The Financial Crimes Enforcement Network (FinCEN) issued a red flag indicator of kleptocracy and foreign corruption advisory on Thursday, naming Russia as a country of "particular concern."
The advisory, which is aimed at financial institutions, comes on the heels of FinCEN's warning last month about Russian sanctions evasion attempts. The Treasury Department's division emphasized the importance of its latest message by citing the country's actions in Ukraine.
"Russia’s further invasion of Ukraine is a yet another example of how a kleptocracy like Russia—a country whose government has been characterized for years by corruption, money laundering, malign influence, sanctions evasions, and armed interventions abroad—harms not only its own citizens, but those living beyond its borders," said Himamauli Das, Acting Director of FinCEN, in a press release. "Financial institutions play a crucial role in identifying corrupt activity and associated money laundering on the part of foreign public officials and should remain vigilant and promptly report suspicious financial activity."
The following are some of the red flag indicators highlighted by FinCEN:
- Transactions involving services provided to state-owned companies or public institutions by companies registered in high-risk jurisdictions;
- Transactions involving public officials related to high-value assets (e.g., real estate or luxury goods);
- Use of third parties to shield the identity of foreign public officials seeking to hide the origin or ownership of funds;
- Transactions involving payments that do not match the total amounts set out in the underlying documentation; and
- Transactions involving fictitious email addresses and false invoices to justify payments.
FinCEN acknowledged that the scope of the corruption goes far beyond Russia. The Odebrecht bribery scandal in Brazil, as well as the recent sanctions against individuals accused of misappropriating public assets in Belarus and El Salvador, were cited by the agency as examples of the many forms corruption can take.
FinCEN's advice is in line with President Joe Biden's anti-corruption strategy, which he announced in December.
By fLEXI tEAM