“Let’s remember who the real enemy is. It’s not each other. It’s the drug dealer, the pusher, the criminal. Let’s unite against them.”
The above powerful statements highlight the importance of strict action against the individuals and groups involved in narcotics trafficking.
The NDTA 2024 report shocked that nearly 40,000 people died due to Fentanyl drug abuse in the country in just one year.
The efforts to combat drug trafficking, the fight was started too early. For instance, it was the year 1995 when President Bill Clinton had to use his executive power to fight against the drug cartels, and the Cali Cartel is a prominent name among them.
With order number 12978, the president made his efforts to isolate drug cartels in Colombia.
Seeing the capability of narcotics to damage not only the common people but the whole global system, the Kingpin Act came up with the essential measures needed to fight against not only drug cartels but also those who used such illegal.
To restrict the individuals and groups involved in this criminal act, the King Act Designation Act provides the power to the U.S. president to impose sanctions on individuals who are potentially involved in the said crimes.
The following content will discuss the basics of Kingpin law, its impacts, and how this act can help combat money laundering in the country.
Understanding Foreign Narcotics Kingpin Designation Act
Before understanding the kingpin, one must know about the drug kingpin. They are the real culprits—the kings of the drug world.
In most cases, they do not show their identity and try to hide behind different people, using fake identities and other methods to avoid any legal action against them.
Kingpin Act was first made law in 1999 to make the process difficult for the drug cartels to proceed with such activities not just in the United States but across the world.
And that is the reason the law obliged every organization and business to follow the act in the fight against curbing drug trafficking.
Businesses of every sort need to understand that the law does not only abide by the financial organization, but all the business and organizations that somehow has any interaction with drugs are obliged to follow the act and play their part in the fight against this heinous crime.
Are there any impacts the Kingpin Act could make?
OFAC is the real player here. Using the Kingpin Act, OFAC can impose sanctions on kingpins or designate them. People involved in narcotics crime could face asset freezes, trade bans, and penalties. Let’s see how the kingpin list acts can impact criminals in real life.
- Asset Freezing
What could be more damaging for criminals than not having access to their illegally obtained money? That is why freezing the assets of designated people has always been a top priority of the U.S. government.
Why does the government take this action first? Without financial access, it will be very difficult for them to continue their dirty actions.
- Restriction of Financial Transactions.
Restricting criminals from using financial institutions to move the money they obtained through narcotics business with any individual or business in the U.S. makes the situation worse for the criminals.
Even businesses running in other jurisdictions avoid dealing with these entities to remain compliant with U.S. regulations.
- Isolate from the Global Financial System
When an individual or group of people are designated under Kingpin sanction, international banks and businesses do not make any business deals with them, ultimately isolating such a group in the global financial system.
Many international banks and businesses fear that interacting with such entities could cause the organization reputational damage and penalties.
What businesses need to do to follow the kingpin law
- Increased due diligence
Are you the one who never wants your business platform exploited for criminal activities? You are. With the enhanced due diligence process, the business can avoid transactions involving the designated people.
This leads to a more rigorous know-your-customer procedure to strengthen the kingpin compliance program.
- Improved monitoring System
Having an advanced and robust monitoring and screening system in place ensures that businesses are practically following the Kingpin Act. AI-incorporated monitoring tools allow businesses to detect suspicious transactions in real-time and avoid the chances of money laundering.
- Better Reporting and Cooperation
With better AML case management in place, organizations can better report suspicious transactions. The Kingpin Act also promotes reporting suspicious activities and greater cooperation between financial institutions and regulatory bodies like FinCEN.
Summing Up
To avoid any regulatory action against your business, you need to incorporate an advanced AML software solution to know whom you are making business deals with. With a robust know-your-customer and transaction monitoring system, businesses can easily detect sanctioned people.
AML Watcher offers robust AML software solutions that monitor transactions in real-time and generate red alerts.