA's AML framework to add
provisions to combat the financing of terrorism through the
USA PATRIOT Act (P.L. 107-56). This provided the
executive branch with greater authority and additional tools
to counter the convergence of illicit threats, including the
financial dimensions of organized crime, corruption, and
terrorism. Two decades later, the Anti-Money Laundering
Act of 2020 (AMLA, Division F of the William M. [Mac]
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