Sec. 204. Report on certain foreign financial institutions
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Congress finds the following: On February 26, 2014, the Department of the Treasury’s Financial Crimes Enforcement Network advised United States financial institutions of their responsibility to take reasonable, risk-based steps regarding the potential suspicious movement of assets related to Viktor Yanukovych departing Kyiv and abdicating his responsibilities and other senior officials resigning from their positions or departing Kyiv. United States financial institutions are required to apply enhanced scrutiny to private banking accounts held by or on behalf of senior foreign political figures and to monitor transactions that could potentially represent misappropriated or diverted state assets, the proceeds of bribery or other illegal payments, or other public corruption proceeds.
On March 3, 2014, the Government of Ukraine announced that it had initiated criminal proceedings against a number of former Ukrainian officials or close associates of former Ukrainian officials. On March 5, 2014, the European Union, based on information from Ukraine’s Prosecutor General, issued a Council Regulation requiring the European Union to freeze the funds and economic resources of various former Ukrainian officials and their close associates. The Government of Canada has taken similar action against the same individuals.
The measures being taken against these former Ukrainian officials and their close associates increase the risk that they will seek to move their assets in a deceptive fashion. Foreign financial institutions should apply similar, enhanced due-diligence and reporting requirements. The United States has a strong interest in seeing the international financial system protected from illicit financial activity, including money laundering, terrorism and proliferation financing, transnational organized crime, and the misappropriation of state assets, and international sanctions evasion, among others.
The Department of the Treasury possesses a range of authorities to insulate the United States financial system from entities or jurisdictions that pose an illicit financing risk. It shall be the policy of the United States to use all of its regulatory and statutory authorities to closely scrutinize all foreign financial institutions, including those in the Russian Federation, that may be complicit in enabling foreign persons and transnational criminal enterprises to evade or otherwise circumvent United States and international sanctions, launder the proceeds of criminal activity, finance acts of terrorism and the proliferation of weapons of mass destruction, or any other illicit activity that presents risks and vulnerabilities to the United States financial system.
Not later than 30 days after the date of the enactment of this Act, and every 180 days thereafter for a period not to exceed 2 years, the Secretary of State and the Secretary of the Treasury shall jointly submit to the appropriate congressional committees a report on— foreign financial institutions that are in direct control of Government of Ukraine state-owned or controlled assets in a manner determined by the Secretary of State and the Secretary of the Treasury to be contrary to the interests of the Government of Ukraine; foreign financial institutions determined by the Secretary of State and the Secretary of the Treasury to be complicit in illicit financial activity, including money laundering, terrorism and proliferation financing, transnational organized crime, or misappropriation of state assets, that are— organized under the laws of the Russian Federation; or owned or controlled by a foreign person described in section 202(b); and foreign financial institutions that are directly or indirectly assisting or otherwise aiding the violation of Ukrainian sovereignty, independence, and territorial integrity, including the Crimea.
The report required to be submitted under this subsection shall be submitted in an unclassified form, to the extent appropriate, but may include a classified annex.