February 10, 2023

By the time you receive this last Trend Letter of 2022, the world footbal championship in Qatar is almost finished but let’s look at some of the Financial Crime Compliance related topics that emerged in the wake of the event. If only to highlight that financial crime is everywhere and always.

First and foremost there were the rumors – or well, maybe more than rumors – about how FIFA and clubs in Europe were bought by Qatar to win the bid to host the worldcup in the first place. Sports in general and FIFA in particular have been rife with corruption scandals so this can hardly be a surprise. For those of  you interest; the German ZDF made a nice documentary about it all which you can find here https://www.zdf.de/dokumentation/zdfzeit/zdfzeit-geheimsache-katar-100.html

Secondly there’s the question where all this Qatari money comes from… from oil of course but to a certain extent also from underpaying and badly treating foreign labor. Officially the kafala system was abolished by Qatar but in practice it still exists. Like in Singapore and other countries. Not only were the people building the facilities and making the worldcup possible, nothing more than modern slaves, labor conditions were often so poor that workers died. Moreover, the reaction from local officials was often disappointing, see this article for instance https://www.theguardian.com/football/2022/dec/08/qatar-launches-investigation-after-reported-death-of-worker-at-world-cup-site

Then there was the claim of match fitching the game between Ecuador and Qatar https://www.foxsports.com.au/football/world-cup/match-fixing-bribery-claim-rocks-opening-world-cup-game-between-qatar-and-ecuador/news-story/7841f4999328b7df79fd9cd7594691a0. Probably the tip of the iceberg only?!

Not all these incidents lead to convictions or fines, but where smoke is, is fire…. it just proves again that money corrupts and when and where there is (lots of) money there will be (suspicions of) financial crime. Another point that is interesting is that financial institutions are hardly mentioned in any of these stories. Maybe all banks and payment service providers didn’t make any mistakes in AML or KYC, but it’s more likely that faults have not been detected and – perhaps more importantly – money has found different ways; think of the expensive watches that some officials were given… Maybe a watch worth 200k euro is a normal gift in Qatar but in most ABC policies tresholds are typically more to be in the order of 20 or 50 euro….

There are also no reports on regulators issueing fines, no surprise audits, no arrests or indictments.

So what does that all teach us? First, all these stories imply that many companies and people are involved in activities bordering on financial crime. In other words: there’s a lot going on and we’re only aware of a fraction.

Second, regulations set the tone and give direction but that doesn’t stop many individuals from violating rules or at least testing the boundaries.

Finally, awareness and what’s more, a sense of ‘righteousness’ and integrity are absent in many people and organisations. The tone from the top and awareness on AML/CFT and Financial Crime in general will need more work – and training – for years to come.

Contact us if you want to know more about how training can help your organisation, if you feel it’s time to re-assess your AML/CFT framework or need any other help.