You may have noticed that FinCEN has been incredibly busy pushing out new guidance in the last year or so in the aftermath of the Russian invasion of Ukraine. Starting in March 2022, multiple Advisories were released as well as a specific trend analysis in 2023 relating to the conflict and efforts by Russian Oligarchs to avoid the sanctions placed upon them by the United States and its allies.
While the guidance is primarily focused on that specific conflict, there really is quite a bit of useful information included in the Advisories that will not only assist your program in detecting this specific issue, but it can also be beneficial to your sanctions evasion monitoring in general. Suspicious Activity Report (SAR) Filing Instructions are included to identify SARs relating to various types of activity and aid authorities in tracking and following the activity. The alerts from FinCEN not only outline specific areas of concern but they also include red flags that can be incorporated into your monitoring system and training as well as specific case studies of detected activity that are also very helpful. This is valuable information for you to consider as you are assessing your bank’s risk in this particular area.
Buried in the Alerts you can find useful information about how specific higher risk activities are presently being used by sanctioned Russian elites and their proxies to evade sanctions. For instance, the FinCEN Alert on Real Estate, Luxury Goods, and Other High Value Assets Involving Russian Elites, Oligarchs, and their Family Members identifies several transaction types that could be incorporated into monitoring efforts and provide excellent examples for your training program. Commercial Loan Officers could be informed about the types of behaviors to be on the lookout for if they are involved with commercial real estate transactions, particularly when there is a complex financing method, cloudy ownership structure or unusual third parties involved.
There was also a helpful Financial Trend Analysis that provides some great real-world examples of the type of transactions and methods being employed. Specific examples of how funds and assets were moved, or how beneficial ownership was transferred will help your team understand the problem and know what to look for.
We will be covering all of the latest guidance from FinCEN and more during our webinar, “BSA: Sanctions Evasion,” on May 16, 2023!
Published
2023/05/08