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Uzbekistan Three Years after the Andijon Massacre: A land where cotton is king and hundreds of thousands of children are forced to pick it
Monday, July 21, 2008

By Ronald J. McNamara, Policy Advisor

The Helsinki Commission convened a briefing on May 13, 2008, the third anniversary of the massacre at Andijon, to hear from experts on the challenges facing the 28 million people of Uzbekistan, including the widespread use of child labor in that country’s lucrative cotton industry. Panelists addressing political, economic and human rights developments in the Central Asian nation were: Marsha Lisitsyna of Human Rights Watch, film maker and writer Shahida Tulaganova, Juliette Williams of the Environmental Justice Foundation, and Professor Eric McGlinchey of George Mason University.

For nearly two decades, Islam Karimov has ruled over Uzbekistan in a regime long-criticized for its harsh reprisals against dissidents, contempt for democratic principles and widespread corruption. Marsha Lisitsyna provided an overview of the findings of a newly released Human Rights Watch report, “Saving its Secrets” Government Repression in Andijan. She decried the fact that the Government of Uzbekistan has never accepted responsibility for its role in Andijon and has been unwilling to allow an independent investigation into the circumstances surrounding the uprising and massacre. Lisitsyna described the ongoing efforts of the Uzbek government to seek out and persecute anyone it deems to have a connection to or information about those events. While welcoming the regime’s release of a number of human rights defenders, she stressed the fact that a dozen others languish in jail.

The report, based on interviews with witnesses to Andijon and relatives in 2007 and 2008, describes the pressures on those who fled the country as well as the reality for those who have returned to Uzbekistan. Lisitsyna told of retribution aimed at family members, including depriving relatives of social benefits, constant surveillance by the security services as well as the labeling of children of refugees as “children of enemies of the state” by teachers. Returnees are generally isolated, finding it difficult to secure work, and are pressured to entice others to return. In urging the international community not to forget Andijon, Lisitsyna concluded, “If the Government of Uzbekistan is able to demonstrate -- would be able to demonstrate -- considerable progress on human rights for sure, we wouldn't need the sanctions. But unfortunately, to date, this is still not the case.”

Shahida Tulaganova echoed this point, urging the international community, including the European Union and the United States, to resist consigning Andijon to the history books while those associated with the tragedy continue to face repression. She reported that nearly 30 rights activists, independent journalists and opposition figures remain jailed and are subject to various forms of abuse. Tulaganova focused on severe limitations imposed by the government on freedom of expression, including tight control of the Internet and reprisals against independent journalists. In this regard, she recalled the murder of her colleague, Alisher Saipov, a prominent investigative journalist and editor of an Uzbek-language newspaper, Siyosat, gunned down outside of his office in Osh, Kyrgyzstan. Saipov was an outspoken critic of President Karimov, reporting regularly on rights abuses in Uzbekistan.

Tulaganova was critical of the European Union and the United States for not being more forceful in the aftermath of the 2007 flawed presidential elections perpetuating Karimov as president, a position he has held since 1990, making him the longest serving Soviet-era leader still in power. “The fact is that everyone is dealing with an illegitimate president and an illegitimate government,” she said. The deteriorating economy under Karimov, an economist by training and expert on state planning, is exacerbated by widespread corruption, resulting in a flood of labor migrants working outside of the country. Tulaganova voiced particular concern over the hundreds of thousands of school children forced to work under harsh conditions in Uzbekistan’s cotton fields.

Juliette Williams focused on the reliance on forced child labor in the cotton industry, reportedly generating a billion dollars annually. She detailed state control over every aspect of cotton production, from seasonal quotas imposed on farmers to daily quotas demanded of school-age children, some as young as seven years old. “Underpinning the entire industry is the systematical use of forced child labor and slave wages in order to maximize profits to the state, with little or no return for laborers or wider society,” said Williams.

In addition to the human toll, Williams described the environmental degradation stemming from the country’s cotton industry. She pointed to estimates that 60 percent of diverted water never even reaches the cotton fields, but is lost in the deteriorating Soviet-era irrigation network. Perhaps the most dramatic case involves the Aral Sea, once the world's fourth largest inland sea, that has been drained to just 15 percent of its former volume, largely due to mismanagement by the Soviets and their successors. Soil damage is another area of environmental concern. Based in the United Kingdom, Williams explained efforts to organize an international boycott of Uzbek cotton given the reliance on forced child labor. She concluded, “I appeal to the Helsinki Commission and to people here today to engage in a full examination of the human rights and environmental abuses connected to cotton production in Uzbekistan.”

