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Recent Sanctions on Russia to Identify Private Investors

Recent sanction on Russia sparks new efforts to identify private investors in the recent months. This topic has come about from round after round of sanctions have been imposed on Russian. However the idea of imposing anti-money laundering (AML) requirements on private firms isn’t a new one, in fact, it has garnered attention in the past. However, due to recent events in Russia, pushes to stop illicit funds has grown louder. Thus reigniting efforts to clamp down on money-laundering in the private sector, specifically to stop the flow of illicit transactions from Russian and even Chinese money.

The recent sanctions on Russia, along with this potential new round are aimed at ensuring that no Russian money is entering the U.S. There are several bills that are pending right now in Congress, and these bills are targeted at making private funds such as private equity and hedge funds subject to AML requirements.  These bills if passed, could release potentially large amounts of information on investors.  

Management of private funds have enjoyed being exempt from AML requirements in the past. Because the private sector tends to hold onto money in their investments for a longer period of time, those arguing the bill say that the individuals who are trying to launder money, would not do so using a private fund.  There are also those arguing that if regulations are imposed on the private sector, that that could hurt small businesses and stifle entrepreneurship and innovation in the business sector.

If these regulations are passed, then private-equity funds that raise large amounts of money through shell companies, would have to report on every individual that has invested, as well as all those supporting the fund, and this could blow the doors wide open on money laundering in the private sector. However, that’s not to say every investment firm has something to hide. In fact, there are some self-imposed regulations in place already, from those private investment firms that want to prevent money laundering. Click here to learn more.

The bill has a long way to go in Congress, and it’s not yet clear if it will even get passed. However, with the recent sanctions on Russia, as well as increasing compliance requirements in the financial sector, don’t wait to start implementing your own AML and KYC technology. Truth Technologies has the answer for your compliance needs, and we are constantly updating our technology and staying up to date with trends to make sure we provide the best in AML and KYC compliance technology. Contact us today.

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