Financial Crime World

FinCEN Files: Spanish Media Analysis

In a groundbreaking investigation, the International Consortium of Investigative Journalists (ICIJ) and BuzzFeed News published a trove of financial data known as the FinCEN files. The report revealed suspicious transactions handled by some of the world’s largest banks over the past two decades, potentially linked to money laundering, corruption, and fraudulent activities.

The FinCEN Files: A Revelation

The FinCEN files, comprising approximately 2,100 Suspicious Activity Reports (SARs) from 1999 to 2017, have sent shockwaves through the global financial sector.

  • Bank shares plummeted on September 21, 2020.
  • Several institutions experienced up to an eight percent drop.
  • Debates over banks’ role in money laundering and regulation effectiveness ensued.

The reported suspicious transactions, totaling over $2 trillion, were flagged by major banking institutions like HSBC, Standard Chartered, JP Morgan Chase, and Deutsche Bank.

Understanding Suspicious Activity Reports (SARs)

SARs are financial intelligence instruments filed by financial institutions and other professionals when they deem transactions as suspicious, possibly linked to money laundering, fraud, terrorism financing, or other crimes. Reports include transaction details and the rationale behind the filing. Financial institutions are required to report suspicious transactions within 30 or 60 days of discovery under the Bank Secrecy Act (BSA). Unauthorized disclosure of a SAR is a federal crime.

Key Points from the FinCEN Files

  • Approximately 0.02% of the over 12 million total SARs filed within the same timeframe were analyzed.
  • Significant differences from previous leaks, like the Panama Papers and Lux Leaks:
    • Regulatory reports rather than internal company records.
    • Involves multiple major banks.
    • Exposes high-profile individuals.

Criticism and Calls for Change

Criticism arose as thousands of suspicious transactions were identified, and criminal activity continued. The financial sector and law enforcement must address the weaknesses and strive for continuous improvement.

Financial institutions argue they are acting in compliance with regulations. However, calls for regulatory amendments under the Bank Secrecy Act (BSA) aim to expedite reporting and subsequent actions on suspicious transactions.

The Future of Regulatory Policies

As the financial industry and law enforcement grapple with the implications of the FinCEN files, it remains to be seen how this will influence regulatory policies and institutions’ ongoing efforts to combat financial crime.