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The FinCEN Files reveals how banks have been moving trillions of dollars in suspicious transactions

Leaked documents detail the extent to which world’s largest banks have facilitated money laundering, corruption and fraud.

What are the FinCEN files?

According to BBC, The FinCEN files are thousands of suspicious activity reports, and other US government documents that expose how banks and regulators have allowed criminals to move dirty money around the world.

The documents which are estimated to be more than 2,500 files were leaked to Buzzfeed News and shared with the International Consortium of Investigative Journalists (ICIJ) which distributed them to 108 news organizations in 88 countries.

The FinCEN files involve a number of banks, that highlight a range of potentially suspicious activity involving companies and individuals, and raise questions about the banks.

What 's at Issue?

Concerns about transactions made in US dollars need to be sent to The Financial Crimes Enforcement Network, or FinCEN which is a branch of the US Treasury Department responsible for combating financial crimes such as money laundering or terrorist financing. It compiles millions of Suspicious Activity Reports also known as SARs.

Although they are not proof of wrongdoing or crime, banks are required to file SARs within 30 or 60 days of learning of questionable transactions. By law, banks are required to know who their clients are, and if they have evidence of criminal activity they should stop moving the cash.

However, these documents reveal how the world’s biggest banks kept doing business with clients that they themselves suspected were facilitating terror and corruption.

What are the key findings?

Almost 90 financial institutions appeared in the documents which showed suspicious payments around the world into countless industries. ICIJ and Buzzfeed News investigations reveal the following:

  • Global banks moved more than $2 trillion between 2000-2017 in payments they believed were suspicious in around 2,100 filings with the U.S. Treasury’s Financial Crimes Enforcement Network, or FinCEN.

  • Global banks flagged bank clients in more than 170 countries who were identified as being involved in potentially illicit transactions. The figures include $514 billion at JPMorgan Chase and $1.3 trillion at Deutsche Bank

  • Five global banks — JPMorgan Chase, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — moved illicit cash for suspect individuals and criminal networks even after U.S. authorities fined these financial institutions for earlier failures to stem flows of dirty money.

  • In half of the FinCEN Files reports, banks didn’t have information about one or more entities behind the transactions.

  • Years after concerns first emerged, banks continued to move money for fraudsters, drug dealers and allegedly corrupt officials, leading to cases of real harm.

  • Banks reported more than $4.8 billion between 2009 and 2017 in suspicious transactions with links to Venezuela. Nearly 70% of that amount had a Venezuelan government entity, such as the Ministry of Finance or the state oil company, as a party.

What 's Next?

The FinCEN files investigation “reinforces the fact that we now have two systems of law enforcement and justice in the country.” said Sen. Ron Wyden of the Senate Intelligence Committee. Drug cartels move millions through US banks; poor people go to jail for possession. According to Sen. Ron Wyden, “If you're wealthy and well-connected, you can figure out how to do an enormous amount of harm to society at large and ensure that it accrues to enormous financial benefit for all of you.”

According to experts in financial crime, one step for the government to stop money laundering would be to require companies to disclose their owners to the Treasury Department, rather than allowing people to hide behind companies. However this initiative could raise privacy issues.

Nonetheless making this material public might help in the long-term as it

“could enhance national security, aid future investigations, and encourage institutions to more consistently adhere to SARs filing requirements”, and "will hopefully get people who are in a position of power to correct an apparent systemic failure.” said Robert Mazur, former federal special agent and expert in money laundering.





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