By FATIMA HUSSEIN, Associated Press
WASHINGTON (AP) — The Treasury Department on Friday issued recommendations to strengthen laws to guard against money laundering and illicit threats to the U.S. financial system, citing Russian conduct supporting the invasion of the U.S. Ukraine as evidence of exploiting loopholes.
The Treasury’s 32-page strategy document outlines recommendations aimed at closing gaps in anti-money laundering laws, combating the use of real estate for money laundering purposes and improving information sharing between the government and private sector financial companies.
“Illicit finance is a major threat to national security and nowhere is this more apparent than in Russia’s war on Ukraine, fueled by decades of corruption by Russian elites,” said Elizabeth Rosenberg, Assistant Secretary of the Treasury for Terrorist Financing.
Sanctioned individuals and entities can remove credentials from their bank accounts or simply hide them, the department said. They may also use cryptocurrency to a limited extent or hide behind shell companies to evade financial penalties.
“We need to close the gaps, work effectively with international partners, and leverage new technologies to combat the risks posed by corruption, an increase in domestic violent extremism, and the abuse of virtual assets,” Rosenberg said. .
Every two years, the Treasury publishes a report with recommendations on how to close gaps that could facilitate terrorist and illicit financing. Russia’s invasion of Ukraine “demonstrates that those who seek to undermine global security and stability are exploiting these same loopholes”, the report said.
The department highlighted the number of sanctions imposed on individuals and entities due to the war and the ability of sanctioned individuals to evade sanctions. Earlier this month, the Treasury barred people in the United States from providing accounting, legal and consulting services to anyone located in Russia.
The United States has worked closely with allied governments in Europe, Asia and elsewhere to impose thousands of sanctions on Russian elites, oligarchs and banks.
Earlier this year, the Treasury, Justice Department and other agencies convened a task force known as REPO – short for Russian Elites, Proxies and Oligars – to work with other countries to investigate and prosecute oligarchs and individuals allied to Russian President Vladimir Putin.
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