U.S. Treasury Undersecretary for Terrorism and Financial Intelligence ("TFI") Sigal Mandelker described strategies and priorities in combating terrorist financing, money laundering, and other threats to the U.S. and its allies.

In testimony before the House Financial Services Subcommittee on Terrorism and Illicit Finance, Ms. Mandelker explained that the TFI consists of four components: the Financial Crimes Enforcement Network ("FinCEN"), the Office of Foreign Assets Control ("OFAC"), the Office of Intelligence and Analysis ("OIA"), and the Office of Terrorist Financing and Financial Crimes ("TFFC"). Through these components, Ms. Mandelker said the TFI utilizes sanctions authorities in order to "ramp up" pressure on terrorist groups and other bad actors. She highlighted the establishment of the Terrorist Financing Targeting Center as an example of a multinational effort to combat terrorist groups. In addition, she represented that virtual currencies and other emerging technologies comprise a significant area of focus, as exemplified by a recent FinCEN enforcement action targeting a virtual currency exchange for anti-money laundering violations.

Ms. Mandelker emphasized the need to coordinate agency initiatives in order to ensure that each challenge is addressed in the most effective manner. She pointed to intelligence-driven actions, enforcement cooperation and adjustments in response to outcomes as key components that contribute to the efficient deployment of resources. With regard to specific enforcement priorities, Ms. Mandelker identified North Korea as the most pressing concern. She underscored recent sanctions efforts, vowed continued commitment to disrupting North Korean financing, and identified cross-agency cooperation as an essential facet of this approach. Further, Ms. Mandelker committed to continued action against Iran's Revolutionary Guard Corps ("IRGC") (see previous coverage).

Going forward, Ms. Mandelker said the TFI will reexamine the Bank Secrecy Act in order to further develop a "strong and effective anti-money laundering framework." She stressed that the TFI needs to move hiring forward in an expeditious manner, and encouraged Congress to confirm the nomination of Isabel Patelunas as the Assistant Secretary for Intelligence and Analysis.

Commentary / Joseph V. Moreno

TFI is a significant bureaucracy. Undersecretary Mandelker deserves credit for prioritizing the efficiency and effectiveness of Treasury's fight against financial crimes. As FinCEN battles money laundering, it should continue to encourage Congress to update the Bank Secrecy Act's currency reporting and suspicious activity report thresholds. Those thresholds have remained unchanged for years and result in an ever-growing number of reports being submitted to FinCEN. There is no doubt that the Trump Administration and Congress will continue to aggressively use economic sanctions as a foreign policy tool to target, among others, North Korea, Russia, Iran and Venezuela.

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