The US treasury department’s Financial Crimes Enforcement Network (FinCEN) is mulling different measures to combat trade-based financial crime as it considers what are expected to be sweeping new US priorities in anti-money laundering and counter financing of terrorism (AML/CFT) compliance (Trade-based Financial Crime, 5 July 2021, Banks should start preparing for new AML/CFT Priorities in BSA says FinCEN).

FinCEN is particularly concerned about trade-based criminality in drug trafficking organisations (DTOs) and proliferation financing.

DTOs and TBML

Professional money laundering networks in Asia, primarily China, are increasingly relied upon by DTOs according to FinCEN.

It says that these networks facilitate exchanges of Chinese and US currency or serve as money brokers in trade-based money laundering (TBML) schemes

Proliferation threats

The principal threat of proliferation financing arises from proliferation support networks according to FinCEN.

It says networks of individuals and entities, such as trade brokers and front companies, seek to exploit the US financial system to move funds that could be used to acquire weapons of mass destruction or delivery systems or their components.

Alternatively, such funds could be used in the furtherance or development of state-sponsored weapons programmes in efforts to evade UN, US or other sanctions.

Correspondent banking vulnerable

Global correspondent banking is a principal vulnerability and driver of proliferation financing risk within the US according to FinCEN.

The agency says this is because correspondent banking plays a central role in processing US dollar transactions, which comprise a substantial proportion of cross-border trade.

FinCEN’s AML/CFT Priorities Statements, along with an accompanying Interagency Statement and FinCEN Statement can be downloaded from here.

Categories: Trade Based Financial crimes News

Tags: AML/CFT, BSA, DTO, FinCEN, TBML, trade-based financial crimes, US treasury, US Treasury Department