The Financial Crimes Enforcement Network has warned financial institutions against efforts by kleptocratic regimes and corrupt officials to launder their illicit gains, and cited Russia as a particular area of concern.
The U.S. Treasury Department’s Anti-Money Laundering Unit on Thursday urged banks and other financial institutions to focus their efforts on detecting the proceeds of foreign public corruption, which could potentially be laundered through front companies, offshore financial centers and professional service providers, according to the statement.
FinCEN said kleptocrats use their positions of power and influence to steal public wealth for personal gain and to enrich their networks of corrupt actors, eroding public trust and harming the most vulnerable in society. society. Foreign public corruption may also violate US law, the Foreign Corrupt Practices Act.
The US government has long expressed concerns about Russian kleptocracy. Russia deserves special attention, FinCEN said, because the country serves as a “nexus” of public corruption, sanctions-busting, money laundering and malicious activity abroad. FinCEN cited the recent Kremlin invasion of Ukraine as an example, where many Russian elites and oligarchs who control much of Russia’s economic interests supported and enabled its actions there.
“Russia’s new invasion of Ukraine is yet another example of how a kleptocracy like Russia…harms not only its own citizens, but also those who live beyond its borders,” the official said. Acting FinCEN Director Himamauli Das in a statement. “Financial institutions play a crucial role in identifying corrupt activities and associated money laundering by foreign public officials and must remain vigilant and promptly report suspicious financial activity.”
The advisory, which provides potential red flags associated with kleptocracy and other forms of foreign corruption, comes as President Biden has identified the fight against corruption as a fundamental U.S. national security issue. .
As part of these efforts, the Treasury last month launched the Kleptocracy Asset Recovery Rewards Program, which offers payments for tips leading to the seizure or forfeiture of assets linked to corruption of foreign governments, including those related to the Russian government.
The advisory also comes as the United States increases pressure on Russian oligarchs. Earlier this month, US and Spanish authorities seized a $90 million super yacht in Spain which they say belongs to a sanctioned oligarch with close ties to Russian President Vladimir Putin, the first seizure of this kind.
Write to Mengqi Sun at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8