FinCEN Issues New Guidance for Banks to Identify Hezbollah-Linked Transactions

The Financial Crimes Enforcement Network (FinCEN), the anti-money laundering division of the U.S. Department of the Treasury, has issued new guidance to banks on how to detect transactions that may be funding Hezbollah. This Lebanese Shia Islamist political party and paramilitary group is currently involved in conflict with Israel.

FinCEN director Andrea Gacki highlighted that Hezbollah’s involvement in the Middle East conflict has “exacerbated the risk of a wider regional war,” noting that the group's attacks on Israeli territory have “displaced thousands and killed innocent civilians.”

The Treasury’s notice outlines Hezbollah’s involvement in various sectors, including oil, gas, gold, and currency exchanges. Additionally, the group has ties to transactions related to real estate, high-value art, construction, and import-export businesses. The notice emphasizes that Hezbollah’s money-laundering activities are concentrated in Europe, West Africa, and South America.

The Treasury identified Hezbollah’s particular interest in the “tri-border area of Argentina, Brazil and Paraguay,” where it is involved in both licit and illicit activities. The organization has also shown interest in free trade zones in Panama, using them as a means to generate revenue. These operations often involve coordination with drug cartels and organized crime groups.

In its alert, FinCEN outlined seven red flags that financial institutions should be aware of when identifying Hezbollah-related criminal transactions. Among these indicators are any activities connected to entities on lists of sanctioned companies or banks designated as a “primary money-laundering concern.”

Gacki stated, “As part of the Treasury Department’s enduring campaign against Hezbollah’s finances and in response to Hezbollah’s attacks against Israel, we are issuing this alert to help financial institutions uncover Hezbollah’s illicit activities and protect the U.S. financial system from abuse by terrorists.”

The updated guidance is intended to support U.S. financial institutions in their efforts to detect and report any suspicious activities that may be linked to the group, further safeguarding the integrity of the U.S. financial system.

By fLEXI tEAM