As Prepared for Delivery
Thank you all for coming together today for this important discussion.
I am Brian Nelson, the U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, or ‘TFI’. The offices I lead, which include the Office of Foreign Assets Control, known as OFAC, the Office of Intelligence and Analysis, or OIA, the Office of Terrorist Financing and Financial Crimes, TFFC, the Treasury Executive Office for Asset Forfeiture, or TEOAF, and the Financial Crimes Enforcement Network, or FinCEN, are tasked with deploying our financial intelligence, expertise, and economic authorities to combat terrorist financing, money laundering, weapons proliferators, corrupt actors, and other national security threats.
I am in San Juan to meet with you, as well as my government counterparts, to discuss the full range of our shared priorities to combat illicit financial activities and implementing strong AML/CFT standards to regulate the financial sector.
You are on the front lines of combatting financial crimes, so I hope this will be a frank and open discussion and exchange of perspectives on how we can collectively mitigate these threats.
In recent years, there has been significant progress enhancing supervision of Puerto Rican Financial Entities (PRFEs), but we assess that significant risks remain so I’d like to hear from you how the regulatory developments and outstanding risks in this sector affect Puerto Rico’s commercial banking sector.
In response to these risks, FinCEN Director Andrea Gacki was here in February and convened the first ever FinCEN Exchange in Puerto Rico.
This FinCEN Exchange was dedicated to enhancing collaboration between federal law enforcement and federally chartered commercial banks in Puerto Rico.
FinCEN Exchanges are a critical form of a public-private partnership that bring together our law enforcement, national security agencies, and financial institution partners to engage in candid and open dialogue.
I look forward to discussing what insights the FinCEN Exchange has produced into illicit financial activity in Puerto Rico, and where there are opportunities to further advance this work.
Before we dive into that discussion, I’d like to highlight a couple priority areas of focus for us. We are focused on countering narcotics trafficking from Puerto Rico to the mainland United States, as well as combatting fraud and public corruption.
I’d like to hear from you how you identify suspicious transactions associated with narcotics trafficking, fraud, corruption, and other financial crimes, and where we can enhance our partnership to combat these risks.
I recognize the progress achieved enhancing supervision of Puerto Rican Financial Entities (PRFEs) through implementation of the Gap Rule and amendments to Puerto Rico Law 273.
However, we also recognize that more needs to be done to bolster Puerto Rico’s financial sector from abuse by illicit actors.
We assess that supervisory gaps are still being exploited by drug traffickers, corrupt actors, sanctions evaders, and others to launder significant amounts of funds through the U.S. financial system.
I welcome your insights into how you as commercial banks are mitigating these threats, and how you are working with International Banking Entities and International Financial Entities to do the same.
At the same time, Treasury is working to enhance transparency of our financial sector. This includes implementation of the Corporate Transparency Act to launch FinCEN’s beneficial ownership registry, as well as increasing transparency in the U.S. real estate sector and investment advisors.
While these reform efforts are underway, we have identified a growing trend of cash transactions for real estate purchases in Puerto Rico which create concerns due to limited transparency and reporting.
I look forward to discussing how Puerto Rico’s commercial banks assess and mitigate these risks.
We have also identified the limited transparency in Puerto Rico’s growing cooperitavas sector as a priority to enhance regulation, supervision, and cooperation to mitigate the significant threats this sector poses to the integrity of the U.S. financial system.
Combatting these threats requires close partnership with you on the front lines. I am here today to identify how we can enhance our collective efforts to mitigate these risks.
I look forward to discussing these priority issues further.
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