Early rhetoric from the Biden administration has encouraged anti-corruption advocates that the new president’s tenure in the White House may mark a turning point in the fight against dirty money and tax haven abuse — two overlapping problems made worse by a veil of secrecy that shields vast sums of money from tax collectors and law enforcement authorities.

“We will crack down on tax havens and illicit financing that contribute to income inequality, fund terrorism, and generate pernicious foreign influence,” the administration’s Interim National Security Strategic Guidance, released last month, says, identifying the fight against global corruption as a top security priority. The strategy mirrors promises Joe Biden made during his candidacy.

The pledges come at a time when the U.S., like many other countries, is seeing political momentum around proposals to ensure that wealthy individuals and high-earning corporations pay their fair share of taxes to aid pandemic relief and economic recovery.

It’s time to “change the paradigm,” Biden said in his first press conference, to “reward work, not just wealth” — a line that reinforced his pledges to raise marginal tax rates for the rich and for corporations. This week, Biden unveiled a proposed tax hike on companies and foreign profits to pay for his infrastructure plan.

The International Consortium of Investigative Journalists has documented across many investigations how millionaires, including corrupt politicians, drug dealers, human rights abusers and tax evaders use the offshore system to hide their wealth. Most recently, in 2020, the FinCEN Files investigation revealed how banks allow billions of dollars in suspect money to flow through their accounts.

So far, the Biden administration hasn’t provided specifics about how the promised fight against tax havens and dirty money might shake out. Taxation and money laundering experts say there are at least five reforms that the new president should put at the top of the list.

1. Crack down on tax havens at home and abroad

The United States has served as a financial haven for kleptocrats, tax evaders and criminals for decades, and has been consistently ranked among the top jurisdictions that facilitate financial secrecy by the Tax Justice Network. Biden himself served 30 years representing Delaware — a state known as a secrecy haven — in the U.S. Senate.

Recent estimates from a report by IRS researchers and academic economists indicate that the top 1% of high-income Americans avoid reporting more than 20% of their income, a significantly higher proportion than previously assumed. The wealthy employ sophisticated strategies to dodge income tax, including offshore tax avoidance.

Biden’s new plan promises to bolster the IRS’ enforcement capacity. “Large corporations have at their disposal loopholes they exploit to avoid or evade tax liabilities, and an army of high-paid tax advisors and accountants who help them get away with this,” the proposal says. “An under-funded IRS lacks the capacity to scrutinize these suspect tax maneuvers.”

During testimony before the Senate finance committee last week, Kimberly Clausing, deputy assistant secretary at the Department of the Treasury, stressed the need for reforms and modernization to build a tax system that is “fit for purpose, fair, and focused on the needs of all Americans.”

Clausing said that while economic inequality increased in recent decades, governments around the world have shifted the tax burden away from wealth and corporate income to individual workers. “Instead of dampening economic inequality, the tax system has too often exacerbated it,” she said.

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Despite measures adopted in 2017 aimed at reducing “profit shifting” — the strategic movement of profit from jurisdictions with higher taxes to jurisdiction with lower taxes — Clausing said that “the use of tax havens to avoid tax continues unabated.”

“We need better protections to defend the U.S. corporate tax base from the tax-motivated shifting of corporate profits to offshore havens,” Clausing said. “We can do a lot more to ensure our tax system works for American workers.”

2. Close loopholes in the Corporate Transparency Act

Donald Trump’s presidency ended with legislators pushing through the landmark Corporate Transparency Act, a long-sought reform that requires U.S. companies to report their true owners to the Treasury Department’s Financial Crimes Enforcement Network, known as FinCEN. But loopholes may limit the law’s power. Some Wall Street investment vehicles created by hedge funds are exempt, for example, as are larger companies, and possibly trusts. A report released by Transparency International in February called for an expansion of due diligence rules to cover lawyers, accountants, private equity and hedge funds.

A spokesperson for Sen. Sherrod Brown, chairman of the Senate banking committee, said that the U.S. Government Accountability Office is required to look into whether certain financial groups should be covered by the new transparency rules.

“While it exempts certain entities, generally because they already provide ownership information to other governmental actors like their regulators, others exempt entities are required to be studied by the GAO, in consultation with law enforcement and national security officials, with a report and recommendation back to Congress on whether they also should be covered by the new transparency rules,” Brown’s office said in a statement to ICIJ. “Prompt, effective implementation of these new laws will be a huge advance for transparency and is a high priority for Chairman Brown.”

