Azerbaijan’s Banking Industry Rocked by Laundromat Scandal: EU Ties to Baku Raise Serious Concerns
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Azerbaijan’s authoritarian regime has been embroiled in yet another major corruption scandal, with a massive money laundering scheme dubbed the “Laundromat” revealing millions of euros in dirty money flowing into European politicians’ pockets. The scheme, uncovered by a joint investigation led by OCCRP, has raised serious concerns over the European Union’s increasingly close ties to Baku.
The Laundromat: A Staggering USD 2.9 Billion-Worth System of Money Laundering
The Laundromat is a staggering system of money laundering that operated from 2012-2014, allegedly fueling Azerbaijan’s “influence machine” and generating benefits for the country’s elite close to President Ilham Aliyev. The scheme has far-reaching implications, with several European politicians accused of taking bribes from Azerbaijani officials.
A Pattern of Corruption
The scandal is just the latest in a string of high-profile corruption cases linked to Azerbaijan’s ruling regime. In recent years, Malta’s Prime Minister was forced to call early elections after allegations his wife and government officials had received Azerbaijani money, while offshore companies linked to President Aliyev’s family were revealed in the Panama Papers investigation.
EU Ties to Azerbaijan: A Concerning Neglect of Human Rights
Despite these revelations, the EU appears poised to turn a blind eye to Azerbaijan’s human rights abuses and offer millions of euros in loans to the country’s massive gas infrastructure project. The Southern Gas Corridor, which would fill the pockets of Azerbaijani elites, has been heavily supported by European public banks, with record loans being considered for sections of the pipeline.
Concerns Over EU Energy Diplomacy
- Xavier Sol, Director of Counter Balance, warns that the EU’s energy choices are increasingly dictated by its need for gas, even if it means sacrificing fundamental European values.
- The EU is currently negotiating a comprehensive agreement with Azerbaijan and heavily supporting the Southern Gas Corridor.
Calls for Change
Anna Roggenbuck, EIB campaigner at Bankwatch, added that the EU’s energy diplomacy is leading to a concerning neglect of human rights and democracy in partner countries. “We call on the European Union to uphold its values and not provide a blank check to the Azeri regime by feeding it with public money,” she said.
Outrage and Calls for Action
The revelations have sparked widespread outrage among human rights groups, who are calling for the EU to rethink its relationship with Azerbaijan. As the EIB Board of Directors prepares to discuss a EUR 1 billion loan for the Southern Gas Corridor next month and the EBRD schedules a USD 500 million loan for discussion in October, critics are warning that any further support for the project would be a worrying signal of political support to the Azeri regime.
What’s Next?
The fate of the Southern Gas Corridor and the EU-Azerbaijan relationship hangs in the balance. Will the EU prioritize its values over its energy interests, or will it continue to turn a blind eye to Azerbaijan’s human rights abuses? Only time will tell.