While not widely reported, it is worth noting that the UK government rejected an appeal by Lord Peter Hain of the UK Labor Party to support the creation of an international anti-corruption tribunal.
Why this is vital is the shameful fact that more illicit money has been withdrawn from Africa than the amount of development aid and loans the continent has received.
In 2015, African countries received $162 billion, mainly in loans, aid and personal transfers. In the same year, $203 billion was channeled through multinational corporations repatriating profits and illegally transferring money to tax havens.
In South Africa, at least $3.5 billion left the country during nine years of state control, with the help of banks, consultants and chartered accountants.
This week, the FBI pounced on the extradition of former Mozambican Finance Minister Manuel Chang, who was being held in South Africa and who nearly collapsed Mozambique’s economy and currency through deals with US financiers and the International Monetary Fund.
Chang has entrusted the impoverished, war-torn country with $2 billion in secret borrowing by state-owned entities.
In this case, the governor of the Central Bank of Mozambique, Ernesto Jove, approved the illegal debt contracts.
Corruption in Mozambique is deep and deadly, as evidenced by the indictment of three directors of the government’s intelligence services – the Director General, the Director of Economic Intelligence and the Director of Studies and Planning – for receiving $30 million in bribes to facilitate. contracts.
This person rooting in the trash can at traffic lights, this homeless community huddled under a bridge in the rain and winter cold, all the kids who can’t read for meaning, the crumbling hospital infrastructure – they are all symptoms of this kind of predatory politics and action. No matter where you are in the world – New York, Lagos, Cape Town – it is a direct result of this sleazy plundering of the 21st century.
Collusion of the financial sector
The United Kingdom and the United States have long been chosen as destinations for the ultra-rich and other politically connected thieves to invest in real estate and businesses, and to transfer money through those countries’ banking systems.
The idea of an international body is gaining momentum as the extent of the plundering of sovereign states by political elites and organized crime, along with the financial sector, has been widely exposed in several scandals.
The role of the financial sector in moving dirty money to offshore tax havens and shelf companies, and through shadow banks, has been exposed in the Panama Papers and FinCEN files, to name a few.
The Panama Papers was a 2.4 terabyte leak of documents in 2016 from the law firm Mossack Fonseca that clearly showed how and where political villains, the rich and famous hid their stashes. In the group, journalists found the names of 35 sitting and former heads of state.
Investigations into the FinCEN files by BuzzFeed News, in collaboration with media organizations in several countries and coordinated by the International Consortium of Investigative Journalists, revealed how major banks continued to process payments identified as at high risk for money laundering and other crimes.
Henn noted: “Canada, the Netherlands, Ecuador, Moldova, Nigeria, and the European Parliament have recently called for the creation of an international anti-corruption court, as have more than 300 leaders from more than 80 countries, more than 45 former presidents and prime ministers, and 30 Nobel laureates.” .
He added that a group of eminent international jurists and other experts were in the process of drafting a model treaty and that the UK should support that.
British Deputy Foreign Minister Tariq Ahmed replied, “Now is not the time to endorse a new, bespoke institution of this kind.” But, he added, the idea wasn’t completely “off the table.”
Meanwhile, Ahmed said the UK’s International Anti-Corruption Unit is a “leading global institution that has achieved a lot since its inception in 2017 in close coordination with UK partners”.
Haine persuaded the Conservative government in 2022 to ban the US consulting firm Bain & Company from doing business with the British government for three years as a result of the international firm’s complicity in State Capture during Jacob Zuma’s presidency.
Remarkably, in March this year, the UK lifted the ban early. That’s how serious they are.
How do we stop corporate bullying?
In the case of the United Kingdom, a 2022 report by the University of Cambridge and the University of Texas showed how easy it is to breach regulations aimed at stemming the international flow of black money.
As reported by David Baty WatchmanA test of 5,000 banks and 7,000 other financial intermediaries in 273 countries from 2020 to 2021 showed that one in 30 banks failed to comply with international regulations, including the Magnitsky Act.
Known as the Magnitsky Sanctions Test, it is named after lawyer Sergei Magnitsky, who worked for London-based investor Bill Browder and who died in a Russian prison.
The study established 12 shell companies “in countries recognized as having a low risk of corruption including the UK and the US, high risk including Papua New Guinea and Pakistan, as well as in offshore jurisdictions, such as the British Virgin Islands”.
“They then posed as representatives of those companies and sought to open bank accounts for them,” Paty writes.
Foreign affairs expert Jason Sharman, professor of international relations at the University of Cambridge, told Patti: “It will take one day to break these sanctions. You don’t have to go to great lengths to send 20 emails.”
Global Witness, an NGO that exposes links between corruption, natural resources and conflict, has suggested that governments should hold top bankers personally accountable. This would work in an instant.
Barriers to authorities holding senior executives accountable for implementing strict compliance with anti-money laundering legislation must also be removed. very easy.
Governments also need to introduce beneficial ownership records for corporations and trusts that allow banks to verify the identity of real individuals who benefit from owned accounts in corporate entities.
While solutions exist, the political will clearly is not. DM
This story first appeared in our weekly Daily Maverick 168, available nationwide for R29.
