SIOUX FALLS, S.D. (KELO) — Legislation being proposed in Washington D.C. could impact South Dakota’s growing trust industry.
The bill would make it harder for people putting their money in trusts to remain anonymous if they’re doing something wrong.
It’s called the Enablers Act, and its sponsors say it is meant to stop states like South Dakota, Nevada and Alaska from enabling dishonest foreign investors.
Representatives Malinowski, Salazar, Cohen and Wilson are introducing bipartisan legislation to stop enablers of international corruption. Salazar and Wilson are Republicans and Malinowski and Cohen are Democrats.
The legislation comes after documents were leaked to international journalists. They revealed large hidden sums of money being stashed in offshore accounts and in a few states with relaxed laws.
“You can hide illegal gains, you can hide proceeds from corruption, you can hide assets from creditors, or even family members and it’s almost impossible to get to and that’s a big part of the problem,” said Greg Miller of the Washington Post.
According to a 2020 state report, South Dakota’s burgeoning trust industry holds an estimated $367 billion in assets.
All legal under the law.
The Enablers Act would allow the Treasury Department to create basic due diligence rules for investment advisors, art dealers, attorneys involved in financial activity, accountants and public relations firms.
Representative Tom Malinowski of New Jersey put out this statement on his congressional website.
“If we make banks report dirty money but allow law, real estate, and accounting firms to look the other way, that creates a loophole that crooks and kleptocrats can sail a yacht through.. Our bill closes that loophole and encourages the administration to move in the same direction.”
If passed, the U.S. Treasury Department would have until December 2023 to create anti-money laundering rules for the trust industry.