The U.S. Federal Government through its Financial Crimes Enforcement Network (“FinCEN”) revised last year’s Advisory on the Use of the Financial System to Facilitate Ransom Payments. In short, the U.S. Government is underscoring the importance of due diligence and compliance obligations required by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”).[2]
What You Need to Know:
The latest Advisory requires that financial institutions must comply with currency-transaction and suspicious-activity reporting requirements and continually update their compliance programs to establish procedures in advance for determining and assessing ransomware threats as well as prevent the laundering of ransomware proceeds to avoid criminal and civil penalties under the laws administered by DOJ, FinCEN, and OFAC.
FinCEN Urges Financial Institutions to Revise Compliance Programs to Account for Recent Trends in Ransomware Attacks
In response to increased frequency and severity of ransomware attacks, FinCEN has updated and replaced its October 1, 2020 Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments. As noted in the Advisory, all entities (including victims) involved in the chain of facilitating ransomware payments are at risk of criminal and civil penalties. Accordingly, appropriate due-diligence and compliance procedures are necessary to limit exposure to ransomware and sanctions-related violations. Failure to implement a risk-based compliance program—or a failure to ensure that it is up to date—may result in increa ..
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