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FinCEN Advisory on the Iranian Regime’s Attempts to Exploit the Financial System

October 11, 2018
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Advisory Warns Financial Institutions of Potentially Illicit Transactions 

On October 11, 2018, FinCEN issued an advisory to help financial institutions identify potentially illicit transactions related to the Islamic Republic of Iran (Iran). The advisory details known key players and their tactics in exploiting the US financial system. FinCEN is warning financial institutions in an effort to prevent financing related to nefarious activities, including the funding of terrorist organizations such as the Islamic Revolutionary Guard Corps and Hamas.

Specifically, FinCEN is warning against the use of personal accounts by Central Bank of Iran senior officials and the illicit use of virtual currency, shipping companies, and precious metals, to name a few. In addition to maintaining strong controls over ensuring compliance with sanctions around the regime, the agency warns against transactions originating from, or otherwise involving, jurisdictions with strong geographical or ethical ties to Iran. Robust, multi-tiered levels of screening should be used to review transactions originating in, or involving, any jurisdiction in close proximity to Iran.

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The advisory contains 21 red flags to help financial institutions identify suspicious activity around these warnings.  Those include illicit activity by CBI/CBI officials, illicit activity through exchange houses, use of procurement networks, illicit procurement of aircraft parts, Iran-related shipping companies access to U.S. financial system, virtual currencies, and suspicious funds transfers. 

Additionally, the advisory highlights the need for beneficial ownership compliance and strong customer due diligence practices to ensure you are not indirectly or unknowingly involving your financial institution with the regime.  Read the detailed advisory in its entirety here to ensure you are properly monitoring for the outlined activity and appropriately mitigating risk for your institution.

If you are filing a SAR you believe is related to the activities documented in this advisory, reference the advisory by including the key term “Iran FIN-2018-A006".

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