Financial Crime World

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FEDERAL REGISTER

Volume 89, Number 128

Wednesday, July 3, 2024

Rules and Regulations

FINANCIAL CRIMES ENFORCEMENT NETWORK (FinCEN)

Final Rule: Special Measure Imposed on Al-Huda Bank

The Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, is issuing a final rule imposing a special measure on Al-Huda Bank, a foreign financial institution deemed to be of primary money laundering concern.

According to FinCEN’s investigation, Al-Huda Bank has been linked to the laundering of billions of dollars in Iraq during former Prime Minister Nouri al-Maliki’s rule. The bank has also been accused of using forged documents and counterfeit Iraqi dinars (IQD) in transactions outside of Iraq.

Despite comments from some individuals disputing these claims, FinCEN found no evidence to support their allegations. Instead, the agency based its findings on corroborated evidence from public and non-public sources, including media reports.

Prohibition on Correspondent Accounts

Under the special measure imposed by this final rule, U.S. financial institutions are prohibited from opening or maintaining correspondent accounts for, or on behalf of, Al-Huda Bank. This prohibition is designed to prevent the bank’s continued interaction with the U.S. financial system and mitigate the risk of money laundering and terrorist financing posed by the bank.

Additional Measures

FinCEN remains concerned about the potential indirect access to the U.S. financial system through USD correspondent accounts at six foreign financial institutions. The CBI, Iraq’s central bank, has already banned Al-Huda Bank from accessing the CBI dollar auction.

Comments and Concerns

Some commenters expressed concerns about the competitive disadvantage and additional costs associated with compliance. FinCEN assesses that these burdens are neither undue nor inappropriate in view of the threat posed by Al-Huda Bank’s illicit activities.

Effective Date and Applicability

The final rule is effective immediately and applies to all U.S. financial institutions subject to FinCEN regulations.

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