The proponents of ‘transparency’ claim that it can be used to fight crime and think that invoking privacy indicates criminal intent, because ‘you have nothing to hide’, don’t you?

An example of such transparency is the public accessibility of the register of beneficial owners (‘ubo-register’), as recently decided by the European legislator in the anti-money laundering package (AML Package). The idea is that thanks to that public register, ‘the public’ can fight crime, forgetting (deliberately?) that criminals, trolls and other unpleasant types can also access that register. After all, those who request access to the register are not tested for integrity.

In reality, the ubo-register and the international anti-money laundering systems (under which data is processed and shared on a very large scale by both private and public parties) ensure that misuse of personal data becomes very easy.

Report on Transnational Repression to Muzzle Dissidents Abroad

This is clearly illustrated by the report published by instituDE (Institute for Diplomacy and Economy) [*], that is announced in the article Weaponizing Financial Systems Erdoğan’s Transnational Repression to Muzzle Dissidents Abroad. From the summary:

Anti-money laundering and terrorism financing regulation is one of the mechanisms exploited by the Erdoğan government. Part of these checks are performed under Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols, which include watchlist screenings. By feeding false, manipulated, and politically biased information about critics into these lists, the Erdoğan government prompts financial institutions to label these individuals as “risky.”

By manipulating open-source platforms, asset-freeze orders, INTERPOL systems, and directly influencing banks, the Erdoğan government has weaponized financial services and international cooperation to suppress opposition and dissent. The experiences of victims underscore the systemic discrimination and marginalization perpetuated by governmental directives and risk-averse financial institutions.

The repression against Erdoğan’s dissidents is significantly amplified by the integration of AI systems. When AI systems are fed biased or false data, particularly from authoritarian regimes like Erdoğan’s, they can perpetuate and exacerbate these biases. Dissidents can be unfairly labeled as high-risk customers based on manipulated data, leading to unjust account closures and financial exclusion.

Financial data providers, whose information banks rely on for risk assessments, often disseminate inaccurate or politically motivated data. This not only results in financial discrimination but also furthers the victimization of individuals targeted by regimes for their political beliefs. Despite regulatory frameworks like the GDPR and the upcoming AI Act, significant gaps in compliance and accountability persist.

As these manipulative practices of the Erdoğan administration and likeminded governments continue, there is an urgent need for robust safeguards and increased scrutiny within financial institutions to protect the integrity of personal data usage and uphold the rights of individuals against authoritarian misuse.

Time for change in AML/CFT

When will transparency advocates – both in government and government-funded organisations advocating transparency (such as Transparency International and Tax Justice Network) – finally start to realise that data protection is important.

Anti-money laundering activities should be carried out by high-level professional parties (i.e. not gatekeeper amateurs from the private sector) on the basis of good-quality information that is carefully protected from unauthorised persons.

[*] They write about themselves: “The Institute for Diplomacy and Economy (instituDE) stands as an independent, research-driven NGO. Headquartered in Brussels, instituDE was established by a group of former Turkish diplomats. Driven by deep concerns about the descent into autocracy over the last decade, both Turkey and abroad, instituDE firmly believes that reembracing democratic norms and values, as well as restoring the rule of law is essential for achieving a peaceful, stable, and prosperous world.“