A poignant short documentary film, White Gold, the True Cost of Cotton [http://www.ejfoundation.org/page325.html], was shown during the briefing to provide a human face to child labor in Uzbekistan. Scenes of grounded derelict ships and caravans of camels crossing the now arid seabed that once supported fertile fishing grounds provide stark images of the cost to the environment.

Professor McGlinchey pointed to several changing dynamics that could affect bilateral relations between the United States and Uzbekistan: a lessening of the importance of the Karshi-Khanabad base to operations in Afghanistan, Karimov’s concerns over his legacy, and volatility of international commodity markets. While each could provide an opening, he warned that they could also lead to retrenchment by the regime. The abrupt departure of that U.S. from the K2 base diminished Karimov’s ability to portray himself as a serious partner in the war against terrorism, McGlinchey suggested. Given regime changes in Kyrgyzstan and Turkmenistan, he suggested that Karimov might seek to orchestrate his own succession, opening an opportunity for U.S. engagement with possible successors.

McGlinchey cited escalating food prices as another factor that could generate new pressures and popular demands, potentially further undermining the already fragile foundations of the government. He warned that a vulnerable Karimov regime may resort to even greater repression rather than reform and stressed the importance of U.S. monitoring of human rights as a lifeline to vulnerable activists. With respect to the crucial role of cotton in the Uzbek economy, McGlinchey suggested that it is an unsustainable industry in the region given the depleted water supplies. “Water is not, unfortunately, a renewable resource in Central Asia. The Aral Sea is almost tapped out, and now the glacier stores are going to be tapped out, and in the long run something else besides cotton has to be promoted,” said McGlinchey.

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    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following briefing: PIPELINE POLITICS Energy and Power in Europe Tuesday, July 23, 2019 11:00 a.m. Longworth House Office Building Room 1334 Live Webcast: www.facebook.com/HelsinkiCommission Pipeline Politics is the use of energy resources to exert influence and achieve foreign policy goals. This behavior distorts markets that would otherwise be efficient and provide for the energy needs of all countries at a reasonable price and exacerbates corruption in the region. Panelists will review the history of political influence in European energy markets, focusing on the political vs. commercial viability of Russia’s Nord Stream 2 and Turkstream projects compared to other efforts, such as the Southern Gas Corridor. They also will discuss the impact of pipeline politics on intra-European relations and the transatlantic relationship and explore a comprehensive way forward for the United States to achieve its commercial, national security, and foreign policy goals and allay the concerns of European allies.   Speakers will include: Ed Chow, Senior Associate (Non-Resident), Energy and National Security Program, Center for Strategic and International Studies David Koranyi, Senior Fellow, Energy Diplomacy, Atlantic Council Colin Cleary, Director for Energy Diplomacy for Europe, Western Hemisphere and Africa, U.S. Department of State Efgan Nifti, Executive Director, Caspian Policy Center

  • Delegation Led by Co-Chairman Wicker Demonstrates U.S. Commitment to Countering Kremlin Aggression and Preserving Stability in Europe

