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Countering Russian Kleptocrats: What the West’s Response to Assault on Ukraine Should Look Like

Transparency International condemns the lack of progress made on closing the financial loopholes that enable kleptocrats to abuse the global financial system to conceal their money and influence, connecting it directly to the lack of effectiveness of and progress made on sanctioning Kremlin-linked individuals and businesses. Sanctions will always be of limited effectiveness as long as authorities are unable to track down the assets purchased with dirty money, which should have never been allowed by Western governments in the first place. Transparency International has been calling attention to this dynamic, whereby the kleptocratic global system of dirty money threatens democracy, for years, and advances ten recommendations for key policies to prioritise adopting and strengthening enforcement in:

  1. Identify and freeze the assets of corrupt officials and complicit elites. The recently-established Transatlantic Task Force will be useful in this endeavour and moving forward.
  2. End anonymous companies by establishing central, public registers with verified information of the real owners of companies, including on foreign companies.
  3. Increase transparency of trusts by requiring the registration of trusts, with disclosure requirements for all parties recorded in a register accessible to authorities as well as to the public.
  4. Improve transparency and checks in the real estate sector by requiring disclosure of beneficial owners in a publicly available database.
  5. Open the black box of hedge funds, private equity and other investment funds by requiring checks on customers, and identification, disclosure and registration of beneficiaries of investment funds.
  6. Increase transparency in luxury goods ownership by disclosing information about the real owners of such goods to governments and the public.
  7. Ban golden passports and regulate golden visas, and revoke existing passports issued to Russian oligarchs under the current schemes.
  8. Hold professional enablers to account. Dissuasive sanctions should apply to firms and senior management.
  9. Stronger mechanism for seizing, confiscating and returning assets that goes beyond sanctions and helps to return confiscated assets to the victims of corruption.
  10. Support civil society organisations, independent journalists, activists and whistleblowers by investing in programmes combining investigative journalism with civil society advocacy for systemic change and providing support to anti-corruption fighters.

Read the full piece here at Transparency International.