Treasury Department Issues Warning on Foreign Public Corruption

Following last year’s Presidential Memorandum which announced a new U.S. Strategy on Countering Corruption, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently issued an Advisory on Kleptocracy and Foreign Public Corruption.  The advisory urged financial institutions to focus their efforts on detecting the proceeds of foreign public corruption, noting that kleptocratic regimes and corrupt public officials may exploit U.S. financial institutions to launder illicit gains.  This marks the latest effort by the Biden Administration in its commitment to leading the global fight against corruption.

Not surprisingly, Russia figures prominently in this latest warning to financial institutions. While the U.S. government has long expressed concerns about Russian corruption, the advisory described Russia as a particular source of concern because corruption is so prevalent throughout the Russian government. This has been highlighted by the regime’s recent invasion of Ukraine with the apparent support of the country’s elites.  The advisory makes clear that these oligarchs have a mutually beneficial relationship with President Putin that allows them to misappropriate assets from the Russian people while helping keep Putin power.  FinCEN warned that corrupt public officials often utilize the same money laundering methods used by bad actors in the private sector.

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