Importance of Risk Assessment in Finance Highlighted in New Reports

Washington D.C. - The U.S. Department of the Treasury has released its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, shedding light on the most significant illicit finance threats facing the country.

Key Findings

• The reports identify key concerns, including:
  • The fentanyl crisis
  • Foreign and domestic terrorist attacks
  • Increased potency of ransomware attacks
  • Growth of professional money laundering
  • Continued digitization of payments and financial services
• The assessments also address how global events such as Russia’s invasion of Ukraine and Hamas’ terrorist attacks in Israel have shaped the illicit finance risk environment in the United States.

Importance of Risk Assessment

Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson emphasized the importance of addressing these risks, stating:

“Illicit finance is a common thread across our nation’s biggest national security threats…Treasury is committed to analyzing the global risk environment to protect the U.S. and international financial systems from abuse by illicit actors.”

Report Highlights

• The reports reveal that criminals use both traditional and novel techniques to launder money, with fraud, drug trafficking, cybercrime, human trafficking, and corruption generating the largest amounts of illicit proceeds in the United States.
• The assessments highlight persistent and emerging risks related to:
  • Legal entities
  • Real estate transactions
  • Regulated financial institutions

Terrorist Financing Threats

• Terrorist financing threats remain a significant concern, with foreign and domestic groups exploiting the international financial system to solicit funds and support their activities.
• The reports also discuss Hamas’ use of front companies and transshipment points to acquire U.S.-origin goods with military applications.

Digital Assets Challenges

• The proliferation of digital assets has created new challenges for law enforcement and regulators, with networks linked to North Korea increasingly exploiting these systems to facilitate illegal activity.

Assessment Process and Future Plans

• Treasury’s Office of Terrorist Financing and Financial Crimes led the assessment process, working closely with various agencies and stakeholders.
• The department will release a National Strategy for Combatting Terrorist and Other Illicit Finance in the coming weeks, outlining recommendations for addressing the highlighted issues.

Availability of Reports

The reports are available online, providing valuable insights for financial institutions, policymakers, and law enforcement agencies to better understand the evolving illicit finance threat environment and inform their own risk mitigation strategies.