Whitehouse, Grassley Lead Senate Caucus in Issuing Report on Strategies to Combat Money Laundering by Drug Cartels

Washington, DC – Senators Sheldon Whitehouse (D-RI) and Chuck Grassley (R-IA), the Chairman and Co-Chairman of the Senate Caucus on International Narcotics Control, today released a bipartisan report entitled: Strengthening U.S. Efforts to Attack the Financial Networks of Cartels.  The report offers recommendations for Congress and the Biden administration to reduce the supply of illicit drugs by closing loopholes in the U.S. anti-money laundering (AML) framework that enable narcotics traffickers to obscure and access their illicit proceeds. 

“Drug traffickers exploit weaknesses in our laws to run multi-billion dollar criminal enterprises that have caused hundreds of thousands of American drug overdose deaths and immense pain in Rhode Island and across the nation,” said Whitehouse.  “Our report outlines necessary reforms to crack down on the financial trickery that cartels and other criminals engage in.  When implemented, these reforms will reduce the supply of illicit narcotics by better enabling the U.S. to attack the sophisticated financial networks that allow drug cartels to thrive.”

“Drug cartels are exploiting our borders to flood the nation with deadly drugs, and they’re reaping huge profits on the pain and suffering they inflict.  Our report examines how the federal government can better target and dismantle the flow of their ill-gotten gains.  Reducing the financial incentive for drug traffickers to operate in the United States is an important step in our effort to crack down on the illicit drug epidemic and fight addiction.  As the report highlights, a key component in that fight is enacting the Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2022 that Senator Whitehouse and I sponsored,” Grassley said.

Senate Caucus on International Narcotics Control members Richard Blumenthal (D-CT), Maggie Hassan (D-NH), Ben Ray Luján (D-NM), and James E. Risch (R-ID) have also endorsed the report, which includes the following recommendations:

  • Help partner nations strengthen their institutions to better defend against corruption and implement justice sector reforms; 
  • Better track whole-of-government efforts to combat narcotics-related illicit finance;  
  • Deploy experts in narcotics-related illicit finance to assist partner nations;
  • Authorize innovative and effective programs to combat international money laundering, such as Trade Transparency Units;
  • Use regulatory authorities to close loopholes in the U.S. AML framework, including by: ensuring greater transparency in the cross-border transportation of stored value or prepaid access devices, and fully implementing the beneficial ownership requirements of the Corporate Transparency Act;
  • Aggressively investigate, prosecute, and pursue the maximum allowable criminal penalties for culpable banks, employees, and executives who fail to timely report suspicious transactions; and
  • Address vulnerabilities in the AML framework by swiftly enacting the Combating Money Laundering, Terrorist Finance, and Counterfeiting Act.

The report further includes additional views from Chairman Whitehouse, which detail additional actions the Biden administration should take to close regulatory loopholes.  Specifically, Whitehouse recommends that the administration bolster AML safeguards in the U.S. property market and extend strong AML reporting requirements to gatekeepers of the U.S. financial system by:

  • Making geographic targeting orders (GTOs) permanent and nationwide; and
  • Subjecting investment advisors to Bank Secrecy Act reporting and recordkeeping requirements.

The Senate Caucus on International Narcotics Control has a long history of working on a bipartisan basis to crack down on illicit drug trafficking globally, while expanding addiction prevention, treatment, and recovery services at home.  As Chairman of the Caucus, Whitehouse has held hearings to examine: the role of the federal government in attacking the financial networks of cartelscorruption associated with the illicit drug trade; and how drug cartels have adapted their production, trafficking, and finance schemes for the 21st Century.

A PDF of the full report is available here