Leaked FinCEN documents have this week revealed how some of the world’s biggest banks have allowed criminals to move dirty money all over the world.
The documents include around $2tn of transactions and also reveal how Russian oligarchs have used banks to avoid sanctions that were meant to prevent them from accessing their money in the West.
This week’s leak is the latest in a string of revelations over the past five years that have brought attention to secret deals, financial crime and money laundering.
So what are the FinCEN files? The FinCEN files are more than 2,500 documents, most of which are files sent to the US authorities from banks between 2000 and 2017 raising concern about their clients’ activity.
Whilst banks use them to report suspicious activity or data changes, they aren’t proof of criminal activity and they are some of the international banking industry’s closest guarded secrets.
FinCEN is the US Financial Crimes Enforcement Network who are the team within the US Treasury who investigate and combat financial crimes. Any concerns regarding transactions made in American dollars are sent to FinCEN, even if the transactions themselves took place outside of the US.
If a bank is concerned that their client is up to suspicious or illegal activity then they must fill out a FinCEN report which is then sent on to the authorities.
The leak of the documents has shed light on how much, or in some cases how little, some of the leading international banking giants know about their clients and their behaviour. By law banks are required to ensure they do not assist their clients in laundering money and must know who their clients are. It’s not enough to file a report on suspicious activity, they must act to stop the trail of moving cash.
The FinCEN document leak revealed a variety of information on many leading banking giants including HSBC, JP Morgan and Barclays.
The leak revealed that HSBC allowed fraudsters to move millions of dollars around the world, even after the US authorities made them aware that the money was stolen. JP Morgan were revealed to have allowed a client to move more than $1bn through a London account without knowing who owned it. Meanwhile Barclays were used by one of the closest allies of Russian President Vladimir Putin in order to avoid sanctions meant to be in place to prevent him from using financial services in the west.
Deutsche Bank meanwhile are thought to have facilitated the moving of money for organised crime, drug trafficking and terrorists while Standard Chartered moved cash for Arab Bank for over a decade after client accounts at the Jordanian bank had been used to fund terrorists.
Over recent years there have been a number of leaks revealing financial information however the FinCEN papers differ in the fact that they provide information on numerous big name banks rather than just one.
The leak has raised a series of questions as to why banks have not acted when they’ve suspected suspicious or illegal activity has been underway and FinCEN have already announced plans to overhaul its anti-money laundering programmes in the hope of preventing future leaks.