The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today named Banca Privada d’Andorra (BPA) as a foreign financial institution of primary money laundering concern pursuant to Section 311 of the USA PATRIOT Act (Section 311) and issued a related Notice of Proposed Rulemaking (NPRM). This finding and NPRM are based on information indicating that, for several years, high–level managers at BPA have knowingly facilitated transactions on behalf of third–party money launderers acting on behalf of transnational criminal organizations.
“BPA’s corrupt high–level managers and weak anti–money laundering controls have made BPA an easy vehicle for third–party money launderers to funnel proceeds of organized crime, corruption, and human trafficking through the U.S. financial system,” said FinCEN Director Jennifer Shasky Calvery. “Today’s announcement is a critical step to address this compromised financial institution’s egregious conduct and send a message that the United States will take strong measures to protect the integrity of its financial system from criminal actors.”
Today’s action also highlights the threat posed by third-party money launderers to financial institutions. Transnational criminal organizations often encounter obstacles in achieving direct access to financial institutions internationally and in the United States because of their illicit activities. To obtain access to financial institutions, some transnational criminal organizations use the services of third-party money launderers, including professional gatekeepers such as attorneys and accountants.
BPA’s activity of primary money laundering concern occurred largely through its Andorra headquarters. BPA is one of five Andorran banks and is a subsidiary of the BPA Group, a privately–held entity. The activity involved the proceeds of organized criminals in Russia and China, foreign corruption, and other criminal activity. BPA accesses the U.S. financial system through direct correspondent accounts held at four U.S. banks, through which it has processed hundreds of millions of dollars. BPA’s high–level managers established financial services tailored to its third–party money launderer clients to disguise the origins of funds. In exchange for some of these services, BPA’s high–level managers accepted payments and other benefits from their criminal clients.
FinCEN has delivered to the Federal Register a notice of its finding that explains the basis for this action. In addition, FinCEN has delivered to the Federal Register an NPRM that, if adopted as a final rule, would prohibit covered U.S. financial institutions from opening or maintaining correspondent or payable–through accounts for BPA, and for other foreign banks being used to process transactions involving BPA. The NPRM also proposes to require covered financial institutions to apply special due diligence to their correspondent accounts maintained on behalf of foreign banks to guard against processing any transactions involving BPA. These measures are subject to a 60–day comment period, beginning the day the NPRM is published in the Federal Register.
As part of the notice of its finding, FinCEN’s action describes a high–level manager at BPA in Andorra who provided substantial assistance to Andrei Petrov, a third-party money launderer working for Russian criminal organizations engaged in corruption. In February 2013, Spanish law enforcement arrested Petrov for money laundering. Petrov is also suspected to have links to Semion Mogilevich, one of the FBI’s “ Ten Most Wanted” fugitives.
