Financial Crime World

Title: Belarus Faces Mounting Financial Crimes Amid Political Upheaval

Subtitle: From money laundering to tax evasion, the economic instability in Belarus fuels a thriving underworld

Belarus, an Eastern European nation, has faced political unrest since August 2020. Amid this turmoil, there have been increasing reports of financial crimes, including money laundering, tax evasion, and fraud.

Concerns of Money Laundering and Other Illicit Activities

  • The European Bank for Reconstruction and Development (EBRD) and the Organisation for Economic Cooperation and Development (OECD) have raised concerns about the Belarusian economy becoming a hotbed for money laundering and other illicit financial activities.
  • Belarus ranks 143rd out of 180 countries in the Transparency International Corruption Perceptions Index 2020.

Investigations and Arrests

  • Multiple financial and business entities are under investigation for money laundering, tax evasion, and fraud.
  • On March 10, 2021, Belarusian authorities arrested 35 individuals involved in an international money laundering scheme worth an estimated €13 million ($15 million).

Tax Evasion

  • Tax evasion has become rampant among businesses to avoid paying taxes in the unstable economic environment.
  • The Ministry of Taxes and Levies reported over 5,400 administrative procedural actions for tax evasion during the first six months of 2021, totaling over €67 million ($80 million) in penalties.

International Pressure and Sanctions

  • The EU and the United States have imposed sanctions on Belarus, restricting its financial sector and raising concerns about potential misuse for money laundering or other illicit activities.
  • The EU imposed sanctions on Belarus’ state-owned banking sector and four major commercial banks on March 16, 2022.

Steps Towards Combating Financial Crimes

  • Belarusian authorities have created a unit dedicated to preventing and investigating fraud and tax evasion cases.
  • International organizations like the EBRD and OECD are providing technical assistance to strengthen Belarusian legal frameworks against money laundering and other financial crimes.

The Future of Combating Financial Crimes in Belarus

  • It remains to be seen how effectively the Belarusian authorities will tackle financial crimes given the context of political instability, economic turmoil, and international sanctions.
  • A coordinated international response is necessary to mitigate the risks and protect the global financial system from illicit activities.