[Federal Register Volume 77, Number 102 (Friday, May 25, 2012)]
[Notices]
[Pages 31434-31438]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12742]


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DEPARTMENT OF THE TREASURY


Finding That JSC CredexBank Is a Financial Institution of Primary 
Money Laundering Concern

AGENCY: The Financial Crimes Enforcement Network (``FinCEN''), 
Treasury.

ACTION: Notice of finding.

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SUMMARY: Pursuant to the authority contained in 31 U.S.C. 5318A, the 
Secretary of the Treasury, through his delegate, the Director of 
FinCEN, finds that reasonable grounds exist for concluding that JSC 
CredexBank is a financial institution of primary money laundering 
concern.

DATES: The finding made in this notice is effective as of May 25, 2012.

FOR FURTHER INFORMATION CONTACT: Regulatory Policy and Programs 
Division, FinCEN, (800) 949-2732.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statutory Provisions

    On October 26, 2001, the President signed into law the Uniting and 
Strengthening America by Providing Appropriate Tools Required To 
Intercept and Obstruct Terrorism Act of 2001 (the ``USA PATRIOT Act''), 
Public Law 107-56. Title III of the USA PATRIOT Act amends the anti-
money laundering provisions of the Bank Secrecy Act (``BSA''), codified 
at 12 U.S.C. 1829b and 1951-1959, and 31 U.S.C. 5311-5314 and 5316-
5332, to promote prevention, detection, and prosecution of 
international money laundering and the financing of terrorism. 
Regulations implementing the BSA appear at 31 CFR Chapter X. The 
authority of the Secretary of the Treasury (``the Secretary'') to 
administer the BSA and its implementing regulations has been delegated 
to the Director of FinCEN.\1\
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    \1\ Therefore, references to the authority of the Secretary of 
the Treasury under section 311 of the USA PATRIOT Act apply equally 
to the Director of FinCEN.
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    Section 311 of the USA PATRIOT Act (``section 311'') added 31 
U.S.C. section 5318A to the BSA, granting the Secretary the authority, 
upon finding that reasonable grounds exist for concluding that a 
foreign jurisdiction, institution, class of transactions, or type of 
account is of ``primary money laundering concern,'' to require domestic 
financial institutions and financial agencies to take certain ``special 
measures'' against the primary money laundering concern. Section 311 
identifies factors for the Secretary to consider and Federal agencies 
to consult before the Secretary may conclude that a jurisdiction, 
institution, class of transaction, or type of account is of primary 
money laundering concern. The statute also provides similar procedures, 
i.e., factors and consultation requirements, for selecting the specific 
special measures to be imposed against the primary money laundering 
concern.
    Taken as a whole, section 311 provides the Secretary with a range 
of options that can be adapted to target specific money laundering and 
terrorist financing concerns most effectively. Through the imposition 
of various special measures, the Secretary can gain more information 
about the jurisdictions, institutions, transactions, or accounts of 
concern; can more effectively monitor the respective jurisdictions, 
institutions, transactions, or accounts; or can prohibit U.S. financial 
institutions from involvement with jurisdictions, institutions, 
transactions, or accounts that pose a money laundering concern.
    Before making a finding that reasonable grounds exist for 
concluding that a financial institution is of primary money laundering 
concern, the Secretary is required to consult with both the Secretary 
of State and the Attorney General. The Secretary is also required by 
section 311, as amended, to consider ``such information as the 
Secretary determines to be relevant, including the following 
potentially relevant factors:'' \2\
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    \2\ 31 U.S.C. 5318A(c)(2).
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     The extent to which such financial institutions, 
transactions, or types of accounts are used to facilitate or promote 
money laundering in or through the jurisdiction, including any money 
laundering activity by organized criminal groups, international 
terrorists, or entities involved in the proliferation of weapons of 
mass destruction or missiles;
     The extent to which such institutions, transactions, or 
types of accounts are used for legitimate business purposes in the 
jurisdiction; and
     The extent to which such action is sufficient to ensure, 
with respect to transactions involving the jurisdiction and 
institutions operating in the jurisdiction, that the purposes of this 
subchapter continue to be fulfilled, and to guard against international 
money laundering and other financial crimes.\3\
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    \3\ See Section II,D below for an additional factor relevant to 
this action.
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    If the Secretary determines that reasonable grounds exist for 
concluding that a financial institution is of primary

