Recent Developments in BSA/AML: FinCEN Targets Money Laundering Infrastructure with Geographic Targeting Order in Miami

Sullivan & Cromwell LLP - April 22, 2015

Yesterday, the Financial Crimes Enforcement Network (“FinCEN”) issued a Geographic Targeting Order (“GTO”) that requires approximately 700 electronics exporters located near Miami, Florida to record and report to FinCEN additional information on certain transactions involving cash and certain negotiable instruments.  The GTO is aimed at shedding light on currency  transactions that may be tied to trade-based money laundering (“TBML”) schemes, which are commonly used by drug cartels to launder their illicit proceeds.   This highlights for financial institutions the risks associated with criminal organizations using legitimate activity to facilitate their illicit dealings.  Financial institutions should continue to appropriately monitor for any red flags identified by FinCEN that may signify suspicious funnel account and TBML activity, and report such activity, as appropriate, on a Suspicious Activity Report (“SAR”) with FinCEN.