Today, Congresswoman Maxine Waters (D-CA), Ranking Member on the House Financial Services Committee, announced an important victory that she successfully secured in the Fiscal Year 2022 National Defense Authorization Act (NDAA) — legislation that authorizes the federal government to spend money on the nation’s defense. The law includes language that is substantially similar to Ranking Member Waters’ H.R. 6829, the “International Financial Access Improvements Act,” which would require the U.S. State Department’s International Narcotics Control Strategy Report (INCSR) to include examples of improvements to anti-money laundering (AML) regimes for countries that are covered by the report.
This provision was first introduced in the 117th Congress as H.R. 8798, the “INCSR Improvement Act,” and it later passed the Committee markup in the 118th Congress as H.R. 5523, the “Financial Access Improvements Act.” All three versions were inspired by discussions that occurred at the April 2022 Caribbean Financial Access Roundtable in Bridgetown, Barbados. Co-hosted by then Chairwoman Waters and Barbadian Prime Minister, the Honorable Mia Amor Mottley, S.C., M.P., the event included visiting Members of Congress and nearly a dozen Caribbean heads of state, along with financial institutions, the International Monetary Fund, the Caribbean Development Bank, the U.S. Embassy in Bridgetown, and members of civil society. The issue of financial access was also discussed at a historic full committee hearing before the House Financial Services Committee on Caribbean de-risking in September 2022, where PM Mottley became the first Prime Minister to testify in front of Congress in nearly 40 years.
The roundtable discussion identified several concrete actions to address financial de-risking, including a shift in how the INCSR reflects the financial-crime effects of narcotics trafficking. Because that report’s “Money Laundering” volume is often used by correspondent banks as a component of their risk rating process, the countries felt that the negative impression given by the report had an outsized impact on their financial access. While not the sole reason for the loss of or increased costs of cross-border banking services, the Roundtable participants resoundingly advocated for the opportunity to show off the improvements made to national anti-money laundering regimes, a counter to what they viewed as an incomplete and potentially unfair reflection of their efforts to combat financial crime. The changes made to the INCSR in the FY26 NDAA direct the State Department to highlight examples, where available, of ameliorating AML-related actions taken by the country, such as regulatory actions, criminal prosecutions, asset forfeitures, and status changes in financial crime-related evaluations by international standards-setting bodies.
The inclusion of this section may help to improve financial access for island nations in the Caribbean as well as other countries around the world. That means that individuals and businesses in those countries may experience easier or less expensive access to the cross-border banking services that are essential for facilitating trade and tourism. It may also mean that diaspora communities in the United States will find lower fees for the remittances that they send home – funds that are significant to many families and economies. This is important for our allies’ economic wellbeing, but also it would be a check on Chinese Belt-and-Road power, by increasing the financial services alternatives available in the region.
Ranking Member Waters appreciates the tireless work of PM Mottley, the Caribbean Community (CARICOM) leaders, and all of those who participated in the Roundtable and the hearing. Their efforts to work together to develop executable actions to tackle this difficult issue contributed to a number of tangible improvements, including the drafting and passage of this legislation. There is more to be done, and together, we will continue to confront the financial de-risking challenge.
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