A year ago the Qatargate scandal broke out when the buying of favors in the European Parliament was discovered. Then it also evolved into Moroccogate. And it will not be the last, continues Tom Keatinge (Aldershot, United Kingdom, 1970), director of the center for security and financial crimes at RUSI, the oldest British think tank on security and defense. Illicit finances are expanding, he explains, and he even relates them to the attack against former politician Alejo Vidal-Quadras, which the victim himself linked to his financial ties with the opposition to the Iranian regime. The sanctions against Russia in the midst of the war in Ukraine, which he oversees and denounces as being breached, also complicate everything.
Are sanctions useful?
With sanctions the objective is to have the capacity for action, but each time they are used, the sanctioned countries are distanced and encouraged to create new relationships beyond the reach of the West. Thus, new financial systems are being created to be specifically out of the reach of the US and the EU, whether with China, North Korea or Iran.
With what consequences?
For example: to what extent are cryptocurrencies starting to play a role in your financing? Or to what extent do the new financial relations between Russia and Africa bypass Europe and use only the Chinese currency? We need to understand these new financial connections.
You maintain that the EU's approach to financing terrorism and crime has failed, but the threat remains. What new challenges are there?
There is a dangerous combination right now. There are problems with the internal extreme right. And in the UK, where I live, there is the material threat from Iran. And who knows what the Chinese are doing. We have States that are operating in our territory in a way that has not been as aggressive in the past, threats that require a certain degree of financing.
Alejo Vidal-Quadras, a former Spanish politician, was recently shot in the street: he has linked it to his relationship with the financing of the Iranian opposition. Is Spain central in these global illicit financial networks?
Spain is a pretty good place to establish a coordination base for organizations like Hizbullah, which are like multinational companies. Hizbullah has very strong ties in Latin America, and with which European country does Latin America have the strongest ties? With Spain. You can imagine that you can have connections to the Middle East, North Africa or wherever.
The digital revolution adds challenges and many are supposed to be under the surface. Is there therefore anything new among the financial threats?
That are expanding.
As?
They are becoming more complex and more sophisticated. There will always be people exchanging bags of cash under the table, but now we also have cryptocurrencies or NFT trading alongside the formal banking system or the Hawala system [based on trust between intermediaries] between Europe and the Middle East, for example.
He worked for an investment bank for 20 years before assuming his current responsibility at RUSI. If you were to draw a map of illegal transactions in the world, what would be the main points to illustrate? Because London and New York always appear, but is there more?
The map is made up of different layers. You have a layer that could be the movement of products and another, financial, which is what marks where the finances that support this illicit trade move. Places like London are obviously very important along with all the overseas territories: Virgin Islands, Cayman Islands, etc. Then there are other financial centers in Europe: Germany, with Frankfurt; Paris, in France; or Madrid. Countries need to recognize that they all have their own vulnerabilities.
He has long warned that democracy remains blind to illicit finance. Because?
Precisely because our systems are democratic and open, clean money and dirty money are in our societies. We need to be honest to admit that openness comes at a cost and protect it too.
And here Keatinge returns to the beginning of the conversation, to Ukraine, to the sanctions on Russia. Because if he maintains that “new financial systems are being created to be specifically out of the reach of the US and the EU, whether with China, North Korea, or Iran,” the news corroborates it. And the last one says something like this: “Dozens of Russian oligarchs have used opaque companies in Cyprus to move money despite the invasion.” He touches the EU squarely. As it happens before, it was published that at times Spain doubles imports of Russian gas and Russia continues among the three main origins. Also the fact that it is known that there are routes through third countries through which Russian oil circumvents the embargo and reaches Europe.
Is everyone doing what is necessary to ensure that the sanctions are applied to Russia? Keatinge, in charge of supervising them at the British RUSI, is asked, which is why he met in Barcelona recently with several actors involved.
"The short answer is no. Not all EU states implement sanctions as rigorously as they could, either by not having criminalized evasion, or by having complex and disorganized government structures, or by having a lack of personnel, etc. There are many reasons, but in the end it is the private sector that has to implement them,” he answers.
Is there a list of companies mentioned, for example from Spain?
I am not aware of any, although it is worth noting that Spain currently holds the presidency of the Council and that progress on sanctions since it took office has been, in my opinion, slow. Spain has a lot to prove before the end of December…
Data on trade flows are considered keys to be able to track whether sanctions are complied with. And are they tracked as necessary?
The short answer is again no. In the EU David O'Sullivan is in charge of the sanctions area. He has been in office for a year. He has been visiting all of Central Asia, Türkiye, United Arab Emirates, etc. Keep it up. But until we start seeing European countries punished for their trade relations, we won't be able to say we are doing enough. Many choose to have commercial relations with countries from which they export to Russia. For example, from Spain he goes to Kazakhstan and then, unfortunately, he goes from Kazakhstan to Russia. These third countries represent a breach in the sanctions wall.
Problem: be it the tension between the US and China, the war in Gaza, the internal tension in several countries (in Spain due to the amnesty for the process) and more, if until recently Ukraine was on the cover, not anymore. “And winter is coming,” Keatinge recalls.
