FinCEN Issues Guidance on Complying With Russia Sanctions
The Financial Crimes Enforcement Network issued an alert to financial institutions to be vigilant against efforts to evade the sanctions and other restrictions implemented against Russia. FinCEN warned that all financial institutions identify and report suspicious activity associated with potential sanctions evasion, and conduct customer due diligence. The alert highlighted the following activities as possible evasion activities requiring higher scrutiny:
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- Use of corporate vehicles to obscure ownership, finances or jurisdictions
- Use of shell companies to conduct international wire transfers
- Use of third parties to shield the identity of sanctioned persons seeking to hide the origin or ownership of property or funds
- Accounts transferred without a clear economic or business rationale
- Jurisdictions having a recent increase in new companies
- Newly established accounts that attempt to send or receive funds from sanctioned institutions or those removed from SWIFT
- Nonroutine foreign exchange transactions, particularly those that deviate from activity over the past year.
The alert also said that the safe harbor authorized by the USA Patriot Act allows information sharing on individuals, entities, organizations and countries suspected of possible terrorist financing or money laundering.