[[Page 31435]]

money laundering concern, the Secretary is authorized to impose one or 
more of the special measures in section 311 to address the specific 
money laundering risks. Section 311 provides a range of special 
measures that can be imposed individually, jointly, in any combination, 
and in any sequence.\4\ Before imposing special measures, the statute 
requires the Secretary to consult with appropriate federal agencies and 
other interested parties \5\ and to consider the following specific 
factors:
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    \4\ Available special measures include requiring: (1) 
Recordkeeping and reporting of certain financial transactions; (2) 
collection of information relating to beneficial ownership; (3) 
collection of information relating to certain payable-through 
accounts; (4) collection of information relating to certain 
correspondent accounts; and (5) prohibition or conditions on the 
opening or maintaining of correspondent or payable-through accounts. 
31 U.S.C. 5318A(b)(1)-(5).
    \5\ Section 5318A(a)(4)(A) requires the Secretary to consult 
with the Chairman of the Board of Governors of the Federal Reserve 
System, any other appropriate Federal banking agency, the Secretary 
of State, the Securities and Exchange Commission (``SEC''), the 
Commodity Futures Trading Commission (``CFTC''), the National Credit 
Union Administration (``NCUA''), and, in the sole discretion of the 
Secretary, ``such other agencies and interested parties as the 
Secretary may find to be appropriate.'' The consultation process 
must also include the Attorney General if the Secretary is 
considering prohibiting or imposing conditions on domestic financial 
institutions opening or maintaining correspondent account 
relationships with the targeted entity.
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     Whether similar action has been or is being taken by other 
nations or multilateral groups;
     Whether the imposition of any particular special measures 
would create a significant competitive disadvantage, including any 
undue cost or burden associated with compliance, for financial 
institutions organized or licensed in the United States;
     The extent to which the action or the timing of the action 
would have a significant adverse systemic impact on the international 
payment, clearance, and settlement system, or on legitimate business 
activities involving the particular jurisdiction; and
     The effect of the action on the United States national 
security and foreign policy.

B. JSC (``Joint Stock Company'') CredexBank

    JSC CredexBank (``Credex'') is a depository institution located and 
licensed in the Republic of Belarus that primarily services corporate 
entities.\6\ Originally established on September 27, 2001, as Nordic 
Investment Bank Corporation by Ximex Executive Limited 
(``Ximex''),7 8 the bank changed its name to Northern 
Investment Bank on April 5, 2006, and then to the current name of JSC 
CredexBank on February 12, 2007. Credex is 96.82% owned by Vicpart 
Holding SA, based in Fribourg, Switzerland.\9\ With 169 employees \10\ 
and a total capitalization of approximately $19 million,\11\ the bank 
currently ranks as the 22nd largest in total assets among 31 commercial 
banks in Belarus.\12\ Credex has six domestic branches and one 
representative office in the Czech Republic.\13\ While the majority of 
its correspondent banking relationships are with domestic banks, Credex 
maintains numerous correspondent relationships with Russian banks, and 
also single correspondent relationships in Latvia, Germany, and 
Austria.\14\ According to available public information, Credex does not 
have any direct U.S. correspondent relationships.\15\
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    \6\ Bankers Almanac (2012).
    \7\ ``Belarus on a Roll,'' Business New Europe, July 22, 2009 
(http://www.bne.eu/story1701/Belarus_on_a_roll).
    \8\ Bankers Almanac (2012).
    \9\ Id. CredexBank's Web site lists Vipcart's ownership as 
98.82%. See ``Business Card,'' CredexBank Web site (http://en.credexbank.by/bank/general/businesscard/).
    \10\  Bankers Almanac (2012).
    \11\ Id.
    \12\ National Bank of the Republic of Belarus, Information on 
Banks Functioning in the Republic of Belarus and Their Branches, as 
of January 20, 2012 (http:www.nbrb.by/engl/system/banks.asp).
    \13\ Id.
    \14\ Id. See also ``International settlements,'' CredexBank 
(http://www.en.credexbank.by/entities/settlements/).
    \15\ Id.
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C. Belarus

