Markets Wired

As Prepared for Delivery

Good afternoon, everyone. Thank you for coming today to discuss the state of Colombia’s vibrant banking sector. My name is Elizabeth Rosenberg, and I am the Assistant Secretary for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury. In this role, I am responsible for protecting the U.S. financial system from money laundering, terrorist financing, sanctions evasion, and any other financing of criminal activities. My office also leads the U.S. delegation to the Financial Action Task Force and the Latin American Financial Action Task Force, GAFILAT.

My Treasury colleague and Deputy Director of the Office of Foreign Assets Control, Brad Smith, was in Colombia just a few months ago and spoke with some of you all about our sanctions-focused work. Today, I want to widen the scope of the conversation and discuss the frameworks that protect our financial systems, share what we are learning, and how we are taking action based on what we have learned.

Each country faces different risks. For the United States, we assess the risks to our financial system through regular research and reports. Every two years, my office publishes our country’s national risk assessments on money laundering, proliferation financing, and terrorist financing. We also publish reports on an ad hoc basis on emerging trends and threats, such as our recent risk assessment on decentralized finance or our numerous advisories from Treasury that have covered the evolving illicit finance risks related to Russia. This requires us to work very closely with stakeholders, including our banks, money service businesses, and others in the private sector to ensure we capture the full spectrum of threats we all face.

However, we know this is just one important aspect of our relationship with the financial sector. Our financial institutions also conduct their own risk assessments to guide a risk-based approach to doing business and combatting illicit financial activity. This is particularly important for the United States because, as Secretary of the Treasury Janet Yellen has said before, the size of our economy and the stability of our financial sector makes the United States one of the most desired destinations for money laundering and illicit finance.

I am illustrating this process to encourage you to work closely with the Colombian government as well as to do your own careful research to understand your risk exposure. While some threats, such as fraud, overlap between our systems, Colombia has its own unique illicit finance risks and must apply its own unique mitigation measures to ensure that money is not going to the wrong people.

Our risk assessments also inform policy actions. I want to highlight a specific case where we are taking critical action to safeguard our financial system: beneficial ownership transparency. We have found time and again that illicit actors obfuscate their identity to hide and move funds in and through the U.S. financial system. Therefore, it is a key priority of the Biden-Harris Administration to strengthen our own beneficial ownership regulations to end criminal activity, prevent the proceeds of corruption entering our financial system, and clamp down on sanctions evasion. This is why the United States finalized a rule implementing beneficial ownership information reporting requirements in September 2022, to come into effect in January 2024.  

I also want to raise financial inclusion and the phenomenon of de-risking. My team recently published the first-ever U.S. strategy on de-risking earlier this year, where we consider the factors that cause de-risking and propose ways to mitigate its effects.

It is my understanding that Colombian banks are well-connected to the U.S. financial system and have not had significant recent concerns regarding de-risking from their correspondent relationships. However, I also know Colombia has prioritized financial inclusion across the country as well as maintaining relationships with what some may consider to be “higher risk” jurisdictions in South and Central America. I am eager to hear from you all about the state of these relationships, and what measures you are taking to protect your banks while admirably maintaining and expanding financial connectivity.

To close, I want to reinforce the importance that the United States, and Treasury in particularly, places in our relationship with Colombia. Not every country in the world has Treasury representatives at our Embassies—Colombia is one of the select few. I hope our representative can be a strong point of connectivity between us and a resource for you all. Again, I am excited to be here and discuss these issues with you and find ways we can be helpful to one another.

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