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Stolen money survey unanswered due to Covid-19, says minister

Stolen money survey unanswered due to Covid-19, says minister

by John MONAGHAN 3 min. 09.09.2021 From our online archive
Health crisis meant Luxembourg was unable to respond to World Bank Survey issued in April 2020, Justice Minister Sam Tanson claims
Justice Minister Sam Tanson cited the Covid-19 crisis as the main reason that officials had not yet responded to a survey issued in April 2020
Justice Minister Sam Tanson cited the Covid-19 crisis as the main reason that officials had not yet responded to a survey issued in April 2020
Photo credit: Gerry Huberty

Luxembourg’s government has not yet responded to a World Bank survey – initially issued almost 18 months ago – on stolen funds hidden in the country due to the Covid-19 pandemic, Justice Minister Sam Tanson said on Thursday.

The failure to provide answers to the World Bank survey comes as Luxembourg struggles to shake off a reputation for a lack of transparency following successive reports that the country is a haven for those wishing to hide money.

The minister was responding to a written parliamentary question brought by Christian Democrats (CSV) deputy Laurent Mosar after an article in The Luxembourg Times last month revealed the country had still not provided any information to the World Bank, which had asked states across the globe to update it on progress in efforts to recover stolen funds in April 2020.

The Stolen Asset Recovery Initiative is a partnership between the World Bank and the United Nations Office on Drugs and Crime (UNODC) which looks to retrieve money that has been stolen by corrupt officials, or which derives from crime such as the drug trade.

Mosar asked the minister whether the inability to respond could “have a negative impact” when the international anti-money laundering watchdog, the Paris-based Financial Action Task Force (FATF), carries out its next assessment of the country, expected to take place next year. Luxembourg failed a previous FATF test in 2010 before getting a clean slate four years later.

Luxembourg’s Justice Ministry had “been in close contact” with officials from the team in charge of the survey, Tanson said, but she confirmed the country has still not sent the details requested.

“The questionnaire requires serious research…it is not about simply providing statistics but detailed information about assets which have been seized or confiscated…over a period of 10 years,” Tanson said.

Officials responsible for responding “do not have computerised access to all the information requested but have to extract the details manually from files”, the minister added.

“Given the context of the sanitary crisis, the questionnaire was unable to be completed in due time, something which was communicated to the organisation (World Bank),” Tanson said.

The government had also decided, Tanson went on, to hold off on responding due to amendments to a bill on the recovery of assets and the finalisation of an agreement in July which was set to complete the transfer of nearly €10 million to Peru, funds stashed in the Grand Duchy decades ago by Peru’s former intelligence chief Vladimiro Montesinos, who profited from corrupt arms deals.

In June, the European Commission said that it was taking Luxembourg to court over its failure to fully transfer new EU rules to stop money laundering into national law. The deadline for imposing the EU directive passed in October 2016, leading Brussels to launch an infringement procedure the following month. By June, the Grand Duchy had still not notified the Commission that it had put the desired changes into law to date.

Luxembourg has also not yet ratified another international convention it signed 16 years ago regarding money laundering and the seizure of assets. So far, 37 countries have ratified the Council of Europe treaty, but despite signing up to the agreement in 2005, it is not enforceable in the Grand Duchy.

In February, the OpenLux joint investigation by more than a dozen media outlets around the world reported that Russian mafia bosses, cronies of the Venezuelan regime and organised crime figures in Italy were among those stashing their money in the Grand Duchy.

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