    The concentration of power in the hands of the Presidency and the 
lack of a system of checks and balances among the various branches of 
government are the greatest hindrances to the rule of law and 
transparency of governance in Belarus.\16\ In particular, economic 
decision-making is highly concentrated within the top levels of 
government, and financial institutions have little autonomy.\17\
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    \16\ ``2011 International Narcotics Control Strategy Report 
(INCSR)--Volume II Money Laundering and Financial Crimes Country 
Database,'' May 20, 2011. (http://www.state.gov/documents/organization/164239.pdf), pp. 45-47.
    \17\ Id.
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    Under Belarusian law, most government transactions and those 
sanctioned by the President are exempt from reporting requirements.\18\ 
This is particularly worrisome given well-documented cases of public 
corruption in Belarus,\19\ which has led the United States Government 
(``USG'') in recent years to take action to protect the U.S. financial 
system from abuse by the Belarusian government. In 2006, the President 
signed Executive Order (``E.O.'') 13405, which blocks the property and 
interests in property of Belarusian President Alexander Lukashenko and 
nine other individuals listed in the Annex, as well as authorizing 
subsequent designations of other individuals and entities determined to 
be responsible for or to have participated in public corruption, human 
rights abuses, or political oppression.\20\ Pursuant to this E.O., the 
U.S. Department of the Treasury (``Treasury'') in November 2007 
designated the state petrochemical conglomerate, Belneftekhim, for 
being controlled by President Lukashenko.\21\ Separately, Treasury in 
April 2006 issued an advisory highlighting abuse and theft of public 
resources by senior Belarusian regime elements, including senior 
executives in state-owned enterprises.\22\ Furthermore, in April 2004, 
Treasury identified Infobank, Minsk (later renamed PJSC Trustbank) as a 
primary money laundering concern under section 311 for laundering funds 
for the former Iraqi regime of Saddam Hussein.\23\ At the time of that 
action,

[[Page 31436]]

