- FinCEN Issues Guidance Regarding Recent Events in Tunisia
- February 25, 2011 | Authors: Andres A. Fernandez; Marina Olman; Clemente L. Vázquez-Bello
- Law Firm: Gunster, Yoakley & Stewart, P.A. - Miami Office
On January 14, 2011, a wave of social protests ended Tunisian president’s Zine El Abidine Ben Ali (“Ben Ali”) 23-year old regime. Ben Ali reportedly fled Tunisia for Saudi Arabia and is estimated to have amassed a fortune in excess of $5 billion as a result of the misappropriation of state assets and public corruption.
On January 20, 2011, the Financial Crimes Enforcement Network (“FinCEN”) issued an advisory (“Advisory”) to remind U.S. financial institutions to monitor transactions that could potentially represent misappropriated or diverted State assets, proceeds of bribery or other illegal payments, or other public corruption proceeds originating in or diverted from Tunisia. The Advisory encourages U.S. financial institutions to be aware of the possible impact that the political and social unrest in Tunisia may have on patterns of financial activity when assessing customer and transaction risk in the region (to wit, the Middle East).
The Advisory reminds U.S. financial institutions that they must file a Suspicious Activity Report (SAR) if the U.S. financial institution knows, suspects or has reason to suspect that: (i) a transaction relating to a senior political figure involves funds derived from illicit activity; (ii) the transaction appears to have no business or lawful purpose; or (iii) a customer has engaged in activities indicative of money laundering, terrorist financing or any other violation of federal law or regulation.
In addition, the Advisory reminds U.S. financial institutions of the regulations implementing the USA PATRIOT Act (312 U.S.C. 5318(i)), which require:
A written due diligence program for private banking accounts held for non-U.S. persons designed to detect and report any known or suspected money laundering or suspicious activity.
Enhanced scrutiny of private banking accounts maintained by foreign political figures (to wit, politically exposed persons or PEPs) at U.S. financial institutions to detect and report transactions that may involve the proceeds of foreign corruption.
U.S. financial institutions should consider applying enhanced scrutiny to all accounts of senior political figures that pose heightened money laundering risks and monitoring transactions in the region.