Financial Crime World

Financial Institutions Urged to Share Information on Sanctions Evasion and Money Laundering

The Financial Crimes Enforcement Network (FinCEN) has emphasized the importance of information sharing among financial institutions in identifying and reporting suspicious activities related to sanctions evasion, ransomware and cyber attacks, and money laundering. This move aims to combat emerging threats and prevent illegal activities.

Authorized Information Sharing

Financial institutions and associations are authorized to share information under Section 314(b) of the USA PATRIOT Act regarding individuals, entities, organizations, and countries suspected of possible terrorist financing or money laundering. FinCEN strongly encourages such voluntary sharing.

Summary of Relevant OFAC Compliance Obligations

  • All property and interests in property of blocked persons are subject to reporting requirements under the Office of Foreign Assets Control (OFAC).
  • Transactions involving any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC.
  • Violations of U.S. sanctions regulations can result in severe penalties, including civil and criminal fines and imprisonment.

Executive Order 14024: New Sanctions Against Russia

In response to the ongoing conflict in Ukraine, President Biden signed Executive Order (E.O.) 14024, which permits the United States to impose blocking and short-of-blocking sanctions on Russia. OFAC has issued several directives under E.O. 14024, specifying certain prohibitions related to persons determined to be subject to the applicable directive.

Key Takeaways

  • OFAC expects all U.S. persons to review the sanctions lists maintained by the agency.
  • The order targets individuals and entities engaged in deceptive or structured transactions or dealings to circumvent U.S. sanctions, including through the use of digital currencies or assets or the use of physical assets.
  • Anyone facilitating Russian efforts at sanctions evasion should be aware that OFAC sanctions can have severe consequences for those responsible.

By sharing information and complying with OFAC regulations, financial institutions can play a crucial role in preventing illegal activities and supporting national security.