đ¸Kleptocracy #13 | Anti-corruption and foreign policy collide in 2022, Kazakhstan revolts against corruption, and UAE fears FATF gray list
The latest news, research and analysis on how corruption is reshaping global politics and security
Welcome to Kleptocracy, the newsletter on how corruption is reshaping global politics and security. Happy New Year to all our readers! Keep scrolling down for all the latest news, research and analysis from around the world.
2021 was a bumper year for anti-corruption advocates in Washington, DC, with the banning of anonymous shell companies and publication of a major US Strategy on Countering Corruption. But beyond initial steps to strengthen US defenses against dirty money, 2022 poses a difficult question for the Biden administration and 117th Congress: How does an aggressive campaign against global corruption work in the context of competition with China and other powerful adversaries? Might targeting corrupt foreign leaders only drive important economic and security partners closer to Beijing? Or is stubborn adherence to our values and the rule of law a long-term strategic advantage against corrupt authoritarian regimes, whatever the short-term consequences?
These questions seem to have arisen recently in the murky example of Equatorial Guinea, where US failure to sanction vice-president Teodorin Obiang for corruption was all but inexplicableâuntil it transpired that China was planning its first Atlantic naval base in the country. The year ahead is likely to see foreign corruption, which had always been treated primarily as an economic development issue by the US and other Western governments, collide head-on with traditional foreign policy and national security concerns. Itâs a fascinating development and something weâll be exploring more at the Kleptocracy Initiative in the coming months.
Meanwhile, as events unfold in Kazakhstan it is worth remembering that it was former president Nursultan Nazabayev, not Vladimir Putin, who pioneered the prevailing model of post-Soviet kleptocracy involving transnational money laundering and reputation whitewashing in Western capitals. It is hardly surprising, therefore, that corruption ranks so highly on protesting Kazakhsâ long list of grievances. There is abundant evidence of funds stolen by the ruling elite being stashed in London real estate and other assets located well within the jurisdiction of Western law enforcement. The best time to seize this dirty money was yesterday, but right now it is the very least we can do to demonstrate solidarity with corruption-conscious protestorsâand avoid complicity as their venal leaders flee the country to avoid accountability and enjoy stolen wealth.
Best,
Nate
đ¸NEW FROM KI
đ§Making a Killing #32: Chinaâs Serial Censorship | Hudson Institute
Paul Massaro talks to Dr. Andreas Fulda about how the CCP leverages its market to silence academics and other critics. They discuss the case of Germany, which has been particularly vulnerable to the CCPâs extraterritorial censorship.
Biden Doesnât Know What He Thinks About Sanctions | Paul Massaro & Benjamin Schmitt, Foreign Policy
âGlobal events unfolding in real time complicated Washingtonâs strategic commitments and demonstrated tension between two foreign policy paths... [Putinâs Ukraine aggression] called for a commensurate sanctions package rollout that specifically targeted Kremlin elite in Russia and the conduits for Kremlin strategic corruption... No such package was forthcoming.â
Itâs Put Up or Shut Up Time in the Fight Against Global Corruption | Casey Michel, The New Republic
âIn many ways, 2022 will illustrate whether the [Biden] administration is serious about this fight against kleptocracy, and can actually translate this new rhetorical burst into reality.â
đď¸NEWS
As Kazakhstan burns over inequality, the eliteâs wealth is safe and sound in London | London is home to some ÂŁ530 million in luxury property owned by the countryâs ruling class | OpenDemocracy
UAE faces risk of inclusion on global watchlist over dirty money | A decision on whether the country will be added to the FATFâs âgray listâ is expected in early 2022 | Bloomberg
US imposes new sanctions on Bosnian Serb leader Milorad Dodik | The Treasury Department accused him of corruption and threatening the stability and territorial integrity of Bosnia and Herzegovina. | Reuters
Top UK law firm fined record sum for breaching money-laundering rules | Mishcon de Reya agrees to pay fine of ÂŁ232,500 after investigation | The Guardian
North Korea accesses âglobal commercial channelsâ to develop nuclear weapons | Pyongyang is using estate agents and even a casino to evade US-led sanctions | Financial Times
South African leader gets first part of corruption report | President Ramaphosa is considering the outcome of a three-year judicial investigation into Jacob Zumaâs tenure | Associated Press
Imelda Marcos expected to return to presidential palace | The OG kleptocrat's son is favorite to become president in 2022 as part of a baffling joint ticket with Rodrigo Duterteâs daughter | Daily Beast
Danske Bank rebuilds compliance program after money laundering scandal | The Copenhagen-based bank is about half-way through a revamp of its financial crimes controls | Wall Street Journal
Former Swedish bank CEO faces fraud charges in money-laundering case | Former boss of Swedbank accused of breaking the law when she played down concerns about bankâs activities in Estonia | Politico
Head of Hong Kongâs anti-corruption commission to head Chinaâs global anti-corruption organization | The International Association of Anti-Corruption Authorities is supposed to support implementation of UN Convention Against Corruption but has been mired in controversies | South China Morning Post
NGO urges Chinese online platforms to help fight illegal wildlife trade | OCCRP
Asylum seekers shut out of financial system by some EU banks, watchdog finds | Banks have become far more nervous as regulators in the EU, the United States and elsewhere crack down on inadequate âknow your customerâ checks | Reuters
Record $14 billion flowed into crime-linked crypto wallets in 2021 | But the overall growth of digital asset markets outstripped the rise in scams. | Financial Times
đRESEARCH & ANALYSIS
Poverty, inequality and corruption: why Kazakhstanâs former leader is no longer untouchable | Shaun Walker, The Guardian
âTo Nazarbayev, it must have seemed like he had found an answer to the problem vexing ageing autocrats across the region: how to step aside in old age without risking retribution. Vladimir Putin and others were doubtless watching with interest.â
From corruption to the âmark of the beastâ â why countries like Malawi are struggling against Covid | With 80% of pandemic funds misused and widespread vaccine myths, citizens have had to step up where government has failed | Madalitso Wills Kateta, The Guardian
Donât you be my neighbor | Michelle Kendler-Kretsch, The Hill
âCorrupt and criminal enterprises are, as we speak, buying up our neighborhoods⌠The US must bolster the real estate sectorâs ability to protect itself from exploitation and criminality. The ENABLERS Act is the right tool for the jobâ
US seeks AML modernization, while UK goes retro | Robert Kim, Bloomberg
Short circuit: The stunning simplicity of top-level corruption in Albania | Prosecutors say a former minister used a remarkably simple scheme to funnel big bribes for public contracts. It still took them years to find out | Balkans Insight
US Strategy on Countering Corruption reflects global enforcement | In-house counsel, company boards and other stakeholders need to start asking certain questions to keep pace with the coming expansion of enforcement actions. | Bloomberg Law
Get ready for an uptick in FCPA / anti-corruption enforcement | Allen & Overy / JD Supra
âWe anticipate an increase in FCPA enforcement actions, so now is a good time to review your compliance programs and make any necessary improvements.â