The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule under Section 311 of the USA PATRIOT Act that severs Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity, from the U.S. financial system. FinCEN also issued today an advisory to further alert financial institutions to schemes commonly used by North Korea to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons programs.
The decline in correspondent banking relationships, or de-risking, has been a concern for the FATF since 2014. Some financial institutions have decided to close their corresponding banking relationships with whole classes of customers or entire regions, in order to avoid, rather than mitigate, money laundering terrorist financing risks.
The FCA is interested in the circumstances around banks closing customers’ accounts, or restricting access for new customers, over the last few years. It wishes to know more about what is driving account closure and how many customers—of which type—are affected. The FCA is also concerned as to whether “wholesale” derisking and financial exclusion from the withdrawal of banking services is occurring and if due consideration is being given to the merits of individual cases before a decision is made to terminate an existing account or to not grant a new account.
As we are working on tax returns for many U.S. clients with international investments, we find that there is a false sense of security based on the information from the people who sell them the foreign investment. There are two issues that are of concern. For the tax payer, who is filing their return, if we fail to do the correct thing there is a minimum civil penalty of $10,000 or a penalty of 50% of the value of the asset. Another important issue Read More