May 3, 2019

FINCEN warns against Venezuelan money laundering

The Financial Crimes Enforcement Network of the United States Department of the Treasury has issued an updated Advisory, warning financial institutions about methods used by senior Venezuelan politicians and their associates to move ill-gotten gains out of Venezuela.  The advisory, which updates previous guidance issued in September 2017, describes financial red flags that may assist US institutions to identify and report suspicious activity.

The Advisory gives several examples of public corruption in Venezuela, such as abuse of the government-sponsored alimentary distribution program in Venezuela by Los Comités Locales de Abastecimiento y Producción (Local Supply and Production Committees, or “CLAP”).  According to FINCEN, the program was established in 2016 to provide subsidized food rations to the Venezuelan populace, but instead is being used by the Maduro regime to facilitate embezzlement and price manipulation by corrupt regime insiders.  Another focus of the Advisory is digital currencies, which FINCEN asserts have been used as vehicles by senior Venezuelan officials to launder money.  The Advisory also enumerates US government actions, such as the designation of individuals and organizations and blocking of their assets,  aimed at addressing the situation in Venezuela.

FINCEN press release | FINCEN Advisory