Financial Crimes Enforcement Network (FinCEN) Advisory on Kleptocracy and Foreign Public Corruption – FIN 2022-A001
Kleptocrats and other corrupt public officials steal the public’s wealth for personal gain and use their positions of power and access to state-owned resources for their personal benefit. Like other criminal actors, corrupt public officials launder the proceeds of their corruption through a variety of means, including funneling money through shell companies or by purchasing various high-end assets, such as real estate, yachts, private jets, and high-value art.
As previously noted in FinCEN alerts FIN-2022-Alert001 and FIN-2022-Alert002, Russia is of particular concern as a kleptocracy because of the nexus between corruption, money laundering, malign influence and armed interventions abroad, and sanctions evasion. Corruption is widespread throughout the Russian government and manifests itself as bribery of officials, misuse of budgetary resources, theft of government property, kickbacks in the procurement process, extortion, and improper use of official positions to secure personal profits.
FinCEN also issued a list of typologies and red flag indicators for kleptocracy and foreign public corruption, that include bribery and extortion; misappropriation or embezzlement of public assets; shell companies and offshore financial accounts; purchase of real estate, and luxury goods and other high-value assets.
Suspicious Activity Report (SAR) Filing Instructions for this Alert:
FinCEN requests that financial institutions reference this alert by including the key term “CORRUPTION FIN-2022-A001” in SAR field 2 (Filing Institution Note to FinCEN) and the narrative to indicate a connection between the suspicious activity being reported and the activities highlighted in this alert. Financial institutions may highlight additional advisory or alert keywords in the narrative, if applicable. Financial institutions should include any and all available information relating to the account and locations involved in the reported activity, identifying information and descriptions of any legal entities or arrangements involved and associated beneficial owners, and any information about related persons or entities involved in the activity. Financial institutions also should provide any and all available information regarding other domestic and foreign financial institutions involved in the activity; where appropriate, financial institutions should consider filing a SAR jointly on shared suspicious activity.
Lastly, FinCEN reminds financial institutions of other relevant BSA reporting requirements, instructions for form 8300, due diligence obligations for senior political figures, enhanced due diligence obligations for private banking accounts, and general obligations for correspondent account due diligence and AML/CFT programs.
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