Financial Crime World

Title: U.S. Government Identifies Banca Privada d’Andorra (BPA) as a Money Laundering Concern: FinCEN Issues Notice of Proposed Rulemaking

Banca Privada d’Andorra (BPA) Labeled as a Foreign Financial Institution of Primary Money Laundering Concern

The Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury announced on March 10, 2015, that Banca Privada d’Andorra (BPA) is a foreign financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act. FinCEN simultaneously issued a Notice of Proposed Rulemaking (NPRM) to address this concern.

Corrupt High-Level Managers and Weak Anti-Money Laundering Controls

According to FinCEN, BPA’s corrupt high-level managers and weak anti-money laundering controls have made it an attractive vehicle for third-party money launderers to move illegal funds through the U.S. financial system. These funds include proceeds from organized crime, corruption, and human trafficking.

Third-party Money Launderers and Criminal Organizations

  • Criminal organizations often use third-party money launderers to bypass barriers and establish relationships with banks.
  • These intermediaries facilitate transactions on behalf of criminals seeking to obscure the origins of their funds.

Money Laundering Activity at BPA’s Headquarters

Money laundering activity largely took place at BPA’s headquarters in Andorra, with hundreds of millions of dollars processed through correspondent accounts held at four U.S. banks. The majority of these funds originated from Russia, China, and other criminal activities.

Establishing Financial Services for Third-party Money Launderers

High-level managers at BPA established financial services tailored to third-party money launderers, exchanging services for payments and other benefits. This allowed criminal organizations to disguise the origins of their funds.

Proposed Measures in the Notice of Proposed Rulemaking (NPRM)

The NPRM proposes to prohibit covered U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for BPA and other foreign banks involved in processing BPA transactions. The NPRM also includes requirements for special due diligence to minimize risks to the financial system and is subject to a 60-day comment period following publication in the Federal Register.

Instances of Corrupt High-level Managers at BPA

FinCEN’s action details instances of BPA’s corrupt high-level managers, including:

  • One manager provided assistance to Andrei Petrov, a Russian money launderer linked to the notorious criminal Semion Mogilevich.
  • Another manager accepted exorbitant commissions to process transactions related to Venezuelan money launderers involved in siphoning off funds from Petroleos de Venezuela (PDVSA).
  • A third manager accepted bribes to process bulk cash transfers for Gao Ping, a money launderer linked to a transnational criminal organization involved in trade-based money laundering and human trafficking.

Collaboration with Law Enforcement and Financial Partners

Director Shasky Calvery emphasized the importance of collaboration with law enforcement and financial partners to combat this threat to the integrity of the financial system.

  • Andorran authorities have been recognized for their role in this investigation.
  • Calvery commended the contributions of the Mexican government to the joint efforts between the U.S. and Mexico in combatting money laundering.