Why should human rights defenders be protected from AML/CFT abuses by authoritarian authorities?

11 December 2023 | Author: Natalia Melnychenko

On 8 December 2023, the President of the Open Dialogue Foundation participated in the panel discussion “Regulation as an Opportunity” at the Digital Finance Summit in Brussels. Lyudmyla Kozlovska gave a presentation on the consequences of the misuse of anti-money-laundering and counter-terrorist financing regulations.

The event, moderated by journalist Jimmy Franklin and Toon Vanagt, CEO of data.be, featured:

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Kevin Johnson — the head of the Innovation Competence Centre for Euroclear Group;
Nadia Manzari — attorney, founder and partner of MANZARI LEGAL, a Luxembourg law firm focusing on tech law, financial services, FinTech, AML/CTF, regulatory, compliance and innovation;
Yann Ranchère — head of revenue at Ondorse;
An Swalens — CIO of the National Bank of Belgium (NBB);
Bo Gao — founder and managing director of AI Club Asia.

However, before the panellists began discussing their views on AML/CFT regulation as an opportunity to expand business and social opportunities, Lyudmyla Kozlovska addressed the audience and spoke about the consequences of the misuse of AML/CFT regulations.

In her speech, she explained why she and other activists use Bitcoin to oppose transnational repression and financial exclusion by authoritarian regimes, and why Bitcoin has become a key financial tool for activists.

“I’ve found myself financially excluded in the heart of Europe, in Brussels, after three illiberal states abused AML/CFT regulations and used my banking data against me, my family and all those who surround our organisation,” she said. She went on to explain, “Since 2017, after an unprecedented violation of the rule of law in Poland, the Open Dialogue Foundation began representing politically persecuted judges and lawyers, activists in international forums and EU institutions. A year later, as a way to force me to stop my human rights work, the services of the Polish government, the Law and Justice (PiS) party, unjustifiably claimed that I posed a threat to the country’s national security alleging that I work for the Soros elites in Russia, Brussels and Germany. Poland thus repeated the Moldovan and Kazakhstani disinformation directed against me. I was expelled from the EU and allowed to return only after an international scandal involving abuse of the Schengen Information System (SIS) and AML/CFT regulations. To this day, Poland has not shared with other countries the reasons behind all these allegations against me.”

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As the President of ODF emphasised, the abuse of AML/CFT regulations for financial exclusion in her case turned out to be one of the most radical joint steps of the illiberal regimes of Poland, Moldova and Kazakhstan. She also cited the case of persecuted Kazakh lawyer and human rights activist Bota Jardemalie, who, like Lyudmyla Kozlovska, now resides in Belgium. Having gained access to her bank details, the Kazakhstani regime found and captured her brother as a political hostage, tortured him and imprisoned him for seven and a half years. In addition, three people were convicted in Belgium for attempting to kidnap Bota herself.

“That’s why we started using Bitcoin as a human rights tool to counter transnational repression. We gathered testimonies from other victims of AML/CFT abuse, went to EU institutions and asked them, ‘Have you ever seen people involved in money laundering, extremists, terrorists or those posing a threat to national security?’ But it is us, activists and human rights defenders from around the world, we are the ones who are financially excluded because of the abuse of AML/CFT regulations,” she said.

Kozlovska recommended that AML/CFT legislation should take into account how human rights defenders use Bitcoin to oppose transnational repression. Otherwise, activists’ data will be made available to dictators in the same way as is the case with regular financial institutions.

“We call for greater transparency in the regulatory work of the FATF: civil society and industry representatives should have the opportunity to participate in the legislative process in order to mitigate unintended consequences or abuse by dictators of such important mechanisms as AML/CTF regulations,” the ODF President appealed.

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