More than $550 billion of dirty money is laundered each year in the United States and European Union, the world’s two largest economies. The good news is that strongmen, drug traffickers, criminals, and kleptocrats may find it harder to park and hide their money thanks to recent U.S. and EU actions that tighten anti-laundering regulations, and expand monitoring and enforcement. But even more importantly, U.S. President-elect Joe Biden has made the fight against corruption a top domestic and national security priority, while the EU has long been concerned about illicit and untaxed money. Neither side can act alone on this global problem—coordinated action is needed to shut down safe havens for nefarious actors. High on the Biden administration’s agenda should therefore be a transatlantic anti-corruption action plan, which would help rebuild frayed U.S.-EU relations while bolstering the security of countries on both sides of the Atlantic.
The United States is one of the world’s largest havens for illicit cash and one of the easiest places to form anonymous shell companies, which must be at the center of anti-corruption efforts. A few examples: For many years before the scheme was shut down in 2015, the Iranian regime circumvented U.S. sanctions and used an anonymous corporation to purchase a skyscraper on New York’s Fifth Avenue worth as much as $1 billion and to collect millions of dollars in rent. During the 1990s and 2000s, the Russian arms dealer Viktor Bout—known as the Merchant of Death—used at least 12 shell companies in Delaware, Florida, and Texas to move funds related to his weapons-trafficking network. Mexico’s largest drug cartel, Sinaloa, secretly laundered millions of dollars in drug proceeds after purchasing a horse ranch in Two Ukrainian oligarchs, after laundering funds stolen from a bank in Kyiv through anonymous companies in Europe, used U.S. shell companies to purchase U.S. real estate and businesses; two Cleveland properties alone are worth $70 million.
