FinCEN, Financial Crimes Forcement, an office of the U.S. Treasury Department created with a mission to protect the financial system against illegal use and fight against money laundering and to promote national security, is also intended to address environmental crimes, which reflects the government's efforts to mitigate the causes of climate change.
The world of illegal logging may seem far from the well-lit offices of the major US financial centres, but the government hopes that bankers can play a role in stopping such crimes. The U.S. Treasury Anti-Money Laundering Supervisory Authority issued the first ever Recommendation on Environmental Crimes, asking banks and other financial institutions to pay particular attention to transactions that may be linked to activities that according to the agency contribute to climate change and biodiversity loss.
According to FinCEN, environmental crime ranks third in terms of the volume of illegal activity in the world, generating estimated profits of hundreds of billions.
The Treasury Office, Financial Crimes Enforcement Network, is both a regulator and a financial intelligence collector whose mission is to stop the flow of money related to criminal activity. Although the agency traditionally focuses on crimes such as terrorism, corruption and drug trafficking, the new emphasis is on environmental crime.
Under American anti-money laundering legislation, financial institutions are required to check customers and remittances for suspicious activities and notify FinCEN of any irregularities they detect. The Agency has asked banks to report when they encounter a transaction that may be linked to such activities.
The types of environmental crime that the agency wants to monitor include wildlife trafficking; illegal logging, extraction and fishing, and trafficking in waste and hazardous substances.
FinCEN said that one of the reasons for prioritising this type of action is that environmental offences are often linked to corruption and international criminal organisations. Both are priorities that FinCEN identified in June as areas where banks should focus their compliance resources.
The advisor instructs banks what they should include in their suspicious activity reports, drawing FinCEN's attention to a potential case of environmental crime. The setting of more detailed priorities for financial crime was part of the extensive anti-money laundering reform bill adopted by Congress earlier this year.
Under the FinCEN legislation, it is also working to create the first U.S. database on real beneficiaries, which, as the legislator hopes, will help prevent the use of front companies to hide illegal money.
Source: wsj.com