U.S. Warns Banks to Watch for Russian Oligarchs Investing in Commercial Real Estate

Banks should be vigilant against Russian oligarchs seeking to evade US sanctions by investing in commercial real estate, a watchdog agency of the US Treasury said.

Wealthy Russians with ties to the Kremlin have been imposed in the United States by moving their money into the commercial real estate sector, where complex financing methods and opaque ownership structures could help bad actors hide their money. The Treasury Department’s Financial Crimes Enforcement Network, better known as FinCEN, said Wednesday.

FinCEN, which doubles as the U.S. financial intelligence agency and anti-money laundering regulator, provides suspicious activity reports that financial institutions must file when they suspect a transaction may be illegal in nature. is the recipient of the . Law enforcement officers can use the reports when investigating financial crimes.

As part of its response to President Vladimir Putin’s invasion of Ukraine last year, the Biden administration has targeted wealthy Russians and blocked those with close ties to the Russian government from accessing the U.S. financial system. I put it on the blacklist for the purpose of

The warning issued by FinCEN on Wednesday is the latest effort by the Treasury Department to prevent sanctioned Russians from finding ways to circumvent such financial restrictions. Here are some red flags and typologies to do.

“Thanks to international pressure and the economic restrictions imposed on Russia by more than 30 countries for its brutal war with Ukraine, the sanctioned Russian elites are forced to move and hide their ill-gotten wealth. There are fewer and fewer options to choose from,” said Himauli Das, Executive Director of FinCEN.

Sanctioned individuals may attempt to circumvent the due diligence process by using pooled investment vehicles and offshore funds, FinCEN said in a warning. Banks generally do not have to verify the identity of individuals who own less than 25% of her fund. Sanctioned individuals can continue to lower their stakes to avoid detection while maintaining control over their funds, he said.

Oligarchs may also use shell companies, multi-tiered corporations and trusts, or transfer assets to family members or business associates to hide their ownership, the Treasury added.

Sanctioned individuals aren’t just investing in high-end or luxury real estate, according to the alert. In some cases, you may look for discreet investments that offer steady returns without attracting unnecessary attention. Such sanctions evasion strategies are as likely to occur in small and medium-sized US cities as they are in large metropolitan areas, FinCEN said.

FinCEN’s latest warning builds on a similar warning issued last year, with watchdogs urging banks to exercise extreme caution in transactions involving high-value assets such as artwork, luxury yachts and jewelry. I advise you to pay

Federal prosecutors have warned that attorneys, consultants, and other service providers working for sanctioned individuals may violate the law.

An indictment sealed earlier this week sanctions a former FBI agent and former Russian diplomat in connection with work he did for raw material tycoon Oleg Deripaska, who was put on the sanctions blacklist in 2018. Indicted for violation.

Write to Dylan Tokar at dylan.tokar@wsj.com.

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdb8

Source link

Leave a Reply

%d bloggers like this: