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Date: April 29, 2024 Mon

Time: 11:09 pm

Results for money laundering

206 results found

Author: U.S. Government Accountability Office

Title: Anti-money laundering: improved communication could enhance the support FinCEN provides to law enforcement

Summary: Financial investigations are used to combat money laundering and terrorism financing, crimes that destablize national economies and threaten global security. This report examines the extent to which the law enforcement community finds FinCEN's support useful in its efforts to investigate and prosecute financial crimes.

Details: Washington, DC: GAO, 2009, 39p.

Source: Internet Source

Year: 2009

Country: United States

URL:

Shelf Number: 115337

Keywords:
Global Security
Money Laundering
Terrorism

Author: Levi, Michael

Title: Money Laundering Risks and E-Gaming: A European Overview and Assessment: Final Report

Summary: This report reviews the threat that money laundering through the e-gaming industry presents and could plausibly present to society, and the ways in which the regulated e-gaming industry discharges its duty to reduce money laundering in the EU.

Details: Cardiff: Cardiff University, 2009. 30p.

Source: Internet Resource

Year: 2009

Country: Europe

URL:

Shelf Number: 117769

Keywords:
Internet Gambling
Money Laundering

Author: Financial Action Task Force

Title: Vulnerabilities of Casinos and Gaming Sector

Summary: This report considers casinos with a physical presence and discusses related money laundering and terrorist financing methods, vulnerabilities, indicators to aid detection and deterrence, and international information exchange. The report considers vulnerabilities from gaps in domestic implementation of anti-money laundering to combating the financing of terrorism measures.

Details: Paris: FATF, 2009. 77p.

Source:

Year: 2009

Country: International

URL:

Shelf Number: 118343

Keywords:
Casinos
Money Laundering
Terrorism
Terrorist Financing

Author: Financial Action Task Force

Title: Money Laundering and Terrorist Financing Vulnerabilities of Commercial Websites and Internet Payment Systems

Summary: Criminals have shown adaptability and opportunism in finding new channels to launder the proceeds of their illegal activities and to finance terrorism. As the Internet becomes more and more a worldwide phenomenon, commercial websites and Internet payment systems are potentially subject to a wide range of risks and vulnerabilities that can be exploited by criminal organizations and terrorist groups. This study analyses money laundering and terrorist financing (ML/TF) risks with commercial websites and Internet payment systems with the focus on mediated customer-to-customer websites as the most vulnerable to abuse because of their popularity, accessibility to the public, and high volume of cross border transactions. The analysis also provides a number of case studies that illustrate how mediated customer-to-customer websites can be exploited for ML/TF purposes.

Details: Paris: FATF, 2008. 39p.

Source: Internet Resource

Year: 2008

Country: International

URL:

Shelf Number: 118344

Keywords:
Internet Crimes
Internet Safety
Money Laundering
Organized Crime
Terrorist Financing
Terrorists

Author: Financial Action Task Force

Title: Money Laundering and Terrorist Financing Through the Real Estate Sector

Summary: The objective of this report is to develop more information on the issue of using the real-estate secotor to launder money and to present a clearer picture of the way that real estate activity can be used for money laundering or terrorist financing. First, it explores the means by which illicit money is channelled through the real-estate sector to be integrated into the legal economy. Second, it identifies some of the control points that could assist in combating this phenomenon.

Details: Brussels, Belgium: FATF, 2007. 41p.

Source: Internet Resource

Year: 2007

Country: International

URL:

Shelf Number: 118345

Keywords:
Money Laundering
Organized Crime
Terrorism Financing
Terrorists

Author: Organisation for Economic Co-operation and Development. Committee on Fiscal Affairs

Title: Report on Abuse of Charities for Money-Laundering and Tax Evasion

Summary: Tax evasion and tax fraud through the abuse of charities is a serious and increasing risk in many countries although its impact is variable. Some countries estimate that the abuse of charities costs their treasury many hundreds of millions of dollars and is becoming more prevalent. This report summarizes the status attached to charities in the countries surveyed and compiles the common methods of the abuse of charities, the sectors at risk and the few attempts so far to quantify those risks.

Details: Paris: Organisation for Economic Co-operation and Development, Centre for Tax Policy and Administration. 2008. 65p.

Source: Internet Resource

Year: 2008

Country: International

URL:

Shelf Number: 114341

Keywords:
Charities
Corrupt Practices
Fraud
Money Laundering
Tax Evasion

Author: Kego, Walter

Title: Counteracting Transnational Organized Crime: Challenges and Countermeasures

Summary: According to the United Nations Office on Drugs and Crime, transnational organized crime is one of the major threats to human security, impeding the social, economic, political and cultural development of societies worldwide, and involved in trafficking in human beings, drugs and firearms, money laundering, etc. This report outlines the origins of transnational organized crime, describes how it manifests itself and identifies possible threats against societies. Money laundering is dealt with in some detail since it facilitates transnational crime activities and their expansion into the legal economy. The challenges posed by financial crime are identified and guidelines for its prevention are outlined. The EU strategy against transnational organized crimes is an example of how the common European model of crime prevention can be implemented elsewhere.

Details: Stockholm, Sweden: Institute for Security and Development Policy, 2010. 30p.

