The US Treasury Department has unveiled its illicit financing strategy, which aims to circumvent Russian sanctions

The US Treasury Department has unveiled its illicit financing strategy, which aims to circumvent Russian sanctions

The US Treasury announced a new plan to tackle illicit finance on Friday, including banning the use of shell corporations and all-cash real estate acquisitions, as well as cracking down harder on Russian sanctions evasion. The US has placed a slew of sanctions on Russia in the aftermath of its February invasion of Ukraine, targeting its central bank, key lenders, billionaires, and Russian President Vladimir Putin, as well as attempting to take the assets of targeted Russians.

The Treasury said it would seek to close anti-money laundering and countering terrorist financing loopholes, which it said are exploited by illicit actors, including Russian oligarchs, to anonymously access the U.S. financial system. The Russian Embassy in Washington did not immediately respond to a request for comment. Kremlin spokesperson Dimitry Peskov has previously said ordinary European citizens would suffer from Western sanctions imposed on Russia.

“Illicit finance is a major national security threat and nowhere is that more apparent than in Russia’s war against Ukraine, supported by decades of corruption by Russian elites,” the Treasury’s Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg said in a statement. Russian elites and oligarchs under U.S. sanctions, as well as their proxies, are seeking to anonymize and hide bank accounts, securities, real estate, gold and other assets, the Treasury said, as they try to evade sanctions to support Putin’s war.

The Treasury said it would continue to identify and seize U.S. assets owned by Russians under U.S. sanctions and better detect Russian sanctions evasion. Russian elites and oligarchs can get money into the U.S. financial or the international financial system by hiding behind legal entities when they don’t have to disclose the beneficial owner, a Treasury official said.

 

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