The US government has introduced new financial rewards attached to a previously little-known whistleblower award programme targeting kleptocrats.
The Kleptocracy Asset Recovery Rewards Program established under the 2021 Defense Authorization Act now offers rewards of up to $5 million for information leading to the restraint, seizure, forfeiture or repatriation of stolen assets of sanctioned Russian individuals and entities.
To qualify, the assets must be either held in the account of a US financial institution, including US branches abroad, or the assets must be in the United States or in the possession or control of a US person.
The programme aims to retrieve assets linked to foreign government corruption in general, including that involving the government of the Russian Federation. Other targets are funds related to Brazilian construction company Odebrecht’s bribery scandal and Malaysia’s 1MDB fraud.
The US government released a list of 50 individuals they are particularly interested in, including 28 who are sanctioned by several jurisdictions.
The financial incentive for whistleblowers was announced alongside the launch of a multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force between the US, Australia, Canada, Germany, Italy, France, Japan, the UK, and the EU, last week.
The finance ministries in the respective countries agreed to share information to enforce sanctions, asset freezes and seizures, as well as criminal prosecutions related to any misconduct by sanctioned Russian individuals and companies.
The US government said that the cooperation had already resulted in notable successes in the last three weeks.
Information provided by U.S. law enforcement to foreign partners contributed to the restraint of multiple vessels, worth hundreds of millions of dollars, controlled by sanctioned individuals and entities, the US Treasury Department said.
“Our sanctions, trade restrictions, and other measures have already imposed significant costs on Russia, its leadership, and those who enabled Putin’s unprovoked invasion into Ukraine,” said Treasury Secretary Yellen.
“This multilateral task force will raise those costs even more, by galvanizing coordinated efforts to freeze and seize assets of these individuals in jurisdictions around the world and deny safe haven for their ill-gotten gains.”
The US Treasury’s Financial Crimes Enforcement Network (FinCEN) released an alert last week about the importance of identifying and reporting suspicious transactions by sanctioned Russian elites, oligarchs, and their proxies that involve real estate, luxury goods, and high-value assets.
It outlines how real estate and high-value goods could be used to circumvent the Russia sanctions.
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It’s the USA itself that facilitates kleptocracy by making it so easy to form corporations with anonymous owners. Especially in Delaware, Wyoming, Nevada and even Florida.
Company formation agents will even provide nominee directors for a small extra fee. No need to disclose the shareholders.
It’s a major part of state revenue so no incentive to clean up the business.