Source: Internet Resource; Stockholm Paper Series

Year: 2010

Country: International

URL:

Shelf Number: 118591

Keywords:
Drug Trafficking
Financial Crimes
Human Trafficking
Money Laundering
Organized Crime
Transnational Crime

Author: Global Witness

Title: For a Few Dollars More: How al Qaeda Moved Into the Diamond Trade

Summary: This report examines whether the terrorist group, al Qaeda, has used, and is continuing to use, rough diamonds. The report presents evidence that confirms that al Qaeda have been involved in the rough diamond trade since the 1990s. First in Kenya and Tanzania and then in Sierra Leone and Liberia, where they began to show an interest in diamond trading in 1998, following the crackdown on their financial activities in the wake of the U.S. embassy bombings in Kenya and Tanzania. The report argues that there are several reasons why al Qaeda has used rough diamonds: 1) As a means of raising funds for al Qaeda cells; 2) To hide money targeted by financial sanctions; 3) To launder the profits of criminal activity; and 4) To convert cash into a commodity that holds its value and is easily transportable.

Details: London: Global Witness, 2003. 95p.

Source: Internet Resource

Year: 2003

Country: International

URL:

Shelf Number: 118825

Keywords:
al Qaeda
Diamonds, Trade
Money Laundering
Terrorism
Terrorist Financing
Transnational Crime

Author: World Bank

Title: Stolen Asset Recovery (STAR) Initiative: Challenges, Opportunities, and Action Plan

Summary: The theft of public assets from developing countries is a huge and serious problem. While the traditional focus of the international development community has been on addressing corruption and weak governance within developing countries themselves, this approach ignores the other side of the equation: stolen assets are often hidden in the financial center of developed countries; bribes to public officials from developing countries often originate from multinational corporations; and the intermediary services provided by lawyers, accountants, and company formation agents, which could be used to launder or hide the proceeds of asset theft by developing country rulers, are often located in developed country financial centers. The STAR Initiative is an integral part of the World Bank Group's strategy which recognizes the need to help developing countries recover stolen assets. This action plan presented in this report responds to feedback received from consultations with developed and developing countries, as well as lessons from the experience of Nigeria, Peru, and the Philippines.

Details: Washington, DC: The World Bank; Vienna: United Nations Office on Drugs and Crime, 2007. 48p.

Source: Internet Resource

Year: 2007

Country: International

URL:

Shelf Number: 119268

Keywords:
Bribery
Corruption
Financial Crimes
Money Laundering
Stolen Asset Recovery

Author: Europol

Title: OCTA 2009: EU Organised Crime Threat Assessment

Summary: The 2009 OCTA assesses the threat of organized crime in the EU through the analysis of the organized groups, of the criminal markets, and of their interaction within and without territorial entities denominated as criminal hubs. Through this approach it finds that the most significant criminal sectors are drug trafficking, trafficking in human beings, illegal immigration, fraud, counterfeiting and money laundering.

Details: The Hague: European Police Office, 2009. 64p.

Source: Internet Resource

Year: 2009

Country: International

URL:

Shelf Number: 119244

Keywords:
Counterfeiting
Human Trafficking
Illegal Immigration
Money Laundering
Organized Crime

Author: Beare, Margaret

Title: Global Transnational Crime: Canada and China

Summary: This paper presents a review of the phenomena of transnational crime/organized crime (TNC/OC) as it relates to Canada and China. The paper begins by outlining the changing understanding of TNC/OC. Three issues dominate much of the current debate: issues of the breakdown in strictly ‘ethnic’-based operations and the refocus of law enforcement on criminal markets; the changing perception of the structure of criminal organizations and finally, a recognition of harm as a determinant of the types of criminal activity that ought to be treated internationally with the seriousness of the more traditional organized crimes. Next, this paper identifies the key illicit markets related to Canada and China. These markets include: money laundering, drug trafficking, human smuggling and the counterfeiting of goods, cards and currency. This paper concludes with a discussion on areas of tension and opportunities for enhanced cooperation on a bilateral and multilateral basis between Canada and China. One key unresolved tension relates to China’s quest for international assistance in combating corruption. China and Canada have ratified the UN Convention Against Corruption and in addition Canada is involved in four international agreements dealing with the criminal aspect of corruption – but from China’s perspective these agreements were supposed to assist countries in their fight against various forms of corruption but are either not effective or are not implemented.

Details: Toronto: Canadian International Council, 2010. 24p.

Source: Internet Resource: China Paper No. 16: Accessed August 22, 2010 at: http://www.onlinecic.org/resourcece/archives/chinapapers/cic_chinapapersno16_bearepdf

Year: 2010

Country: Canada

URL: http://www.onlinecic.org/resourcece/archives/chinapapers/cic_chinapapersno16_bearepdf

Shelf Number: 119658

Keywords:
Counterfeiting
Drug Trafficking
Human Smuggling
Illicit Markets
Money Laundering
Organized Crime
Transnational Crime (Canada and China)

