Lyudmyla Kozlovska

🚨 €1M Retaliation for Exposing Russia Sanctions Evasion

#Kyrgyz #Bakai bank filed a SLAPP lawsuit against Open Dialogue Foundation in #Belgium, demanding removal of our two reports & €1M damages - a common intimidation tactic used in Kyrgyzstan to silence critics.

🔴 Key facts on Bakai bank #SLAPP case against ODF in Belgium: • Bank waited 18 months to file • No evidence of actual damage provided • €1M claims typical in Kyrgyz censorship cases • To date, a lot of information can be found with offers of intermediaries to open accounts in Bakai bank to bypass sanctions • ODF's reports remain public, addressing sanctions circumvention

While ODF advocates for financial inclusion and privacy, we have revealed in 8 reports how authoritarian regimes abuse AML/CFT laws to:

• violate financial & human rights domestically,
• conduct transnational repression in Western countries and
• evade sanctions.

🔎The bigger picture: While Russia claims to use #Bitcoin for foreign trade, our investigation shows preference for less traceable traditional banking systems in Central Asia.

🔴 Why? Russia's action, not declarations, should be followed: • Bitcoin = permanent public record • Regional banks of Central Asia = established infrastructure + opacity of completely unaccountable rulers • Traditional banking of third countries enables sanctions evasion more effectively

🔴 The real problem: Current #AML regime relies on 'trust' with authoritarian and dictatorial states. This enables: • Sanctions circumvention through banks controlled by them and their allies • Abuse of Western legal systems to silence critics

🔴 AML/CFT laws impact on legitimate actors: • Excessive compliance costs for Western businesses • Financial barriers for NGOs & humanitarian aid • Continued global financial exclusion and repressions

🔴 Bakai's bank SLAPP case against ODF in Belgium proves: Banks will go transnational to silence those exposing sanction evasion schemes. Time to reform the AML/CFT system that enables both censorship and sanctions circumvention.

🟢 Help us to stop such abuses and get funding for legal defence against SLAPP of Bakai Bank, support ODF's human rights work!

3. #EU #AML PROPOSAL TARGETS PRIVACY PAYMENT INSTRUMENTS AND FREEDOM TOOLS

The current AMLR version specifically targets self-hosted wallets, ignoring their role as vital financial tools as #Bitcoin  for millions of activists facing financial oppression.

Labeled high-risk, self-hosted wallets are now seen as significant money laundering and terrorist financing facilitators. Changes include revisions to Recitals (20) and (21) and the addition of Article (31b) in Charter III, which increases operational and compliance costs, affecting business strategies and client relationships.

The consequences for EU users of self-hosted wallets are serious. Additional compliance checks will complicate, if not block, the conversion of crypto-assets to fiat currency for activists and civil society members already facing financial exclusion. The AMLR overlooks the crucial role of self-hosted wallets in transferring funds to non-democratic or conflict regions, exposing donors and recipients to repression by authoritarian regimes using AML/CFT laws (e.g., in #Belarus, #Kazakhstan, #Turkey).

Smaller clients with self-hosted wallets, viewed as higher risks under Article (31b), may be deprioritized or excluded due to higher transaction compliance costs. This makes them economically unviable for financial institutions, which often favor larger, lower-risk clients for efficiency. The latest AMLR version could effectively ban self-hosted wallets in the EU, significantly impacting the cryptocurrency sector and those vulnerable to oppression.

See our reaction in our Submission: https://en.odfoundation.eu/a/725781,building-true-change-btc-coalition-submission-on-the-eu-proposal-for-a-regulation-on-the-prevention-of-money-laundering-or-terrorist-financing/ https://image.nostr.build/9f0269ec843fd6e399f9e795c266c90af43170334412e3d36b4e6958d43bd2af.jpg https://image.nostr.build/ae5cb7a84266cd45d0789dc4e6abf2d9867e132df47d5b6183bb76bbea46fec4.jpg

2. #EU #AML PROPOSAL PROMOTES FINANCIAL EXCLUSION OF VULNERABLE COMMUNITIES Do you have dual citizenship or are you an immigrant to the EU? Your financial rights are further compromised with the upcoming EU AMLR!

Following the outcomes of the #Trialogue, the AMLR no longer includes regulatory safeguards to prevent unwarranted de-risking, ensure non-discrimination, and promote financial inclusion (Recital (32a) and Article (41a) in Chapter III of the AMLR).

In the post-Trilogue draft of the AMLR, all provisions in Recital (32a) concerning the financial protection of vulnerable communities, including all classes of immigrants (dual citizens, refugees, and asylum seekers, among others) have been deleted.

The previous version of Recital (32a) advocated for due diligence measures based on individual risk assessments, which could prevent blanket denials of service and ensure that measures would be proportionate to the actual risks presented by these specific customer categories.

A post-Trilogue of Recital (32a) is more limited compared to the previous version as it focuses more narrowly only on civil society organisations that conduct charitable or humanitarian work in third countries, without explicitly mentioning the broader range of vulnerable groups.

The post-Trilogue version does not adequately address the nuanced balance between mitigating financial crime risks and ensuring financial inclusion for all vulnerable groups.

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Check the text of the #AML regulation “before and after”: you see that provisions which defended #crowdfunding efforts for civil society organisations and supported by the European Parliament in April 2023 were deleted during the #Trilogue.

This unreasonable and disproportionate expansion, without any exceptions, in effect, devastates fundraising efforts for activists and NGOs like Open Dialogue Foundation. In times of crisis, such as natural disasters, military conflicts, like the latest in #Ukraine, or emergencies, crowdfunding becomes a rapid and effective means for civil society to gather resources.

The proposed expansion of the AMLR to categorize all crowdfunding platforms as risky channels echoes existing de-risking practices that have already shown devastating impacts on vital humanitarian efforts. 2/5 https://image.nostr.build/92c0c5105d3bb59e79c4871bc7b4c60d677d94423914833727280ea2f6183b4f.jpg