Because of their access to the U.S. Federal Reserve System, global banks’ U.S. operations serve as switchboard operators for dollar transactions, allowing them to see who is sending what money where and when.
The banks could serve as a chokepoint, cutting off the flow of dirty money around the world, or at least to anonymous shell companies. But banks’ financial incentives run toward keeping dirty money moving. And too often, that is exactly what they do.
In half of the FinCEN Files reports, banks didn’t have information about one or more entities behind the transactions. Shadowy entities with ties to the Baltics, known as formation agencies, use a loophole in U.K. corporate law to mass produce anonymous U.K.-registered shell companies and help them set up accounts in corrupt Baltic banks. Nine agencies alone set up 2,447 companies found in the FinCEN Files.
“As FinCEN has stated previously, the unauthorized disclosure of SARs is a crime that can impact the national security of the United States, compromise law enforcement investigations, and threaten the safety and security of the institutions and individuals who file such reports,” FinCEN said.seeking public comment
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