Author: Madzima, Jackson

Title: Money Laundering and Terrorism Financing Risks in Botswana

Summary: Botswana has a relatively good legal foundation to fight financial crime in general. With the second reading of the Financial Intelligence Bill and the regulation of non-financial institutions prone to money laundering, the legal framework will be remarkably enhanced. However, Botswana has not yet undertaken an assessment of its risks and vulnerabilities to money laundering and the financing of terrorism in terms of international requirements. Significantly, Botswana’s legal framework does not recognise the risk of money laundering in either limited- or high-risk situations. This is in spite of the Financial Action Task Force (FATF) espousing a country-specific risk analysis and application of a regulative framework for all forms of business relationships. The rationale for adopting the risk-based approach is that a better understanding of the extent, form, production and disposal or use of the proceeds of crime helps to determine the appropriate interventions. Tentative steps towards establishing trends in money laundering and the financing of terrorism have been taken over the past few years. A team of World Bank experts visited Botswana at the end of 2006 to assess the implementation of the FATF anti-money laundering and counter-financing of terrorism (AML and CFT) standards. In early 2007 the Directorate on Corruption and Economic Crime (DCEC), in collaboration with the Institute for Security Studies (ISS) of South Africa, undertook research to establish trends in money laundering in Botswana. The findings are yet to be publicised. However, what is apparent is that these investigations were by no means exhaustive. This paper is a contribution to the discourse on money laundering and the financing of terrorism in Botswana. It provides an overview of Botswana’s AML/CFT regimes. This will follow a brief outline of the international regulatory regimes for curbing both money laundering and the financing of terrorism. Significantly, the paper subscribes to the view that both these activities exhibit the same characteristics and therefore that their analysis can and should broadly be made within the same framework. An analytical framework woven around the ‘three pillars’ of prevention, enforcement and international co-operation is used in this discussion.

Details: Pretoria, South Africa: Institute for Security Studies, 2008. 22p.

Source: Internet Resource: ISS Paper 184: Accessed August 30, 2010 at: http://www.iss.co.za/uploads/PAPER184.PDF

Year: 2008

Country: Botswana

URL: http://www.iss.co.za/uploads/PAPER184.PDF

Shelf Number: 119705

Keywords:
Money Laundering
Terrorism
Terrorist Financing

Author: Financial Action Task Force

Title: Global Money Laundering and Terrorist Financing: Threat Assessment

Summary: The Global Money Laundering and Terrorist Financing Threat Assessment (GTA) report provides an assessment of the global systemic money laundering/terrorist financing threats. The document is aimed at raising the level of understanding of these threats and their negative impact, and help governments to take decisive action to minimize the harms they can cause.

Details: Paris: FATF, 2010. 76p.

Source: Internet Resource: Accessed September 1, 2010 at: http://www.fatf-gafi.org/dataoecd/48/10/45724350.pdf

Year: 2010

Country: International

URL: http://www.fatf-gafi.org/dataoecd/48/10/45724350.pdf

Shelf Number: 119711

Keywords:
Money Laundering
Terrorism
Terrorist Financing
Terrorists

Author: Financial Action Task Force

Title: Money Laundering Vulnerabilities of Free Trade Zones

Summary: Free trade zones (FTZs) are designated areas within countries that offer a free trade environment with a minimum level of regulation. The number of FTZs have increased rapidly in recent years, today there are approximately 3,000 FTZs in 135 countries around the world. FTZs offer many incentives and benefits to the companies that operate within it, such as the exemption from duty and taxes and simplified administrative procedures. However, the absence of strict regulations and transparency of the FTZs which is beneficial for legitimate businesses, also make them highly attractive for illicit actors who take advantage of this relaxed oversight to launder the proceeds of crime and finance terrorism. Through a series of cases studies, this report aims to illustrate the ways in which FTZs can be misused for money laundering and terrorist financing purposes.

Details: Paris: FATF, 2010. 48p.

Source: Internet Resource: Accessed September 1, 2010 at: http://www.fatf-gafi.org/dataoecd/45/47/44888058.pdf

Year: 2010

Country: International

URL: http://www.fatf-gafi.org/dataoecd/45/47/44888058.pdf

Shelf Number: 119712

Keywords:
Money Laundering
Terrorism
Terrorist Financing
Terrorists

Author: Global Financial Integrity

Title: Illicit Financial Flows From Africa: Hidden Resource for Development

Summary: This paper presents an analysis of the volume and pattern of illicit financial flows from African countries over a 39-year period from 1970 to 2008. The paper makes a contribution given that existing research on long-term trends in the pattern of illicit flows from African countries is rather scanty. The classification of African countries used in this paper differs from that in the IMF’s World Economic Outlook; here, Egypt and Libya (members of the African Union) are included under North Africa while the group of CFA Franc countries is distributed along a geographical basis. The paper presents estimates of illicit financial flows from Africa and its various regions and economic groupings during the 1970s, 1980s, 1990s, and the most recent nine-year period 2000-2008 for which data are available. We find that illicit flows have not only grown on a decennial basis, cumulatively they have come to far exceed the continent’s outstanding external debt at the end of 2008. The statistical analysis of long-term trends brings out some interesting regional disparities in the pattern and growth of such flows. Utilizing the World Bank Residual model and the IMF Direction of Trade Statistics, illicit outflows from Africa across the 39-year period are estimated at US$854 billion. The authors point out that data limitation significantly understates the problem. Making various adjustments to the estimate suggests that the volume of illicit flows over the period 1970 to 2008 may be closer to US$1.8 trillion. We argue that this staggering loss of capital seriously hampers Africa’s efforts at poverty alleviation and economic development.

Details: Washington, DC: Global Financial Integrity, 2010.

