Op-Ed: Fighting Financial Crime – at Home and Abroad

March 20th, 2012

Global Witness’s Robert Palmer wrote the following Op-Ed in the Frankfurther Rundschau, a German-language paper. He writes about the importance of following illicit money, how difficult it can be to do so, and how the new FATF rules can make a difference. A translated excerpt below:

The Financial Action Task Force (FATF) is a group of bureaucrats from the rich and emerging economies who get together three times a year to set the global rules designed to curb the flow of dirty money through the world’s financial system. Their revised approach will do more to crack down on tax crimes and the spread of nuclear weapons, all of which depend on illicit transactions for procurements and payments.

Yet despite two years of painful negotiations, there are still two glaring holes in the system.

The first is that although most countries in the world have anti-money laundering rules in place – largely thanks to FATF’s embarrassing habit of naming and shaming recalcitrant governments – these laws are too often ignored. Just think how easy it was for billions of dollars of North African dictators’ funds to end up in western banks. If FATF’s rules had been enforced, the Gaddafi, Mubarak and Ben Ali regimes would have been unable to hide their country’s wealth in private foreign bank accounts. In Germany, €10 billion of Libyan money was frozen, most of which was state funds, which given the highly autocratic nature of Gaddafi’s regime are likely to have been under the personal control of the Supreme Leader and his cronies. In addition we know that at least one German bank held €2m belonging to one of Gaddafi’s sons. What due diligence could the bank that held this €2m possibly have done to reassure themselves that this money was not corrupt?

You can read the complete Op-Ed, in German, here.

Written by EJ Fagan

Follow @FinTrCo