Treasury’s financial crimes unit on Tuesday issued an advisory to warn U.S. financial institutions about the connection between corrupt senior foreign political figures and their enabling of human rights abuses, how they seek to use the financial system, and financial institutions’ obligations to report related suspicious activities.
The advisory (FIN 2018-A003), from the Financial Crimes Enforcement Network (FinCEN), reminds institutions of their Bank Secrecy Act (BSA) obligations regarding the filing of suspicious activity reports (SARs) related to facilitators of corrupt officials. It notes that U.S. financial institutions may expose themselves to risks by holding the accounts of these corrupt individuals directly or indirectly through correspondent banking relationships.
The advisory was sent the same day Treasury’s Office of Foreign Assets Control (OFAC) issued new sanctions under a 2017 executive order regarding the blocking of property of those involved in “serious human rights abuse or corruption.” The order builds on the Global Magnitsky Human Rights Accountability Act of 2016.
Included in Tuesday’s FinCEN advisory are descriptions of the typologies used by bad actors to access the U.S. financial system, obscure and further illicit activity. It provides “red flags” to look out for, and it highlights the activities of those who have been subject to sanctions for providing facilitation services to human rights abusers and others engaged in corruption.
“When filing a SAR, financial institutions should provide all pertinent available information in the SAR form and narrative,” the advisory says. “FinCEN further requests that financial institutions select SAR field 35(l) and reference the advisory by including the key term ‘Financial Facilitator FIN-2018-A003’ in the SAR narrative and in SAR field 35(z) to indicate a connection between the suspicious activity being reported and the persons and activities highlighted in the advisory.”
“Treasury is sharing information with financial institutions, foreign counterparts, and non-governmental organizations on evolving tactics and typologies across the globe, particularly in regions susceptible to abuse,” said Treasury Undersecretary Sigal Mandelker.
“Theft and other bad acts committed by corrupt senior foreign political figures undermine democratic institutions, destabilize economies, and erode societal foundations,” said FinCEN Director Kenneth A. Blanco. “FinCEN is committed to continuing its fight against corruption and those who use the U.S. financial system to further their nefarious activities at the expense of innocent people.”
FinCEN Advisory FIN 2018-A003
Treasury Sanctions Two Individuals and Five Entities Under Global Magnitsky