FinCEN Issues Advisory on Kleptocracy and Foreign Public Corruption

In its latest Advisory, FinCEN urged financial institutions to focus their efforts on detecting instances of foreign public corruption. FinCEN requested that financial institutions use the term "CORRUPTION FIN-2022-A001" when filing Suspicious Activity Reports ("SARs") "to indicate a connection between the suspicious activity being reported and the activities highlighted in this alert."

In the Advisory, FinCEN provided "indicators associated with kleptocracy and other forms of foreign public corruption," including bribery, embezzlement, extortion and misappropriation of public assets. FinCEN highlighted red flags "to assist financial institutions in detecting, preventing, and reporting suspicious transactions associated with kleptocracy and foreign public corruption." These red flags include, among others, transactions involving (i) long-term government contracts, (ii) services for state-owned companies or public institutions and (iii) foreign government business that is conducted through personal accounts.

In addition to FinCEN's efforts, the U.S. Treasury also launched a Kleptocracy Asset Recovery Rewards Program that offers payments for any information leading to seizure, restraint or forfeiture of assets linked to corruption, including corruption of the Government of the Russian Federation. The advisory was part of a government roll-out of its Strategy on Countering Corruption.