Reporting of major corruption scandals usually puts the high-profile kleptocrats front and centre, and rightly so. But, more often than not, the criminal and corrupt couldn’t launder their ill-gotten gains without a variety of professional services, including those of accountants, notaries, real estate agents and bankers.
These professions are subject to specific anti-money laundering obligations, and are meant to be the first line of defence protecting the global financial system against dirty money.
However, when they engage in wilful, complicit or negligent conduct, as illustrated in numerous cases, they earn another nickname: professional enablers of money-laundering.
The latest investigation into the business dealings of a politically connected family from Azerbaijan adds to the long list of examples where intermediaries appear to have helped obscure the origins of the suspect funds.
A lack of due diligence and reporting of suspicious transactions by professionals in Spain and the United Kingdom, in particular, seem to have helped the family in question make investments in luxurious real estate and legitimate businesses, despite major red flags.
Authorities in the countries involved, including in the United Kingdom, should take note of the new evidence and thoroughly investigate whether the professional intermediaries conducted the necessary checks. There should also be stronger anti-money laundering supervision and tougher sanctions for the professional enablers who open the gates of the financial system to kleptocrats.
This is especially crucial now. These gatekeepers should play a key role in preventing the post-COVID-19 recovery from being undermined by corruption.
Our new study finds evidence that during previous crises, professional enablers facilitated economic crime. Drug money was laundered through banks during the 2008 global financial crisis, and funds disbursed in previous humanitarian crises, such as the Ebola outbreak, were lost and laundered with assistance from professional enablers. The particular features of the COVID-19 crises may create more opportunities for economic crime as the crisis unfolds.
More than ever, we need these professional service providers to do their jobs and keep the gates of the financial system shut for the kleptocrats.
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