I write often and hopefully about the rising acceptance throughout the world of anti-financial crime standards.
But it turns out global anti-money laundering and counter-terrorist financing (AML/CTF) standards are a little like ‘The Force’ in the Star Wars universe: there is a light (good) side and, as adopted and implemented by some governments, a dark side.
The dark side includes the practice of twisting and then leveraging recognised AML standards to harass and even criminally charge political opponents and individuals connected to non-governmental organisations (NGOs) advocating for human rights.
The increasing misuse of AML surveillance and enforcement actions for political purposes was documented in a recent ACAMS moneylaundering.com news story1 reporting on a statement issued by the Egmont Group, the association that represents 166 countries’ financial intelligence units (FIUs).
The Egmont Group’s important work facilitates robust cross-border exchanges of actionable financial intelligence and relies on trust that a member FIU will not misuse the information it receives from others. The ‘operational autonomy and independence’ of FIUs from their respective governments is crucial, Egmont Chair Hennie Verbeek-Kusters writes in a 3 March 2021 statement.2
The statement from Verbeek-Kusters warns of the ‘deeply concerning allegations pertain[ing] to FIUs limiting or coercing civil society actors for their work and critiques of current governments in their jurisdictions.’
Whilst this unprecedented rebuke of some governments for misusing shared financial intelligence to target NGOs does not identify abuses by any one country, it suggests that such abuses abound and appear to be on the rise. ACAMS Today, ACAMS conferences and webinars, as well as ACAMS moneylaundering.com are replete with examples.
As noted in the story about the Egmont Group statement, the whole world watched as Kremlin critic Alexei Navalny, upon his return to Russia in January, was arrested in connection with charges he embezzled roughly 6.8 million euros in donations from the anti-corruption group he chairs, charges that were dismissed by European Union courts.
The threat to global AML efforts presented by some governments’ abuse of financial intelligence and prosecutorial powers ranks with the threat to fighting financial crime presented by countries that adopt AML/CTF regimes to avoid being dinged by the Financial Action Task Force (FATF) in mutual evaluation reports but do not actually prosecute or seize assets from financial criminals.
Although both require a vigorous response, neither should suggest that the globalisation of anti-financial crime efforts has failed.
FATF’s introduction of effectiveness standards beginning with the fourth round of mutual evaluations is an important counter to countries merely giving lip service to AML standards. Among other things, countries must now show that they are prosecuting criminals for money laundering, seizing illicit assets and implementing anti-corruption policies.
Similarly, the statement from Verbeek-Kusters in March is important as both a sobering criticism of a bad practice that undermines anti-financial crime efforts and human rights, and a crucial line in the stand against governments abusing their relationship with the Egmont Group.
It is also encouraging that the Group has demonstrated a willingness to investigate members and, when abuses have been uncovered, to block them from requesting and receiving financial intelligence from other members. For example, as ACAMS moneylaundering.com’s Gabriel Vedrenne reported, the Egmont Group suspended Nigeria from its platform from July 2017 to September 2018 over concerns regarding the protection of confidential information and a perceived lack of independence.
FATF’s efficacy standards and Verbeek-Kusters’ strong statement are just some of the efforts needed to keep global anti-financial crime efforts on track. But they are also a reason for me to keep writing hopefully about a growing global consensus around the importance of cooperation, information sharing and basic international standards. After all, even if the movement toward that consensus involves taking two steps forward and one step back, the light side is staying a step ahead of the dark side.
Kieran Beer, CAMS
chief analyst, director of editorial content
Follow me on Twitter: @KieranBeer
“Financial Crime Matters with Kieran Beer”
- Gabriel Vedrenne, “EXCLUSIVE: Egmont Flags Government Abuse of Financial Intelligence,” ACAMS moneylaundering.com, 9 March 2021, https://www.moneylaundering.com/news/exclusive-egmont-flags-government-abuse-of-financial-intelligence/
- “Egmont Group Warns Against Misuse of FIU Powers,” ACAMS moneylaundering.com, March 2021, https://www.moneylaundering.com/legs_and_regs/egmont-group-warns-against-misuse-of-fiu-powers/