FinCEN Asks Banks to Watch for Transactions Linked to Environmental Crimes

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The new emphasis on environmental crimes reflects widespread pressure from the government by the Biden administration to downplay the causes of climate change

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A bureau of the Treasury, the Financial Crimes Enforcement Network, is both a regulator and a collector of financial intelligence whose mission is to stop the flow of money associated with a range of criminal activities.

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Although the agency has traditionally focused on crimes such as terrorism, corruption and drug trafficking, the new emphasis on environmental crimes is part of a government-wide effort by the Biden administration to mitigate the causes of climate change.

According to FinCEN, environmental crime is the third largest illegal activity in the world, generating hundreds of billions in estimated profits. The agency has asked banks to file a report when they come across any transactions involving such activity.

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Action is at the heart of one of FinCEN’s primary responsibilities. Under US anti-money-laundering laws, financial institutions are required to investigate money transfers from clients and suspicious activity, and notify FinCEN if they find anything unusual.

FinCEN then analyzes the data for trends and makes it available to law-enforcement officials investigating a variety of crimes.

The agency wants the types of environmental crimes that banks should monitor include trafficking in wildlife; Illegal logging, mining and fishing; and smuggling of waste and dangerous substances.

One reason these types of activities are preferred is that environmental crimes are often linked to corruption and international criminal organizations, FinCEN said. Both are priority areas designated by FinCEN in June on which banks should focus their compliance resources.

The advisory instructs banks on what they should include in their suspicious activity reports when drawing FinCEN’s attention to a possible occurrence of environmental crime.

The expression of more specific financial crime priorities was part of a massive anti-money-laundering reform bill passed by Congress earlier this year. As part of the legislation, FinCEN is also working to create the first US for-profit ownership database, which lawmakers hope will help prevent shell companies from being used to hide illicit funds.

Dylan Tokar [email protected] . Feather

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