The administration of former President Donald Trump has drawn criticism for its approach to financial crime, particularly through the scaling back of enforcement on anti-money laundering and bribery laws. This policy change could embolden criminals by weakening measures aimed at curtailing shell company misuse and corporate corruption. The move contradicts Trump's stated aim to combat organized crime while simultaneously loosening regulations that protect against such illicit activities.

Experts argue that these changes not only undermine global efforts to tackle financial crime but also risk tarnishing the U.S.'s reputation as a leader in ethical business practices. With an estimated $300 billion laundered annually within the country, according to the Treasury Department, the implications of reduced enforcement are significant both domestically and internationally.

Weakening Measures Against Shell Companies

The Trump administration's decision to weaken the Corporate Transparency Act (CTA) represents a major shift in how the U.S. addresses money laundering via shell companies. By suspending enforcement of beneficial ownership reporting requirements, this move undermines transparency and opens avenues for criminal exploitation.

Experts highlight that shell companies serve as critical conduits for organized crime globally. In Latin America, for example, numerous multimillion-dollar laundering schemes have leveraged U.S.-based entities. The CTA was designed to enhance accountability by requiring corporations to disclose their true owners, aligning with international standards advocated by organizations like FATF and the World Bank. However, under the new policy, businesses can now operate with greater anonymity, posing challenges to law enforcement efforts.

While opponents claim compliance is burdensome, advocates suggest practical solutions exist to ease implementation without abandoning the law entirely. Simplifying definitions, shortening forms, and enhancing education outreach could address concerns raised by small businesses. Furthermore, resource constraints and limited database access have already hindered effective enforcement of the CTA, compounding issues created by the rollback. Legal challenges from both sides further complicate the situation, leaving the future of beneficial ownership regulation uncertain.

Rolling Back Anti-Corruption Initiatives

Beyond shell companies, the Trump administration also curtailed broader anti-corruption efforts by pausing enforcement of the Foreign Corrupt Practices Act (FCPA). This landmark legislation prohibits bribery in international business dealings, yet its suspension raises questions about the administration's commitment to ethical global commerce.

Historically, Latin America has been a focal point for FCPA actions, with 44% of cases involving bribes paid in the region. Major corporations, including Walmart and Eli Lilly, have faced hefty penalties for violating the act. Notable cases, such as the Odebrecht scandal, underscore the importance of prosecuting systemic graft operations spanning multiple countries. Despite alternative legal avenues available for addressing bribery, experts warn that reduced enforcement may normalize corrupt practices abroad.

In addition to FCPA changes, specialized anti-corruption units within the Justice Department faced dismantling under Trump's tenure. These teams had successfully collaborated with regional partners to expose high-profile corruption networks in Latin America and beyond. Shifting priorities toward organized crime and transnational groups might overlook elite corruption prevalent in many developing nations. Reports indicate potential cuts to domestic public integrity units, jeopardizing investigations into influential figures accused of accepting foreign bribes, exemplified by ongoing cases like that of Rep. Henry Cuellar.