By Benjamin Goad - 04/25/13 06:45 PM EDT
In 2009 alone, the most recent year for which estimates were available, some $1.6 trillion dollars — almost three percent of global gross domestic product — was laundered, according to the United Nations Office on Drugs and Crime.
The two lawmakers released a report Thursday, laying out a set on nine recommendations meant to curtail laundering operations involving U.S. businesses and financial institutions.
Feinstein and Grassley pressed the U.S. Justice Department to be more aggressive in enforcing anti-money laundering regulations already on the books. That includes potential criminal cases when banks and executives deemed responsible for allowing criminal activity to take place.
The lawmakers cited last year’s $1.92 billion HSBC settlement with regulators after a finding that they failed to maintain an effective anti-money laundering program. Both in that case and in a 2010 Wachovia case that concluded with a $160 million settlement, the Justice Department did not pursue criminal prosecutions.
“Without serious consequences for those who break the law, financial institutions will continue to avoid compliance with U.S. anti-money laundering rules and regulations,” according to the report.
The report calls upon the administration to close a loophole exempting armored cash carriers from reporting requirements and finalize a rule aimed at thwarting the use of prepaid cards to launder money across the border.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has been working on rules since 2011 that would require travelers to tell customs officials if they’re carrying more than $10,000 on the cards. Authorities say criminals use pre-paid cards to travel undetected with huge sums of money.
Grassley and Feinstein are also pushing for passage of legislation targeting shell companies and various gaps in anti-money laundering laws.