Puerto Rico Takes Steps to Prevent Financial Crime, Removed from High-Risk List
Puerto Rico has made significant progress in combating illicit banking activity, according to a recent meeting between Governor Pedro Pierluisi and Brian Nelson, Under Secretary for Terrorism and Financial Intelligence at the U.S. Treasury Department.
Strengthening Investigative Unit and Supervision
The commonwealth’s efforts to strengthen its investigative unit, supervision of financial institutions, and enforcement against non-compliant entities have paid off. Puerto Rico is no longer considered a high-risk jurisdiction in the 2024 National Money Laundering Risk Assessment.
Regulatory Framework for International Banking Entities and International Financial Entities
The Office of the Commissioner of Financial Institutions (OCIF), led by Commissioner Natalia Zequeira, has been instrumental in achieving this milestone through its regulatory and supervisory framework for International Banking Entities (IBEs) and International Financial Entities (IFEs). Two recent mandates, Acts 44 and 45 of 2024, have improved the OCIF’s ability to combat money laundering.
Quotes from Commissioner Zequeira
“This is definitely positive news for Puerto Rico,” said Zequeira. “It means that our financial sector, which operates from the island, is no longer considered a risk to the federal financial system.”
Discussions with Under Secretary Nelson
Nelson’s visit aimed to discuss key illicit finance issues, including:
- Countering illicit fentanyl and narcotics trafficking
- Strengthening anti-money laundering regulations
- Promoting awareness among the business community of beneficial ownership reporting requirements
U.S. Treasury Department Support
The U.S. Treasury Department has been working closely with Puerto Rico to support law enforcement and regulatory agencies, as well as implementing reforms to strengthen its financial sector.
Next Steps
Governor Pierluisi and Nelson discussed the challenges faced by IBEs and IFEs in processing transactions, with many U.S. banks minimizing their exposure risks by closing accounts. Nelson emphasized his commitment to providing continued support to ensure a compliant banking system on the island and eliminating potential risks of terrorism and money laundering.
Previous Collaboration
The visit comes after FinCEN Director Andrea Gacki’s trip to Puerto Rico in February, where she hosted the first-ever FinCEN Exchange on the island. The U.S. Treasury Department has been actively working with Puerto Rican authorities to address financial crime, including a $15 million civil penalty against Bancrédito International Bank and Trust Corp. for violations of the Bank Secrecy Act.
Conclusion
With this significant accomplishment, Puerto Rico is one step closer to eliminating financial crimes and ensuring a safe and compliant financial system for its residents and consumers.