FLASH
Shkruar nga Pamfleti
The report sheds light on systemic weaknesses within the banking sector, which remains the most common channel for large-scale money laundering...
Criminal networks are exploiting financial institutions across the Western Balkans to move illicit money across borders, exploiting regulatory weaknesses and systemic weaknesses. This is the conclusion reached by the Global Initiative against Transnational Organized Crime (GI-TOC).
Despite significant efforts to combat illicit financing, such as the implementation of EU anti-money laundering (AML) directives and compliance with Financial Action Task Force (FATF) standards, financial systems in the region remain highly vulnerable to exploitation from organized crime groups, according to the report entitled: " Dirty money: Assessment of the vulnerability of financial institutions in the Balkans to illegal finance ".
According to the report, the paradox of the financial sector is that it acts as the main channel for illegal financing and as the main system responsible for its detection and prevention.
On the one hand, financial institutions aim to serve as gatekeepers of financial integrity, with robust anti-money laundering and anti-terrorist financing standards, including customer due diligence procedures, transaction monitoring, and reporting of suspicious transactions to financial intelligence units.
On the other hand, there is considerable evidence, including the Global Initiative Against Transnational Organized Crime (GI-TOC)'s own research in the region and reports by Moneyval, that financial institutions are an integral part of the three-stage process of money laundering: placing , layering and integration ", the report points out
Organized crime networks use a mix of methods to launder the proceeds of criminal activities, ranging from real estate transactions to misuse of bank loans and cryptocurrencies.
Poor goalkeepers
The report sheds light on systemic weaknesses within the banking sector, which remains the most common channel for large-scale money laundering. Despite their robust AML frameworks, banks often fall prey to internal corruption, regulatory loopholes and complex criminal schemes.
In one case in Tirana, Albania, authorities arrested seven individuals in June 2024 and seized assets worth €50 million linked to money laundering. The suspects were said to have secured large and unjustifiable loans from a second-tier bank, which itself acted as guarantor. These funds were ostensibly earmarked for hydroelectric projects, but construction never began.
" Banks and bank officials play a critical role in the global fight against money laundering, but in some cases they have been complicit in facilitating illicit financial activities. The involvement of banks in money laundering often occurs through lax supervision, the granting of fraudulent loans, or the direct involvement of bank officials with corrupt officials and criminal networks ," the report said.
Another high-profile case highlighted in the report is that of Eurostandard Bank in North Macedonia, which was involved in an internal money laundering scheme worth around 110 million euros. The scandal led to the bank's license being revoked in 2020.
The real estate sector is another weakness, again enabled by weak regulatory oversight and a lack of mechanisms to verify property valuations. Properties are often bought at inflated prices to clear large sums, or prices are manipulated to secure inflated loans.
" The influx of non-residents, especially from Russia, Ukraine and Turkey, is intensifying illegal financing in the region ," the report states. “Countries such as Serbia and Montenegro have experienced a greater influx of Russian and Ukrainian citizens as a result of the war in Ukraine. A large proportion of foreign direct investment in the Western Balkans is through real estate purchases, particularly in luxury residential areas in Serbia and Montenegro.
Cryptocurrency Risks
Cryptocurrency poses an increasingly high risk for illicit financing in the Western Balkans, where regulatory frameworks lag behind technological advances. Criminal networks are using cryptocurrencies to move proceeds from drug, arms and human trafficking, as well as fraud.
" Without adequate regulation, virtual assets operate without compliance requirements and create a greater risk of money laundering ," the report warns. Montenegro has emerged as a hotspot, with cryptocurrencies often used to buy real estate and luxury goods.
Beyond banks and cryptocurrencies, other financial institutions, such as money transfer services and foreign exchange offices, are used to launder smaller amounts of money. These institutions often handle high volumes of cash transactions with limited oversight, making them attractive to criminal networks.
To address these gaps, the report calls for a multi-pronged approach involving governments, financial institutions and non-state actors. The main recommendations include: strengthening the regulatory framework; better cooperation between agencies; training and capacity building; and the establishment of centralized registers. /Adapted "Pamphlet" from "Intelli News"
Lini një Përgjigje