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1 1 (January 2, 2019)

handle is hein.crs/govyxe0001 and id is 1 raw text is: In rmr t heleiltv dbae ice14 January 2, 2019 Targeting Illicit Finance: The Financial Crimes Enforcement Network's Financial Institution Advisory Program Introduction The Financial Crimes Enforcement Network (FinCEN), a bureau of the Department of the Treasury, is charged with administering the U.S. government's financial regulatory regime to counter money laundering, terrorist financing, and other illicit financial activity. Since 1996, FinCEN has periodically issued public and nonpublic advisories on these topics. Some policymakers, including in Congress, have taken an interest in FinCEN's financial institution advisory program as a means to boost private sector reporting of financial intelligence on key transnational crime concerns and U.S. foreign policy priorities, including counterterrorism. Although Congress has not specifically mandated FinCEN's advisory program, the 115th Congress has sought to encourage FinCEN to issue advisories on a range of topics, including foreign corruption, human trafficking, proliferation finance, and cybercrime. FinCEN's Mandate. FinCEN was created in 1990 as the financial intelligence unit (FlU) of the United States. Its mandate includes the collection, analysis, and dissemination to law enforcement of a range of reports on financial transactions collected by private sector entities. This mandate was broadened in I994 to include regulatory responsibilities administering the Bank Secrecy Act (BSA). Under the 2001 USA PATRIOT Act (31 U.S.C. 3 10), FinCEN became a Treasury bureau. ackground The purpose of FinCEN's advisory program is twofold: (1) to elicit from financial institutions high-quality financial intelligence that, in turn, can be used to further ongoing law enforcement investigations, and (2) to help financial institutions mitigate their exposure to money laundering risks by reminding them of their BSA/AML compliance obligations and developing and sharing with them red flags that may indicate illicit financial activity. Advisories represent one of several communications tools available to FinCEN to share information with the financial and regulatory communities on current trends in money laundering and priorities for financial intelligence collection. They are informed by various reports financial institutions are required to file with FinCEN under the BSA regarding suspicious transactions or external developments that may trigger heightened financial crime risks. Advisories may also be issued to signal to the private sector certain current law enforcement interests. In recent years, FinCEN has issued, on average, fewer than 10 advisories annually. The more complex advisories, including a recent advisory issued on Iran in November 2018, can reportedly take up to six months to prepare. Unlike with FinCEN's rulemaking activities, its advisories do not add new regulatory obligations. Instead, they are intended to provide relevant context and often detailed descriptions of financial crime methods to better inform a bank's risk-based anti-money laundering (AML) compliance program. As financial crime patterns evolve, FinCEN has updated and rescinded some advisories. In 2018, FinCEN began translating a few advisories into Spanish, potentially increasing prospective readership. Public Versus Nonpublic Advisories. Most advisories are publicly disseminated and posted on FinCEN's website. Additionally, FinCEN issues nonpublic advisories that may include law enforcement-sensitive information. These nonpublic advisories are disseminated to select financial institution recipients through FinCEN's secure information sharing system-a system also used for its outreach to the financial community pursuant to Section 314(a) of the USA PATRIOT Act of 2001 (P.L. 107-56). Types of Advisories Advisories typically share predictable formats, which include background information on the financial crime concern, examples of money laundering typologies, descriptions of redacted or adjudicated law enforcement case studies, and a list of illicit activity red flags that financial institutions could monitor. Beyond the common format, however, they are characterized primarily by their diversity of subjects. Recent public advisories have addressed the following topics: Supporting National Security Priorities FinCEN has issued both public and nonpublic advisories on national security priorities. Nonpublic advisories have reportedly addressed current threats related to the financing of terrorism. Public advisories have addressed topics such as the illicit financial activities of Iran (issued in November 2018) and North Korea (issued in November 2017) and how evolving policies toward these countries are affecting U.S. financial institutions' BSA/AML obligations. >s://crsreports.congress.gos S

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