    WASHINGTON—From July 4 to July 8, Helsinki Commission Co-Chairman Sen. Roger Wicker (MS) led the largest bipartisan, bicameral U.S. delegation in history to the 2019 OSCE Parliamentary Assembly (OSCE PA) Annual Session in Luxembourg. The participation of 19 members of Congress showed the deep U.S. commitment to European security and to countering Kremlin aggression and anti-democratic trends across the 57-country OSCE region. “The size of our delegation for this Parliamentary Assembly is a clear demonstration of the importance that the Americans place on this institution and its mission,” said Sen. Wicker ahead of the official opening of the event, which brought together approximately 300 parliamentarians from North America, Europe, and Central Asia. Sen. Wicker, who also serves as a vice-president of the OSCE PA, was joined in Luxembourg by House Majority Leader and former Helsinki Commission Chairman Rep. Steny Hoyer (MD-05); Helsinki Commissioners Sen. Ben Cardin (MD), Rep. Robert Aderholt (AL-04), Rep. Steve Cohen (TN-09), Rep. Richard Hudson (NC-08), and Rep. Gwen Moore (WI-04). Other participants included Sen. John Cornyn (TX), Sen. Rick Scott (FL), Rep. Chris Smith (NJ-04), Rep. Tom Cole (OK-04), Rep. Val Demings (FL-10), Rep. Jeff Duncan (SC-03), Rep. Garret Graves (LA-06), Rep. Tom Graves (GA-14), Rep. Andy Harris (MD-01), Rep. Billy Long (MO-07), Rep. Gregory Meeks (NY-05), and Rep. Lee Zeldin (NY-01). In the opening plenary, Rep. Hoyer, a founder of the OSCE PA, reminded the delegates of the OSCE’s commitment to human rights, fundamental freedoms, and democratic governance. Rep. Moore then spearheaded the passage of a resolution on protecting and engaging civil society that was originally introduced by Helsinki Commission Chairman Rep. Alcee L. Hastings (FL-20). The assembly also adopted a second U.S. initiative on educating children to avoid human trafficking introduced by Rep. Smith, who serves as OSCE PA Special Representative on Human Trafficking Issues. Fourteen of the 16 amendments proposed by the U.S. delegation were adopted, including those holding the Kremlin accountable for the collapse of the Intermediate-Range Nuclear Forces Treaty; criticizing Moscow for abusing INTERPOL diffusions to harass Kremlin critics abroad; expressing concern about the overreliance of European countries on Russia for energy supplies; and seeking to protect those who report hate crimes from retaliation.  During the annual session, Sen. Wicker and Rep. Smith co-hosted a presentation to raise awareness and encourage reporting of efforts to entice children into being trafficked. Sen. Cardin, who serves as the OSCE PA Special Representative on Anti-Semitism, Racism and Intolerance, hosted a discussion on best practices to combat hate in society. Prior to attending the annual session, Co-Chairman Wicker convened the first-ever Helsinki Commission hearing held outside of the United States. In Gdansk, Poland, senior U.S. civilian and military leaders briefed members of Congress on their approaches to enhancing security in the region. High-level defense officials from Lithuania, Poland, Finland, Sweden, and Estonia also provided regional perspectives on the evolving security environment in and around the Baltic Sea. Hearing participants included Lt. Gen. Stephen M. Twitty, Deputy Commander, United States European Command; Douglas D. Jones, Deputy Permanent Representative, United States Mission to NATO; Raimundas Karoblis, Minister of National Defense, Republic of Lithuania; Maj. Gen, Krzysztof Król, Deputy Chief of the General Staff of the Polish Armed Forces; Janne Kuusela, Director-General, Defense Policy Department, Ministry of Defense of the Republic of Finland; Jan-Olof Lind, State Secretary to the Minister for Defense, the Kingdom of Sweden; and Kristjan Prikk, Permanent Secretary of the Ministry of Defense, the Republic of Estonia. The hearing underscored America’s commitment to security in the Baltic Sea region and its unwavering support for U.S. friends and allies.

  • The Helsinki Process: A Four Decade Overview

    In August 1975, the heads of state or government of 35 countries – the Soviet Union and all of Europe except Albania, plus the United States and Canada – held a historic summit in Helsinki, Finland, where they signed the Final Act of the Conference on Security and Cooperation in Europe. This document is known as the Helsinki Final Act or the Helsinki Accords. The Conference, known as the CSCE, continued with follow-up meetings and is today institutionalized as the Organization for Security and Cooperation in Europe, or OSCE, based in Vienna, Austria. Learn more about the signature of the Helsinki Final Act; the role that the Conference on Security and Cooperation in Europe played during the Cold War; how the Helsinki Process successfully adapted to the post-Cold War environment of the 1990s; and how today's OSCE can and does contribute to regional security, now and in the future.

  • Co-Chairman Wicker on Release of 2018 Report on International Religious Freedom