Infobank was widely reported to be a bank specializing in financial 
transactions related to arms exports, including procuring and financing 
weapons and military equipment for several nations deemed by the United 
States to be State Sponsors of Terrorism.\24\
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    \18\ ``2010 and 2011 International Narcotics Control Strategy 
Reports (INCSR)--Volume II Money Laundering and Financial Crimes 
Country Database,'' March 1, 2010 and May 2011, respectively. 
(http://www.state.gov/documents/organization/141643.pdf), p. 48.
    \19\ Id. For other example of public corruption in Belarus, see 
also Transparency International's 2011 Corruption Perception Index 
(http://archive.transparency.org/content/download/64426/1030807). 
Belarus ranked 143 out of 182 countries, with 1 being least corrupt.
    \20\ ``Treasury Targets Lukashenko-controlled Petrochemical 
Conglomerate,'' U.S. Department of the Treasury, 11/13/2007 (http://www.treasury.gov/press-center/press-releases/pages/hp676.aspx.); 
INCSR (2011), p. 46. In June 2006, President Bush issued Executive 
Order 13405, ``Blocking Property of Certain Persons Undermining 
Democratic Processes or Institutions in Belarus'' (http://www.gpo.gov/fdsys/pkg/FR-2006-06-20/pdf/06-5592.pdf). E.O. 13405 
blocks the property and interests in property of the ten individuals 
listed in the Annex to the E.O. and individuals or entities 
determined, inter alia, to be responsible for, or to have 
participated in, actions or policies that undermine democratic 
processes or institutions in Belarus; to be responsible for, or have 
participated in, human rights abuses related to political oppression 
in Belarus; to be senior-level officials, family members of such 
officials, or persons closely linked to such officials, who are 
responsible for, or have engaged in public corruption related to 
Belarus. To date, there are 16 individuals and 9 entities listed on 
OFAC's Specially Designated Nationals and Blocked Persons (SDN) List 
as blocked under the Belarus sanctions program.
    \21\ Id.
    \22\ ``FinCEN Advisory: Guidance to Financial Institutions on 
the Provision of Financial Services to Belarusian Senior Regime 
Elements Engaged in Illicit Activities,'' April 10, 2006 (http://www.fincen.gov/statutes_regs/guidance/pdf/advisory_belarus040706.pdf).
    \23\ ``Imposition of Special Measure Against Infobank as a 
Financial Institution of Primary Money Laundering Concern, Notice of 
Proposed Rulemaking,'' Federal Register/Vol. 69, No. 163, August 24, 
2004. Moreover, a publicly available source indicates that Trustbank 
and Credex maintain a correspondent relationship.
    \24\ Id.
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    Since January 2011, in response to the repression of democratic 
activists following fraudulent presidential elections in Belarus, the 
European Union (``EU'') has imposed a series of increasingly stiff 
sanctions against Belarus, including a travel ban and assets freeze 
extending to some 200 Belarusian officials and an assets freeze of 
three companies closely associated with President Lukashenko.\25\ Most 
recently, on March 23, 2012, the EU reinforced restrictive measures 
against the Belarusian government by adding 12 individuals and 29 
entities to the sanctions list for their role in supporting the 
regime.\26\
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    \25\ ``Council Conclusions on Belarus,'' January 31, 2011, 
(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/119038.pdf).
    \26\ Press Release: ``Council Reinforces Restrictive Measures 
against Belarusian Regime,'' Council of The European Union, March 
23, 2012, (http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/129230.pdf). Since 2004, the EU has imposed 
sanctions against Belarus that include a travel ban and asset freeze 
on President Alexander Lukashenko and other Belarusian officials. 
For details on EU's restrictive measures against the Belarusian 
regime, see ``Factsheet: The European Union and Belarus'', March 23, 
2012, (http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/129232.pdf).
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II. Analysis of Factors

    Based upon a review and analysis of the administrative record in 
this matter, consultations with relevant Federal agencies and 
departments, and after consideration of the factors enumerated in 
section 311, the Director of FinCEN has determined that reasonable 
grounds exist for concluding that Credex is a financial institution of 
primary money laundering concern. In addition to the bank's location in 
a high risk jurisdiction, FinCEN has reason to believe that Credex (1) 
has engaged in high volumes of transactions that are indicative of 
money laundering on behalf of shell corporations; and (2) has a history 
of ownership by shell corporations \27\ whose own lack of transparency 
contributes to considerable uncertainty surrounding Credex's beneficial 
ownership. Taken as a whole, the lack of transparency associated with 
Credex indicates a high degree of money laundering risk and 
vulnerability to other financial crimes. The factors relevant to this 
finding are detailed below:
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    \27\ The term ``shell corporation,'' as used herein, refers to 
non-publicly traded corporations, limited liability companies 
(LLCs), and trusts that typically have no physical presence (other 
than a mailing address) and generate little to no independent 
economic value. As noted in the 2005 U.S. Money Laundering Threat 
Assessment, shell corporations have become common tools for money 
laundering and other financial crimes, primarily because they are 
easy and inexpensive to form and operate. Additionally, ownership 
and transactional information on these entities can be concealed 
from regulatory and law enforcement authorities. See ``U.S. Money 
Laundering Threat Assessment'' U.S. Money Laundering Threat 
Assessment Working Group, December 2005 (http://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/mlta.pdf), pp. 
47-49.
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A. The Extent to Which Credex Has Been Used To Facilitate or Promote 
Money Laundering in or Through the Jurisdiction

