Oversight of the Financial Crimes Enforcement Network (FinCEN) and the Office of... (EventID=116841)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Wednesday, February 14, 2024, at 10:00 a.m. (ET) full Committee Chairman McHenry and Ranking Member Waters will host a hearing entitled, “Oversight of the Financial Crimes Enforcement Network (FinCEN) and the Office of Terrorism and Financial Intelligence (TFI)." ___________________________________ Witnesses for this one-panel hearing will be: • The Honorable Brian E. Nelson, Undersecretary for Terrorism and Financial Intelligence (TFI), U.S. Department of the Treasury • Ms. Andrea Gacki, Director, Financial Crimes Enforcement Network (FinCEN) ___________________________________ General Background Purpose of Hearing This is the second hearing with the Director of FinCEN as required by statute. Section 5336 (c)(11) of the Corporate Transparency Act requires the Director to testify no later than March 31st of each year, beginning in 2022 for five years. This hearing will give Members of the Financial Services Committee (Committee) the opportunity to hear from and question FinCEN on its operations, the status of the Beneficial Ownership reporting regime, effective January 2024, and other anti-money laundering initiatives it may be undertaking. The hearing will also examine the history and effectiveness of the Bank Secrecy Act (BSA) and subsequent amendments over the last fifty years, including the most recent amendments in the Anti-Money Laundering Act of 2020. Terrorism and Illicit Finance The Treasury Department has a dedicated office to develop and implement official U.S.government efforts to combat the financing of terrorism (CFT). The Office of Terrorism and Financial Intelligence (TFI) was established in 2004 to marshal Treasury’s policy, enforcement, regulatory, and intelligence functions “with the twin aims of safeguarding the financial system against illicit use and combating rouge nations, terrorist facilitators… and other national security threats.” TFI is currently led by Undersecretary Brian Nelson, and is comprised of the Office of Terrorist Financing and Financial Crimes (TFFC), the Office of Intelligence and Analysis (OIA), the Office of Foreign Assets Control (OFAC), the Financial Crimes Enforcement Network (FinCEN), and the Treasury Executive Office for Asset Forfeiture (TEOAF). TFFC is the policy development and outreach office for TFI, which, among other priorities, leads the U.S. delegation to the Financial Action Task Force (FATF). OIA, which is a formal member of the U.S. Intelligence Community, contributes all-source financial threat assessments and products. OIA’s analysts have been central in interagency efforts to address terrorist financing such as the Afghanistan and Iraq Threat Finance Cells. OFAC administers multiple sanctions programs to block transactions and freeze assets within the United States of specified foreign terrorist, criminal, and political entities, including specially designated individuals and nation states. FinCEN is a separate Treasury bureau which reports to the Undersecretary for TFI. FinCEN administers the Bank Secrecy Act (BSA) for Treasury, including collecting and analyzing data on financial crimes, investigating violations of the BSA, and enforcing penalties for BSA violations. Both FinCEN and OFAC pre-date the formation of TFI. Terrorist Financing Terrorist financing describes a form of financial crime in which an individual or entity solicits, collects, or provides funds “with the intention that [these funds] may be used to support terrorist acts or organizations.” The U.S. government’s overall counterterrorism strategy is guided by the 2011 National Strategy for Counterterrorism, which encourages expanding and enhancing “efforts aimed at blocking the flow of financial resources to and among terrorist groups and to disrupt terrorist facilitation and support activities….” According to the most frequently cited typologies report released by the FATF, the international standard-setting body for anti-money laundering (AML) and CFT safeguards, the most common sources of terrorist financing include state sponsors, private donors, charitable entities, self-funding mechanisms, and various criminal activities like drug trafficking. Recognizing that terrorists, including the Islamic State of Iraq and Syria (ISIS), frequently evolve as better methods of funding and finance arise, FATF re-evaluated terrorist financing methods in late-2015, finding that groups are increasingly fundraising through social media, the exploitation of new payment products like virtual currencies, and the appropriation of natural resources and cultural items for profit. According to Treasury, these... Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=411170