Treasury says banks need to collaborate to combat corruption

Financial Crimes Of Interest to Non-US Persons Department of Treasury Corruption Beneficial Ownership

On February 3, U.S. Treasury Department Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg spoke before the Union of Arab Banks Conference to discuss the importance of working with member institutions in the Middle East and Africa to fight corruption. While noting that countering terrorist financing remains a crucial priority, Rosenberg pointed out that terrorist financing is not the only threat affecting the financial system. “In countries across the region, we have seen trends in which some politically exposed persons have sought to hide their ill-gotten gains through transfers to secondary jurisdictions under both themselves as well as family members’ and associates’ names,” Rosenberg said. “This is something that banks have a responsibility, indeed an obligation, to identify and halt,” she added, emphasizing that “[w]e will all be stronger, more secure, if every bank represented here builds and maintains strong compliance programs” designed to “identify and disrupt the onboarding of customers and the processing of transactions involv[ing] bribes or expropriated government funds.” Rosenberg encouraged the banks to share information on corruption with each other and to ensure enhanced due diligence, especially when dealing with politically exposed persons. “Nearly every act of corruption flows through the formal financial system, the system we are all a part of, which means all of us have the ability—and the responsibility—to stop it,” Rosenberg noted, highlighting the “global corruption boom” in recent decades resulting from individuals seeking to conceal assets and ownerships though shell companies or transactions involving art, real estate, and cryptocurrencies. Rosenberg also informed the banks that as part of the Biden Administration anti-corruption strategy, Treasury “will soon require many U.S. and foreign companies to report their true beneficial owners and to update that information when those beneficial owners change.”