Source: Internet Resource: Accessed September 13, 2010 at: http://www.gfip.org/storage/gfip/documents/reports/gfi_africareport_web.pdf

Year: 2010

Country: Africa

URL: http://www.gfip.org/storage/gfip/documents/reports/gfi_africareport_web.pdf

Shelf Number: 119790

Keywords:
Corrupt Practices
Economics and Development
Money Laundering

Author: Unger, Brigitte

Title: Detecting Criminal Investments in the Dutch Real Estate Sector

Summary: The real estate sector is a prominent candidate for money laundering and criminal abuse. Real estate objects can be used in two ways for criminal purpose. They can be traded in order to hide the origin of illicit funds on a non transparent and speculative market, or they can be used as a final investment, where criminals park their money in business or houses permanently. Given the importance of this sector in the Netherlands, both with regard to its economic size and its relevance for criminals, several studies on criminal behavior in the real estate sector have been made. Most prominently the study of the WODC by Ferwerda et al (2007), which gives a good overview over maleficent behavior in the Dutch real estate sector, and the Financial Expertise Center (FEC) report of 2008 on money laundering techniques. However, so far, no systematic study on the importance and frequency of diverse maleficent behavior constructions for money laundering in this sector has been conducted. This study tries to use all information available, to operationalize it into measurable indicators, and to systematically analyze criminal investment in the Dutch real estate sector.

Details: The Hague: Dutch Ministry of Finance, Justice and Interior Affairs, 2010. 252 p.

Source: Internet Resource: Accessed September 16, 2010 at: http://www.minfin.nl/dsresource?objectid=80301&type=org

Year: 2010

Country: Netherlands

URL: http://www.minfin.nl/dsresource?objectid=80301&type=org

Shelf Number: 119823

Keywords:
Financial Crimes
Money Laundering
Organized Crime
Real Estate

Author: Smith, Russell G.

Title: The Illegal Movement of Cash and Bearer Negotiable Instruments: Typologies and Regulatory Responses

Summary: As part of global regulatory measures designed to minimise risks of money laundering and financing of terrorism, financial institutions and other designated businesses in most countries are required to report certain financial transactions to government regulators. This has increased the probability that transactions involving the proceeds of crime will be detected and reported officially. In order to avoid such detection, serious criminals may simply retain the proceeds of their crimes in cash or use bearer negotiable instruments in connection with their money laundering activities. Although not a new concern, the illegal movement of cash and bearer negotiable instruments across borders is likely to continue and although such movements are now regulated, criminals will continue to devise new strategies to circumvent regulatory controls. This paper explores the ways in which covert movements of currency and bearer negotiable instruments currently take place and reviews the regulatory measures that exist to address such activities in Australia. Increased detection and enforcement action, coupled with intensive data collection and analysis, are likely to be the most effective ways in which to address this way of laundering the proceeds of crime.

Details: Canberra: Australian Institute of Criminology, 2010. 6p.

Source: Internet Resource: Trends & Issues in Crime and Criminal Justice, No. 402: Accessed October 26, 2010 at: http://www.aic.gov.au/documents/8/2/3/%7B8239E8CD-681A-401B-B094-414C872418BE%7Dtandi402.pdf

Year: 2010

Country: International

URL: http://www.aic.gov.au/documents/8/2/3/%7B8239E8CD-681A-401B-B094-414C872418BE%7Dtandi402.pdf

Shelf Number: 120096

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Kego, Walter

Title: The Fight Against Money Laundering in Latvia and Sweden

Summary: The common denominator in all transnational criminal activities is money laundering, the process by which the proceeds of illegal activities are converted into means for legal investments. The fight against money laundering means combating large scale crime. The World Bank and the International Monetary Fund (IMF) estimate that shadow transactions amounted to between US$6.5 trillion and US$9 trillion, equaling 20-25% of total global GDP. On the other hand, the United Nations International Drug Control Program (UNDCP) assesses the annual turnover from the entire criminal market to be around US$1500 billion. This Policy Brief summarizes the proceedings of the Workshop on Money Laundering organized by the Institute for Security and Development Policy, and the Riga Stradins University, Latvia, held May 28, 2010.

Details: Stockholm: Institute for Security & Development Policy, 2010. 4p.

Source: Internet Resource: Accessed November 1, 2010 at: http://www.isdp.eu/images/stories/isdp-main-pdf/2010_kego_the-fight-against-money-laundering.pdf

Year: 2010

Country: Europe

URL: http://www.isdp.eu/images/stories/isdp-main-pdf/2010_kego_the-fight-against-money-laundering.pdf

Shelf Number: 120149

Keywords:
Financial Crimes
Money Laundering

Author: Choo, Kim-Kwang Raymond

Title: Challenges in Dealing with Politically Exposed Persons

Summary: Politically exposed persons (PEPs) are individuals who are, or have been, entrusted with prominent public functions. PEPs are potential targets for bribes due to their prominent position in public life. They have a higher risk of corruption due to their access to state accounts and funds. A review of Financial Action Task Force (FATF) and FATF-style regional bodies' mutual evaluation reports reveals that a significant number of jurisdictions are found to be either non-compliant or partially-compliant with the FATF recommendation on PEPs. Corrupt PEPs may exploit the regulatory difference between jurisdictions to facilitate the laundering of corruption proceeds and/or illegally diverted government, supranational or aid funds. To combat money laundering risks posed by PEPs, there is a need for ongoing monitoring of risks by regulated entities. This paper also outlines three policy implications, namely: deciding whether to include domestic public office holders in existing PEP definitions; deciding when to terminate PEP status; and deciding whether to extend PEP monitoring to individuals holding important positions in the private sector, that is, financially exposed persons.

Details: Canberra: Australian Institute of Criminology, 2010. 6p.

