The FinCEN Files

The FinCEN files consist of more than 2500 documents. The majority of which were files submitted between 2000 and 2017 by banks to the US authorities. These files raise questions about the client’s activities and are heavily secured by the international banking system. They are used by banks to report any suspicious activity but they are not indicative of fraud or crime.

The documents were leaked to investigative journalists from around the world, which circulated them to 108 news organizations in 88 countries. Hundreds of journalists have been sifting through the complex documents, revealing practices that the banks would not like the public to learn.

Image source: icij.org

FinCEN is the US Financial Crimes Enforcement Network. These are the people who fight financial fraud at the US Treasury. It is mandatory to inform FinCEN about transactions made in US dollars even if they have taken place outside the US.

Another important acronym to remember is SARs which stands for Suspicious Activity Reports. These reports are concerns related to recorded transactions. A bank must fill out the SARs if they suspect any illegal activity and send it to the authorities.

This is important because it is the responsibility of banks to make sure they are not helping to launder money.

According to law, banks must know the identities of their clients. It is not enough to just fill out the SARs and keep on taking illegal money from clients and relying on the authorities to tackle the problem. If banks have proof of illegal activities they should immediately halt moving the cash.

Fergus Shiel from the International Consortium of Investigative Journalists mentioned that the leaked files provided and insight into the level of information banks are aware of regarding the circulation of dirty money around the world. He also said the documents in the FinCEN files cover about $2tn of transactions and it is only the tip of the iceberg.

What has been revealed?

• HSBC allowed fraudsters to circulate millions of dollars around the world even though HSBC was aware that it was a scam through US investigators.

• JP Morgan allowed a company to move more than $1bn without knowing the identity of the owner through an account in London. Later on, it was revealed the company might be owned by a mobster on the FBI’s 10 Most Wanted list.

• Chelsea owner Roman Abramovich once held secret investments in footballers not owned by his club through an offshore company.

• Deutsche Bank moved money launderers' dirty money for organized crime, terrorists, and drug traffickers.

• Standard Chartered moved cash for Arab Bank for more than a decade after clients' accounts at the Jordanian bank had been used in funding terrorism.

And many more…

Image source: bbc.com

Lastly, there have been many big leaks of financial information over the years but the FinCEN papers are different because they are not just documents from one or two companies- they come from a number of banks. They display potential illegal activities among institutions and individuals and raise the question about why the banks which have noticed the suspicious activities did not report to the authorities. Moreover, FinCEN stated that the leak could compromise the US national security, investigations, and safety of the institution or individuals who file the reports.

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About the Author

Mahmuda Begum Meem

Mahmuda Begum Meem is currently a year 2 student at the University of Nottingham Malaysia majoring in Economics. She loves to read, write, and watch movies during her spare time. She hopes to be a well-known economist one day.