A global game of sanctions cat-and-mouse is now underway. This week, the Financial Crimes Enforcement Network, a Treasury Department bureau, issued a new alert to financial institutions urging them to identify and report suspicious transactions involving real estate, luxury goods and other high-value assets of sanctioned Russian elites and their families. It warned jewelry and art dealers that such assets could be particularly ripe for Russian sanctions evasion.
March 17, 2022, 2:01 p.m. ET
“Because real estate, luxury goods, and other high-value assets can be used as a store of value, a medium of exchange, or an investment, sanctioned Russian elites and their proxies may use such assets to evade expansive U.S. and other sanctions and restrictions imposed in response to the Russian Federation’s invasion of Ukraine,” the network, known as FinCEN, said.
The Treasury Department on Wednesday also opened its new Kleptocracy Asset Recovery Rewards Program, which offers rewards of up to $5 million for information that leads to the seizure of stolen assets linked to Russia or other foreign governments. And to improve international coordination in targeting Russian assets, the United States unveiled the Multilateral Russian Oligarch Task Force with counterparts from Australia, Canada, Germany, France, Italy, Japan, Britain and the European Commission.
Much of the sanctions enforcement in the United States will be done through the I.R.S. Officials from the agency said they would use financial tracing technology and work with banks and international counterparts to track how oligarchs and others were shifting money and assets around the world in violation of the sanctions. They are looking for signs of newly created fictitious businesses that could be used to shelter assets and transactions involving cryptocurrencies, which criminals use to move money anonymously.
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According to the report, the I.R.S. seized $3.6 billion of stolen cryptocurrency last year and has already surpassed that this year.
Mr. Rettig made the case personally on Thursday morning when he testified before the House Ways and Means Committee.
“A strong, robust criminal tax enforcement presence provides significant deterrence to those willing to evade their lawful obligations to our country,” he said. “Without adequate resources, we risk sending a much less powerful message to would-be and active tax evaders.”
