The Financial Crimes Enforcement Network (FinCEN) issued an Advisory to U.S. financial institutions reminding them to take risk-based steps to track the potential movement of assets related to Viktor Yanukovych and his former administration.
Tuesday’s Advisory said the former Ukrainian president and other departing senior officials from his administration posed a risk to the financial system in terms of potential bribery, money laundering and terrorist financing activity.
FinCEN reminded U.S.-based financial firms that they are required:
to apply enhanced scrutiny to private banking accounts held by or on behalf of senior foreign political figures and to monitor transactions that could potentially represent misappropriated or diverted state assets, the proceeds of bribery or other illegal payments, or other public corruption proceeds.
The agency said that even ongoing news reports about corruption by Yanukovych and high-level officers associated with him could create patterns of financial activity meriting special scrutiny.
If a financial institution knows or suspects that a transaction relating to a senior foreign political figure involves funds derived from illicit activity, including money laundering, terrorist financing or any violation of a law or regulation, the company must file a suspicious activity report.
In instances where senior foreign political figures maintain private banking accounts at a covered institution, those firms must apply enhanced scrutiny of such accounts to detect and report transactions that may involve the proceeds of foreign corruption.
FinCEN noted that its Advisory was not meant to call into question the maintenance of normal business relationships between financial institutions in the United States and Ukraine.
Instead, it was designed to target Yanukovych and senior members of his administration and the risks posed by their hasty departure from an area where violent protests have occurred.
Yanukovych fled the capital city on Saturday after three months of anti-government protests left about 80 people dead.
Over the weekend, opposition forces seized the former president’s private estate where Yanukovych kept dozens of classic sports cars, a jet-powered boat, hovercraft, golf course, zoo, private floating restaurant, and helicopter pad inside the compound.
For updated information on developments concerning Yanukovych and other members of his former administration, see here.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.