FinCEN issues advisory to help banks detect foreign corrupt activity

The Financial Crimes Enforcement Network today issued an advisory on kleptocracy and foreign public corruption, urging financial institutions to focus their efforts on detecting the proceeds of foreign public corruption.

Kleptocrats launder corrupt proceeds in a variety of ways, including funneling money through shell companies or by purchasing high-end assets. The advisory provides types and potential indicators of kleptocracy and other forms of foreign public corruption, such as bribery, embezzlement, extortion and the misappropriation of public assets. The advisory also highlights financial red-flag indicators to assist banks in preventing, detecting and reporting suspicious transactions.

“Foreign public corruption erodes public trust and disproportionately harms the most vulnerable in societies,” said FinCEN Acting Director Himamauli Das. “Financial institutions play a crucial role in identifying corrupt activity and associated money laundering … and should remain vigilant and promptly report suspicious financial activity.”

Last month, the Treasury Department launched the Kleptocracy Asset Recovery Rewards Program, which offers rewards for information leading to seizure, restraint or forfeiture of assets linked to foreign government corruption.