Russia’s central government building, the Kremlin, in Moscow
The US Treasury unveiled new plans targeting corrupt Russian oligarchs and their activities.
Plans published Friday outlined the need to close regulatory loopholes linked to shell companies.
The Treasury also wants to stop all-cash real-estate purchases, often used to launder money.
The US Department of Treasury unveiled a raft of new measures designed to unearth illicit finance on Friday, saying Russia’s invasion of Ukraine had sparked renewed efforts to close regulatory loopholes.
The Department’s National Strategy for Combating Terrorist and Other Illicit Financing, pubished every two years, outlined plans to increase transparency in the US financial system and strengthen the anti-money laundering and counter the financing of terrorism.
In a National Strategy for Combating Terrorist and Other Illicit Financing report published on Friday, the Treasury outlined plans to increase transparency in the US financial system and strengthen the anti-money laundering and counter the financing of terrorism.
The Treasury took sweeping action last week, prohibiting US persons from providing accounting, trust and corporate formation, or management consulting services to any individual or organization located in Russia, making anyone engaged in such activity eligible for sanctions.
Speaking on Friday, Elizabeth Rosenberg, the Treasury’s financial crime chief, said: “Illicit finance is a major national security threat and nowhere is that more apparent than in Russia’s war against Ukraine, supported by decades of corruption by Russian elites.
“We need to close loopholes, work efficiently with international partners, and leverage new technologies to tackle the risks posed by corruption, an increase in domestic violent extremism, and the abuse of virtual assets,” Rosenberg added.
The Biden-Harris Administration seeks to counter corruption, the report said, especially against designated Russian elites like oligarchs and their proxies, who have sought or are seeking to anonymize and hide bank accounts, securities, real estate, gold, and other assets.
The report said such individuals were attempting to “evade financial sanctions so they can continue to fund, support, and benefit from President Vladimir Putin’s military aggression.”
Insider previously reported that sanctioned Russian oligarchs had resorted to using an underground payment system, a move described as “desperate” by experts, and a payment system that has previously been linked to terrorist financing.
The Treasury also brought forward the need for greater controls in the real-estate sector, including additional scrutiny of all-cash transactions.
The Treasury identified a number of illicit-finance risks to the US financial system in March, which included fraud, drug trafficking and cybercrime – crimes that generate the largest amount of illicit proceeds.
The risks and deficiencies includes: “The COVID-19 pandemic, ransomware attacks, an opioid-driven overdose epidemic, domestic violent extremism, corruption, the increased digitization of payments and financial services, and the enactment of significant new requirements to the US framework.”
It also takes into account “Russia’s full-scale invasion of Ukraine and the unprecedented international sanctions and economic pressure campaign that have occurred in response.”
Treasury officials have said that corruption has played a role in funding the Ukraine invasion, thus the importance to implement measures to counter Russian President Vladimir Putin and corrupt Russian oligarchs with ties to the Kremlin.
A Treasury official said during a briefing with reporters, per the Wall Street Journal: “Some of the most sophisticated money launderers and financial criminals in the world work on behalf of Russia. They take advantage of these gaps to move and hide their money, including in the US.”
Rosenberg also said on Friday: “Strengthening safeguards against money laundering and terrorist financing here in the US will keep the international financial system strong.”
Finance, News, Weekend BI UK, Ukraine, Russia, oligarch, Oligarchs, Money Laundering, Sanctions, sanctions evasion
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