US Treasury Publishes National Risk Assessments for Financial Crimes

The US Treasury has published the 2022 National Risk Assessments (NRAs) on Money Laundering (NMLRA), Terrorist Financing (NTFRA), and Proliferation Financing (NPFRA) to secure financial operations. 

The issued document highlighted the crucial illegal financial risks, shortcomings, and threats of sophisticated criminal activities that are happening in the United States. According to the key findings of regulatory investigations, the country is prone to all three kinds of illegal activities that are affecting the US financial institutions and the centrality of the dollar in the payment infrastructure of the global trade.

However, this national risk assessment document is the third iteration of the NMLRA and NTFRA since 2015 and the second for NPFRA since 2018. These updates were taken into account after the risk of financial crime accelerated due to coronavirus pandemic, domestic violent extremism, corruption n ransomware attacks, the surge in digital financial services, and the implementation of new standards to the US Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework. The national risk assessments are a viable resource that can assist the public as well as the private sectors to understand the present situation of financial crimes in the country and allow them to make their own risk-identification strategies.

“The National Risk Assessments underscore the U.S. government’s commitment to protecting our economy and financial system from exploitation by a variety of criminal actors and national security threats,” said Brian E. Nelson, Under Secretary for Terrorism and Financial Intelligence.  “By better understanding the current risk environment, we can more effectively guard the integrity of the U.S. financial system.”

Among the key findings of the national risk assessments:

• NMLRA: The financial criminals are still using sophisticated tools and techniques to route and conceal illegal gains along with promoting criminal activities depending on availability and convenience. Therefore crimes including drug trafficking, human trafficking, smuggling, and corruption accounted to generate the largest amount of illegitimate proceeds laundered in the US. Moreover, the country continues to experience both persistent and emerging money laundering risks that are associated with the misuse of legal entities, the lack of transparency in the real estate industry, merchants and professionals that misuse their businesses or positions, and shortcomings in compliance at regulated financial firms.
• NTFRA: With respect to organized crime as well as foreign terrorist groups, the US-based individual continuous to support by transferring money to those that are operating on behalf of ISIS or its affiliates. However, for the first time, in this assessment, the funding gateways that support Domestic Violent Extremists (DVE) are analyzed thoroughly.
• NPFRA: The Democratic People’s Republic of Korea (DPRK) and Iran, continue to pose the most significant proliferation finance threats. The proliferation of finance networks continues to misuse the banking relationships to create multiple shell companies to assist money launderers.

Therefore, in the coming weeks, the US Department of Treasury will also publish the 2022 National Strategy for Combatting Terrorism and Other Illicit Finance, a plan directly informed by the analysis in the risk assessments. In this, the Treasury will share effective recommendations to highlight the issues.

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