Financial Institutions Urged to Exercise Caution with Marshall Islands Transactions
The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a warning to banks and other financial institutions operating in the US, urging them to exercise enhanced scrutiny when dealing with transactions involving the Marshall Islands.
Serious Systemic Problems with Counter-Money Laundering Regime
The Marshall Islands’ counter-money laundering regime suffers from serious systemic problems. The country lacks adequate laws or regulations to prevent money laundering, and its bank secrecy laws are strict. Offshore entities in the Marshall Islands are also largely unsupervised, making it difficult for authorities to track their activities.
FinCEN Advisory: Exercise Caution with Transactions Involving the Marshall Islands
According to FinCEN, financial institutions should carefully examine any transaction originating from or routed through the Marshall Islands, or involving entities organized or domiciled there. The agency recommends that institutions determine if these transactions require reporting under suspicious transaction rules.
Key Recommendations
- Carefully examine transactions originating from or routed through the Marshall Islands
- Identify transactions involving entities organized or domiciled in the Marshall Islands
- Determine if these transactions require reporting under suspicious transaction rules
Legitimate Business Not Affected
This advisory is not intended to deter legitimate business between US financial institutions and the Marshall Islands. Rather, it emphasizes the importance of due diligence in transactions involving high-risk jurisdictions.
Reporting Suspicious Transactions
FinCEN has assured that any report related to a transaction described in this advisory will be considered a report of a suspicious transaction relevant to a possible violation of law or regulation.
Technical Assistance Offered
US officials are also offering technical assistance to the Marshall Islands government as they work to remedy their deficiencies in counter-money laundering systems.