    WASHINGTON—Following the release of the 2018 Report on International Religious Freedom by U.S. Secretary of State Mike Pompeo and Ambassador at Large for International Religious Freedom Sam Brownback, a former chairman of the Helsinki Commission, Helsinki Commission Co-Chairman Sen. Roger Wicker (MS) issued the following statement: “This report shows that some of the worst government violators of religious freedom in the world continue to be in Eurasia, including Russia, Tajikistan, and Turkmenistan. I am concerned that these OSCE participating States have not made any progress in implementing their commitments to ensure freedom of religion. “One exception where the situation has improved is Uzbekistan. I hope the final version of the country’s new religion law will demonstrate the commitment of President Mirziyoyev and his government to advancing religious freedom reforms. I would not want a situation in which the new law retains the most problematic elements of current law. That would put Uzbekistan at risk of remaining on the Special Watch List or even once again being designated as a Country of Particular Concern. “The Government of Uzbekistan must also keep its promise to formally work with international experts, including the OSCE Office of Democratic Institutions and Human Rights, to ensure its religion law complies with Uzbekistan’s international commitments.” In October 2018, Co-Chairman Wicker urged the Government of Uzbekistan to formally request that the OSCE Office of Democratic Institutions and Human Rights conduct a legal review of Uzbekistan’s draft religion law. He repeated the call during a December 2018 Helsinki Commission hearing with Ambassador Brownback. Following last year’s International Religious Freedom Report, Secretary of State Pompeo designated OSCE participating States Tajikistan and Turkmenistan as Countries of Particular Concern. Turkmenistan has been designated as a CPC since 2014 and Tajikistan since 2016. Pompeo further designated Uzbekistan and Russia for the Special Watch List, for continuing religious freedom violations. For Uzbekistan, the designation upgrades the country’s ranking in recognition of progress made under the regime of President Mirzoyoyev. Uzbekistan was a CPC from 2006 to 2017. Russia was designated for the Special Watch List for the first time. As OSCE participating States, these countries repeatedly have committed themselves to respecting religious freedom. The annual State Department International Religious Freedom Report details religious freedom in every country. The report includes government policies violating religious belief and practices of individuals and religious groups, and U.S. policies to promote religious freedom around the world. Following the release of the annual report, the Secretary of State has 90 days to submit updated designations for the Countries of Particular Concern and the Special Watch List.

  • Co-Chairman Wicker, Sen. Sinema Introduce Legislation to Fight Illicit Tobacco Trade

    WASHINGTON—Helsinki Commission Co-Chairman Sen. Roger Wicker (MS) and Sen. Kyrsten Sinema (AZ) today introduced the Combating the Illicit Trade in Tobacco Products Act (CITTPA) in the Senate. The bill was introduced by Helsinki Commissioners Rep. Sheila Jackson Lee (TX-18) and Rep. Richard Hudson (NC-08) in the House in March as H.R.1642. “The illicit tobacco trade supports political corruption, organized crime, and terrorism worldwide. Our bill would take aim at this source of financing from these bad actors and the governments that enable them,” said Co-Chairman Wicker. “We’re combatting the illicit tobacco trade to protect Arizonans, strengthen our economy, and disrupt terrorist and criminal organizations who profit from such illegal activity,” said Sen. Sinema. The Combatting the Illicit Trade in Tobacco Products Act (CITTPA) would improve the U.S. Government’s ability to identify and deter those engaging in the trade of illicit tobacco. The bill would: Enable the United States to deter countries involved in the illicit trade in tobacco, and better assist its allies. The bill grants the Department of State the authority to withhold U.S. foreign assistance from those countries knowingly profiting from the illicit trade in tobacco or its activities. In countries where the government is working to stop these trafficking efforts, the Department of State would be able to provide assistance for law enforcement training and investigative capacity. Help the United States target individuals assisting in the illicit tobacco trade. It authorizes the President of the United States to impose economic sanctions and travel restrictions on any foreign individual found to be engaged in the illicit tobacco trade, and requires the president to submit a list of those individuals to Congress. Provide better information on countries involved with the illicit tobacco trade. The legislation requires the Department of State to report annually on which countries are determined to be a major source of illicit tobacco products or their components, and identify which foreign governments are actively engaged and knowingly profiting from this illicit trade. In July 2017, the Helsinki Commission held a hearing on illicit trade in tobacco products, which included testimony from academia, public health advocacy, and industry.

  • Representatives Cohen and Chabot Introduce Kleptocrat Exposure Act

    WASHINGTON—Helsinki Commissioner Rep. Steve Cohen (TN-09) and Rep. Steve Chabot (OH-01) today introduced the Kleptocrat Exposure Act. The act will provide the Secretary of State the authority to publicly reveal the names of individuals and their immediate family members who are subject to U.S. visa bans as a result of human rights abuses, corruption, and other malign activity. “Global criminals and corrupt autocrats—or kleptocrats—seek to spend their ill-gotten gains in the United States, where they can indulge in luxury, pursue positions of influence, and exploit the rule of law, which protects their stolen wealth. Our country should not be a shelter for these corrupt individuals,” said Rep. Cohen. “Corrupt elites in Russia, and around the world, fear exposure. They thrive off of secrecy to continue to keep their corruption going. It is time to sound the alarm about who these bad actors are and shield American citizens from these crooks,” said Rep. Chabot. Many kleptocrats already have been prohibited from traveling to the United States on the grounds of their engagement in malign activity. However, under current law, these and future visa bans are confidential. If made public, this information would further protect the United States and its allies by exposing these kleptocrats. Chairman of the Helsinki Commission Rep. Alcee L. Hastings (FL-20), Ranking Member of the Helsinki Commission Rep. Joe Wilson (SC-02), Helsinki Commissioners Rep. Sheila Jackson Lee (TX-18) and Rep. Brian Fitzpatrick (PA-01), and Rep. John Curtis (UT-03) are original cosponsors of the legislation.

