4. Anti-Money Laundering Laws

Statement of Steven M. D’Antuono Section Chief Criminal Investigative Division Federal Bureau of Investigation Department of Justice Before the Committee on Banking, Housing, and Urban Affairs United States Senate For a Hearing Entitled “Combating Money Laundering and Other Forms of Illicit Finance: Regulator and Law Enforcement Perspectives on Reform” (November 29, 2018).

Public Law 99-570.

Section 312 of the Patriot Act.

As of 13 February 2019, the European Commission considers the following to be high-risk third countries: Afghanistan; American Samoa; The Bahamas; Botswana; DPR Korea; Ethiopia; Ghana; Guam; Iran; Iraq; Libya; Nigeria; Pakistan; Panama; Puerto Rico; Samoa; Saudi Arabia; Sri Lanka; Syria; Trinidad and Tobago; Tunisia; US Virgin Islands; Yemen.

The six specified offenses are: participation in an organized criminal group and racketeering; terrorism; trafficking in human beings and migrant smuggling; sexual exploitation (including of children); illicit trafficking in narcotics and psychotropic substances; and corruption.

FIN-2019-G001 (May 9, 2019): Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies, p. 7.

The Democratic Republic of the Congo’s (DRC) efforts to counter money laundering and terrorist financing (AML/CFT) are inadequate. Kleptocrats and terrorists from all around the world are utilizing the DRC’s banking system as an ideal platform to launder the proceeds of their illicit activities. Unless the authorities of the DRC undertake significant effort to combat that these deficiencies potentially empower criminals, corrupt officials, and terrorists and threaten the integrity of the international financial system. That is, the DRC’s government, if any, should enact laws prohibiting banks from opening anonymous accounts and encourage banks to adopt stricter controls on accounts managed by politically exposed persons (PEPs).

In June 2019, the US Department of the Treasury’s Office of Foreign Assets imposed sanctions on Corneille Nangaa, the head of Congo’s Independent National Electoral Commission, Norbert Basengezi his deputy and Marcellin Basengezi, for their alleged “persistent corruption” and delaying the vote that originally had been scheduled for late 2016. The DRC has become a platform for narco-traffickers since Joseph Kabila acceded to power in 2001. Prior to the recent sanctions, the US Treasury Department imposed sanctions on Israeli businessman Dan Gertler in December 2017, alleging he used his friendship with Kabila to amass a fortune through corrupt and opaque mining and oil deals. In July 2019, the FinCEN recommended banks operating in the DRC to the lenders put in place rigorous control and monitoring of the accounts of politically exposed people, given the widespread corruption in the DRC.

A recent case involving Teodoro Nguema Obiang Mangue, the Second Vice President of Equatorial Guinea, highlights the challenge of successfully prosecuting money laundering schemes when parties have concealed the true ownership of bank accounts and assets. In that case, Nguema Obiang reported an official government salary of less than $100,000 a year during his 16 years in public office. Nguema Obiang, however, used his position and influence to amass more than $300 million in assets through fraud and corruption, money which he used to buy luxury real estate and vehicles, among other things. Nguema Obiang then orchestrated a scheme to fraudulently open and use bank accounts at financial institutions in California to funnel millions of dollars into the United States. Because US banks were unwilling to deal with Nguema Obiang out of concerns that his funds derived from corruption, Nguema Obiang used nominees to create companies that opened accounts in their names, thus masking his relationship to the accounts and the source of the funds brought into the United States. The Department ultimately reached a settlement of its civil forfeiture actions against assets owned by Nguema Obiang. However, the Department needs effective legal tools to directly target these types of fraudulent schemes and protect the integrity of the US financial system from similar schemes.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 1.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 4.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 4.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 6.

Refers to individuals holding or, as appropriate, having held, senior, prominent, or important public positions with substantial authority over policy, operations, or the use or allocation of government-owned resources, such as senior government officials, senior executives of government corporations, senior politicians, important political party officials, as well as their close family and close associates.

Business relationships that are conducted through the Internet, telephone, or similar technology or are otherwise through non-face-to-face interactions will need to be assessed by the Art Market Operator prior to transactions taking place and, in some circumstances, enhanced due diligence may be appropriate for such relationships.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 9.

Basel Art Trade Anti-Money Laundering Principles (2018), p. 10.

Statement of Steven M. D’Antuono Acting Deputy Assistant Director, Criminal Investigative Division Federal Bureau of Investigation Before the United States Senate Committee on Banking, Housing, and Urban Affairs For a Hearing Entitled “Combatting Illicit Financing by Anonymous Shell Companies” (May 21, 2019).

The UN Office on Drugs and Crimes estimates that global illicit proceeds total more than $2 trillion annually, and proceeds of crime generated in the United States were estimated to total approximately $300 billion in 2010.

International Consortium of Investigative Journalists (2018): New Panama Papers Leak Reveals Firm’s Chaotic Scramble to Identify Clients, Save Business Amid Global Fallout.

Testimony for the Record Kenneth A. Blanco Director Financial Crimes Enforcement Network U.S. Department of the Treasury Committee on Banking, Housing and Urban Affairs United States Senate (May 21, 2019).

Testimony for the Record Kenneth A. Blanco Director Financial Crimes Enforcement Network U.S. Department of the Treasury Committee on Banking, Housing and Urban Affairs United States Senate (May 21, 2019).

Statement of Steven M. D’Antuono Acting Deputy Assistant Director, Criminal Investigative Division Federal Bureau of Investigation Before the United States Senate Committee on Banking, Housing, and Urban Affairs For a Hearing Entitled “Combating Illicit Financing by Anonymous Shell Companies” (May 21, 2019), p. 1.

The FATF is an independent intergovernmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

FATF Recommendations 24 and 25.

Statement of Steven M. D’Antuono Acting Deputy Assistant Director, Criminal Investigative Division Federal Bureau of Investigation Before the United States Senate Committee on Banking, Housing, and Urban Affairs For a Hearing Entitled “Combating Illicit Financing by Anonymous Shell Companies” (May 21, 2019), p. 2.

Idem, p. 3.

FATF (2017): Private Sector Information Sharing, p. 22.