This morning I watched the news while getting ready for work, checked my social media, and listened to the radio on the drive in – so I know I that am not alone in my concerns for the state of the world we are living in and raising children in. Some days I feel helpless, but I know that there are small things we can all do that make a big impact, which brings me to an advisory recently issued by the Financial Crimes Enforcement Network (FinCEN).
FIN-2018-A003: Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and their Financial Facilitators is an important reminder to financial institutions about their role in detecting and reporting suspicious activity related to politically exposed persons (PEPs). The advisory is recommended reading for CEOs, COOs, compliance, risk and legal departments, and is intended to highlight the connection between corrupt PEPs and their enabling of human rights abuses. In it, FinCEN describes a number of typologies used by PEPs to access the U.S. financial system to obscure and further their illicit activity. These may include the misappropriation of state assets, the use of shell companies, the exploitation of the real estate sector, or any combination of these methods.
The advisory provides several red flags that can assist financial institutions in identifying the methods used by corrupt PEPs to hide the proceeds of their activities, which contribute directly or indirectly to human rights abuses. In addition, it reminds financial institutions of their requirements under BSA to conduct due diligence and file suspicious activity reports (SARs) when warranted.
If you still need convincing that your reporting may help, take a look at the Appendix 1: Case Examples of Financial Facilitation Methods at the end of the advisory. While these cases are difficult to read, they may provide some incentive for you and your staff to keep a keen eye out for these red flags.
While it is easy to feel jaded or overwhelmed by politics and injustices in our society, I’d like to think there is still some hope that we can make it a better place. There is no better place to start then at our credit unions – after all, we were built as cooperatives with a concern for the community, and live by the philosophy of “people helping people.”
To learn more, see FinCEN’s press release.