    Information made available to the USG shows that since 2006, Credex 
has engaged in highly questionable patterns of financial transactions 
that are indicative of money laundering. Such activity includes: high 
volumes of transactions involving foreign shell corporations 
incorporated and operating in high risk jurisdictions; disproportionate 
and evasive transactional behavior; and nested account \28\ activity.
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    \28\ Nested accounts occur when a foreign financial institution 
gains access to the U.S. financial system by operating through a 
U.S. correspondent account belonging to another foreign financial 
institution. Thus, these third-party financial institutions can 
effectively gain anonymous access to the U.S. financial system. See 
``Correspondent Accounts (Foreign)--Overview,'' Federal Financial 
Institutions Examination Council Bank Secrecy Act Anti-Money 
Laundering Examination Manual,'' (``FFIEC Manual'') (http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_047.htm).
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    The facts surrounding these transactions are consistent with 
typical ``red flags'' regarding shell company activity identified in 
most banking standards, including wire transfer volumes that are 
extremely large in proportion to the asset size of the bank; 
transacting businesses sharing the same address, providing only a 
registered agent's address, or having other address inconsistencies; 
and frequent involvement of multiple jurisdictions or beneficiaries 
located in higher-risk offshore financial centers.\29\
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    \29\ See ``Money Laundering Red Flags: Wire Transfers,'' Federal 
Financial Institutions Examination Council (http://www.ffiec.gov/bsa_aml_infobase/documents/red_flags/Wire_Trans.pdf) and 
``Appendix F: Money Laundering and Terrorist Financing `Red Flags,' 
'' FFIEC Manual (http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_106.htm). See also ``FinCEN Guidance: Potential Money 
Laundering Risks Related to Shell Companies,'' November 9, 2006. 
FIN-2006-G-14.
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    For example, large-dollar transactions originated from multiple 
shell corporations located at shared formation addresses were 
subsequently transferred through Credex to suspected shell corporations 
that also shared the same formation addresses in various jurisdictions. 
Specifically, between June and July 2007, two shell corporations 
located at known company formation addresses in the United Kingdom 
(``UK'') and the British Virgin Islands (``BVI'') made multiple 
payments totaling millions of U.S. dollars by utilizing accounts at 
Credex and another foreign financial institution for the benefit of a 
separate BVI company. Overall, numerous suspicious transactions (1) 
occurred in spurts for a brief period, in repetitive patterns, and then 
ceased without explanation, (2) were for unrelated goods and services 
that did not correspond to an apparent business relationship between 
the transacting parties, and (3) were remitted through multiple foreign 
banks with U.S. correspondent accounts with vague payment details. 
These patterns strongly suggest a failure of anti-money laundering/
countering the financing of terrorism (AML/CFT) controls at Credex and/
or willfulness by the bank in carrying out transactions on behalf of 
shell corporations.
    Furthermore, Credex has engaged in high volumes of transactions 
that are significantly disproportionate to the bank's level of 
capitalization. For example, from January to March 2010, information 
made available to the USG shows that Credex transferred nearly $1 
billion to shell corporations in multiple jurisdictions--a substantial 
amount of wire activity for a bank of Credex's size. From 2007 to 2009, 
Credex averaged approximately $10 million in capitalization.\30\ In 
addition, Credex wire transaction customers during this period were 
mostly parties sending money from Credex accounts. However, there were 
no observable corresponding inflows, which one would expect at a 
legitimate commercial bank.
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    \30\ Bankers Almanac (2012).
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    Information made available to the USG also shows that Credex 
engages in evasive conduct in a significant portion of its financial 
transactions. In some instances, critical information identifying 
Credex as the originating financial institution was omitted from the 
wire transaction details, or the stated purpose of the transaction 
involving Credex accountholders was inconsistent with the expected 
business profile of those companies. Such disproportionate volumes of 
activity compared to the bank's size, coupled with evasive behaviors, 
strongly suggest that Credex is vulnerable to money laundering and 
other financial crimes.

