Where in the World Is Dirty Money Going? FinCEN’s Newest Investigation Unit Targets Global Money Laundering
The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently announced the launch of a Global Investigations Division (“GID”). GID will focus its efforts on implementing targeted investigation strategies to combat money laundering and terrorism financing in domestic and international contexts.
At this time, not much information about GID is available outside of what FinCEN provided in a press release. However, the press release offers some clues as to how GID will function and what type of executive authority it will leverage.
For one, GID intends to use Section 311 of the USA PATRIOT Act in its investigation and targeting of terrorist financing and money laundering. Section 311 allows the Treasury Secretary to require domestic financial institutions and financial agencies to take certain special measures against anyone or anything found to be a primary money laundering concern. 31 U.S.C. § 5318A(a). Such a finding is concurrently announced with a Notice of Proposed Rulemaking (“NPRM”), which explains the proposed special measures to be implemented regarding the primary money laundering concern. Id. § 5318A(a)(3).
Although any proposed special measures in an NPRM are still subject to a notice-and-comment period and must be finalized in a final rule, potential special measures can include the following:
- Recordkeeping and reporting certain transactions;
- Collection of information relating to beneficial ownership;
- Collection of information relating to certain payable-through accounts;
- Collection of information relating to certain correspondent accounts; and
- Prohibition or conditions on the opening or maintaining of correspondent or payable-through accounts
Id. § 5318A(b). To date, Treasury has used Section 311 against three jurisdictions and eight financial institutions and, when applicable, their affiliates.1 It appears that GID, as a division in the Department of Treasury, will also begin making findings regarding primary money laundering concerns and initiating rulemaking regarding proposed special measures.
GID also has signaled its intent to work closely with foreign counterparts in conducting its investigations. At this time, it is unclear which foreign counterparts will be involved with GID’s investigations. A safe bet would be that GID will work closely with the
Financial Action Task Force (“FATF”), an intergovernmental organization intended to combat money laundering and terrorism financing. FATF has 37 different member countries, which provides GID a wide variety of possible allies.
GID is replacing and building upon the work of FinCEN’s former Office of Special Measures. It will be led by Matthew Stiglitz, a former Principal Deputy Chief in the Department of Justice’s Criminal Division. Mr. Stiglitz has more than 24 years of prosecutorial experience at both the state and federal level.
What This Means For You
As showcased in the creation of GID, the U.S. government’s investigative and enforcement actions are focused on cross-border, international money laundering threats. Although the impact of GID is left to be seen, its launch reminds companies to prioritize compliance with existing anti-money laundering laws and fully investigate any red flags uncovered by a compliance program.
Visit our website to learn more about V&E’s Government Investigations & White Collar Criminal Defense practice. For more information, please contact Vinson & Elkins lawyers Jennifer Freel or John Satira.