FINCEN issues advisory on widespread political corruption in Venezuela
AML AND COMPLIANCE NEWS |
The Financial Crimes Enforcement Network (FinCEN) has issued an advisory for financial institutions to be aware of widespread public corruption in Venezuela, and the methods Venezuelan senior political figures may use to move and hide corruption proceeds. The advisory provides financial red flags to assist in identifying and reporting suspicious activity that may be associated with the Venezuelan corruption, particularly in the South Florida and Houston, Texas areas. In addition, FinCEN is providing this advisory to remind financial institutions to meet their due diligence obligations by taking reasonable, risk-based steps to identify and limit any exposure they may have to funds and other assets associated with Venezuelan public corruption, and to file and provide instructions on filing a suspicious activity report (SAR) related to this matter. FinCEN highlights that the key term “Venezuelan Corruption” must be included in the SAR narrative.
Venezuela faces severe economic and political circumstances, which can lead to an increased risk of corrupt money into the U.S. financial system. The Office of Foreign Assets Control (OFAC) designated individuals from the Venezuelan government in February and August 2017. The OFAC designations increased the likelihood that other nondesignated Venezuelan senior political figures may seek to protect their assets, including those that are likely to be associated with political corruption and to avoid potential future blocking actions. Due to the government corruption, and the social and economic deterioration that is taking place in Venezuela along with the recent OFAC designations FinCEN has issued this advisory.