Angola’s Hidden Wealth: The Paradox of Money Laundering Institutions

Corruption and Weak Anti-Money Laundering Policies in Angola

In a shocking revelation, Angola has emerged as a hub for corruption and hidden wealth, despite its weak anti-money laundering (AML) policies. The country ranked 165 out of 180 in Transparency International’s Corruption Perceptions Index and was listed by the Financial Action Task Force (FATF) as having “strategic deficiencies” in its AML regime.

The Flaws in Global Financial Regulations

The fact that dos Santos’ network, which spanned across 41 countries, remained undetected for so long is a stark reminder of the flaws in global financial regulations. Despite operating mainly in countries with supposedly robust AML institutions, banks failed to conduct due diligence and identify suspicious transactions.

FATF’s Effectiveness Data Reveals Alarming Trends

An analysis of FATF’s effectiveness data reveals an alarming trend: jurisdictions that score high on AML effectiveness are more likely to host companies linked to dos Santos. This suggests that the very places meant to prevent money laundering are instead facilitating illicit financial flows.

Correlation between Corruption and Financial Secrecy

The study also found a correlation between countries with lower levels of corruption and financial secrecy, as measured by Transparency International and Tax Justice Network respectively. These findings are not unique to Angola, as a similar pattern was observed in the Troika Laundromat scheme linked to the Kremlin.

The Paradox of Money Laundering Institutions

The paradox of money laundering institutions is that places with robust AML policies are often the same places where illicit wealth seeks to hide under a veneer of legitimacy and respectability. The ease with which dos Santos’ network operated in these jurisdictions highlights the need for regulators to rethink their approach to combating financial crimes.

Lessons Learned and Recommendations

• Regulators must acknowledge that even seemingly effective AML systems can be exploited by money launderers.
• Wealthy countries must recognize the negative externality of safely stashing illicit wealth on developing nations, which are often punished for not meeting AML standards.
• Regulators must work towards creating a more level playing field.

Conclusion

As the global fight against financial crimes continues, it becomes increasingly clear that understanding how well our AML institutions work is crucial. By analyzing data and policy outcomes, we can begin to identify areas for improvement and create a more effective system for detecting and preventing illicit wealth.