US Treasury issues guidelines to help banks identify transfers tied to terror groups

The US Treasury’s Financial Crimes Enforcement Network issues an advisory meant to help banks and financial institutions identify potentially illicit transactions related to Iran-backed terrorist groups, Hamas, Hezbollah, Palestinian Islamic Jihad and groups in Iraq and Syria.

The advisory comes “in light of intensified terrorist activity in the Middle East,” according to the Treasury.

“As we witness continuing instability and violence in the Middle East, we are issuing this Advisory to help financial institutions protect the financial system from abuse by terrorists and to encourage financial institutions to stay vigilant in identifying and reporting related suspicious activity,” says FinCEN Director Andrea Gacki.

The advisory lists the ways that terror groups use to raise funds, and how to identify them. For instance, Hamas has a history of using fake charities to raise funds, where donations are often placed in bank accounts in third countries such as Lebanon, Qatar and Turkey. Hezbollah uses a network of front companies and legitimate businesses as well as cryptocurrencies to raise, launder and transfer funds.

The US Treasury says Hezbollah financiers use free trade zones and countries with weak regulatory frameworks to establish import-export companies to build out money laundering schemes, using companies often held in the name of a relative of the financier.