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Bipartisan anti-money laundering overhaul bill introduced in US Senate

Two U.S. senators have introduced a sweeping bill that revises anti-money laundering rules in a long-awaited update to the Bank Secrecy Act law.

The bipartisan pair, Sens. Mark Warner, D-Va., and Tom Cotton, R-Ark., introduced the bill on Sept. 26. The ILLICIT CASH Act would require shell companies to disclose their owners to the Department of Treasury and also require the Department of Justice to share with Treasury data from potential money laundering activity.

In addition, the bill aims to prevent foreign banks from obstructing investigations into money laundering or terrorist financing by requiring those banks to produce records establishing their authenticity and reliability as proof and by compelling them to comply with subpoenas. The measure would authorize contempt sanctions for banks that fail to comply and increase penalties on repeat violators.

"Transparency is the best weapon we have against the misuse of our financial system by those who would harm the United States and our allies," Warner wrote in a statement. "As bad actors use ever more sophisticated techniques, we need to make sure federal agencies have the tools they need to prevent this abuse of our financial system and protect our national security. That starts with making sure we have a full usable record of who actually owns these shell companies."

Greg Baer, president and CEO of the Washington-based trade group Bank Policy Institute, said his organization supports the measure and that it would "modernize" the "antiquated AML regime."

The bill is co-sponsored by Sens. Doug Jones, D-Ala.; Mike Rounds, R-S.D.; Bob Menendez, D-N.J.; John Kennedy, R-La.,; Catherine Cortez Masto, D-Nev. and Jerry Moran, R-Kan.