Title: Treasury Department’s 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing

United States Department of the Treasury Releases Latest Assessments

In a press release published on February 7, 2024, the United States Department of the Treasury unveiled its latest National Risk Assessments (NRAs) for Money Laundering, Terrorist Financing, and Proliferation Financing. The reports outline the most significant illicit finance risks and vulnerabilities facing the United States, offering an in-depth analysis of key updates to its anti-money laundering and countering-financing of terrorism (AML/CFT) framework.

Key Threats and Vulnerabilities

• Money Laundering

  • Criminals exploit traditional methods and innovative techniques to move and conceal ill-gotten proceeds.
  • Sources of illicit funds include fraud, drug trafficking, cybercrime, human trafficking, and corruption.
  • Major risks: misuse of legal entities, insufficient coverage for certain sectors, complicit merchants or professionals, and weaknesses in compliance and supervision at some regulated U.S. financial institutions.

• Terrorist Financing

  • The US faces numerous terrorist financing threats, both foreign and domestic.
  • Foreign sources: direct funding of groups via cash, registered money services businesses, and virtual assets.
  • Domestic: increasing threat from violent extremist movements.

• Proliferation Financing

  • Heightened threats from Russia and the Democratic People’s Republic of Korea (DPRK):
    • Russia: military applications using obfuscation techniques and illicit attempts to acquire U.S.-origin goods.
    • DPRK: exploiting hacking of virtual asset service providers and the deployment of fraudulent information technology workers overseas.

The Next Steps

Within the coming weeks, the Treasury Department will release the 2024 National Strategy for Combatting Terrorist and Other Illicit Finance. This document will provide recommendations for addressing the highlighted issues based on the analysis contained in the risk assessments. Previous iterations of the strategy have informed improvements to the AML/CFT regime, such as the recent beneficial ownership reporting requirement and forthcoming rules targeting illicit finance vulnerabilities in the residential real estate sector and for certain investment advisers.

Under Secretary’s Perspective

Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson shared, “Illicit finance is a common thread across our nation’s biggest national security threats. Treasury is committed to analyzing the global risk environment to protect the U.S. and international financial systems from abuse by illicit actors.”