In her recent remarks at the Royal United Services Institute’s conference on “Tackling Money Laundering: Towards a New Model for Information Sharing,” FinCEN Director Jennifer Shasky Calvery continued to emphasize the important role that reports FinCEN receives from financial institutions play in efforts to counter all types of illicit funding. Those reports contain a wealth of high value information that FinCEN is able to analyze and disseminate to law enforcement for their prosecution of illicit actors. This information, according to Director Shasky Calvery, is “essential” to efforts to disrupt, degrade and ultimately defeat terrorist groups. Director Shasky Calvery noted that FinCEN plays an important role specifically with respect to what the Director identifies as the perhaps the greatest current threat – the threat posed by terrorist groups such as al-Qa’ida and the Islamic State in Iraq and the Levant.
Director Shasky Calvery also discussed the role of Financial Intelligence Units (FIUs) as a national center for the collection and analysis of suspicious transaction reports and other information relevant to money laundering and terrorist financing, emphasizing that FIUs are only as good as the reports they receive from financial institutions. In particular, she recognized the Egmont Group of FIUs for its provision of a global platform for the sharing of financial intelligence between governments while at the same time cautioning that it should not be viewed as a “panacea” because FIUs are limited by home country privacy and confidentiality restrictions. The Egmont Group, currently comprised of 147 member jurisdictions, provides a platform for the secure exchange of financial intelligence to counter money laundering and terrorism.
In addition, Director Shasky Calvery identified efforts in the U.S. at “ongoing experimentation” in the area of information sharing by and between FinCEN, law enforcement, financial institutions and regulators, including:
- Pilot initiatives by FinCEN to improve information sharing between governments and industry under Section 314 of the PATRIOT Act;
- The Bank Secrecy Act Advisory Group, which consists of government and private sector representatives and through which Treasury receives advice on BSA operations; and
- FinCEN’s Financial Institutions Advisory Program, through which FinCEN seeks to share its insights on financial crime threats with financial institutions.
According to Director Shasky Calvery, these “experiments” have facilitated efforts to address specific threats, such as red flags associated with the illicit use of funnel accounts and the movement of funds associated with human trafficking or smuggling, which had their genesis in the advisory program. However, the Director stressed two significant areas requiring further national and multilateral legal and policy action:
- lack of sufficient access by many FIUs to relevant national information; and
- legal limitations preventing financial institutions from providing their multinational view of terrorist financing networks to all affected jurisdictions.