3. Reform FinCEN

Implementation and enforcement of the CTA falls to FinCEN, the government agency tasked with combating money laundering, financing of terrorism and other financial crimes. But a recent critical report by Global Financial Integrity says that FinCEN is underfunded and overstretched in its responsibilities, and that the U.S. government anti-money-laundering efforts “are widely seen as inefficient and ineffective.”

Last year, ICIJ, BuzzFeed News and other media partners worldwide, published the FinCEN Files investigation, based on more than 2,000 secret financial records from inside FinCEN. The investigation revealed that major banks transact dirty money, some from criminal organizations and kleptocrats, in plain view of government regulators.

FinCEN’s director Kenneth Blanco, said that the agency was focused on getting the necessary resources to implement the CTA and other anti money laundering reforms in a recent virtual conference held by the International Institute of Bankers. FinCEN is soliciting public comment on implementing beneficial ownership information reporting until May 5, 2021.

Meanwhile, some reforms proposed in the wake of FinCEN Files have been on pause after the Biden administration imposed a regulatory freeze on pending regulations from the Trump administration. One of them is a proposal to require banks and others to collect and share with authorities information on potentially suspicious transactions sent overseas for more than $250, down from $3,000. A FinCEN spokesperson told ICIJ that the so-called travel rule is still pending and the agency couldn’t provide an update. Some in the financial industry warned that the change could create an additional compliance load to banks.

There are signs that the financial industry wants better regulation, too. A recent survey of 340 financial compliance professionals found that the vast majority of respondents would like to see more guidance from regulators and law enforcement officials, including about reporting suspicious financial activities and assessing risks.

4. Hold financial institutions accountable

Prosecution of financial crimes and fines to corporations hit a record low during the Trump years, and his administration oversaw the dismantling of anti-corruption regulations.

Now advocates say they hope accountability is prioritized by the new administration and that the Justice Department goes after corrupt actors in the financial sector. The FinCEN Files investigation showed how big banks have continued to profit from suspect transactions, even after being fined for compliance failures. Meanwhile, the government agencies responsible for enforcing money laundering laws seldom prosecute big banks that break the law.

“What we hope to see from a Biden White House is higher priorities on these issues and the initial signs are encouraging, given what Biden has said about these issues and the appointees that he has nominated for key positions,” said Ian Gary, executive director of the FACT Coalition.

The Biden appointees who would play a role in financial crime enforcement include Attorney General Merrick Garland, a former federal appeals court judge. While Garland’s record with white collar crime isn’t extensive, his potential Deputy Attorney General Lisa Monaco was part of the Enron Task Force, which investigated one of the biggest fraud cases in U.S. history in 2001. Her nomination is pending confirmation.

Gary Gensler, a former Wall Street executive who then became a financial regulator, will lead the Securities and Exchange Commission. He is known for taking on big banks after the 2008 financial crisis, when he chaired the U.S. Commodity Futures Trading Commission. The Department of the Treasury is now headed by Janet Yellen, an economist and former chair of the Federal Reserve. In that role, she imposed growth restrictions on Wells Fargo after the bank admitted employees created fake accounts to meet unrealistic sales goals. Her nomination as Treasury Secretary was applauded by financial groups, while some progressive groups raised concerns since she has received more than $5 million in speaking fees from the financial institutions she is now responsible for regulating.

5. Level the tax burden

Biden’s newly unveiled plan seeks to raise $2 trillion in 15 years to fund his infrastructure agenda by clawing back some of the corporate tax reductions Republicans made in 2017. He is also proposing an increased tax rate on the foreign profits of U.S. companies, and a 15% minimum tax on the “book income” of corporations.

Details on plans to increase taxes on wealthy individuals are expected in future releases of Biden’s agenda, the Wall Street Journal reported.

Meanwhile, bills that seek to hike taxes for America’s wealthy have been introduced in recent weeks by senators Elizabeth Warren and Bernie Sanders.

Sanders, chairman of the Senate Budget Committee, proposed a tax scheme for wealthy estates as well as for corporations. Warren’s bill seeks to impose  a 2% annual tax on people with net worths above $50 million and 3% for billionaires. Both proposals include measures aimed at deterring the flow of money offshore.

However, Yellen has not expressed support for a wealth tax, telling the New York Times that she wasn’t planning one because it is “something that has very difficult implementation problems.”

Yellen does support efforts to create an international agreement on a global minimum tax on multinational corporations, according to the Washington Post. Those critical of a higher corporate tax say that an increase would hurt the United States global competitiveness. The change would go against an international trend in recent decades of countries lowering the amount of taxes corporations pay in order to attract new investment.

It will be a major subject of negotiation for the Organisation for Economic Co-operation and Development this year.

Update: This story has been updated since publishing with a link to submit comment to FinCEN about implementing provisions in the Corporate Transparency Act.