New Federal Budget Seeks Increases for Financial Intelligence and Sanctions Units

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President Biden’s budget is looking to boost funding for both the Treasury Department’s Office of Terrorism and Financial Intelligence and the Financial Crimes Enforcement Network

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A nine-month Treasury-led audit of US sanctions policy, published in October, said the agency needs to adapt and modernize its underlying operational architecture to meet the emerging challenges that could potentially reduce the efficacy of sanctions, including cybercrimes, technological innovations such as digital currencies and new methods of hiding cross-border transactions.

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The budget request also comes after Deputy Treasury Secretary Wally Adeyemo said last fall that the administration’s financial intelligence and sanctions units require significantly more funding and staff to combat national-security threats, including those arising from ransomware and the cryptocurrency markets. Mr. Adeyemo said the department was overseeing expansive sanction programs, and needed to implement major new anti-money-laundering laws and protect the US from terrorists, international criminal groups, state actors and other foes that have become increasingly adept at using the evolving global financial system for their activities.

President Biden’s budget also sets aside $210 million for the Financial Crimes Enforcement Network to bolster its oversight of the financial sector, increase corporate transparency and provide financial intelligence to law enforcement. The anti-money-laundering unit has been tasked with building a complex corporate ownership registry and implementing a new anti-money-laundering whistleblower program among other things.

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The budget request for FinCEN is $49 million above the level enacted in fiscal year 2022. The budget increase will also enable the unit to increase staffing in the coming fiscal year by more than 47% to an estimated 420 people, according to the budget plan. The agency had 269 full-time employees in fiscal year 2021.

The US Senate Committee on Appropriations earlier this month approved $161 million for FinCEN for fiscal year 2022, about $29 million short of the $191 million that was requested.

The budget increases for TFI and FinCEN have been welcomed by the Financial Accountability & Corporate Transparency Coalition, a Washington-based alliance of more than 100 organizations that advocate for financial transparency. The requested budget would give the two agencies the resources they need “especially at a time when Russia’s invasion of Ukraine has exposed the ease with which criminals move ill-gotten gains around the globe,” said Ian Gary, FACT’s executive director.

FACT Coalition added that Congress also approved a package of emergency funding of $19 million and $25 million, respectively, to FinCEN and TFI to help them enforce sanctions related to the crisis in Ukraine.

Erica Hanichak, the government affairs director for FACT Coalition, said the requested funding increase is encouraging but that there is room to do more, considering the role FinCEN and TFI play in the Biden administration’s efforts to counter corruption. She added that the budget increase to hire more personnel at FinCEN is a positive development but that “FinCEN needs a lot more funding” to boost the US’s anti-money-laundering approach at the local and federal level.

Write to Mengqi Sun at [email protected]

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Credit: www.Businesshala.com /

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