  • Chernobyl

    By Rachel Bauman, Policy Advisor and Kyle Parker, Senior Senate Staff Representative Disaster In the early morning hours of April 26, 1986, during a safety test designed to simulate a power outage, a combination of operator error and inherent flaws in reactor design led to an explosion and fire at Chernobyl Nuclear Power Station’s Reactor 4. The graphite fire burned uncontained for nine days, releasing radioactive particles over most of Europe, contaminating Ukraine and neighboring Belarus most severely. It took nearly two full days for Soviet authorities to begin the evacuation of the approximately 50,000 residents of the nearby city of Pripyat, located just a mile away from the power station. A public admission of the accident only came on the evening of April 28 following diplomatic pressure on the Kremlin from the government of Sweden where, earlier that day, monitors at the Forsmark Nuclear Power Plant north of Stockholm had detected elevated radiation levels and suspected an accident in the Soviet Union. Given the secrecy of the Soviet system, the subjectivity of first-hand accounts, and the breakup of the Soviet Union, some of the why and how of what happened remain controversial. This amusement park in Pripyat was scheduled to open on May 1, 1986, a few days before the disaster. Less than six months after the disaster, construction began on nearby Slavutych, a city to replace Pripyat and house the displaced workers from the Chernobyl Nuclear Power Station and their families. Much work remained to be done to contain and assess the April disaster, not to mention run the remaining three reactors, the last of which ceased to operate only in December 2000. The formal decommissioning process of Reactors 1, 2, and 3 began in 2015 and will continue for decades. To this day, many residents of Slavutych board a special train for the power station’s workers transiting Belarus to enter the Exclusion Zone for work at the plant and nearby storage facilities for spent nuclear fuel. Consequences Thirty-three years after that safety test at Reactor 4 went fatally wrong, the nuclear disaster at the Chernobyl Nuclear Power Station remains the worst in world history, superseding the 1979 partial meltdown of a reactor at the Three Mile Island Nuclear Generating Station in Pennsylvania and eclipsing the meltdown of three reactors at Japan’s Fukushima Daiichi Nuclear Power Plant following damage sustained by a catastrophic tsunami in 2011. The accident at Three Mile Island remains the worst in the history of U.S. commercial atomic energy and ranked a 5 (accident with wider consequences) on the International Atomic Energy Agency’s scale of assessing nuclear and radiological events. Chernobyl and Fukushima are the only two disasters to ever be ranked as a 7 (major accident), the scale’s maximum. Due to the differences in the half-lives of the specific contaminants, a full remediation and resettlement around Fukushima holds far greater promise than around Chernobyl. If radioactive leakage can be fully contained at Fukushima, there is a chance that the area could be declared completely safe for permanent human habitation in less than 100 years. By comparison, the first zone of exclusion immediately surrounding Chernobyl’s Reactor 4 is likely to remain unsafe for permanent habitation for thousands of years. The total human, environmental, and financial cost of the disaster is fraught with obvious political sensitivities, but even in the scientific realm, significant disputes remain. The unprecedented magnitude of the Chernobyl nuclear disaster frustrates efforts to draw a definitive conclusion on the lingering effects of the explosion and fire of 1986. While there is wide agreement that somewhere between 30 and 50 people died in the immediate aftermath as a direct result of the accident, consensus breaks down over estimates of a longer-term assessment of deaths attributable to the radioactive fallout from the disaster. Shortly after the disaster, a zone of approximately 1,000 square miles around Reactor 4 was established, evacuated, and condemned for permanent human habitation. This area—known as the Exclusion or Alienation Zone—has begun the long process of being reclaimed by nature. The area is divided between Zone 1 and Zones 2 and 3. The first zone is the immediate vicinity around the Chernobyl Nuclear Power Station and comprises roughly 15 percent of the total Exclusion Zone. It is also