FinCEN AML/CTF Priorities Part 6: Transnational Organized Crime (TOC)

Hannakah Rubin, CAMS
August 20, 2021
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Transnational Organized Crime Reaches Far and Is Growing 

One of FinCEN's first priorities for AML/CFT policy is to combat transnational organized crime (TOC).

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When the Financial Crimes Enforcement Network (FinCEN)’s released its inaugural national priorities list for policy related to anti-money laundering and countering the financing of terrorism (AML/CFT), one of the eight priorities included on the list was transnational organized crime (TOC).

Transnational organized crime (TOC), as the name suggests, is far reaching. It is also growing. 

Human, Financial Costs of TOC

Transnational organized crime’s costs

The FBI explains TOC groups are “self-perpetuating associations of individuals who operate, wholly or in part, by illegal means and irrespective of geography.” The activity stretches from crimes we know, such as phishing, internet auction fraud, and advanced fee schemes to human trafficking, illegal trade in natural resources (diamonds, timber, etc.), illicit sale of firearms, fraudulent medications, and the most profitable, drug trafficking. TOC also involves cybercrime, specifically, identity theft.

TOC activity reached 7% of the world’s total exports of merchandise

These are crimes committed on a global scale, and the criminals’ reach has never been so capable. 

As evidence of the global nature of TOC, recent data reports the dollar amount of TOC activity reached 7% of the world’s total exports of merchandise.

Below are just some of the statistics tied to the financial impact of TOC. However, as these numbers show, the threat is not only financial. This activity also results in the loss of human lives. Consider: 

  • The profit from human trafficking is estimated to be $150 billion annually and exploits 24.9 million men, women, and children. 
  • Amnesty International reported in 2007 that an estimated 3.7 million lives were lost in conflicts provoked by blood diamonds. 
  • Drug trafficking reached $320 billion in profits in 2009, including $85 billion in cocaine and $68 billion in opiates. Thousands die from overdoses alone; a statistic that does not consider mules, victims of trafficking, etc.
  • Identity theft generates $1 billion in profit annually.

FinCEN states:

“The overall best estimates of criminal proceeds are close to US$2.1 trillion in 2009 or 3.6% of global GDP (95% confidence interval: 2.7%-4.4%). If only typical transnational organized crime proceeds were considered (resulting from trafficking drugs, counterfeiting, human trafficking, trafficking in oil, wildlife, timber, fish, art and cultural property, gold, human organs, and small and light weapons), the estimates would be around 1.5% of GDP. About half of these proceeds were linked to trafficking in drugs. Crime proceeds linked primarily to the national sector such as fraud, burglaries, theft, robberies, loan sharking or protection racketeering were not included in these estimates.”

Read our blog series on the FinCEN's priorities. Start with Part 1: Implications for Community Financial Institutions.
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A Focus Since 2001

A strategy to combat transnational organized crime

In 2001, President Obama announced the Strategy to Combat Transnational Organized Crime. The purpose of this strategy was to commit to the “pursuit of four enduring national interests: security, prosperity, respect for universal values, and the shaping of an international order that can meet the challenges of the 21st century.” 

FinCEN has stepped up to the plate in this fight, making TOC a priority. The director of FinCEN remarked in a speech in 2011 in conjunction with Obama’s strategy announcement that “while the effects are felt here in the U.S., the perpetrators, witnesses, and evidence reside abroad, often in jurisdictions unable or unwilling to cooperate with our investigative efforts.” 

FinCEN joined forces with government agencies around the globe to establish direct communication avenues to ensure crimes do not go unthwarted due to simple miscommunications. It also stood with the former president’s strategy, which had these five goals, as outlined by the FinCEN director the 2011 speech:

  1.  Help partner countries strengthen governance and transparency, break the corruptive power of transnational criminal networks, and sever state-crime alliances.
  2.  Break the economic power of transnational criminal networks and protect strategic markets and the U.S. financial system from TOC penetration and abuse.
  3.  Defeat transnational criminal networks that pose the greatest threat to national security by targeting their infrastructures, depriving them of their enabling means, and preventing the criminal facilitation of terrorist activities.
  4.  Build international consensus, multilateral cooperation, and public-private partnerships to defeat transnational organized crime.
  5.  Protect Americans and our partners from the harm, violence, and exploitation of transnational criminal networks.
Take action

Staying vigilant to detect patterns

What can BSA officers do with this information? The foundation of all this activity is money laundering. The needs of the criminals are rooted in turning illegal gains into legal tender. Detecting specific activity patterns before an incurred loss is the key. 

Financial institutions have regulatory requirements to make sure know-your-customer and due-diligence processes are in place and ready to protect consumers. Still, transnational organized crime threats affect financial institutions and targeted individuals. Financial institutions can encourage customers and members to utilize government reporting avenues as an effective way to work together to combat cybercrimes.

In addition, financial institutions can remain alert about these topics by frequenting trusted sites (e.g., International Finance CorporationFinCENU.S. Dept. of the Treasury) and utilizing BSA/AML webinars, training, and other resources for BSA staff professional development. Vigilance is effective and convenient.

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About the Author

Hannakah Rubin, CAMS

Risk Management Consultant
Hannakah Rubin is a Risk Management Consultant with Abrigo in the Advisory Services Group. She has 21+ years experience working in the financial institution & software industry. She has worked directly with financial institutions to incorporate automated solutions into BSA, AML, and Fraud programs. Hannakah has worked with other financial

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