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FinCEN Releases Advisory Related to Potential Funds Linked to Nicaraguan President

October 4, 2018
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New FinCEN advisory warns against funds linked to Ortega regime.

FinCEN issued a new advisory on October 4, 2018 warning financial industry professionals about the potential for proceeds of crime and corruption from senior political figures, specifically those linked to the regime of Nicaraguan President Daniel Ortega, entering into the U.S. financial system.

FinCEN is asking for institutions to pay close attention to the movement of funds that could be associated with this geographic region or adjacent politically exposed persons (PEPs), and to file SARs as appropriate. You can read about certain known transaction patterns used by foreign political figures to facilitate access to the U.S. Financial system in an advisory previously released by the agency here.

This most recent advisory highlights program requirements that should be in place around private banking accounts for non-U.S. persons, and institutions’ ongoing obligation to implement due diligence around correspondent accounts maintained for foreign financial institutions. Strong programs in these areas will assist in the detection and reporting of activity transacted by senior political figures associated with the regime.

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When filing a SAR on activity that is potentially associated with the Ortega regime, FinCEN directs institutions to select SAR field 38(m) – “Suspected Public/Private Corruption (Foreign)” and reference the advisory by including the key term “Nicaragua FIN-2018-A005” in the SAR field 2. 

The United States continues to strongly condemn the ongoing violence in Nicaragua and the human rights abuses associated with the Ortega regime. As such, FinCEN expects that those connected with the regime may react to the perceived threat and potential sanctions by moving assets out of their accounts in Nicaragua or elsewhere. As always, be diligent in your monitoring of transactions; however, this advisory does not require institutions to restrict legitimate transactions nor does it require a change in normal relationship risk management.

If you need a more thorough way to scan your customer and vendor databases, IQ AutoScan may be the answer. It automatically scans your databases daily against OFAC, Politically Exposed Persons (PEP) list, FinCEN, EU/UK/UN sanctions list and other blacklists/ watch lists, defending your organization and making sure your institution stays in compliance.

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