Treasury Targets Russia, Oligarchs as Part of Plan to Combat Illicit Finance

The US Treasury Department outlined the actions it plans to take to address illicit financial risks, saying Russia’s invasion of Ukraine underscored the need to close regulatory loopholes. and strengthen the fight against corruption.

The National Strategy to Combat Illicit Finance, released on Friday, is the latest report the Treasury Department produces every two years. However, US Treasury officials say this year’s strategy could be one of the most important it has created amid Russia’s aggression with its neighbour.

“Illegal financing is a major national security threat and nowhere is it more evident than in Russia’s war against Ukraine, which has been supported by decades,” said Assistant Secretary of the Treasury Elizabeth Rosenberg. era of corruption of the Russian elite”.

Among its priorities to address that threat, the Treasury Department said on Wednesday, is working on regulations that limit the ability of nefarious actors like Russia’s corrupt oligarchs to hack. secretly access the financial system through shell companies and buy real estate entirely with cash.

The report released Friday responds to a number of illicit financial risks to the US financial system identified in March by the US Treasury Department. The Treasury at the time called fraud, drug trafficking and cybercrime the biggest generators of illicit proceeds. It also identifies emerging risks, including cryptocurrency abuse and growing domestic extremism.

The Biden administration tied its illegal financial work to larger national security goals even before Ukraine invaded. It is said that fighting corruption should be a core national security priority and recently pointed to Russia’s invasion of Ukraine as an example of how corruption destabilizes nations and causes strife. threat to US interests.

The administration has imposed sweeping economic measures against Russia, while also increasing sanctions against individuals and companies it accuses of being involved in corruption. On May 8, they announced new measures banning Americans from providing accounting and management consulting services to Russian companies. The finance ministry said the move was in line with strategies announced Wednesday.

For more than a year, the Treasury Department has been implementing the corporate transparency law, an effort the agency considers a top priority in combating various illicit financial threats it has introduced. determined. The Anti-Money Laundering Act, passed in early 2021, calls for the Treasury Department to create a business ownership registry that lawmakers hope will restrict the use of anonymous companies.

The agency is also pushing for greater anti-money laundering controls in the real estate sector, including additional oversight of all-cash transactions.

Treasury officials on Wednesday said the measures were an important step in fighting Russian President Vladimir Putin and corrupt Russian oligarchs with ties to the Kremlin. They say corruption tied to the Russian government played a role in funding the invasion of Ukraine.

“Some of the most sophisticated money launderers and financial criminals in the world work on behalf of Russia,” a senior Finance Ministry official said at a press conference with reporters. “They take advantage of these loopholes to move and hide their money, including in the United States.”

The Treasury Department on Wednesday said it would also focus on updating regulations that require financial institutions such as banks and money service businesses to put anti-money laundering controls in place. transactions that they process on behalf of customers.

It will also work to improve the effectiveness of law enforcement efforts to combat illicit financing, support technological innovation, and continue to review the risks posed by cryptocurrencies and their products. and other new financial services caused, the Treasury said.

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Appeared on 14 May 2022, print edition as ‘Treasury of Illegal Financial Settlement.’ Treasury Targets Russia, Oligarchs as Part of Plan to Combat Illicit Finance

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