The Secrets of War: Global Financial Secrecy

Civis Mundi Digitaal #119

door Michel van Hulten

The secretariat of Transparency International in Berlin published in her “The week in corruption” of 25 February 2022, ‘The Secrets of War’. The following tekst is borrowed from TI: The Secrets of War (transparency.org)
This week, the world watched in trepidation as Russian forces attacked Ukraine early on Thursday morning.
With more than 137 casualties already reported, and many more injured and rendered homeless, it’s time not only to show our support to the Ukrainian people, but to shed a spotlight on an important factor that fuelled this conflict – global financial secrecy and corruption, enabled by leading economies in the West.


Protests in Berlin against the Russian invasion of Ukraine. Image: Pani Garmyder / Shutterstock

It took the brink of war for Germany to stop the certification process for the contentious Nord Stream 2 pipeline on Thursday. Last week, we reported on a German state foundation’s hidden connections to the Russian gas company Gazprom and the foundation’s actions in support of the Nord Stream 2 pipeline.
Recent investigations have also made it clear that kleptocrats have taken advantage of lax regulations and opaqueness in the financial system to lay the groundwork for the conflict we’re seeing today. They use banks not only to launder money and their reputation, but also to build power. Leading democracies let them get away with it.
For instance, the 2020 FinCEN Files investigation revealed several Russian oligarchs – including those with close ties to Putin – involved in suspicious activities and with unchecked access to the international financial system. 
Just take businessmen Arkady and Boris Rotenberg, known childhood friends of Putin, as an example. After Russia’s annexation of Crimea in 2014, the Russian state commissioned Rotenberg’s company to construct a bridge from mainland Russia to Crimea. 
Despite being placed under sanctions, kleptocrats continue to easily move funds, buy assets and invest in crucial sectors of the economy across the globe. Anonymous companies and a criminal services industry offer bank accounts, luxury mansions and goods and even citizenship in exchange for fatty investments. In fact, very little is known about how the assets of these oligarchs, where they are located and where their interests lie. 
Earlier this week, another damning investigation, Suisse Secrets, exposed how one of Switzerland’s largest banks had autocrats, suspected war criminals and other corrupt people as clients. The investigation also revealed previously unknown breaches by the bank, Credit Suisse, and an alarming volume of dirty money parked in their accounts.  
Clearly, leading democracies have played their part in facilitating conflict and insecurity globally by allowing kleptocrats to further their interests and power across the West.

We express our solidarity with the people of Ukraine and with Russian citizens risking their lives to speak out against war. We call on leading economies to address the corruption exacerbating this conflict and stop the flows of money funding corrupt Russian officials and their attacks on the people of Ukraine.
That is why we will also continue to call on members of the Financial Action Task Force, who are meeting this week to decide the new standard of anti-money laundering laws, to require beneficial ownership registers and end the secretive structures that allow corruption to thrive.
The grave situation in Ukraine clearly shows that the abuse of the financial system – along with the complicity of financial institutions like banks – leads to deadly consequences for people around the world, and it must end now.
What do you think? Let us know @anticorruption.