Reported by Financial IT

(Excerpt shared below. To read full report, go to: https://financialit.net/news/aml-and-kyc/fincen-issues-advisory-and-financial-trend-analysis-chinese-money-laundering)

Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is raising the alarm on Chinese money laundering networks (CMLNs), which pose a significant threat to the U.S. financial system. FinCEN is issuing: (1) an Advisory to urge financial institutions to be vigilant in detecting the use of CMLNs by Mexico-based drug cartels, including several designated as Foreign Terrorist Organizations; and (2) a Financial Trend Analysis (FTA) highlighting the scope and breadth of CMLN activity in the United States.

“Money laundering networks linked to individual passport holders from the People’s Republic of China enable cartels to poison Americans with fentanyl, conduct human trafficking, and wreak havoc among communities across our great nation,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “The United States will not stand by and allow nefarious actors to launder illicit proceeds through our financial system. Today’s publication of FinCEN’s Advisory and Financial Trend Analysis reinforce Treasury’s and law enforcement’s ongoing work to combat Chinese money laundering networks, and will help financial institutions better identify signs of illicit activity.”

“Chinese money laundering networks are global and pervasive, and they must be dismantled,” said FinCEN Director Andrea Gacki. “These networks launder proceeds for Mexico-based drug cartels and are involved in other significant, underground money movement schemes within the United States and around the world. FinCEN’s Advisory and Financial Trend Analysis support Treasury’s continuing efforts, alongside our law enforcement and international partners, to bankrupt transnational criminal organizations and their enablers.”

Bank Secrecy Act Reports Highlight Breadth of Chinese Money Laundering Networks in the United States

• As discussed in the FTA , FinCEN analyzed 137,153 Bank Secrecy Act (BSA) reports filed by financial institutions between January 2020 and December 2024 (the dataset) associated with suspected CMLN-related activity, totaling approximately $312 billion in suspicious transactions.
• CMLNs, as discussed in the Advisory and FTA, play a significant role in laundering proceeds from drug trafficking. CMLNs are also involved in facilitating a range of additional illicit activity, including fraud, human trafficking, and human smuggling.
• Private individuals carrying passports from the People’s Republic of China (PRC) play a significant role in these networks and may wittingly or unwittingly assist CMLNs launder money on a global scale.