THE FinCEN Files investigation by The Indian Express (September 20-September 26, 2020) has set off a major exercise within the government to find out if Indian banks whose transactions were red-flagged as “suspicious” — by the US regulator — brought these to the attention of the Indian financial watchdog.
The FinCEN Files, a global investigation led by the International Consortium of Investigative Journalists (ICIJ) and BuzzFeed News, scrutinized over 2,000 Suspicious Activity Reports (SAR) filed to the top US financial watchdog, Treasury’s Financial Crimes Enforcement Network (FinCEN), for suspected money laundering, terrorism, drug dealing or financial fraud.
These related to transactions between 1999 and 2017 worth $2.09 trillion.
Officials told The Indian Express that on publication of the FinCEN Files in India and details of individual transactions being uploaded by ICIJ, work began to determine if Indian banks and their branches filed STRs (Suspicious Transaction Reports) with FinCEN’s counterpart in India, the Financial Intelligence Unit (FIU).
To begin with, a database has been prepared based on ICIJ’s findings of 406 transactions involving 28 Indian banks.
Initially, the banks are being sent the date and value of the transactions listed in the SARs and are asked to verify details. Sources said several banks have replied confirming that these transactions were, indeed, conducted through their local branches or correspondent branches abroad.
The next stage, currently on, sources said, will involve questioning the banks whether they had red-flagged these transactions and, if not, asking them why.
Officials have calculated that the listed 406 transactions involving Indian banks contain incoming remittances worth $482.18 million and outgoing transfers worth $406.27 million.
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Among banks which have the largest number of transactions under scrutiny are: State Bank of India, HDFC Bank, ICICI Bank and IndusInd Bank.
As reported by The Indian Express, 44 Indian banks figured in multiple transactions listed in SARs which became part of the global media investigation.
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The SARs are, in themselves, not evidence of illegality. They reflect views by watchdogs within banks, known as compliance officers, reporting past transactions that bore hallmarks of financial crime, or that involved clients with high-risk profiles or past run-ins with the law.