WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) issued an advisory today to alert U.S. financial institutions of the increasing risk that proceeds of political corruption from Nicaragua may enter or traverse the U.S. financial system. FinCEN expects that senior foreign political figures connected to the regime of Nicaraguan President Daniel Ortega could react to the perceived threat of further unrest, potential sanctions, or other factors by moving assets out of their accounts in Nicaragua or elsewhere. These assets could be the proceeds of corruption, and they may be directed into U.S. accounts, or laundered through the U.S. financial system. FinCEN requests that financial institutions file Suspicious Activity Reports (SARs), consistent with their existing Bank Secrecy Act (BSA) obligations, when they identify potential misuse of Nicaraguan public funds or potential proceeds of political corruption associated with senior foreign political figures connected to the Ortega regime.
“For years, Nicaragua’s President Daniel Ortega and his government have held fraudulent elections, suppressed civil society and independent media, and stolen money from government funds. The violence that Ortega’s regime has perpetrated against the Nicaraguan people is despicable, and the international financial community must be on guard to prevent exploitation by corrupt regime insiders,” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “FinCEN’s advisory is part of this Administration’s ongoing campaign to hold individuals who engage in human rights abuses and corruption in Nicaragua to account.”
“The Ortega regime in Nicaragua is oppressive and corrupt, and it has illicitly enriched its membership and associates by stealing and depriving Nicaraguan citizens of resources and money that belongs to them. At the same time, this regime is perpetrating human rights abuses in response to citizen protests,” said FinCEN Director Kenneth A. Blanco. “Given the oppressive and corrupt conduct of the Ortega regime, and resulting unrest in Nicaragua, people and companies associated with or linked to the Ortega regime may try to move corruption-related assets out of Nicaragua. U.S. financial institutions are an important line of defense against corrupt and bloodstained money flowing through our system, and we are advising our partners in the financial sector to be on high alert.”
Today’s advisory is underscored by the actions Treasury has taken against Nicaraguan officials involved in corruption and human rights abuse. To date, Treasury’s Office of Foreign Assets Control (OFAC) has designated four senior officials—within the Nicaraguan government, the Sandinista National Liberation Front, and ALBA de Nicaragua (ALBANISA), the company that imports and sells Venezuelan petroleum products—under the Global Magnitsky authority, which enables Treasury to target corrupt officials, human rights abusers, and their facilitators around the world. In doing so, OFAC has highlighted these officials’ roles in corrupt and violent acts, which include involvement in human rights abuses, illicitly amassing sizeable personal wealth, stealing large sums of money from municipal projects, and exploiting government funds for the personal use of Nicaraguan leaders.
FinCEN previously published a June 2018 “Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and Their Financial Facilitators” in which it identified typologies and red flags illustrating how corrupt senior foreign political figures and their facilitators access the U.S. financial system to obscure and launder the proceeds of high-level political corruption. Financial institutions may reference today’s advisory together with the June 2018 advisory.
This advisory does not address transactions of ordinary Nicaraguan citizens, who may also seek to move assets out of the country due to the current political unrest. This advisory is not intended to affect normal financial relationships between the United States and Nicaragua.
The advisory also reminds financial institutions of their obligations regarding the filing of SARs related to facilitators of corrupt senior foreign political officials. FinCEN requests that financial institutions reference this advisory by including the key term “Nicaragua FIN-2018-A005” in the SAR narrative and in appropriate SAR fields to indicate a connection between the suspicious activity being reported and the persons and activities highlighted in the advisory.
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