On September 20, 2017, FinCEN published Advisory FIN-2017-A006 to financial institutions about potential abuse of the U.S. financial systems by all Venezuelan government agencies and bodies, including state-owned enterprises (SOEs). The Venezuelan government uses its control over large parts of its socialist economy to generate considerable wealth for government officials and SOE executives, their families, and associates. This heightened corruption risk extends to Venezuelan government officials and employees at all levels, including those at Venezuelan SOEs.
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) had previously designated Venezuelan Vice President Tareck El Aissami for involvement in international narcotics trafficking. OFAC also designated Samark Lopez Bello for assisting El Aissami.
These OFAC designations have increased the probability that other nondesignated Venezuelan senior political figures may position their assets to avoid any future blocking actions, or use Venezuelan government contracts to facilitate embezzlement and bribery schemes. FIN-2017-A006 lists a number of red flags for which financial institutions must monitor, and reminds all financial institutions about their AML responsibilities and obligations.
When filing a suspicious activity report (SAR) related to Venezuelan political activity, financial institutions should:
- Select SAR field 35(l) and include the key term “Venezuelan Corruption”
- Include the key term “Venezuelan Corruption” in the SAR narrative and in SAR field 35(z).
On June 23, 2017, the Financial Action Task Force (FATF) updated its designations of jurisdictions with strategic deficiencies in their anti-money laundering and combatting the financing of terrorism (AML/CFT) programs. The FATF’s Public Statement includes jurisdictions subject to countermeasures or enhanced due diligence (EDD). The following jurisdictions have been added:
- Democratic People’s Republic of Korea (DPRK)
The FATF’s Improving Global AML/CFT Compliance: On-going Process document lists jurisdictions that have strategic AML/CFT deficiencies. The following were added:
These updates may affect U.S. financial institutions’ obligations and risk-based approaches with respect to the cited jurisdictions. Consequently, institutions should consider these changes when reviewing their policies, procedures, and practices.
In response to FinCEN’s advisory and the FTAF’s updated documents, FIRE Solutions has updated its Firm Element course Anti-Money Laundering — Current Issues, and published this blog to quickly disseminate this important information.
For further information about FIRE Solutions, contact your FIRE sales rep or firstname.lastname@example.org.
For more information about the FinCEN Advisory FIN-2017-A006, visit the FinCEN Resource Center at FRC@fincen.gov, or the toll-free hotline at (866)556-3974.
The FATF’s documents may be viewed in their entirety at: