issued a final rule prohibiting U.S. financial institutions from opening or maintaining correspondent accounts for,
or on behalf of, the bank.
FinCEN also issued an advisory to alert financial institutions of red flags of illicit North Korean schemes, including
the use of financial representatives, front and shell companies, trading companies, and financial institutions
operating in areas bordering North Korea. Read the final rule. Read the advisory.
FINCEN ADVISORY TO FINANCIAL INSTITUTIONS ON DISASTER
FinCEN is warning financial institutions of fraudulent transactions in the wake of disasters, including recent
hurricanes and wild fires. Financial institutions should pay particular attention to benefits fraud, charities fraud,
and cyber-related fraud, FinCEN's advisory said.
Benefits fraud occurs when individuals apply for assistance benefits to which they are not entitled, and may put
banks at risk when such individuals seek to obtain cash from emergency assistance payments. Charities fraud
may occur when criminals seek to exploit vehicle donations for their own gain. Cyber-related fraud includes
financial fraud and malware. The advisory reports that, as of Sept. 2017, more than 743 domain names were
registered with the word "Irma," and a combination of words such as "help," "relief," and "claims," among others.
Financial institutions should be aware of hurricane-related or wild fire phishing campaigns, malicious websites,
and associated malware.
The advisory identifies possible signs of fraudulent activity and red flags, and encourages financial institutions to
report suspicious activity and file a Suspicious Activity Report (SAR) when warranted. " . . . [T]he presence or
absence of a red flag in any given transaction is not by itself determinative of whether a transaction is suspicious.
Financial institutions should consider additional factors such as a customer’s overall financial activity and whether
it exhibits multiple red flags, as well as the specifics of their own risk profiles and business models as those relate
to the information and red flags outlined in this advisory." FinCEN requests that financial institutions reference
this advisory and include the key term, “Disaster-related Fraud” in the SAR narrative when filing SARs. Read the
U.S. AMENDS CUBA SANCTIONS RULES
The Office of Foreign Assets Control and the Department of Commerce's Bureau of Industry and Security
announced amendments, effective on November 9, to the Cuban Assets Control Regulations and Export
Administration Regulations, respectively, to implement changes to the Cuba sanctions program announced by
the President in June. At the same time, the Department of State updated the Cuba Restricted List to help
implement these changes. Many of the changes expand the list of those associated with the Cuban government
who are deemed off-limits. Among the changes adopted by the Administration:
Persons subject to U.S. jurisdiction will now be prohibited from engaging in certain direct financial
transactions with entities and sub-entities identified by the State Department on the Cuba Restricted List;
Although a number of transactions will be banned going forward, commercial engagements in place prior
to the State Department’s listing of any entity or sub-entity will continue to be authorized, as will most
previously arranged travel;
BIS is simplifying and expanding its license exception that authorizes certain license-free exports to the
Cuban private sector;
Americans engaging in certain authorized travel will now be required to do so under the auspices of an
organization that is a person subject to U.S. jurisdiction, accompanied by a U.S. person who is a
representative of the sponsoring organization;
OFAC is amending the definition of the term prohibited officials of the Government of Cuba to include
certain additional individuals.