contaminated with transuranium elements that decay over a period of thousands of years, placing this area off-limits indefinitely. Zones 2 and 3 comprise the remaining territory and were largely contaminated with elements that decay much faster. Some of this shorter-term contamination is already gone and the rest could be gone in the coming decades. The Exclusion Zone is as alive as it is hauntingly empty. Forests encroach on what were once fertile fields. Butterflies flutter above concrete cracked open by saplings. Wild horses roam by day and wolves by night, and entropy takes its toll on man-made construction. It almost seems that the flora and fauna suffered more from proximity to humans than they now do from lingering radiation in the contaminated soil—a phenomenon known as the ecological paradox. Containment In those first critical hours after the explosion, when firefighters heroically battled a radioactive blaze, efforts were made to erect temporary barriers around the damaged core of Reactor 4. Those emergency efforts continued once the fire was out, but the hasty construction allowed radiation to continue to escape the confines of the reactor and was structurally unsuitable for containing the deadly transuranium elements inside. In 2018, with the support of the international donor community, Ukraine completed construction on the New Safe Confinement facility designed to safely entomb Reactor 4 for as long as 100 years. Helsinki Commission policy advisor Rachel Bauman inside the structure containing Reactor 4. Support from the West, most notably the United States, is critical to safety. Currently, Western contractors are working with Ukrainian partners to complete the construction of a long-term storage facility for spent nuclear fuel from other reactors across the country. Construction is reportedly on, or slightly ahead of, schedule on this facility that is planned to eliminate Ukraine’s need to contract with Russia for its growing storage needs. Protecting the public from the widely dispersed radioactive particulate found within the Exclusion Zone is the main reason for the establishment of the zone itself as well as the multiple checkpoints encountered when leaving the zone. The most immediate danger to further contamination of habitable areas beyond the Exclusion Zone are wildfires; their smoke disperses contaminated debris into the atmosphere and in the direction of prevailing winds. Ukrainian firefighters have trained regularly with firefighters from the American West as they execute what is not only a domestic priority, but an international responsibility. Other regular challenges to the safe administration of the Exclusion Zone are trespassers pursuing adventure, souvenirs, or wild game. Risks include not only the obvious danger of radiation exposure, but also crumbling construction and poor communications should a rescue be needed. Trespassers also risk the safety of the broader public by inadvertently transporting radioactive materials outside the Exclusion Zone. A final, and enduring, challenge to securing the Exclusion Zone lies with waning public interest and thus political pressure to devoting scarce financial resources to protect this beautiful but contaminated landscape for the long term. The Future Government authorities plan to use Exclusion Zone 1 for dangerous industrial activities such as storing spent nuclear fuel or developing massive solar panel farms designed to replace some of the electricity that was once generated by the power station’s four reactors. The remainder of the Exclusion Zone will serve as a buffer between habitable areas and Zone 1 as well as a unique nature preserve and massive open-air laboratory to study any lingering effects of the disaster. Construction site of a future spent storage facility. As the passage of time has made parts of the Exclusion Zone safer, more and more visitors come to learn about those tragic events of the spring of 1986. Locals are beginning to tap a developing market for nuclear tourism, fueled by politicians, scientists, and thrill-seekers. When leaving the Exclusion Zone and passing through the last checkpoint, travelers are greeted by tour buses, flag-carrying guides, and a roadside kiosk selling cheap t-shirts. Increasing interest in Chernobyl tours, and particularly the photogenic abandoned town of Pripyat, ensure a steady stream of income. The city may no longer generate power, but it continues to generate interest.

