FinCEN issues advisory on BSA obligations to report corrupt political figures & human rights violations
“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.”
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 reminds financial institutions of their obligations under the Bank Secrecy Act to report suspected illicit activity by these facilitators. It also highlights the activities of those who have been subject to sanctions for providing facilitation services to human rights abusers and others engaged in corruption.
Facilitators may access the financial system to obscure and launder the illicit proceeds of high-level political corruption by using shell companies, misappropriating state assets, and exploiting the real estate sector. Consistent with existing regulatory obligations, financial institutions should take reasonable, risk-based steps to identify and limit exposure they may have to funds and other assets associated with individuals and entities providing financial facilitation for corrupt senior foreign political figures. The advisory also reminds financial institutions of their obligations regarding the filing of Suspicious Activity Reports (SARs) related to facilitators of corrupt senior foreign political officials.
When filing a SAR, financial institutions should provide all pertinent available information in the SAR form and narrative. 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.