To enhance efforts to prevent sanctioned Russian individuals from accessing the global financial system, the Treasury and Justice Departments, in concert with Australia, Canada, the European Commission, Germany, Italy, France, Japan, and the UK yesterday held the first meeting of the Russian Elites, Proxies, and Oligarchs (REPO) multilateral task force that the leaders of those countries announced last month. The task force will ensure the effective implementation of the significant sanctions imposed on Russian individuals, firms, and financial institutions after Russia’s invasion of Ukraine by identifying their assets, freezing them, and sharing intelligence that can help participating jurisdictions limit the ability of sanctioned individuals to conceal them. The newly formed Justice Department KleptoCapture task force and the Financial Crimes Enforcement Network (FinCEN), will support the international effort by helping detect and prosecute criminal conduct associated with the movement of illicit assets, sanctions evasion, and associated unlawful financial activity.
- In conjunction with the first meeting of the REPO task force, Treasury has publicly released the names of 28 sanctioned Russian oligarchs and government officials out of a list of 50 that are priorities for the United States. The list includes oligarchs Oleg Deripaska, Kremlin spokesman Dmitry Peskov, and President Putin himself, among others.
- FinCEN yesterday issued an alert highlighting select red flags to help identify suspicious transactions and reminding financial institutions about the importance of their reporting obligations under the Bank Secrecy Act. The bureau underscores that Russian elites or their proxies may use real estate, luxury goods, and other high-value assets as a store of value, a medium of exchange, or an investment to evade global sanctions.
- Treasury yesterday also launched the Kleptocracy Asset Recovery Rewards Program that will be administered by the department’s Office of Terrorism and Financial Intelligence (TFI), offering rewards for information leading to seizure, restraint, or forfeiture of assets linked to foreign government corruption. TFI will work in coordination with the Justice and State Departments, as well as federal law enforcement agencies.
These efforts align with the Biden administration’s focus on corruption and kleptocracy as core national security interests and efforts to increase coordination with foreign and private-sector partners described in last year’s sanctions review.
These efforts suggest that the US and participating governments will keep an extra watchful eye for violations of sanctions, efforts to hide assets, and other issues that will undermine efforts to hold Russia accountable for its attack on Ukraine. FiveBy advises financial institutions and firms in the real estate, high-value arts, precious metals or gemstones, and other vulnerable sectors, to pay particular attention to transactions that employ complex corporate structures and shell companies, examine third parties involved in financial transactions for connections to Russian elites or government officials, and monitor accounts for sudden changes in business activities without an apparent business reason—especially in risky jurisdictions and where new transactions involve convertible virtual currencies and Russian-linked investments or firms. Whenever possible, firms and financial institutions should engage with linguistic, regional, and illicit finance experts who can help them conduct research into possible clients and business partners and avoid regulatory pitfalls.