Source: Internet Resource: Trends and Issues in Crime and Criminal Justice, No. 386: Accessed November 3, 2010 at: http://www.aic.gov.au/documents/D/3/6/%7BD36F2729-AFC4-48CC-8A3C-2C81FCDCE5A3%7Dtandi386.pdf

Year: 2010

Country: International

URL: http://www.aic.gov.au/documents/D/3/6/%7BD36F2729-AFC4-48CC-8A3C-2C81FCDCE5A3%7Dtandi386.pdf

Shelf Number: 120173

Keywords:
Bribery
Corruption
Financial Crimes
Money Laundering

Author: Xiu, Liu

Title: Organized Crime and the Black Economy in China

Summary: Organized crime has now become a serious social problem in all cities in China. Officially, the Chinese government has thus far acknowledged that only a few criminal groups have acquired so-called mafia-like characteristics in their organizational structure. However, there are no real mafia-type organizations in China. Organized crime in China mainly engages in drug trafficking, money laundering, smuggling, human trafficking, manufacture and smuggling of counterfeit money and guns, prostitution, etc.

Details: Santiago, Chile: Global Consortium on Security Transformation, 2010. 20p.

Source: Internet Resource: Working Paper Series, No. 7: Accessed November 29, 2010 at: http://www.securitytransformation.org/images/publicaciones/173_Working_Paper_7_-_Organized_Crime_and_the_Black_Economy_in_China.pdf

Year: 2010

Country: China

URL: http://www.securitytransformation.org/images/publicaciones/173_Working_Paper_7_-_Organized_Crime_and_the_Black_Economy_in_China.pdf

Shelf Number: 120299

Keywords:
Drug Trafficking
Human Trafficking
Money Laundering
Organized Crime (China)
Prostitution
Smuggling
Trafficking in Weapons

Author: U.S. Government Accountability Office

Title: Moving Illegal Proceeds: Challenges Exist in Federal Government's Effort to Stem Cross-Border Currency Smuggling

Summary: U.S. Customs and Border Protection (CBP) is the lead federal agency responsible for inspecting travelers who seek to smuggle large volumes of cash--called bulk cash--when leaving the country through land ports of entry. It is estimated that criminals smuggle $18 billion to $39 billion a year in bulk cash across the southwest border. The Financial Crimes Enforcement Network (FinCEN) is responsible for reducing the risk of cross-border smuggling of funds through the use of devices called stored value, such as prepaid cards. GAO was asked to examine (1) the extent of actions taken by CBP to stem the flow of bulk cash leaving the country and any challenges that remain, (2) the regulatory gaps, if any, of cross-border reporting and other anti-money laundering requirements of stored value, and (3) if gaps exist, the extent to which FinCEN has addressed them. To conduct its work, GAO observed outbound operations at five land ports of entry. GAO also reviewed statutes, rules, and other information for stored value. This is a public version of a law enforcement sensitive report that GAO issued in September 2010. Information CBP deemed sensitive has been redacted. In March 2009, CBP created an Outbound Enforcement Program aimed at stemming the flow of bulk cash leaving the country, but further actions could be taken to address program challenges. Under the program, CBP inspects travelers leaving the country at all 25 land ports of entry along the southwest border. On the Northern border, inspections are conducted at the discretion of the Port Director. From March 2009 through June 2010, CBP seized about $41 million in illicit bulk cash leaving the country at land ports of entry. Stemming the flow of bulk cash, however, is a difficult and challenging task. For example, CBP is unable to inspect every traveler leaving the country at land ports of entry and smugglers of illicit goods have opportunities to circumvent the inspection process. Other challenges involve limited technology, infrastructure, and procedures to support outbound operations. CBP is in the early phases of this program and has not yet taken some actions to gain a better understanding of how well the program is working, such as gathering data for measuring program costs and benefits. By gathering data for measuring expected program costs and benefits, CBP could be in a better position to weigh the costs of any proposed expansion of the outbound inspection program against likely outcomes. Regulatory gaps of cross-border reporting and other anti-money laundering requirements exist with the use of stored value. For example, travelers must report transporting more than $10,000 in monetary instruments or currency at one time when leaving the country, but FinCEN does not have a similar requirement for travelers transporting stored value. Similarly, certain anti-money laundering regulations, such as reports on suspicious activities, do not apply to the entire stored value industry. The nature and extent of the use of stored value for cross-border currency smuggling and other illegal activities remains unknown, but federal law enforcement agencies are concerned about its use. FinCEN is developing regulations, as required by the Credit CARD Act of 2009, to address gaps in regulations related to the use of stored value for criminal purposes, but much work remains. FinCEN has not developed a management plan that includes, among other things, target dates for completing the regulations. Developing such a plan could help FinCEN better manage its rulemaking effort. When it issues the regulations, law enforcement agencies and FinCEN may be challenged in ensuring compliance by travelers and industry. For example, FinCEN will be responsible for numerous tasks including issuing guidance for compliance examiners, revising the way in which it tracks suspicious activities related to stored value, and addressing gaps in anti-money laundering regulations for off-shore entities that issue and sell stored value. GAO recommends that CBP, among other things, gather data on program costs and benefits and that FinCEN develop a plan, including target dates, to better manage its rulemaking process. CBP and FinCEN concurred with these recommendations.

Details: Washington, DC: U.S. Government Accountability Office, 2010. 75p.

Source: Internet Resource: GAO-11-73: Accessed December 2, 2010 at: http://www.gao.gov/new.items/d1173.pdf

Year: 2010

Country: United States

URL: http://www.gao.gov/new.items/d1173.pdf

Shelf Number: 120339

Keywords:
Border Security
Financial Crimes
Illegal
Money Laundering
Smuggling

Author: Olson, Eric L.

