The Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis on the financial activity of Russian oligarchs. The report focuses on trends seen in Bank Secrecy Act (BSA) reports filed between March 2022 and October 2022 involving Russian oligarchs, high-ranking officials, and sanctioned individuals. The report also highlights the value of BSA data filed by regulated financial institutions.
FinCEN and BSA reporting contribute to the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force, led jointly by the Departments of the Treasury and Justice. The REPO Task Force has leveraged extensive multilateral coordination to block or freeze more than $30 billion worth of sanctioned Russians’ assets, freeze or seize sanctioned persons’ high-value goods, and heavily restrict sanctioned Russians’ access to the international financial system.
FinCEN examined BSA reports filed on Russian oligarchs, high-ranking officials, and sanctioned individuals, and identified 454 BSA reports detailing tens of billions of dollars in suspicious activity. Some of the trends in the data include:
- Russian oligarchs moved or transferred funds and assets around the time of the Russian invasion of Ukraine in February 2022—Several Russian oligarchs transferred beneficial ownership of their companies, trusts, or accounts to their children, other family members, or close business associates
- Russian oligarchs purchased high-value goods or property in 2022—This included jewelry, art, and property or real estate in other countries leading up to the invasion.
- BSA data indicated potential changes in longstanding oligarch-linked financial flows related to U.S. properties and companies—Several oligarchs moved funds from accounts in Russia to accounts in other countries, including the United States, soon before or around the time of the Russian invasion, and used the funds for property-related expenses.
In regard to the real estate Russian oligarchs obtained, the analysis states, “BSA data and open source reporting identified that residential or commercial real estate, specifically in Turkey and the UAE, has increasingly become a safe haven for Russian wealth, both legitimate and illicit, since the beginning of the Russian invasion at the end of February 2022. Financial institutions also filed on several oligarchs who sent payments to real estate investment companies or companies specializing in the real estate market.”
It further stated, “Several oligarchs moved funds from accounts in Russia to accounts in other countries, including the United States, usually right before or around the time of the Russian invasion, and used the funds for property-related expenses. In some cases, these oligarchs had been transferring funds between their Russia-based accounts and their U.S.-based accounts for years, but the frequency and value of the transactions increased around the time of the invasion, potentially for fear of not being able to use or transfer funds once hostilities commenced, according to BSA reports. Some of this activity may be disguised by using accounts linked to shell companies, family members, or associates. In addition to U.S.-based accounts, several oligarchs owned or partially owned assets, companies, or property in the United States. While this activity is not inherently illegal or suspicious, financial institutions noted that, in most cases, the source of funds from Russia was unknown and could be linked to corruption.”
Since March 2022, FinCEN has also published several alerts urging U.S. financial institutions to be vigilant against efforts to evade the expansive sanctions and other U.S.-imposed restrictions implemented in connection with Russia’s unprovoked military invasion of Ukraine. These alerts provide select red flags to assist in identifying potential sanctions evasion activity and remind financial institutions of their BSA reporting obligations, including with respect to convertible virtual currency. Financial institution filers noted these Russia-related alerts in 284 of the 454 BSA reports analyzed for this Financial Trend Analysis.