Since coming to power in April 2010, Kyrgyzstan’s government has said that the family of deposed President Kurmanbek Bakiyev and his associates used the country’s largest bank to launder and export vast amounts of cash. A new report by Global Witness, an anti-corruption watchdog, says lax Western banking regulations abetted such alleged criminal activities.
After Bakiyev and his notoriously venal family were overthrown in April 2010, the interim government promptly nationalized AsiaUniversalBank (AUB); the bank’s former managers claim the charges are politically motivated. The European Bank for Reconstruction and Development, in an audit, appears to support Bishkek’s money-laundering claims. The former president is living in Belarus; his son Maxim has sought asylum in the UK.
But the case points to a larger problem, says Global Witness in the report, “Grave Secrecy”: It is too easy to set up a fake company in many Western countries “to launder the proceeds of corruption, tax evasion and other crimes.” The UK, New Zealand, and states such as Delaware “are effectively permitting hidden company ownership” and doing little to enforce anti-money laundering laws. “This matters because ‘shell’ companies – entities that are little more than just a name on a piece of paper – are key to the outflow of corrupt money that keeps poor countries poor.”
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