Russian oligarchs and elites might look to use investment advisers as a low-risk way to evade U.S. sanctions because of the industry’s vulnerability to illicit finance, a top U.S. Treasury Department official said.
Brian Nelson, the Treasury’s undersecretary for terrorism and financial intelligence, said Wednesday at a conference hosted by the Securities Industry and Financial Markets Association that his agency is scrutinizing the illicit finance risks facing the investment adviser industry and wants to engage with it to determine whether additional rules are needed to help prevent the sector from being used for nefarious purposes.
Mr. Nelson’s remarks come as concerns grow that Russian oligarchs and elites are seeking to evade sanctions imposed on them after the country’s invasion of Ukraine. Mr. Nelson said the U.S. is working with its allies to “prevent sanctions evaders from exploiting financial loopholes to hide and move their wealth.”
The Treasury’s National Money Laundering Risk Assessment, which became public in March, noted that certain financial intermediaries such as investment advisers aren’t subject to comprehensive anti-money-laundering and counterterrorism financing regulations.