USA Treasury Department Publishes National Money Laundering Risk Assessment (June, 25th 2015)
Reports Identify Key Illicit Finance Concerns to the United States; Enable the Public and Private Sectors to More Effectively Manage and Combat Illicit Finance Risks
The U.S. Department of the Treasury today issued the National Money Laundering Risk Assessment (NMLRA) and the National Terrorist Financing Risk Assessment (NTFRA). The purpose of these assessments is to help the public and private sectors understand the money laundering and terrorist financing methods used in the United States, the risks that these activities pose to the U.S. financial system and national security, and the status of current efforts to combat these methods. In doing so, these assessments enable the U.S. Government and financial institutions to more effectively detect and combat illicit finance.
This is the first NTFRA, and the NMLRA builds and expands on a previous Treasury money laundering report issued in 2005. The methodology for today’s reports is based on guidance set out in 2013 by the Financial Action Task Force (FATF), the international standard-setting body for anti-money laundering and counter-terrorist financing safeguards, of which the United States is a founding member. The FATF requires all national governments to demonstrate their understanding of the money laundering and terrorist financing risks facing their financial systems. The assessments issued today will help to inform the FATF’s ongoing review of the United States regarding our compliance with the FATF Recommendations – which are global standards focused on these issues.
The United States is the world’s largest financial system and U.S. financial institutions play a central role in the global economy, processing trillions of dollars of transactions from around the world every day. While this position exposes the United States to increased risks for illicit finance, the U.S. Government has developed a robust regulatory framework, complemented by law enforcement and supervision efforts, which make it more difficult and costly for criminals and terrorists to access and use the U.S. financial system.
“Today’s assessments underscore our dedication to better understand and address the risk of illicit finance,” said Adam J. Szubin, Acting Under Secretary for Terrorism and Financial Intelligence. “This comprehensive review will better inform the U.S. Government and our private sector partners about how to further safeguard and strengthen the U.S. economy and national security.”
The NMLRA finds that the United States has effectively kept pace with innovation, such that, criminals pursuing money laundering opportunities rely on costly and burdensome methods to mask their identities from financial institutions in order to open and maintain accounts. These include, but are not limited to, using cash, other monetary instruments, shell companies, and conducting transactions below customer identification thresholds. The report also finds that the U.S. framework for anti-money laundering and counter terrorist financing effectively narrows many of the most significant vulnerabilities that money launderers seek to exploit through a core set of tools, including targeted financial sanctions, law enforcement investigations and prosecutions and regulatory preventive measures, and by working to enhance international standards.
The NTFRA finds that the U.S. Government has made it substantially more difficult for terrorist organizations to raise and move money through the U.S. financial system since the September 11, 2001 attacks. A notable trend highlighted in the report is a decrease in the use of the U.S banking system for terrorist financing-related transactions, as terrorists are forced into more expensive and less efficient methods to facilitate terrorist financing, such as cash smuggling. Such channels outside of the regulated financial system are riskier than straightforward bank transfers, making them more vulnerable to disruption and exposure. Nonetheless, the wealth and resources of the United States will continue to make it an attractive target for a wide range of terrorist organizations seeking to fund their activities, and the risk of terrorist financing through the U.S. financial system persists.
The review for these assessments was led by the Treasury Department’s Office of Terrorist Financing and Financial Crimes, and developed in close coordination with offices and bureaus in the Treasury Department, the Department of Justice, the Department of Homeland Security, the Department of State, and across the intelligence community and staffs of the Federal functional regulators.
- For the 2015 National Money Laundering Risk Assessment, click here.
- For the 2015 National Terrorist Financing Risk Assessment, click here.
- Anti-Money Laundering in Italy - 2014 Report, final version (June, 21st 2015)