The international sporting community has been rocked by arrests and indictments of FIFA officials for bribery, fraud, and money laundering, but the backstory in the AML Compliance world is whether and how FIFA’s bankers will fare relative to the scandal. Investigative reporter Mary Pilon previews this issue in a recent Politico story.
Prosecutors have named at least a dozen financial institutions as servicers of FIFA accounts, but no details have yet emerged on the adherence to Compliance regulations and U.S. banking laws. The Justice Department did explicitly note, however, that alleged FIFA conspirators “relied on the broader strength and stability of the U.S. financial system, including access to the private equity markets.”
Investigators are expected to seek information on whether financial institutions appropriately monitored FIFA transactions and whether they complied with reporting requirements related to these transactions. Dennis Lormel, a consultant on terrorism-prevention measures, said that banks may have been unwitting facilitators given that FIFA is a well-known and respected international organization with a high profile and global reach.
Experts note that this is not likely a CDD/KYC issue because of this, but that the cloud of corruption allegations that have hung over FIFA for years would likely have been known to all who dealt with FIFA on a business level. Interestingly, FIFA’s structure as a massive, multi-billion-dollar non-profit organization would have shielded it from some financial regulations targeted at for-profit businesses.
Corruption in sports and in soccer is not new. Colombian drug cartels in prior years were famous for laundering money through soccer clubs, and the FATF published a special report on money laundering in soccer in 2009.
________________________
Want to boost confidence in the efficacy and efficiency of your core AML Compliance program? AML Partners offers end-to-end solutions for outstanding AML Compliance. Our AML/CTF software solution known as SURETY Suite includes CDD/KYC (customer due diligence and know-your-customer), Behavioral Monitoring, and Sanctions Screening. Contact us today to schedule a personalized demonstration: We will show you how our AML software solutions will be your go-to solution for AML Core Compliance.
