Syndicate of Suspicion: Uncovering a Syrian-Russian Money Laundering Ring Supporting the Assad Regime

Global Witness recently revealed a shocking report, exposing the inner workings of a clandestine money laundering network allegedly aiding the Syrian-Russian relationship and supporting the embattled Bashar al-Assad regime during the ongoing armed conflict.

Mudalal Khouri: The Syrian-Russian Banker and Fixer

The report, titled “Assad’s Money Men in Moscow,” sheds light on a Syrian-Russian banker and fixer, Mudalal Khouri, who has long operated from Moscow and amassed a complex web of banks, companies, and offshore entities. A tightly-knit circle of employees and family members assisted him in moving funds for repressive regimes and organized crime groups.

A Complex Web of Finances

Global Witness estimated that the network has laundered over $4 billion for various clients, including the Assad regime. The following are some of the alleged illicit activities of the network:

1. Purchasing crucial commodities like fuel and banknotes
2. Concealing the regime’s weapons programs

Concerns of Global Witness

Nienke Palstra, Senior Anti-Corruption Campaigner at Global Witness, shared her concerns.

Our investigation highlights how money laundering is far from a victimless crime; it appears to have been used to support the brutal regime of President Bashar al-Assad, along with his accomplices. This includes setting up companies that may have functioned as fronts for Syria’s chemical and ballistic weapons program.

Fueling the Conflict and Human Rights Abuses

The Assad regime’s ongoing war effort has been fueled by the assistance provided by networks like the one run by Mudalal Khouri. The conflict, now in its ninth year, has contributed to some of the worst human rights abuses of the 21st century.

Questions Amid Crisis

As Syria grapples with mass starvation and an unprecedented economic crisis, with almost 1 million people – including over 500,000 children – fleeing due to the escalating conflict, this investigation raises critical questions.

Martha Marcuson, Campaigns Advisor at Global Witness, voiced her concerns, “Our investigation underscores the abject failure of global leadership to confront the endemic corruption and war crimes of al-Assad and his accomplices, which are bankrolled by money laundering networks. The suffering of the Syrian people serves as a poignant reminder of this.”

Urgently Needed Actions

Global Witness is urging action:

1. The European Commission is being called upon to take a more aggressive stance with Member States who have not yet implemented the 5th AML Directive.
2. All states are being asked to properly monitor and regulate company information.
3. The UK is being urged to issue an Order in Council to mandate public registers if the Overseas Territories have not made significant progress in doing so by the end of 2020.

Preventing Abuses: Exposing Real Beneficial Owners

The EU is being encouraged to revise its proposed global sanctions regime to include asset freezes and other measures against money launderers and corrupt individuals, not only those directly tied to human rights abuses. The crux of the issue is exposing the real beneficial owners of companies to prevent such abuses.

Sanctioned Individuals and Companies

Some of the individuals and companies identified in the report have already faced international sanctions by the United States.

Evading Sanctions and Facilitating Fuel Purchases

Mudalal Khouri’s business allies reportedly assisted North Korean entities and individuals under UN or US embargoes, adding another layer to the complex web of illicit activities.