Treasury Targets Russia, Oligarchs as Part of Plan to Combat Illicit Finance


The US Treasury Department outlines actions to address illegal-finance risks, saying Russia’s invasion of Ukraine underscores the need to close regulatory loopholes and step up the fight against corruption .

The National Strategy for Dealing with Illicit Finance, released on Friday, is the latest iteration of a report prepared by the Treasury every two years. But this year’s strategy may be one of the most important, Treasury officials said, given Russia’s aggression against its neighbor.

“Illegal finance is a major national-security threat and nowhere is this more evident than in Russia’s war against Ukraine, which has been supported for decades by the Russian elite with corruption,” said US Treasury Assistant Secretary Elizabeth Rosenberg.

Among its priorities to address that threat, the Treasury said Wednesday, is enforcing rules that covertly access the financial system through corrupt Russian oligarchs such as shell companies and all-cash real estate purchases. limit accessibility.

The report, released Friday, responds to several illicit-finance risks to the US financial system identified by the Treasury in March. The Treasury at the time designated fraud, drug trafficking and cybercrime as crimes that generated the greatest amount of illegal income. It also identified emerging risks, including the misuse of cryptocurrencies and rising domestic extremism.

The Biden administration linked its work on illicit finance to larger national-security goals even before the invasion of Ukraine. It has said that fighting corruption should be a major national-security priority, and has pointed to Russia’s recent invasion of Ukraine as an example of how corruption destabilizes nations and US interests. becomes a threat.

The administration has taken far-reaching economic measures against Russia, and increased sanctions against individuals and companies involved in corruption. On May 8, it announced new measures restricting Americans from providing accounting and management-consulting services to Russian companies. The move was in line with the strategies released on Wednesday, the Treasury said.

For more than a year, the Treasury has been enforcing a corporate-transparency law the agency said was its top priority in combating various illegal-finance threats. The Anti-Money Laundering Act, passed in early 2021, asks the Treasury to create a corporate-ownership registry that lawmakers hope will limit the use of anonymous shell companies.

The agency is also pushing for greater anti-money laundering controls in the real-estate sector, including additional scrutiny of all-cash transactions.

Treasury officials said on Wednesday that the measures were an important step in countering the Russian president’s

Vladimir Putin

and the corrupt Russian oligarchy with ties to the Kremlin. He said corruption involving the Russian government played a role in funding the invasion of Ukraine.

“Some of the world’s most sophisticated money launderers and financial criminals work on Russia’s behalf,” a senior Treasury official said during a briefing with reporters. “They take advantage of these gaps to move and hide their money, including in the United States.”

The Treasury said Wednesday it would also focus on updating rules that require financial institutions such as banks and money-services businesses to implement anti-money-laundering controls for transactions on behalf of customers.

The Treasury said it will also work to improve the effectiveness of law-enforcement efforts to combat illicit financing, support technological innovation, and check risks posed by cryptocurrencies and other new financial products and services.

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