WASHINGTON – The Treasury Department Tuesday cited a Belarus-based bank as potentially having links to money laundering, and proposed barring U.S. banks from opening or maintaining accounts with the institution.
Using authority under the USA Patriot Act, Treasury identified JSC CredexBank as a financial institution “of primary money laundering concern.” Treasury said it had reason to believe JSC CredexBank has engaged in high volumes of transactions indicative of money laundering on behalf of shell corporations. The bank also has a history of ownership by shell corporations, whose lack of transparency contributes to “considerable uncertainty” surrounding the bank’s true ownership, Treasury said.
“This action seeks to protect the U.S. financial system from a foreign financial institution whose highly suspicious transaction patterns and pervasive lack of transparency make it virtually impossible to discern whether the bank is engaged in any legitimate business,” David Cohen, Treasury’s undersecretary for terrorism and financial intelligence, said in a press release.
This is only the tenth time Treasury has used its authority under Section 311 of the Patriot Act, which allows the agency to require domestic banks to take certain measures against a designated company. The last company to be identified was The Lebanese Canadian Bank in Lebanon in 2011.
Treasury’s Financial Crimes Enforcement Network, or FinCEN, also filed a notice of proposed rulemaking Tuesday that would propose additional record keeping requirements and reporting for transactions involving Credex, and would prohibit U.S. banks from opening or maintaining correspondent or payable-through accounts for Credex.
The proposal is subject to a 60-day comment period.
While Credex does not have any direct correspondent relationships with U.S. banks, it has gained indirect access to the U.S. financial system through “nested accounts” via European banks and money services businesses, according to the press release.
Located in the Republic of Belarus, Credex was founded in September 2001 and has been owned by Vicpart Holding SA – an apparent shell corporation – since October 2009.
Since at least 2006, the bank engaged in transactions that are typical “red flags” associated with a shell company, including enormous wire transfers and multiple transactions involving businesses sharing the same address, Treasury said.
In one two-month period in 2010, for example, Credex transferred more than $1 billion to hundreds of shell corporations in multiple jurisdictions, a substantial amount of activity for a bank of its size, Treasury said.
Credex employs 169 people, has a total capitalization of $19 million, and ranks 22nd in total assets among 31 commercial banks in Belarus.
