Azerbaijan’s Banking Industry Rocked by Laundromat Scandal

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A massive money laundering and corruption scheme, dubbed the “Azerbaijani Laundromat”, has left the banking industry in Azerbaijan reeling. The scandal, which was brought to light by a joint investigation between Danish newspaper Berlingske, the Organized Crime and Corruption Reporting Project (OCCRP), and major European media outlets, has raised serious questions about the involvement of several major European banks.

The Laundromat Scheme

The scheme allegedly laundered $2.9 billion through four UK-based shell companies, believed to have been used by Azerbaijan’s ruling elite to influence European decision-makers and secure billions of dollars in international loans for its mega-projects.

Involvement of Major European Banks

Several European banks have been implicated in the scandal, including Société Générale, which has been linked to at least one payment identified in the Laundromat investigation. The bank has denied any wrongdoing, but critics argue that its involvement in the project raises serious questions about its commitment to ethical banking practices.

Calls for a Comprehensive Investigation

European parliamentarians are calling for a comprehensive investigation into the scandal, which they believe has compromised the integrity of European institutions and undermined public trust in the banking sector. “We will insist that this investigation thoroughly looks into the various responsibilities of all those involved in this massive money laundering and corruption scandal, including European banks, and holds them accountable,” said Catalan MEP Jordi Solé.

The Southern Gas Corridor Project

The Azerbaijani government has been accused of using its vast oil wealth to bribe politicians and officials across Europe in order to secure support for its gas projects. The SGC project, which includes the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP), is seen as a key component of Azerbaijan’s strategy to become a major player in the global energy market.

The scandal has also raised concerns about the environmental and social impact of the SGC project, which is expected to affect thousands of people in countries along its route. “This is not just a matter of corruption and money laundering,” said a spokesperson for BankTrack, an international coalition of NGOs that monitors the activities of major banks. “It’s also about the human, social, and environmental rights of the people who will be affected by this project.”

Calls for Robust Due Diligence

As the scandal continues to unfold, critics are calling on European banks to conduct robust due diligence and engage with civil society stakeholders in a more meaningful way.

Conclusion

The Laundromat scandal is just the tip of the iceberg. It’s time for European banks to stop enabling corruption and start prioritizing ethical banking practices. The Azerbaijani government, meanwhile, has been accused of using its vast oil wealth to silence critics and maintain its grip on power.