Financial Crime World

Strengthening Terrorist Financing Laws in Puerto Rico

Washington D.C. - The US Department of the Treasury’s Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, recently arrived in San Juan to meet with local authorities and discuss ways to combat terrorist financing and money laundering in Puerto Rico.

Significant Progress, but More Needs to be Done

While there has been significant progress in enhancing supervision of Puerto Rican financial entities (PRFEs), significant risks remain. The recent FinCEN Exchange held in February brought together federal law enforcement agencies and federally chartered commercial banks in Puerto Rico to enhance collaboration and share intelligence on illicit financial activities.

Priority Areas for Improvement

Nelson highlighted two priority areas that need attention:

  • Countering Narcotics Trafficking: There is a significant risk of drug traffickers, corrupt actors, sanctions evaders, and others laundering funds through the US financial system. Local commercial banks are urged to identify suspicious transactions associated with these crimes and share their insights on how to enhance cooperation.
  • Combating Fraud and Public Corruption: Nelson emphasized the need for local authorities to prioritize combating fraud and public corruption, which pose significant threats to the integrity of the US financial system.

Cash Transactions and Transparency

Nelson expressed concern over a growing trend of cash transactions for real estate purchases in Puerto Rico, citing limited transparency and reporting. He emphasized the need to increase transparency in the US financial sector, including implementation of the Corporate Transparency Act and the beneficial ownership registry.

Cooperatives Sector: A Priority Area

The cooperatives sector in Puerto Rico poses significant threats to the integrity of the US financial system due to limited transparency. Nelson called for close partnership with local authorities to enhance regulation, supervision, and cooperation to mitigate these risks.

Conclusion

The meeting marks an important step towards strengthening terrorist financing laws in Puerto Rico and enhancing international cooperation to combat illicit financial activities. Nelson’s visit underscores the importance of prioritizing these issues to protect the integrity of the US financial system.