[[Page 31437]]

    Credex maintains a total of 66 correspondent accounts,\31\ 
including more than 20 U.S. dollar accounts, almost exclusively with 
Russian and Belarusian financial institutions.\32\ This number of 
correspondent accounts is highly disproportionate relative to Credex's 
size--the bank's total assets were approximately $46 million as of the 
end of 2010.\33\ For example, the largest bank in Belarus--whose assets 
number more than $14 billion--only has a total of 18 correspondent 
accounts.\34\ This indicates the intent to obfuscate the movement of 
funds; there is no logical explanation or purpose for maintaining so 
many correspondent accounts while incurring the operational costs and 
fees associated with them.
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    \31\ These appear to be ``nostro'' accounts, which are commonly 
used for currency settlement.
    \32\ Bankers Almanac (2012).
    \33\ Id.
    \34\ Id.
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    According to available public information, Credex does not have 
direct correspondent relationships with U.S. financial 
institutions.\35\ However, information made available to the USG 
indicates that transactions involving U.S. dollars are conducted via 
multiple ``nested accounts'' with European banks and money service 
businesses \36\ that allowed indirect access to the U.S. financial 
system. For example, of 91 wires totaling approximately $10 million 
conducted through Credex, 69 wires totaling $9 million involved 
apparent nesting activity via U.S. correspondent accounts, and the 
remaining 22 wire transfers totaling over $1 million were sent by order 
of, or for the benefit of, shell-like entities, some of which were also 
involved in the 69 nested wires.
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    \35\ Bankers Almanac (2012).
    \36\ Additionally, according to Credex's Web site, the bank 
performs transfers through international money transfer services 
(Anelik, Leader, Western Union, and Moneygram) without opening an 
account. See ``General Information,'' CredexBank Web site (http://www.en.credexbank.by/bank/general).
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    Given this evasive conduct, U.S. financial institutions remain 
particularly at risk of indirectly providing Credex with anonymous 
access to the U.S. financial system.

B. The Extent to Which Credex Is Used for Legitimate Business Purposes 
in the Jurisdiction

    The lack of transparency--regarding the jurisdiction, beneficial 
ownership of the bank (discussed in Section II (D), below), and 
transactional activity with shell corporations--makes it difficult to 
assess the extent to which Credex is engaged in legitimate business. 
Thus, any legitimate use of Credex is significantly outweighed by the 
apparent use of Credex to facilitate or promote money laundering and 
other financial crimes.

C. The Extent to Which Such Action Is Sufficient To Ensure, With 
Respect to Transactions Involving Credex, That the Purposes of the BSA 
Continue To Be Fulfilled, and To Guard Against International Money 
Laundering and Other Financial Crimes

    As detailed above, FinCEN has reasonable grounds to conclude that 
Credex is being used to promote or facilitate international money 
laundering, and is therefore an institution of primary money laundering 
concern. Currently, there are no protective measures that specifically 
target Credex. Thus, finding Credex to be a financial institution of 
primary money laundering concern, which would allow consideration by 
the Secretary of special measures to be imposed on the institution 
under section 311, is a necessary first step to prevent Credex from 
facilitating money laundering or other financial crime through the U.S. 
financial system. The finding of primary money laundering concern will 
bring any criminal conduct occurring at or through Credex to the 
attention of the international financial community and will further 
limit the bank's ability to be used for money laundering or for other 
criminal purposes.

