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Ciara O'Rourke
By Ciara O'Rourke April 12, 2022

No, Ukraine isn’t the money laundering or child sex trafficking capital of the world

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Other countries have worse money laundering and human trafficking problems than Ukraine, according to experts and government reports. 

 

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 "No. 2 kidnapping capital in the world," and in 2012, a claim that Tampa is the "strip club capital of the world." 

Now amid Russia’s invasion of Ukraine is a post claiming Ukraine is the "money laundering and child sex trafficking capital of the world!"

This post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

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 Middlebury Institute of International Studies at Monterey.

Ruehsen pointed us to two lists used to gauge money laundering risk around the world. 

First is the Basel AML Index, with AML standing for anti-money laundering. 

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

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

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The task force keeps a "grey list" — countries under increased monitoring as they address deficiencies in their anti-money laundering — and a "black list," countries Ruehsen said people shouldn’t do business with at all. 

Ukraine is on neither list. (Iran and North Korea are on the black list.)

The European Commission also identifies high-risk countries that have "strategic deficiencies in their regime on anti-money laundering and countering the financing of terrorism." Afghanistan, Cambodia, and Pakistan are on the list, but Ukraine is not among them. 

Ukraine was on FATF’s "grey list" about 20 years ago, Ruehsen said, and up until 2014, when the country’s former president, Viktor Yanukovych, was overthrown, Ukrainian leadership was widely considered to be corrupt. "I don’t doubt it that a lot of that corrupt behavior trickled down to lower levels of government," Ruehsen said.

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

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As for sex trafficking, we’ve previously debunked a claim that Russian President Vladimir Putin vowed to "‘crush’ child sex traffickers in Ukraine."

According to the State Department’s latest Trafficking in Persons report, Russia has a more serious problem with child sex trafficking than Ukraine. Both countries struggle with the issue, the report said, but Ukraine took action to address it between 2020 and 2021, while Russia failed to make "significant efforts" to eliminate the problem.

While Ukraine convicted traffickers, increased financial assistance to victims, and launched awareness campaigns, Russia "convicted only one trafficker," failed to "initiate any new prosecutions of suspected traffickers," and "offered no funding or programs to provide services for trafficking victims."

Russia, not Ukraine, is among 11 governments 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 employment or recruitment of child soldiers. 

The report also ranks countries based on the extent of government efforts to meet minimum standards for the elimination of human trafficking. Tier 1, the United States’ ranking, is the highest, but it doesn’t mean the country has no human trafficking problems. Rather, it means the country fully meets minimum standards to eliminate trafficking. Tier 2 — Ukraine’s tier — means a country’s government doesn’t fully meet the minimum standards but is making significant efforts to bring itself into compliance. Tier 3 includes countries such as Afghanistan and Russia that don’t meet the minimum standards and aren’t trying to. 

We rate this post False.

 

Our Sources

Facebook post, April 7, 2022

PolitiFact, Dewhurst says Phoenix has more kidnappings than any other city in the world except for Mexico City, June 18, 2010

PolitiFact, Is Tampa the 'strip club capital of the world'?, Jan. 13, 2012

European Commission, EU policy on high-risk third countries, visited April 11, 2022

Basel AML Index, Global ranking in 2021, visited April 12, 2022

FATF, Jurisdictions under Increased Monitoring, March 2022

FATF, High-Risk Jurisdictions subject to a Call for Action, 21 February 2020

FATF, High-Risk Jurisdictions subject to a Call for Action, March 2022

PolitiFact, There is no evidence that Putin invaded Ukraine to fight child trafficking, March 18, 2022

TRAFFICKING IN PERSONS REPORT, JUNE 2021

Interview with Moyara Ruehsen, financial crime intelligence professor, Middlebury Institute of International Studies at Monterey, April 12, 2022

 

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No, Ukraine isn’t the money laundering or child sex trafficking capital of the world

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