  • Curbing Corruption through Corporate Transparency and Collaboration

    The United Kingdom has implemented some of the world’s most innovative anti-corruption policies. In particular, its public beneficial ownership registry is the only active one of its kind and its Joint Money Laundering Intelligence Taskforce models effective collaboration between law enforcement and the private sector. This briefing examined these policies and the United Kingdom’s broader strategy to counter illicit finance. Panelists discussed how the United Kingdom implements its policies, their successes and shortcomings, and what remains to be done. Though U.S. corporate transparency proposals take a non-public approach, panelists also discussed the lessons that the United States can draw from the British experience. John Penrose, M.P., U.K. Prime Minister’s Anti-Corruption Champion, explained the reputational risks associated with money laundering in the U.S. and U.K. financial markets to the rules-based system. Penrose explained the British approach of establishing a beneficial ownership registry, saying, “What we are trying to do in the U.K. is we are trying to set up something which will effectively create a global norm to say let’s all have some kind of a register about who owns and controls these companies.  We’re not asking for the moon.  As I said, we don’t need to know everybody who owns a piece of every company.  We just need to know who the controlling minds and the controlling interests are.” Edward Kitt, Serious and Organized Crime Network Illicit Finance Policy Lead at the British Embassy in Washington, covered the issues the U.K is facing with their beneficial ownership policy. Kitt explained, “One challenge we have is feedback to financial institutions on suspicious activity reports. Often, financial institutions will submit suspicious activity reports and they don’t hear any feedback as to actually what was the utility of that, how useful was that.” Even considering the difficulty the policy has experienced, Kitt maintained, “It’s not just a talking shop; it delivers. And… it’s assisted in identifying and restraining in excess of £9 million.  So, the results are palpable.” Mark Hays, Anti-Money Laundering Campaign Leader at Global Witness and the sole American panelist, reflected on his company’s investigations into corruption: “Simply put, if the U.S. wants to continue to show this leadership we need to match the U.K.’s efforts in establishing some modicum of disclosure for beneficial ownership transparency for companies.” Hays continued, “If we don’t, not only will we be failing to live up to this leadership test, but we will put ourselves at greater risk for becoming a haven for bad actors and their ill-gotten gains.” Nate Sibley, Research Fellow for the Kleptocracy Initiative at the Hudson Institute, spoke to how the UK’s policies could transfer to the U.S. Sibley described a House Financial Services Committee bill, “introduced by Representative Carolyn Maloney called the Corporate Transparency Act,” that ensures companies disclose beneficial owners. He went on to explain that the bill “would create a private beneficial ownership register. So not a public one like they have in the U.K., but one that was accessible only to law enforcement, under very strict and controlled circumstances.” Sibley outlined the ways that the U.S. federal system changes the prospect of the registry logistics, but maintained that it would still work in the U.S.

  • Shady Shipping

    Trade-based money laundering (TBML) is the process of disguising the proceeds of crime and moving value through trade transactions in an attempt to legitimize their illicit origins. This highly sophisticated form of money laundering has become a favorite method for transnational criminals, dictators, and terrorists to move ill-gotten gains to new jurisdictions. This event examined what TBML is, how it works, and why it has become such a ubiquitous method of laundering money. Panelists also discussed the broader interplay of illicit commerce, global corruption, and TBML. Finally, panelists recommended practical steps the United States and non-governmental organizations can take to counter TBML. David Luna, President and CEO of Luna Global Networks, shared his insights on the dark side of globalization and how it fits into the TBML paradigm. Luna outlined the need to increase understanding of the networks between illicit commerce and money laundering across legal and illegal means through convergence crimes. He spoke to the methodologies of “cleaning dirty money” utilized by kleptocrats, criminal organizations, and terrorist groups, while expressing the importance of tracing money and the value of goods to expose illicit crimes. Luna cited a 2015 World Economic Forum report to support his points, which estimated the value of transnational criminal activities between 8-15 percent of Gross Domestic Product, even by conservative standards, totaling around 80 trillion in the US market. John Cassara, retired Special Agent of the U.S. Department of the Treasury, spoke about the confusion surrounding TBML, both in understanding and enforcement. He explained that TBML is the largest method of money laundering because of excess ways to commit it: customs fraud, tax evasion, export incentive fraud, evading capitol controls, barter trade, and underground financial systems. Cassara explained how money is transferred under the noses of customs enforcement by undervaluing or overvaluing an invoice of an otherwise legal trade. Cassara asked, “If our highly trained police force can’t catch this, what about the rest of the world?” Lakshmi Kumar, Policy Director at Global Financial Integrity, described the difficulty with tracking TBML, both domestically and internationally. She outlined how domestic policy and law complicates internal tracking, while the lack of consistent transnational collaboration and information sharing complicates international tracking. Kumar spoke to the components of the trade chain and how hard it is to watch all the mechanisms with due diligence. Explaining the role of banks, Kumar noted that 80 percent of all international trade occurs through open account trading, in which banks aren’t involved or able to offer oversight. This allows for trade profits to be separated into various accounts, tricking the customs and enforcement agencies to enforce a lower level of taxation on the profits and the freights and allowing for TBML. In summary, even with world class law enforcement, the U.S. legal and financial frameworks needs to catch up in order to adequately combat TBML.