D. Other Relevant Factor: Lack of Transparency

    As outlined above, the pervasive lack of transparency surrounding 
Credex's business activities--including its high volume of suspicious 
transactions with shell corporations, the substantial uncertainty 
surrounding the transacting parties and purposes involved in those 
transactions, the bank's evasive conduct, and its operation in a high 
risk jurisdiction--makes it virtually impossible to discern the extent 
to which the bank is engaged in legitimate business, and most 
importantly, to evaluate its capacity to identify and mitigate risk and 
illicit finance. This situation is exacerbated by a similar lack of 
transparency in the bank's ownership, which has passed from one shell 
corporation to another, creating considerable uncertainty as to the 
identity of the true beneficial owner(s).
    Credex's original registered owner, Ximex,\37\ displays numerous 
characteristics of a shell corporation. Listed at 12-16 Clerkenwell Rd, 
London, United Kingdom,\38\ Ximex shares the same mailing address as 
another firm--whose primary activities are formation and servicing of 
international business companies, as well as tax and financial 
planning.\39\ Ximex is owned by ``Imex Executive, Limited,'' a company 
registered to the address of a BVI company formation agent.\40\ 
Additionally, Ximex is listed by the UK's Financial Services Authority 
(``FSA'') among firms and/or individuals who are not authorized to 
conduct regulated investment activities.\41\ The FSA is an independent 
body that regulates the financial services industry in the UK.\42\ \43\
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    \37\ ``Belarus on a Roll,'' Business New Europe, July 22, 2009 
(http://www.bne.eu/story1701/Belarus_on_a_roll).
    \38\ See ``Ximex Executive Limited,'' (http://www.biz-info.co.uk/ximex+executive+limited_04605867.html).
    \39\ See ``Carrington Accountancy,'' (http://www.freeindex.co.uk/profile(carrington-accountancy)--277286.htm). 
See also ``Carrington Corporate Services Limited,'' (http://www.biz-info.co.uk/carrington+corporate+services+limited_03160163.html).
    \40\ Dun & Bradstreet, Global Reference Solution (2011) 
(www.dnb.com).
    \41\ ``Unauthorized firms/individuals,'' Financial Services 
Authority, November 4, 2010 (http://www.fsa.gov.uk/pages/Doing/Regulated/Law/Alerts/unauthorised.shtml).
    \42\ ``What We Do,'' Financial Services Authority (http://www.fsa.gov.uk/pages/about/what/index.shtml).
    \43\ ``Warnings & alerts,'' Financial Services Authority, 
November 4, 2010 (http://www.fsa.gov.uk/Pages/Doing/Regulated/Law/Alerts/index.shtml).
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    Since October 2009, Credex has been owned by Vicpart Holding SA 
(``Vicpart''), based in Fribourg, Switzerland.\44\ Publicly available 
information about Vicpart reveals significant inconsistencies and gaps 
that raise concerns about the true nature and purpose of the company. 
Vicpart shares the same address with more than 200 other companies, 
some of which are in liquidation.\45\ These companies in liquidation 
merit particular scrutiny because at least one Financial Action Task 
Force (``FATF'') study has identified the practice of dissolving 
companies rapidly after creation as a risk factor signaling the 
potential misuse of corporate vehicles.\46\ The Vicpart Web site is 
currently inaccessible to the public. Prior to its shutdown, the Web 
site stated that the purpose of the company is the management of

[[Page 31438]]

