On September 20 of 2020, the FinCEN Files were made public, a journalistic investigation following the leak of more than 2,000 reports from FinCEN’s database. These reports reveal transactions and account movements that suggest money laundering activities. However, today we want to focus not on this journalistic investigation, but on analyzing what FinCEN is.
History and Structure
The Financial Crimes Enforcement Network, or FinCEN, is a U.S. agency under the Department of the Treasury. Its goal is to safeguard the financial system from illicit use by combating money laundering and other financial crimes, such as terrorist financing. Additionally, it enhances national security by collecting, analyzing, and studying financial intelligence.
FinCEN was established in April 1990 by Nicholas F. Brady, who was Secretary of the Treasury from 1988 to 1993, through Treasury Order 105-08. Currently, FinCEN operates under Treasury Order 180-01. Under this order, FinCEN gained new powers following the enactment of the USA PATRIOT Act of 2001, a U.S. law passed after the 9/11 attacks to combat terrorism, enhancing the capabilities of various U.S. agencies, including FinCEN, as we have discussed in other posts.
The agency is structured into 7 divisions: Global Investigations, Intelligence, Executive, Legal, Strategic Operations, Technology, and Management. All of them report to the Office of the Director, a position currently held by Kenneth A. Blanco since August 2017. He is the eighth person to hold this position since 1990. FinCEN also employs over 300 experts specializing in the financial industry.
FinCEN Today
Today, FinCEN is one of the key agencies within the U.S. Treasury, overseeing and enforcing policies to prevent and detect money laundering. It achieves these objectives through two main avenues.
First, by enforcing anti-money laundering regulations. Just like in Spain, U.S. law also requires banks and financial institutions to implement certain measures and obligations. These preventive regulations include the requirement to file “Suspicious Activity Reports” (SARs), whereby banks and financial institutions must report any activities suspected of being related to money laundering.
Second, FinCEN provides analytical and intelligence support to assist law enforcement. This analytical work is structured around the SARs submitted by financial institutions, which are then cross-referenced with public information or FinCEN’s internal data. Once this process is complete, FinCEN shares this aggregated information with obligated entities to ensure compliance with anti-money laundering regulations.
In addition, FinCEN issues advisories and alerts on scams, frauds, or any activity that could compromise the financial system. For instance, on July 30, it issued an advisory warning about cybercrime during the COVID-19 pandemic. It highlighted how attackers exploit remote applications through phishing, business email compromise, or malware, particularly targeting financial and healthcare systems.
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