The Treasury Department has identified a growing number of wealthy Russian citizens who have been accused of violating U.S. sanctions and who are using their assets to hide the illicit funds.
The “Russian Kleptocrats of Particular Concern to U.S. Treasury” is a term that has been used by the U.S. Treasury Department in recent years to describe Russian oligarchs who have amassed significant wealth and power during the Putin era, but whose activities are not necessarily related to Russia’s economy or state-owned enterprises.
The Financial Crimes Enforcement Network (FCEN) issued a warning to financial institutions about kleptocratic governments and corrupt public officials attempting to launder their unlawful riches, citing Russia as a particular source of worry.
According to a statement released Thursday by the US Treasury Department’s anti-money laundering unit, banks and other financial institutions should focus their efforts on detecting the proceeds of foreign public corruption, which could be laundered through shell companies, offshore financial centers, and professional service providers.
Kleptocrats, according to FinCEN, utilize their positions of power and influence to steal the wealth of the public for personal benefit and to enrich their networks of corrupt actors, eroding public confidence and harming society’s most vulnerable citizens. Foreign public corruption may also be a violation of the Foreign Corrupt Practices Act, which is a US statute.
The impacts of Russia’s tough economic sanctions are already being felt throughout the world. Greg Ip of the Wall Street Journal joins other experts to discuss the importance of what has occurred so far and how the war may affect the global economy. Alexander Hotz contributed to this image.
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Russian kleptocracy has long been a source of worry for the US administration. According to FinCEN, Russia warrants special attention since it is a “nexus” of public corruption, sanctions evasion, money laundering, and harmful actions overseas. FinCEN mentioned the Kremlin’s recent invasion of Ukraine as an example, noting that many of Russia’s elites and oligarchs, who control most of the country’s economic interests, backed and aided the war.
In a statement, FinCEN Acting Director Himamauli Das stated, “Russia’s continued invasion of Ukraine is just another illustration of how a kleptocracy like Russia…harms not only its own inhabitants, but those living outside its borders.” “Financial institutions play a critical role in detecting foreign public officials’ corrupt activities and related money laundering, and they should stay watchful and report suspicious financial activity swiftly.”
The recommendation, which identifies possible red flags linked with kleptocracy and other kinds of international corruption, comes as President Biden has identified fighting corruption as a top priority for the United States.
The Treasury created the Kleptocracy Asset Recovery Rewards Program last month as part of the endeavor, which pays for information that lead to the seizure or forfeiture of assets tied to foreign government wrongdoing, particularly those linked to the Russian government.
The warning comes as the United States intensifies its pressure on Russian billionaires. The first of its kind, US and Spanish officials confiscated a $90 million super yacht in Spain earlier this month, claiming it belonged to a sanctioned tycoon with strong links to Russian President Vladimir Putin.
Mengqi Sun can be reached at [email protected]
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