financial, industrial, and commercial participation, as well as real 
estate operation.\47\ Separately, a global business registry indicates 
that Vicpart is registered as a joint stock company whose primary line 
of business is investment management.\48\ However, Credex is listed as 
its only holding.\49\
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    \44\ Bankers Almanac (2012).
    \45\ Analyst Search of Dun & Bradstreet, Global Reference 
Solution (2012). (www.dnb.com) (search for ``Rue St Pierre 18 
Fribourg Switzerland'').
    \46\ ``The Misuse of Corporate Vehicles, Including Trust and 
Company Service Providers,'' FATF (http://www.fatf-gafi.org/media/fatf/documents/reports/Misuse%20of%20Corporate%20Vehicles%20including%20Trusts%20and%20Company%20Services%20Providers.pdf), p. 33.
    \47\ See Vicpart Web site (http://vicpart.ch/en/about) (accessed 
1/19/12, but no longer accessible as of 5/21/12).
    \48\ Dun & Bradstreet, Global Reference Solution (2011) 
(www.dnb.com).
    \49\ See Vicpart Web site (http://vicpart.ch/en/about) (accessed 
1/19/12, but no longer accessible as of 5/21/12).
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    Adding to these concerns are allegations of criminal involvement by 
Vicpart's management. According to information made available to the 
USG, two former Vicpart board members were charged with criminal 
activity, including document forgery. These individuals may have used 
companies registered to Vicpart's current address as part of their 
alleged criminal activity. Meanwhile, aside from the listing of a 
single individual as both a Vicpart director and the sole authorized 
signatory for the company, there is no other publicly available 
information on the current composition of Vicpart's board of 
directors.\50\
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    \50\ Dun & Bradstreet, Global Reference Solution (2012) (http://www.dnb.com).
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    Although the Credex Web site currently states that the single 
individual listed as a Vicpart director is also the ``beneficial 
owner'' of the company,\51\ the USG has concerns about the accuracy of 
this information. According to publicly available information, the 
individual named as Vicpart's beneficial owner has also been identified 
by global business registries as being involved with at least 30 
different companies, many of which are in liquidation and list the 
individual's personal residence as their address.\52\ This involvement 
with a large number of companies, many of which are in liquidation and/
or share the same address, raises concerns that the individual may 
function purely as a formation agent or nominal owner whose 
identification as a company's owner in public sources may be intended 
to shield the true beneficial owners from scrutiny.
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    \51\ ``Business Card,'' CredexBank Web site (http://www.en.credexbank.by/bank/general/businesscard). See also Dun & 
Bradstreet, European Report (2012) (http://www.dnb.com), which does 
not provide any indication that the single individual is the 
company's beneficial owner but indicates that he has been the sole 
authorized signatory since June 2009.
    \52\ Dun & Bradstreet, Global Reference Solution (2012) (http://www.dnb.com). See also ``Moneyhouse'' (http://www.moneyhouse.ch/en).
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    The ambiguity surrounding Vicpart's ownership is particularly 
concerning because the company also exhibits several indicators of 
typical shell corporation activity, and owns a bank that has been 
engaged in highly questionable patterns of transactions that are 
indicative of money laundering. For example, while Vicpart's Web site 
states that the company was incorporated in 1999,\53\ it does not 
appear to have been active until June 2009--four months prior to 
acquiring Credex from another shell corporation, Ximex in October 
2009.\54\ This long period of dormancy followed by involvement in a 
major transaction bears the hallmark of Vicpart being a ``shelf 
company.'' \55\ Additionally, Vicpart's financial statements at the 
time of acquisition showed no balance sheet assets except for 100,000 
Swiss Francs (estimated $108,000) in share capital.\56\
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    \53\ See Vicpart Web site (http://vicpart.ch/en/about) (accessed 
1/19/12, but no longer accessible as of 5/21/12).
    \54\ Id.
    \55\ The term ``shelf company'' is typically applied to a 
company which, among other things, has inactive shareholders, 
directors, and secretary; and is left dormant--that is, sitting ``on 
a shelf''--for the purpose of being sold. See ``Puppet Masters: How 
the Corrupt Use Legal Structures to Hide Stolen Assets and What to 
Do About It,'' The World Bank and UNODC, 2011, p. 37. 
(www.worldbank.org).
    \56\ See Vicpart Web site (http://vicpart.ch/en/about) (accessed 
1/19/12, but no longer accessible as of 5/21/12).
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III. Finding

    Based on the foregoing factors, the Director of FinCEN hereby finds 
that Credex is a financial institution of primary money laundering 
concern.

    Dated: May 22, 2012.
Peter S. Alvarado,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2012-12742 Filed 5-24-12; 8:45 am]
BILLING CODE 4810-02-P