Title: Shared Responsibility: U.S.-Mexico Policy Options for Confronting Organized Crime

Summary: The research for this volume is the product of a project on U.S.-Mexico Security Cooperation jointly coordinated by the Mexico Institute at the Woodrow Wilson Center and the Trans-Border Institute at the University of San Diego. As part of the project, a number of research papers were commissioned that provide background information on organized crime in Mexico, the United States, and Central America, and analyze specific challenges for cooperation between the United States and Mexico, including efforts to address the consumption of narcotics, money laundering, arms trafficking, intelligence sharing, police strengthening, judicial reform, and the protection of journalists. Each chapter in this volume was first released in a preliminary form as part of a “Working Paper Series” throughout 2010. Contents include the following: Introduction, by Eric L. Olson, David A. Shirk, and Andrew Selee; Drug Trafficking Organizations and Counter-Drug Strategies in the U.S.-Mexican Context by Luis Astorga and David A. Shirk; Drug Trafficking Organizations in Central America: Transportistas, Mexican Cartels and Maras by Steven S. Dudley; Crossing the Mississippi: How Black Tar Heroin Moved Into the Eastern United States by José Díaz-Briseño; How Can Domestic U.S. Drug Policy Help Mexico? by Peter Reuter; Money Laundering and Bulk Cash Smuggling: Challenges for the Mérida Initiative by Douglas Farah; Justice Reform in Mexico: Change & Challenges in the Judicial Sector by David A. Shirk; Police Reform in Mexico: Advances and Persistent Obstacles by Daniel Sabet; Protecting Press Freedom in an Environment of Violence and Impunity by Dolia Estévez; Armed Forces and Drugs: Public Perceptions and Institutional Challenges by Roderic Ai Camp; Combating Organized Crime and Drug Trafficking in Mexico: What are Mexican and U.S. Strategies? Are They Working? by John Bailey; and U.S.-Mexico Security Collaboration: Intelligence Sharing and Law Enforcement Cooperation by Sigrid Arzt.

Details: Washington, DC: Woodrow Wilson International Center for Scholars, Mexico Institute: San Diego, CA: University of San Diego, Trans-Border Institute, 2010. 376p.

Source: Internet Resource: Accessed December 20, 2010 at: http://www.wilsoncenter.org/topics/pubs/Shared%20Responsibility--Olson,%20Shirk,%20Selee.pdf

Year: 2010

Country: Mexico

URL: http://www.wilsoncenter.org/topics/pubs/Shared%20Responsibility--Olson,%20Shirk,%20Selee.pdf

Shelf Number: 120552

Keywords:
Drug Control Policy
Drug Trafficking
Money Laundering
Organized Crime (United States and Mexico)

Author: Setiono, Bambang

Title: Fighting Forest Crime and Promoting Prudent Banking for Sustainable Forests Management: The Anti Money Laundering Approach

Summary: If illegal logging was a crime involving only poor forest-dependent people, truck drivers or underpaid forest rangers, it would not be difficult to stop. With involvement of financiers of illegal logging, known as cukong, legal timber industries, and government officers, illegal logging becomes a complex problem not only for Indonesia, but also for the international forestry community. The current forestry law enforcement approach fails to capture the masterminds of illegal logging. However, the money laundering law enforcement approach which ‘follows the money’ provides an important option to deal with the masterminds of illegal logging. This new approach requires banks and other financial service providers to be more active and prudent in dealing with financial transactions related to their customers. Bank customers could include financiers of illegal logging, timber industries, law enforcement and government officers. Overall, proper implementation of the anti money laundering regime should provide opportunities for promoting prudent banking practices and sustainable forest management, and for curtailing forestry crimes.

Details: Jakarta, Indonesia: Center for International Forestry Research, 2005. 25p.

Source: Internet Resource: CIFOR Occasional Paper No. 44: Accessed February 1, 2011 at: http://www.cifor.cgiar.org/publications/pdf_files/OccPapers/OP-44.pdf

