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Cracking Down on Terrorist Groups: Understanding the New FinCEN Treasury Advisory

Posted  May 13, 2024

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has just rolled out an important Advisory. This guide is designed to help banks and other financial institutions spot and stop illegal transactions linked to terrorist groups supported by Iran, especially with the recent uptick in terrorist activity in the Middle East.

FinCEN Director Andrea Gacki explained that as violence and instability continue to rock the Middle East, it’s crucial for financial systems to be protected from exploitation by terrorist organizations. The Advisory provides detailed insights into the various schemes these groups use to sneakily move and use money across borders. It also flags potential warning signs that banks can look for to catch suspicious activity early.

The Advisory included a list of “red flags” to assist financial institutions in detecting, preventing, and reporting suspicious activity connected to the financing of Iran-backed terrorist organizations. Some of the red flags include transactions with entities or individuals flagged by the Office of Foreign Assets Control (OFAC), involving identifiers like email, physical addresses, or passport numbers. Red flags also appear in transactions with financial institutions in high-risk areas with poor anti-money laundering practices, or involving companies with opaque ownership linked to Iran or Iranian-supported terrorist groups.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, pointed out that Iran is always looking for new ways to fund its shadowy operations, from spreading dangerous weapons to supporting regional militant groups. “As we celebrate 20 years of work at our office, we’re doubling down on our commitment to prevent Iran and its terror allies from abusing the global financial system,” he said.

Recent developments have further exposed Iran’s involvement in financing terrorism, supporting notorious groups like Lebanese Hezbollah, Hamas, the Palestinian Islamic Jihad, the Houthis, and several militias in Iraq and Syria. This latest advisory is part of the broader effort to clamp down on these activities and keep the financial industry secure from such threats.

If you have information relating to potential government contract fraud or a False Claims Act violation and would like to speak to a member of the Constantine Cannon whistleblower lawyer team, please don’t hesitate to contact us for a free and confidential consultation.