Enforcement
August 28, 2019

U.S. Treasury Office Launches Division Focused on Money Laundering Threats

By Samuel Rubenfeld

An office in the U.S. Treasury Department on Wednesday launched a new division responsible for identifying, investigating and deterring illicit finance threats across the globe.

The Financial Crimes Enforcement Network (FinCEN), which is the U.S. financial intelligence unit (FIU), announced the creation of the Global Investigations Division (GID). The division will use FinCEN’s authorities under the Bank Secrecy Act, including Section 311 of the USA Patriot Act, to investigate and target terrorist finance and money laundering threats, FinCEN said.

GID will focus on a wide range of threats, including those with a nexus to weapons of mass destruction proliferation, rogue state actors, transnational organized crime, international drug trafficking and terrorism, FinCEN said. 

Matthew Stiglitz, a former official in the Justice Department’s Criminal Division, will lead GID, said FinCEN Director Kenneth A. Blanco. Stiglitz also serves as an adjunct professor at Georgetown Law, according to a faculty biography.

The foundation of GID is FinCEN’s former Office of Special Measures (OSM), which was part of FinCEN’s Enforcement Division, the office announced. FinCEN has greatly expanded its remit in recent years, including through increased enforcement of anti-money laundering rules, as well as wider data collection activity via geographic targeting orders (GTO) and foreign financial agency regulation authorities. “FinCEN will now have one dedicated division focused on utilizing these authorities to maximum effect, building upon OSM’s prior work,” the announcement said.

FinCEN has historically played a role in U.S. sanctions enforcement, including through its use of Section 311. The USA Patriot Act provision authorizes the U.S. to designate a foreign jurisdiction or foreign financial institution as being of “primary money laundering concern.” The designation doesn’t block any assets, but it typically bars U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for a listed party. 

The U.S. has issued final rules under Section 311 against, among others, the countries of Iran and North Korea, Tanzania-based FBME Bank Ltd. and China-based Bank of Dandong. FinCEN in 2018 issued a notice of proposed rulemaking on Latvian lender ABLV Bank.

 

Kharon research

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