The head of the US treasury department’s Financial Crimes Enforcement Network (FinCEN) has issued a reminder in a congressional committee of two alerts related to recent sanctions imposed on Russia that provide financial institutions with information about red flags and typologies that include several trade-based channels for shifting corrupt proceeds.
But FinCEN’s acting director, Himamauli Das, also told the committee that limited resources have presented significant challenges to his organisation meeting the implementation requirements of significant new anti-money laundering and counter financing of terrorism (AML/CFT) legislation introduced in the last two years.
Lack of funding is particularly hindering progress towards establishing a beneficial ownership database, Das said in response to an invitation by congress to provide an update on FinCEN’s implementation of the AML Act of 2020, including the Corporate Transparency Act (CTA).
Trade-based Russia alerts
FinCEN has issued two Russia-related alerts to provide financial institutions with information about red flags and typologies – including several trade-based channels – that may be used by proscribed Russian individuals or entities to shift corrupt proceeds.
The first alert focused on sanctions evasion, and the second highlighted channels through which oligarchs hide and launder corrupt proceeds. These channels include shell companies, real estate, and the purchase of luxury goods, including precious metals, stones, and jewellery and high-end art.
Das said the timely and effective implementation of the AML Act is a top priority for FinCEN but the organisation is hampered by a lack of funding.
“While the AML Act made significant improvements to the AML/CFT framework, these improvements come at a cost,” Das told the committee, adding that “FinCEN has significant staffing requests that remain unfunded. These include, but are not limited to, personnel needed to implement the beneficial ownership framework.”
He then listed critical positions that remain unfunded, including BSA innovation and information security officers, innovation experts, data scientists and emerging technology experts. “Many of these positions are requirements of the AML Act”, Das concluded.
Statement by Himamauli Das Acting Director Financial Crimes Enforcement Network United States Department of the Treasury before the Committee on Financial Services US House of Representatives can be found here.
The alert, FinCEN Provides Financial Institutions with Red Flags on Potential Russian Sanctions Evasion Attempts, can be found here.
FinCEN’s Alert on Real Estate, Luxury Goods, and Other High-Value Assets Involving Russian Elites, Oligarchs, and their Family Members can be found here.
Categories: Trade Based Financial crimes News