US Treasury Publishes National Money Laundering and Terrorist Financing Risk Assessments
17 Sep 2015

The US Treasury Department has published two reports: the National Money Laundering Risk Assessment (‘NMLRA’) and the National Terrorist Financing Risk Assessment (‘NTFRA’).

The stated purpose of these two assessments is: “to help the public and private sectors understand the money laundering and terrorist financing methods used in the United States, the risks that these activities pose to the U.S. financial system and national security, and the status of current efforts to combat these methods”.

A previous NMLRA was published by the US Treasury in 2005, but this is the first time a NTFRA has been produced.

The reports were produced using the 2013 guidance from the Financial Action Task Force (‘FATF’).

The press-release that accompanied the issuing of the two reports stated that:

“The NMLRA finds that the United States has effectively kept pace with innovation, such that, criminals pursuing money laundering opportunities rely on costly and burdensome methods to mask their identities from financial institutions in order to open and maintain accounts.  These include, but are not limited to, using cash, other monetary instruments, shell companies, and conducting transactions below customer identification thresholds.  The report also finds that the U.S. framework for anti-money laundering and counter terrorist financing effectively narrows many of the most significant vulnerabilities that money launderers seek to exploit through a core set of tools, including targeted financial sanctions, law enforcement investigations and prosecutions and regulatory preventive measures, and by working to enhance international standards.

The NTFRA finds that the U.S. Government has made it substantially more difficult for terrorist organizations to raise and move money through the U.S. financial system since the September 11, 2001 attacks.  A notable trend highlighted in the report is a decrease in the use of the U.S banking system for terrorist financing-related transactions, as terrorists are forced into more expensive and less efficient methods to facilitate terrorist financing, such as cash smuggling.  Such channels outside of the regulated financial system are riskier than straightforward bank transfers, making them more vulnerable to disruption and exposure.  Nonetheless, the wealth and resources of the United States will continue to make it an attractive target for a wide range of terrorist organizations seeking to fund their activities, and the risk of terrorist financing through the U.S. financial system persists. “

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