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Civilisation has operated in two ways - To make one part of society more affluent and the other more wretched than would have been the lot of either in a natural state
There are Natural Rights and Civil Rights. Life, Liberty and the Pursuit of Happiness
Where Our Power to Execute Our Natural Rights is Perfect, Government has No Legitimate Jurisdiction
When the Forces for War are Greater than the Forces for Peace   Then the World is in Danger
Politics is not a Dirty Word. It is a Way of Life. How is Your Way of Life Today ?

THE WEEK IN CORRUPTION

25/09/2020: Oops! Banks did it again
Hi 

This week’s big headline is that banks know they’re accessories to corruption but don’t really mind. 

By now, you’ll have heard about the FinCEN Files investigations by BuzzFeed News, the International Consortium of Investigative Journalists and media outlets all over the world. The investigations expose major banks’ complicity in cross-border corruption, with documents showing in detail how illicit money has flowed through accounts at small and big banks all over the world.   

Even if major US banks raised red flags, they processed suspect funds anyway. They often flagged payments as suspicious way too late – after scandals had broken – and many of the reports failed to properly identify clients because they were hiding behind anonymous companies. 

For example, Venezuelan kleptocrats – who have looted their country for the past two decades – used EU and US banks to move billions in public money out of the country, as people back home faced the one of the gravest humanitarian crises in the world.  

While banks and bankers have profited from these transactions, people everywhere suffer from underfunded public services and lose trust that things will ever change. 

But change they must, and this time occasional fines and settlements will not do. The global anti-money laundering system needs an overhaul.  

We heavily depend on banks to detect and stop money looted from treasuries and public budgets finding safe haven abroad. The FinCEN Files are further proof that banks need to be better policed by the authorities.

Banks themselves and their senior bankers also need to face real accountability – otherwise they have little incentive to say no to dirty money. 

The US clearly needs to update its toolkit for keeping dirty money out of the financial system. A bi-partisan bill that would end hidden company ownership, currently pending in Congress, needs to pass without any further delay. 

Banks in 25 EU member states were also named in the FinCEN Files as the destination, transit point or origin for suspicious money.  

Among them is a small Portuguese bank EuroBIC, that moved millions of suspect funds for its shareholder Isabel dos Santos, the daughter of Angola’s former president. Transparency International Portugal is demanding answers from the Portuguese banking supervisor, who knew about serious flaws in EuroBIC’s anti-money laundering systems at least since 2015.  

If there ever was the right time to establish an independent, EU-wide anti-money laundering supervisory body, for which we have been calling on for the past two years, it is now. 

The rules of the game must change. 

 
What do you think? Let us know @anticorruption.
STORY OF THE WEEK
Will the EU miss its chance to properly protect whistleblowers?
Widespread corruption during the COVID-19 pandemic has shown once again how important whistleblowers are. The Whistleblower Protection Directive adopted last year is a chance for the EU to ensure that people can expose corruption safely. But member states might be letting this opportunity pass them by. 
FEATURED STORIES
The FACTI Panel is showing a path to a better future. Will governments take it? 

This week’s interim report from the UN FACTI Panel makes clear that the lack of transparency, accountability and integrity in financial systems comes at a great cost, as it undermines the social contract and drains resources from development. The way forward requires a coordinated effort to address the problems underlying the fight against corrupt money flows.  

Does your national (draft) legislation on whistleblower protection comply with the EU Directive and meet best practice? 

Protecting whistleblowers is protecting our society against corruption. We have a new tool that can help policymakers assess draft whistleblower legislation in their countries to ensure they comply with the EU Directive on Whistleblower Protection, and best practice. 

NEWS

FinCEN Files: Overhaul to global anti-money laundering system needed 

The FinCEN Files show only the tip of the iceberg that is the global financial system’s vulnerability to abuse by criminals and the corrupt. Banks that had repeatedly been warned or sanctioned by U.S. regulators and had committed to strengthen their anti-money laundering frameworks repeatedly processed transactions from clients they had flagged with Suspicious Activity Reports.  
 

FinCEN Files & Luanda Leaks: Suspicious EuroBIC payments further proof of anti-money laundering failures in Portugal 

Transparency International Portugal has asked the Bank of Portugal to urgently disclose its conclusions and the measures it has undertaken concerning the suspicious payments processed by EuroBIC – a small Portuguese bank part-owned by Isabel dos Santos that has been previously exposed for processing suspect funds from Angola. 
 

Chavismo Inc. investigation reveals the workings of “Bolivarian capitalism” around the world 

Through a series of reports covering ten countries, the new website launched by Transparency International Venezuela in collaboration with investigative journalists, shows a network of businesses that lined the pockets of a few, who are now established in a worldwide diaspora that illustrates the international dimension of corruption in Venezuela.  

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