FinCEN Files

FinCEN Files Unveil Weaknesses in Global AML System

Saara Barberena
Saara Barberena

Welcome to This Week In Compliance: GAN’s weekly news roundup, where we curate the latest stories on compliance and anti-corruption to keep you informed. This week, the FinCEN files unveil weaknesses in the global anti-money laundering system. Read the full story and more news below:

Top Story:

FinCEN Files Reveal Weaknesses in Global AML System:

The FinCEN files, released on Sunday, September 20th, mark the latest massive data leak implicating some of the world’s largest banks in large-scale money laundering schemes. The International Consortium of Investigative Journalists (ICIJ) and BuzzFeed News made a sweeping investigation as well as confidential files public revealing the role of global banks in industrial-scale money-laundering, known as the FinCEN (U.S. Financial Crimes Enforcement Network) Files. The FinCEN Files reveal that five global banks, JPMorgan Chase, Standard Chartered Bank, Deutsche Bank, and Bank of New York Mellon, helped clients move USD 2 Tn worth in suspicious assets from 1999 to 2017 across 170 countries. According to ICIJ, the banks failed to obtain information on their clients in half of the transactions and processed payments even after filing suspicious activity reports to the U.S. FinCEN. The leak, which has already involved several high-profile figures, raises questions on the inaction of banks towards the expansive movements of illegal money across the world. Transparency International U.S.  attributed the misconduct to the existing AML legal framework, which they state has not been significantly updated in almost 20 years. 

Business

Florida Asphalt Company Settles Bribery Case for USD 16.6 Million: 

The U.S. Department of Justice charged Sargeant Marine Inc., a Florida-based asphalt producer, for foreign bribery in South America. Sergeant was found guilty of paying millions in bribes to affiliated companies in Brazil, Venezuela, and Ecuador in exchange for contracts with each country’s state-owned oil company. The asphalt agreed to pay USD 16.6 M to settle the FCPA’s anti-bribery provisions violations. Brazil and Ecuador’s state-oil firms could not be reached for comments. The Wall Street Journal reports that six individuals have pleaded guilty to charges in related investigations. 

U.S. Justice Department to Brief States on Google Antitrust Inquiry:

The U.S Department of Justice (DOJ) is set to give a briefing to state attorney generals to outline a forthcoming potential antitrust lawsuit on Google for harming rivals. The DOJ opened a probe into Google in 2019 to investigate the tech giant’s advertising branch and has since then broadened the investigation to include the footprint of the company online. According to people familiar with the matter, the lawsuit is expected to come in two weeks but might also come later than expected.

DOJ Charges Ecuador Oil Trader with FCPA Violations:

Javier Aguilar, one of Vitol’s former managers, was indicted for bribery charges by the U.S. Department of Justice (DOJ). According to the allegations, the former manager of the oil-trading firm paid USD 870,000 in bribes to Ecuadorian public officials to get Vitol into a USD 300 M contract with Petroecuador, the country’s state-owned oil company. While Vitol’s identity is anonymized in the DOJ’s indictment, the company has stated it is aware of the charges and that it is committed to upholding its anti-corruption practices across operations. Aguilar’s charges are part of a broader investigation of U.S. authorities into bribery of public officials in Latin America. 

Regulatory Updates

SEC Votes on Whistleblower Law Amendments: 

After having postponed the long-awaited vote on the U.S Securities and Exchange Commission’s (SEC) whistleblower rules set out in the Dodd-Frank Act, the agency reported that they approved new amendments to its whistleblower program. According to the SEC’s press release, the amendments aim to increase transparency and efficiency in the whistleblowing award program. The new rules provide transparent guidance and new criteria to determine whistleblower award sizes. Some of the considerations the agency will take into account include the significance of the information, the level of assistance to the SEC, the severity of the misconduct, and the whistleblower’s involvement with internal compliance systems. The amendments, which also give the SEC increased tools to reward whistleblowers, are set to result in awards either increasing in value, staying the same, or being issued faster.

Government

Canada’s Former U.S. Ambassador Violates Conflict-of-Interests Law:

After having taken an executive role at Palantir Technologies Inc.’s Canada branch, Mr. David MacNaughton, Canada’s former ambassador to the U.S. from 2016 to 2019, was accused of violations of Canada’s conflict-of-interests rules. According to Canada’s Office of Conflict of Interest and Ethics Commissioner, Mr. MacNaugton took an ‘improper advantage’ of his previous role when dealing with the Canadian government. The allegations arose from March and May when MacNaughton offered his help to nine senior officials in the Canadian government for the management of the Coronavirus pandemic. Authorities pose that these interactions were illegal and thus have issued a prohibition for the nine officials of having contact with the former ambassador.

guide to conflicts of interest

Get our newsletter for the latest compliance insights