On 3rd May, FinCEN issued an updated Advisory (updating the last one of September 2017) to alert financial institutions of continuing widespread public corruption in Venezuela under the regime of Nicolas Maduro.  It also alerts financial institutions to additional methods utilized by corrupt Venezuelan senior political figures (and their associates, family members, and front persons) to move and hide corruption proceeds.  The information includes details of misuse of Venezuela’s government-sponsored food distribution program:  Los Comités Locales de Abastecimiento y Producción (“Local Supply and Production Committees”), commonly referred to as the “CLAP program”.  FinCEN has identified trade-based money laundering as a primary mechanism used by high-level, corrupt Venezuelan senior political figures, their family members, and associates to evade sanctions and facilitate the movement and laundering of proceeds related to corruption, fraud, and embezzlement, including to divert Venezuelan government funding for the CLAP program into their own accounts – with the use layered international wire transfers, over-invoicing methods, front and shell companies across multiple international jurisdictions, and nested accounts in foreign-denominated currency to divert illicit gains into personal accounts.  Many of these front and shell companies and their nested accounts are, it says, located in jurisdictions whose corporate formation regimes and financial sector offer limited transparency that impedes AML/CFT controls.  The Advisory lists a number of “red flags” for Venezuelan government corruption.



Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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