No, Ukraine is not the money laundering or child sex trafficking capital of the world


Beware of claims that declare a city or country the capital of something – anything – in the world.

In 2010, we debunked a claim that Phoenix was the “#2 kidnapping capital of the world” and in 2012 a claim that Tampa was the “strip club capital of the world.”

Now, amid Russia’s invasion of Ukraine, an article claims that Ukraine is the “Money Laundering and Child Sex Trafficking Capital of the World!”

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Let’s start with money laundering.

Ukraine is “not even close” to being the money laundering capital of the world, said Moyara Ruehsen, who oversees the financial crime management program at the Middlebury Institute of International Studies in Monterey.

Ruehsen told us about two lists used to assess the risk of money laundering around the world.

The first is the Basel AML index, AML meaning anti-money laundering.

According to the world ranking in 2021, Haiti was No. 1, followed by the Democratic Republic of Congo, Myanmar, Mozambique and the Cayman Islands. Ukraine was 55th, landing between Russia (44th) and the United States (83rd).

Next, Ruehsen directed us to jurisdictions under heightened scrutiny by the Financial Action Task Force, a global watchdog that sets international standards aimed at preventing money laundering.

The task force maintains a “grey list” – countries under heightened scrutiny as they address shortcomings in their fight against money laundering – and a “black list”, of countries with which Ruehsen said people shouldn’t do business at all.

Ukraine is not on either list. (Iran and North Korea are blacklisted.)

The European Commission also identifies high-risk countries that have “strategic gaps in their anti-money laundering and counter-terrorist financing regime”. Afghanistan, Cambodia and Pakistan are on the list, but Ukraine is not.

Ukraine was on the FATF’s “grey list” about 20 years ago, Ruehsen said, and until 2014 when the country’s former president Viktor Yanukovych was ousted, Ukraine’s leaders were widely regarded as corrupt. “I have no doubt that much of this corrupt behavior trickled down to lower levels of government,” Ruehsen said.

Meanwhile, Volodymyr Zelenskyy, the country’s current president, campaigned to fight corruption. The claim that Ukraine is the money laundering capital of the world, she said, “sounds like Russian propaganda.”

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Regarding sex trafficking, we have previously denied a claim that Russian President Vladimir Putin pledged to “‘crush’ child sex traffickers in Ukraine”.

According to the latest State Department report on human trafficking, Russia has a more serious child sex trafficking problem than Ukraine. Both countries are grappling with the problem, according to the report, but Ukraine has taken steps to address it between 2020 and 2021, while Russia has not made “significant efforts” to eliminate the problem.

While Ukraine convicted traffickers, increased financial assistance to victims and launched awareness campaigns, Russia “convicted only one trafficker”, did not “bring new prosecutions against the traffickers suspects” and “has not offered any funding or programs to provide services to victims of trafficking”. “

Russia, not Ukraine, is among 11 governments that the report says have “a documented ‘policy or pattern’ of human trafficking, trafficking in government-funded programs, forced labor in government-affiliated medical services or other sectors, sexual slavery in government camps, or the use or recruitment of child soldiers.

The report also ranks countries based on the extent of government efforts to meet minimum standards to eliminate human trafficking. Tier 1, the United States’ ranking, is the highest, but that doesn’t mean the country doesn’t have human trafficking issues. On the contrary, it means that the country fully meets the minimum standards to eliminate trafficking. Level 2 – Ukraine’s level – means that a country’s government does not fully meet minimum standards but makes considerable efforts to achieve compliance. Tier 3 includes countries like Afghanistan and Russia that do not meet minimum standards and do not attempt to do so.

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