The Treasury Department’s plan to combat illicit finance is targeting Russian oligarchs, per the Washington Post. The United States has also banned US citizens from selling real estate in Turkey and imposed sanctions on four Turkish officials for playing a role in jailing US pastor Andrew Brunson.

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



The US Treasury Department listed steps it expects to take to address illicit-finance issues, claiming that Russia’s invasion of Ukraine highlighted the need to fix regulatory gaps and intensify the battle against corruption.

The national plan for countering illicit money, unveiled on Friday, is the most recent version of a study issued every two years by the Treasury Department. Given Russia’s actions towards its neighbor, Treasury officials believe this year’s strategy will be one of the most crucial ever.

“Illicit funding is a huge national-security danger, and nowhere is this more evident than in Russia’s war against Ukraine, which has been fueled by decades of Russian elite corruption,” said US Treasury Assistant Secretary Elizabeth Rosenberg.

Implementing measures that restrict the ability of illegal actors such as corrupt Russian oligarchs to discreetly enter the financial system via shell companies and all-cash real-estate acquisitions is one of the Treasury’s priorities for countering that danger, it said Wednesday.

The Treasury Department identified a number of illicit-finance vulnerabilities to the US banking system in March, prompting the publication of the report on Friday. Fraud, drug trafficking, and cybercrime were recognized by the Treasury as the offenses that create the most illegal revenues at the time. It also recognized new threats, such as cryptocurrency misuse and increasing domestic extremism.

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Even before the war of Ukraine, the Biden administration linked its efforts on illicit funding to bigger national-security aims. It has said that combatting corruption should be a top national-security priority, citing Russia’s invasion of Ukraine as an example of how corruption destabilizes countries and threatens US interests.

The government has implemented broad economic penalties on Russia, as well as increased sanctions against people and businesses it suspects of corruption. It announced new rules on May 8 prohibiting Americans from offering accounting and management consultancy to Russian businesses. The Treasury said that this measure was in keeping with the strategy announced on Wednesday.

The Treasury has been enforcing a corporate-transparency rule for more than a year, claiming that it is the agency’s top priority in combating the myriad illicit-finance concerns it has identified. The Anti-Money Laundering Act, which was signed into law in early 2021, directs the Treasury to establish a corporate-ownership register in the hopes of reducing the use of anonymous shell firms.

The agency is also pressing for tighter anti-money laundering regulations in the real estate industry, including a closer look at all-cash deals.

The penalties, according to Treasury officials, are an essential step in combating Russian President Vladimir Putin and corrupt Russian billionaires with connections to the Kremlin. According to them, corruption linked to the Russian government had a part in financing the invasion of Ukraine.

“Russia employs some of the world’s most adept money launderers and financial crooks,” a senior Treasury official told reporters during a briefing. “They use these loopholes to shift and conceal their money across the world, even in the United States.”

On Wednesday, the Treasury said that it will concentrate on revising legislation that compel financial institutions like banks and money-services organizations to apply anti-money-laundering controls to transactions they execute on behalf of consumers.

According to the Treasury, it will also endeavor to strengthen the efficacy of law enforcement operations to combat illegal funding, encourage technical innovation, and continue to assess the dangers presented by cryptocurrencies and other innovative financial products and services.

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Dylan Tokar can be reached at [email protected]

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‘Treasury Tackles Illicit Finance’ appeared in the print version of the May 14, 2022, issue.

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