Anjouan Offshore Finance Authority: A History of Controversy

The Anjouan Offshore Finance Authority (AOFA), established on the Comorian island of Anjouan in 2001, became notorious for its role in facilitating illicit financial activities. Despite the Comoros being one of the world’s poorest nations, Anjouan, through the AOFA, aspired to become a significant offshore financial center. This ambition, however, quickly spiraled into a situation rife with corruption, money laundering, and fraud.

The AOFA was authorized to register international business companies (IBCs) with minimal regulatory oversight. This lack of transparency and due diligence attracted individuals and entities seeking to conceal assets and evade taxes. The registration process was reportedly lax, allowing for the creation of shell companies with obscured ownership. This, in turn, made Anjouan a haven for illicit funds derived from criminal activities around the globe.

The consequences of the AOFA’s operations were far-reaching. Its reputation was tarnished by numerous scandals involving money laundering, terrorist financing, and tax evasion. International organizations, including the Financial Action Task Force (FATF), repeatedly flagged the Comoros for its inadequate anti-money laundering and counter-terrorism financing measures. The Comoros was often placed on “grey lists” and faced international pressure to reform its financial sector.

One particularly damaging aspect of the AOFA’s activities involved the sale of citizenship. Reportedly, individuals could obtain Comorian passports and citizenship through investments, often of questionable origin, channeled through the AOFA. This practice raised concerns about national security and the integrity of immigration controls. It also provided individuals involved in criminal activities with a potential escape route and a means to conceal their identities.

The AOFA’s operation ultimately proved unsustainable. The international pressure, combined with internal corruption and mismanagement, led to its demise. In 2008, after years of criticism and mounting evidence of its role in facilitating illicit activities, the Comorian government revoked the AOFA’s license. This decision followed interventions by the International Monetary Fund (IMF) and other international bodies.

Even after its closure, the legacy of the AOFA continued to haunt the Comoros. The task of untangling the web of shell companies and recovering illicit assets proved to be a monumental challenge. The Comoros has since struggled to rebuild its reputation and establish a more transparent and accountable financial system. The Anjouan Offshore Finance Authority serves as a stark reminder of the dangers of unchecked financial deregulation and the vulnerability of small nations to exploitation by those seeking to hide illicit wealth.