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US Designates Venezuela-Based Company Executive Linked to Hezbollah
Washington D.C., USA - The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated Samer Akil Rada, General Manager and Chief Executive Officer (CEO) of Venezuela-based BCI Technologies, for providing support to the Lebanese terrorist organization Hezbollah.
According to OFAC, Rada was linked to illicit drug trafficking and money laundering in several Latin American countries. The designation alleges that Rada and BCI Technologies “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of” Hezbollah.
US Efforts to Combat Corruption in Latin America
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The move is part of the Biden administration’s efforts to combat corruption and illicit finance in Latin America. The US has committed over $4 billion to address the root causes of undocumented migration from Central America, which includes money laundering, public corruption, and human smuggling.
DOJ’s Anti-Corruption Efforts
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In June 2021, the Department of Justice (DOJ) established an Anti-Corruption Task Force focused on El Salvador, Guatemala, and Honduras. The task force aims to streamline and prioritize investigations into corrupt actors in the region.
- Trained 100 auditors in Guatemala’s Specialized Center for Tax and Customs Crimes to better detect and investigate tax crimes.
- Announced plans to finalize effective beneficial ownership regulations and build a database of company owners to help identify bad actors.
FinCEN’s Role in Combating Money Laundering
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The Financial Crimes Enforcement Network (FinCEN) has taken steps to increase transparency of companies operating in Latin America. FinCEN:
- Proposed a new rule extending Bank Secrecy Act obligations to certain investment advisers.
- Issued a notice of public rulemaking.
Practical Considerations for Businesses Operating in Latin America
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As the US continues to prioritize enforcement efforts in Latin America, businesses and financial institutions operating in or engaging with the region should proceed with caution. A corporate compliance program that only detects traditional money laundering typologies will not adequately address the full range of illicit financing schemes.
- Implement robust anti-money laundering programs that account for varied and evolving types of money laundering risks.
- Consider connections to underlying criminal activity such as terrorist financing, human smuggling, and political corruption.