On February 12, 2018, the Financial Crimes Enforcement Network (“FinCEN”), a division of the Treasury Department charged with enforcing the anti-money laundering provisions Bank Secrecy Act (“BSA”), branded ABLV Bank, AS as a “financial institution of primary money laundering concern” and announced its intention, via a notice of proposed rulemaking, to effectively exclude ABLV Bank from the U.S. financial system by prohibiting U.S. banks from opening or maintaining correspondent accounts in ABLV Bank’s name or on its behalf. The designation of ABLV Bank as a primary money laundering concern takes effect immediately; the imposition of this prohibition against correspondent accounts will take effect when FinCEN issues a final rule after expiration of the administrative comment period on April 13, 2018.… Read More
On Monday, October 30, 2017, Special Counsel Robert Mueller unsealed the indictment against former Trump campaign chairman Paul Manafort and his business associate, Richard Gates. The twelve count indictment (available here) charges Manafort and Gates with multiple offenses relating to the pair’s alleged advocacy on behalf of the Government of Ukraine and Ukrainian political parties and the treatment of funds received in connection with these activities.
In particular, the indictment alleges that Manafort and Gates, acting through foreign nominees, opened numerous offshore bank accounts and deposited some $75 million in proceeds from their Ukraine-related work into these accounts. Manafort allegedly wired a portion of the funds to the United States, where he used them to buy, inter alia, $849,215 worth of men’s clothing from a single store in a little over five years, $655,500 worth of landscaping services for a Hamptons property, and a $2.85 million condominium in Manhattan.… Read More
This week the Federal Reserve Bank of San Francisco announced that East West Bank, based in Pasadena, California and with subsidiaries in China and Hong Kong, has entered into an agreement to strengthen its anti-money laundering (AML) and Bank Secrecy Act (BSA) compliance. The agreement covers many of the same areas as the New York Fed’s recent agreement with The Bank of Nova Scotia, which we discussed in a November 12 post, and calls for revamped compliance programs for key areas, including BSA/AML, Customer Due Diligence, and Suspicious Activity Monitoring and Reporting.
Of interest are two obligations the agreement imposes in connection with the Bank’s required Suspicious Activity Monitoring and Reporting.… Read More
Earlier this year, New York’s Department of Financial Services (“DFS”), the State’s banking and insurance regulator, announced that it was increasing and strengthening its enforcement efforts aimed at financial institutions’ anti-money laundering (“AML”) and Bank Secrecy Act (“BSA”) compliance deficiencies. The latest installment in the DFS’s crackdown on financial institutions came on November 5th, when the DFS and the Federal Reserve Bank of New York (the “New York Fed”) entered into an agreement with The Bank of Nova Scotia and its New York agency (collectively, the “Bank”), obligating the Bank to submit revised compliance programs for several key areas, including BSA/AML, Customer Due Diligence, and Suspicious Activity Monitoring and Reporting.… Read More
Recently I had the opportunity to speak with my former law professor, Brandon Garrett, about the DOJ’s Swiss bank program. Professor Garrett is the Justice Thurgood Marshall Distinguished Professor of Law at the University of Virginia School of Law, and author of the recent book Too Big to Jail: How Prosecutors Compromise with Corporations. Professor Garrett has written and spoken extensively about white collar corporate prosecutions and the use of non-prosecution and deferred prosecution agreements in the corporate prosecution context.
A little background to our conversation. The DOJ’s Swiss bank program provides in part a path for Swiss banks that believe that they may have committed tax-related criminal offenses in connection with undeclared bank accounts held by U.S.… Read More
The Foreign Account Tax Compliance Act, or FATCA, is designed to combat offshore tax evasion by requiring foreign financial institutions to provide the IRS with information about their U.S.-person accountholders or face a substantial penalty. In response to early criticism by the international banking and finance communities that FATCA involved American unilateral demands for information, the U.S. government entered into Intergovernmental Agreements (IGAs) with other countries, committing the signatories to reciprocal information sharing. Under the IGAs’ terms, the foreign signatory is obligated to provide (or authorize its financial institutions to provide) information to the IRS regarding accounts held in the foreign jurisdiction by U.S.… Read More
After their legal challenge to FATCA was dismissed by the Federal Court of Canada, discussed previously in this blog, two American expats sought an injunction from the Canadian Federal Court of Appeal to bar the Canadian Revenue Agency (CRA) from transmitting account data to the IRS, in accordance with the IGA between the two countries.
On September 30, 2015, the court denied the requested injunction, and noted that the CRA intended to disclose the account data later that same day, in accordance with the IGA’s terms. Apparently Canada is not taking advantage of the IRS’s recent extension of the disclosure deadline for Model 1 IGA countries, like Canada, to September 30, 2016.… Read More
The Federal Court of Canada recently dismissed a suit by two American expatriates challenging Canada’s role in implementing the Foreign Account Tax Compliance Act (FATCA), a U.S. law designed to thwart tax evasion. The ruling came as Canada prepares to make its first disclosure to the United States of information regarding financial accounts held in Canada by U.S. persons pursuant to the Intergovernmental Agreement (IGA) between the two countries, which was enacted in connection with FATCA.
FATCA, enacted in 2010 and effective July 1, 2014, is designed to prevent tax evasion by making it nearly impossible for U.S. taxpayers to maintain undisclosed offshore assets.… Read More