Year: 2005

Country: International

URL: http://www.cifor.cgiar.org/publications/pdf_files/OccPapers/OP-44.pdf

Shelf Number: 120653

Keywords:
Illegal Logging
Money Laundering
Offenses Against the Environment

Author: Hubschle, Annette, compiler

Title: Organised Crime in Southern Africa: First Annual Review

Summary: In 2005 representatives of the Institute for Security Studies (ISS) and the Secretariat of the Southern African Regional Police Chiefs Cooperation Organisation (SARPCCO) discussed the lack of reliable information and research on organised crime and how it impacted on law enforcement in southern Africa. The lack of credible homegrown research data ultimately led to the conceptualisation of a joint research project between the Cape Town-based ISS Organised Crime and Money Laundering Programme and SARPCCO. The Enhancing Regional Responses Against Organised Crime (EROC) Project commenced in January 2008 and concludes in December 2010. The objectives of the research are to: Provide in-depth information on contemporary organised criminal activities in the sub-region to policy and decision makers; Analyse the transnational dynamics of organised criminal groups and networks; Determine whether, and to what extent, links exist between organised crime and terrorism; Consider and document the role that corruption plays in organised crime; and Evaluate the capacity and effectiveness of law enforcement agencies in the sub-region to overcome organised crime. This report comprises the research findings of the first year of data collection (2008) for the EROC project. It is the first of three such reports that will be published by the ISS in collaboration with SARPCCO. It looks at selected organised criminal activities and observed levels of prevalence in 12 southern African countries. Research questions, methodologies, limitations and ethical considerations are discussed in detail. Due to the lack of statistical and quantitative data, the report relies mostly on qualitative methodologies. Representatives of law enforcement agencies, government departments and para-statals, civil society, business and professional associations, academics, prisoners, former gang members and members of the broader communities whose lives have been affected by organised crime, were consulted in one-on-one interviews, focus groups, observations and workshops. A team of field researchers led by a research coordinator collected the data presented and analysed in this report. The research was informed by a working definition of organised crime which was jointly developed by the heads of criminal investigation departments in southern Africa and the research team. The report shows that the more serious forms of crime in terms of the monetary value involved or the potential harm they cause have a transnational dimension, both in terms of being committed by people of varying nationalities and in terms of affecting more than one country. It has been established that organised crime in most countries is underpinned by corruption, which is either a facilitating activity or an organised criminal activity in its own right. The geo-political and economic environments of individual countries amplifies the significance of specific criminal activities, the commonest forms of which have been identified as stock theft, theft/hijacking of motor vehicles, cultivation of marijuana and a broad spectrum of economic crimes. Further, the research has shown that although economic crimes may not be as prevalent as other forms of crime, statistically their impact on the society and the economy are far reaching. Furthermore, the effectiveness of law enforcement against organised crime has been put in the spotlight.

Details: Pretoria, South Africa: Institute for Security Studies, 2010. 101p.

Source: Internet Resource: Accessed February 11, 2011 at: http://www.iss.co.za/uploads/OrgCrimeReviewDec2010.pdf

Year: 2010

Country: South Africa

URL: http://www.iss.co.za/uploads/OrgCrimeReviewDec2010.pdf

Shelf Number: 120675

Keywords:
Corruption
Counterfeit Goods
Drug Markets
Financial Crimes
Human Trafficking
Money Laundering
Offenses Against the Environment
Organized Crime (South Africa)
Poaching
Smuggling
Stolen Motor Vehicles
Wildlife Crime

Author: Blickman, Tom

Title: Countering Illicit and Unregulated Money Flows: Money Laundering, Tax Evasion and Financial Regulation

Summary: In July 1989, the leaders of the economic powers assembled at the G7 Paris summit decided to establish a Financial Action Task Force (FATF) to counter money laundering as an effective strategy against drug trafficking by criminal ‘cartels’. Here began an international anti-money laundering (AML) regime. Since then it has expanded its scope to fight transnational organized crime and counter the financing of terrorism. During that time other illicit or unregulated money flows have appeared on the international agenda as well. Today, tax evasion and avoidance, flight capital, transfer pricing and mispricing, and the proceeds of grand corruption are seen as perhaps more detrimental obstacles to good governance and the stability and integrity of the financial system. Other international bodies were tasked to tackle these ‘public bads’. Tackling tax evasion is still in its infancy, and there is a growing awareness that the AML regime is not working as well as intended. Experts still ponder how to implement one that works. Tax havens and offshore financial centres (OFCs) were identified as facilitating these unregulated and illicit money flows. The 2007-2008 credit crisis made only too clear the major systemic risk for all global finance posed by the secrecy provided by tax havens and OFCs. They were used to circumvent prudential regulatory requirements for banks and other financial institutions and hide substantial risks from onshore regulators. After twenty years of failed efforts, the G20 (having supplanted the G7) has again pledged to bring illicit and harmful unregulated money flows under control. This briefing looks at previous attempts to do so and the difficulties encountered along the way. Can the G20 succeed or is it merely following the same path that led to inadequate measures? What are the lessons to be learned and are bolder initiatives required? In brief, the paper concludes that current initiatives have reached their sale-by date and that a bolder initiative is required at the UN level, moving from recommendations to obligations, and fully engaging developing nations, at present left out in the current ‘club’-oriented process.

Details: Amsterdam: Transnational Institute, 2009. 39p.

Source: Internet Resource: Crime and Globalisation Debate Papers: Accessed February 10, 2011 at: http://www.idpc.net/sites/default/files/library/Countering%20illicit%20and%20unregulated%20money%20flows.pdf

Year: 2009

Country: International

URL: http://www.idpc.net/sites/default/files/library/Countering%20illicit%20and%20unregulated%20money%20flows.pdf

Shelf Number: 118152

Keywords:
Cartels
Financial Crimes
Money Laundering
Organized Crime
Tax Evasion

Author: Kar, Dev

Title: The Absorption of Illicit Financial Flows from Developing Countries: 2002-2006

