Financial Crime World

Headline

FinCEN Designates Banca Privada d’Andorra as a Primary Money Launderer: Implications for US Correspondent Accounts

Subhead

The US Financial Crimes Enforcement Network (FinCEN) labels Banca Privada d’Andorra (BPA) as a foreign financial institution of primary money laundering concern, due to the institution’s senior management’s complicity in transactions for third-party money launderers connected to transnational criminal organizations.

Headline: US Regulators Crack Down on Banca Privada d’Andorra

In a stern warning to Banca Privada d’Andorra (BPA), the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced it has designated the financial institution as a primary money launderer. The move follows years of the Andorran bank’s senior management facilitating transactions for criminal organizations.

  • Corrupt Conduct: BPA’s high-level managers enabled transactions for third-party money launderers.
  • Compromised System: The corrupt practices made BPA an attractive tool for criminal organizations to transport proceeds of organized crime, corruption, and human trafficking.
  • Gatekeepers: Third-party money launderers act as gatekeepers, allowing criminal organizations to access the financial system when they are unable to do so directly.

Headline: BPA’s US Correspondent Relationships

BPA’s access to the U.S. financial system is facilitated through correspondent accounts held at four U.S. banks. These correspondent relationships have allowed BPA to process hundreds of millions of dollars in the past. In return, BPA’s senior managers reportedly accepted payments and other benefits from their criminal clients.

  • Potential sanctions: FinCEN’s designation could result in U.S. financial institutions being prohibited from maintaining or opening correspondent accounts for BPA, as well as payable-through accounts.
  • Due diligence: Covered institutions may be required to apply rigorous due diligence to their correspondent accounts with foreign banks, preventing transactions related to BPA.

Headline: FinCEN’s Investigation Uncovers Criminal Activities at BPA

FinCEN’s investigation uncovered detailed information on three individuals at BPA, revealing their involvement in money laundering activities.

  • Collaboration with U.S. agencies: The Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section; the U.S. Attorney’s Office for the Eastern District of Texas; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Internal Revenue Service Criminal Investigation were crucial in the investigation.
  • Involved Individuals: One manager offered substantial assistance to Russian money launderer Andrei Petrov, another accepted exorbitant commissions for processing transactions related to Venezuelan money launderers, and a third manager accepted bribes to process bulk cash transfers on behalf of a transnational criminal organization.

Headline: The Role of Third-Party Money Launderers

By leveraging their relationships with financial institutions, criminal organizations gain access to the international financial system and taint it with opaque transactions that circumvent anti-money laundering/countering the financing of terrorism (AML/CFT) controls both in the United States and Internationally.

Headline: FinCEN’s Mission

FinCEN’s mandate is to protect the financial system from illicit use, combat money laundering, and promote national security. The organization will not tolerate foreign financial institutions that facilitate the operations of third-party money launderers acting on behalf of transnational criminal organizations and jeopardize the integrity of the financial system.