Advisory includes red flags to aid in detection of suspected schemes.
The Financial Crimes Enforcement Network (FinCEN) released an advisory Tuesday alerting financial institutions to the connection between corrupt senior foreign political figures and their enabling of human rights abuses. They utilize the U.S. and international financial systems, sometimes through a financial facilitator, to circumvent laws and move or hide illicit funds.
A senior foreign political figure is loosely defined as an individual with substantial authority over policy, operations or the use of government-owned resources. It can include current or former officials in the administrative, executive, judicial, legislative or military branch of a foreign government or even a senior official of a major political party.
Corruption in the political sector doesn’t just affect a handful of people directly. It can cause devastating repercussions on the people and societies of that country, weaken markets and economic development and create instability in that region.
Due to the international shockwaves that can be caused by this, the Global Magnitsky Act of 2016 was issued to take enforcement action against financial facilitators of corrupt senior foreign political figures, as well as issuing advisories to financial institutions to help them identify, mitigate and report on these risks. Additionally, the Treasury’s Office of Foreign Assets Control (OFAC) has a range of authorities to designate corrupt senior foreign political figures, human rights abusers and their financial facilitators. OFAC currently has numerous sanctions against the Democratic Republic of Congo (DRC), Iran, North Korea, Russia, Somalia, South Sudan, Syria and Venezuela that prohibit U.S. financial institutions from engaging in transactions with designated people from those countries.