The Financial Crimes Enforcement Network (FinCEN) is alerting all financial institutions to be vigilant against efforts to evade the expansive sanctions and other U.S.-imposed restrictions implemented in connection with the Russian Federation’s further invasion of Ukraine. The United States is committed to supporting Ukraine, and, along with key U.S. partners and allies around the globe, has imposed unprecedented economic pressure measures on Russia and Belarus. This alert provides select red flags to assist in identifying potential sanctions evasion activity and reminds financial institutions of their Bank Secrecy Act (BSA) reporting obligations, including with respect to convertible virtual currency (CVC).
It is critical that all financial institutions, including those with visibility into CVC flows, such as CVC exchangers and administrators—generally considered money services businesses (MSBs) under the BSA—identify and quickly report suspicious activity associated with potential sanctions evasion, and conduct appropriate risk-based customer due diligence or, where required, enhanced due diligence (see Reminder of Relevant BSA Obligations below). FinCEN also strongly encourages all financial institutions to make full use of their ability to share information consistent with Section 314(b) of the USA PATRIOT Act, and consider how the use of innovative tools and solutions may assist in identifying hidden Russian and Belarusian assets.