  • Helsinki Commission to Hold Briefing on UK Anti-Corruption Policies

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following briefing: CURBING CORRUPTION THROUGH CORPORATE TRANSPARENCY AND COLLABORATION The British Model Wednesday, May 29, 2019 9:00 a.m. Rayburn House Office Building Room 2128 Live Webcast: www.facebook.com/HelsinkiCommission The United Kingdom has implemented some of the world’s most innovative anti-corruption policies. In particular, its public beneficial ownership registry is the only active one of its kind and its Joint Money Laundering Intelligence Taskforce models effective collaboration between law enforcement and the private sector. This briefing will examine these policies and the United Kingdom’s broader strategy to counter illicit finance. Panelists will discuss how the United Kingdom implements its policies, their successes and shortcomings, and what remains to be done. Though U.S. corporate transparency proposals take a non-public approach, panelists will also discuss the lessons that the United States can draw from the British experience. Opening remarks will be provided by John Penrose, M.P., the U.K. Prime Minister’s Anti-Corruption Champion. The following panelists also are scheduled to participate: Mark Hays, Anti-Money Laundering Campaign Leader, Global Witness Edward Kitt, Serious and Organized Crime Network Illicit Finance Policy Lead, British Embassy Washington Nate Sibley, Research Fellow, Kleptocracy Initiative, Hudson Institute

  • Helsinki Commission and House Financial Services Committee Announce Joint Briefing on Trade-Based Money Laundering

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, in partnership with the House Financial Services Committee, today announced the following joint briefing: SHADY SHIPPING Understanding Trade-Based Money Laundering Friday, May 24, 2019 9:30 a.m. Rayburn House Office Building Room 2360 Live Webcast: www.facebook.com/HelsinkiCommission Trade-based money laundering (TBML) is the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimize their illicit origins. This highly sophisticated form of money laundering has become a favorite method for transnational criminals, dictators, and terrorists to move ill-gotten gains to new jurisdictions. This event will examine what TBML is, how it works, and why it has become such a ubiquitous method of laundering money. Panelists will also discuss the broader interplay of illicit commerce, global corruption, and TBML. Finally, panelists will recommend practical steps the United States and non-governmental organizations can take to counter TBML. The following panelists are scheduled to participate: John Cassara, Special Agent, U.S. Department of the Treasury, retired Lakshmi Kumar, Policy Director, Global Financial Integrity David Luna, President and CEO, Luna Global Networks

  • Chairman Hastings on Upcoming Meeting Between President Trump and Prime Minister Orban

    WASHINGTON—Ahead of Monday’s meeting between U.S. President Donald Trump and Hungarian Prime Minister Viktor Orban, Helsinki Commission Chairman Rep. Alcee L. Hastings (FL-20) issued the following statement: “Thirty years after Central European nations threw off the mantle of communism and oppression, I recall the unwavering support of the United States for the democratic aspirations of their citizens, and the warm welcome Hungary received when it joined the ranks of self-governing, free nations. I echo Secretary’s Pompeo’s message, delivered in Central Europe in February: Upholding democracy in each and every country is vital to human freedom. “President Trump must urge Prime Minister Orban to end Hungary’s anti-Ukraine policy at NATO, resolve concerns about the relocation of the Russian International Investment Bank to Budapest, ensure that Hungary’s ‘golden visas’ are not used to evade U.S. sanctions, and address document security problems to ensure the integrity of the visa waiver program. In addition, the president must prioritize meaningful democratic change in Hungary and encourage the Hungarian Government to repeal the 2017 and 2018 laws curtailing freedom of speech, assembly, and association.” U.S. authorities have identified at least 85 criminals who fraudulently obtained Hungarian passports to enter or attempt to enter the United States. At an April 2019 Helsinki Commission briefing, Dalibor Rohac of the American Enterprise Institute noted that the chairman of the International Investment Bank has long-standing ties to Russian intelligence agencies, raising concerns that the relocation of the bank from Moscow to Budapest could provide a platform for intelligence-gathering operations against U.S. allies. In April, U.S. Special Representative to Ukraine Kurt Volker visited Budapest and urged Hungary to end its anti-Ukraine policy in NATO. In February, during a visit to Slovakia, Hungary, and Poland, U.S. Secretary of State Mike Pompeo said, “Every nation that raises its voice for liberty and democracy matters, whether that’s a country that’s as big as the United States and with as large an economy as we have in America, or a smaller country. They’re each valuable. Each time one falls, each time a country – no matter how small – each time it moves away from democracy and moves towards a different system of governance, the capacity for the world to continue to deliver freedom for human beings is diminished. And so I would urge every country, no matter its size . . . to stay focused, maintain its commitment.”

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