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On June 3, 2021, President Biden issued the first National Security Study Memorandum (the “NSSM”) of his presidency, formally establishing the fight against global corruption as a core national security interest. The NSSM highlights how “the abuse of power for private gain, the misappropriation of public assets, bribery, and other forms of corruption” not only pose financial costs—estimated to be between 2 to 5 percent of global gross domestic product—but also threaten “national security, economic equity, global anti-poverty and development efforts, and democracy itself.”
To combat these risks, President Biden has called on numerous U.S. federal government departments and agencies to develop a unified strategy “to promote good governance; bring transparency to the United States and global financial systems; prevent and combat corruption at home and abroad; and make it increasingly difficult for corrupt actors to shield their activities.” The memorandum directs a 200-day interagency review to strengthen efforts to prevent and combat corruption at home and abroad, culminating in a report with recommendations to the President.
The NSSM laid out wide-reaching goals for the administration’s anti-corruption efforts. These include:
The NSSM builds on other anti-corruption efforts of the Biden administration. In April, the Department of the Treasury’s Financial Crimes Enforcement Network issued an advance notice of proposed rulemaking seeking public comment on the creation of a “beneficial ownership” registry under the newly passed Corporate Transparency Act that would ban the practice of registering shell companies anonymously. And on June 7, 2021, the Department of Justice announced the establishment of Joint Task Force Alpha, a law enforcement initiative focused on, among other things, corruption and related crimes in Central America – specifically, Mexico, Guatemala, El Salvador and Honduras.
Taken together, these announcements and others demonstrate the importance that the Biden administration places on anti-corruption efforts, and the corresponding marshalling of resources signals that it will continue to receive focused and coordinated attention from U.S. authorities moving forward. A shift in administrative priorities was widely predicted but now, six months into the Biden administration, those new priorities are coming into greater focus, and anti-corruption stands out as a key enforcement priority. This may have extensive implications in the coming months, impacting everything from enforcement action decisions to U.S. foreign policy decisions. While the ultimate impact remains uncertain, the administrative focus guarantees that the future developments will be as fascinating as they are important to monitor.
11 June 2021
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