Financial Crime World

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Angola’s Money Laundering Detection Machines Fall Short, Investigation Reveals

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A network of corruption and hidden wealth originating from Angola has raised concerns over the country’s ability to detect and prevent money laundering. Despite being ranked 165 out of 180 in Transparency International’s Corruption Perceptions Index and listed as having “strategic deficiencies” by the Financial Action Task Force (FATF) for five of the past 10 years, Angola’s money laundering detection machines have failed to uncover a vast network of shell companies controlled by Isabel dos Santos, daughter of former Angolan President José Eduardo dos Santos.

The Investigation

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The investigation reveals that dos Santos’ network spanned across 41 countries, with many operating in jurisdictions known for their strong anti-money laundering (AML) institutions. However, it appears that these institutions failed to detect the illicit activities, with banks involved either not knowing or not asking the right questions about the source of the funds.

Key Findings

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  • Jurisdictions with high effectiveness in combating money laundering were more likely to host companies linked to dos Santos.
  • The presence of shell companies in the dos Santos network was correlated with low levels of financial secrecy, corruption, and FATF watchlist status.
  • Countries with effective AML policies are actually more attractive to money launderers due to their reputation for being trustworthy and legitimate.

Implications

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The study’s findings have significant implications for regulators and policymakers, who must address the weaknesses in current AML policies and ensure that detection machines are effective in preventing money laundering. As the world continues to grapple with the complexities of global finance, it is essential to understand how well our AML institutions work and where they need improvement.

Recommendations

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  • Strengthen AML policies and regulations to prevent money laundering.
  • Improve transparency and cooperation between jurisdictions to combat cross-border money laundering schemes.
  • Enhance financial literacy and education to prevent individuals from being exploited by money launderers.