Reported by FinCEN

Red Flag Indicators Related to the Fundraising and Money Laundering Activities of Iran-Backed Terrorist Organizations

FinCEN has identified the red flags listed below to assist financial institutions in detecting, preventing, and reporting suspicious activity connected to the financing of Iran-backed terrorist organizations. These red flags are in addition to the red flags identified in FinCEN’s 2018 Iran advisory and 2023 Hamas alert, all of which remain relevant. As no single red flag is determinative of illicit or suspicious activity, financial institutions should consider the surrounding facts and circumstances, such as a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple red flags, before determining if a behavior or transaction is indicative of terrorist finance or is otherwise suspicious.

• A customer or a customer’s counterparty conducts transactions with Office of Foreign Assets Control (OFAC)-designated entities and individuals, or transactions that contain a nexus to identifiers listed for OFAC-designated entities and individuals, to include email addresses, physical addresses, phone numbers, passport numbers, or CVC addresses.
• Information included in a transaction between customers or in a note accompanying a peer-to-peer transfer include key terms known to be associated with terrorism or terrorist organizations.
• A customer conducts transactions with a money services business (MSB) or other financial institution, including a VASP, that operates in jurisdictions known for, or at high risk for, terrorist activity and is reasonably believed to have lax customer identification and verification processes, opaque ownership, or otherwise fails to comply with AML/CFT best practices.
• A customer conducts transactions that originate with, are directed to, or otherwise involve entities that are front companies, general “trading companies” with unclear business purposes, or other companies whose beneficial ownership information indicates that they may have a nexus with Iran or other Iran-supported terrorist groups. Indicators of possible front companies include opaque ownership structures, individuals and/or entities with obscure names that direct the company, or business addresses that are residential or co-located with other companies.

• A customer that is or purports to be a charitable organization or NPO84 solicits donations but does not appear to provide any charitable services or openly supports terrorist activity or operations. In some cases, these organizations may post on social media platforms or encrypted messaging apps to solicit donations, including in CVC.
• A customer receives numerous small CVC payments from many wallets, then transfers the funds to another wallet, particularly if the customer logs in using an Internet Protocol (IP) based in a jurisdiction known for, or at high risk for, terrorist activity. In such cases, financial institutions may also be able to provide associated technical details such as IP addresses with time stamps and device identifiers that can provide helpful information to authorities.
• A customer makes money transfers to a jurisdiction known for, or at high risk for, terrorist activity that are inconsistent with their stated occupation or business purpose with vague stated purposes such as “travel expenses,” “charity,” “aid,” or “gifts.
• A customer account receives large payouts from social media fundraisers or crowdfunding platforms and is then accessed from an IP address in a jurisdiction known for, or at high risk for, terrorist activity, particularly if the social media accounts that contribute to the fundraisers contain content supportive of terrorist campaigns.
• A customer company is incorporated in the United States or a third-country jurisdiction, but its activities occur solely in jurisdictions known for, or at high risk for, terrorist activity and show no relationship to the company’s stated business purpose.

Read full report: https://www.fincen.gov/sites/default/files/advisory/2024-05-07/FinCEN-Advisory-Iran-Backed-TF-508C.pdf