Summary: A recent study by Kar and Cartwright-Smith (2008) found that over the period 2002 to 2006, illicit financial flows from developing countries increased from US$372 to US$859 billion. The purpose of this paper is to link these outflows with major points of absorption consisting of offshore financial centers and developed country banks. While offshore centers have recently attracted media attention regarding their lack of transparency, the paper finds that large data gaps exist for banks as well. These gaps make it difficult to analyze the absorption of illicit funds, defined as the change in private sector deposits of developing countries in banks and offshore centers. The paper argues that both need to greatly improve the transparency of their operations. Regular reporting of detailed deposit data by sector, maturity, and country of residence of deposit holder would close many of the data gaps identified in this paper and allow for a more robust analysis of the absorption of illicit flows from developing countries. Given data limitations, certain assumptions had to be made regarding the behavior of illicit flows and investments. These assumptions were formulated as control variables for a simple model of absorption. Several simulations of illicit outflows against absorption (defined as the non-bank private sector deposits of developing countries) were carried out using different settings of the control variables. The paper finds that while offshore centers have been absorbing an increasing share of illicit flows from developing countries over the five-year period of this study, international banks have played a pivotal role in facilitating that absorption. Depending upon whether one uses the narrower Bank for International Settlements or broader International Monetary Fund definition (a control variable), offshore centers hold an estimated 24 or 44 percent of total absorption respectively, while banks hold the balance. As total absorption consists of both licit and illicit funds, the paper presents a simple algebraic analysis to estimate the portion of such deposits in banks and offshore centers. Furthermore, the analysis shows that the polar extreme (all illicit or all licit) in such holdings by either group is not tenable given the overall volume of illicit flows and absorption.

Details: Washington, DC: Global Financial Integrity, 2010. 36p.

Source: Internet Resource: Accessed February 11, 2011 at: http://www.gfip.org/storage/gfip/documents/reports/absorption_of_illicit_flows_web.pdf

Year: 2010

Country: International

URL: http://www.gfip.org/storage/gfip/documents/reports/absorption_of_illicit_flows_web.pdf

Shelf Number: 120745

Keywords:
Financial Crimes
Money Laundering

Author: Kar, Dev

Title: Illicit Financial Flows from Developing Countries: 2000-2009, Update with a Focus on Asia

Summary: The report, “Illicit Financial Flows from Developing Countries: 2000-2009,” finds that approximately $6.5 trillion was removed from the developing world from 2000 through 2008. The report also examines illicit flows from Asia, which produced the largest portion of total outflows and makes projections for 2009. The report ranks countries according to magnitude of outflows with China ranking 1 ($2.18 trillion), Russia 2 ($427 billion), Mexico 3 ($416 billion), Saudi Arabia 4 ($302 billion), and Malaysia 5 ($291 billion). The report also shows the annual outflows for each country and breaks outflows down into two categories of drivers: trade mispricing and “other,” which includes kickbacks, bribes, embezzlement, and other forms of official corruption. The report also looks at the impact of the global economic recession—on both magnitudes and trends in illicit outflows, it makes policy recommendations, and it projects outflows for 2009 (for which complete data is not yet available).

Details: Washington, DC: Global Financial Integrity, 2011. 64p.

Source: Internet Resource: Accessed February 11, 2011 at: http://www.gfip.org/storage/gfip/documents/reports/IFF2010/gfi_iff_update_report-web.pdf

Year: 2011

Country: International

URL: http://www.gfip.org/storage/gfip/documents/reports/IFF2010/gfi_iff_update_report-web.pdf

Shelf Number: 120748

Keywords:
Corruption
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Financial Action Task Force

Title: Money Laundering Using New Payment Methods

Summary: NPMs (prepaid cards, mobile payments and Internet payment services) have become more widely used and accepted as alternative methods to initiate payment transactions. Some have even begun to emerge as a viable alternative to the traditional financial system in a number of countries. The rise in the number of transactions and the volume of funds moved through NPMs since 2006 has been accompanied by an increase in the number of detected cases where such payment systems were misused for ML/TF purposes. The NPM report in 2006 identified potential legitimate and illegitimate uses for the various NPMs but there was little evidence to support this. The current report will compare and contrast the “potential risks” described in the 2006 report to the “actual risks” based on new case studies and typologies. Not all potential risks identified in 2006 were backed up by case studies. This does not mean that those risks are no longer of concern, and jurisdictions should continue to be alert to the market´s development to prevent misuse and detect cases that went unnoticed before. The report will also develop red flag indicators which might help a) NPM service providers to detect ML/TF activities in their own businesses and b) other financial institutions to detect ML/TF activities in their business with NPM service providers, in order to increase the number and quality of suspicious transaction reports (STRs). Although more case studies are now available, issues surrounding appropriate legislation and regulations for NPMs are still a challenge for many jurisdictions. Consequently, the report also identifies the unique legal and regulatory challenges associated with NPMs and describes the different approaches national legislators and regulators have taken to address these. A comparison of regulatory approaches can help inform other jurisdictions’ decisions regarding the regulation of NPM. Finally, this report considers the extent to which the FATF 40+9 Recommendations continue to adequately address the ML/TF issues associated with NPMs.

Details: Paris: FATF, 2010. 116p.

Source: Internet Resource: Accessed February 24, 2011 at: http://www.fatf-gafi.org/dataoecd/4/56/46705859.pdf

Year: 2010

Country: United States

URL: http://www.fatf-gafi.org/dataoecd/4/56/46705859.pdf

Shelf Number: 120873

Keywords:
Financial Crimes
Money Laundering

Author: Financial Action Task Force

Title: Money Laundering Using Trust and Company Service Providers

Summary: Trust and Company Service Providers (TCSPs) provide an important link between financial institutions and many of their customers. TCSPs have often been used, wittingly or unwittingly, in the conduct of money laundering activities. This comprehensive typologies report evaluates the effectiveness of the practical applications of the FATF 40+9 Recommendations as they relate to TCSPs. It also considers the role of TCSPs in the detection, prevention and prosecution of money laundering and terrorist financing. Finally, it evaluates the potential need for additional international requirements or sector-specific international standards for TCSPs. This typologies exercise has drawn from the research and conclusions that were made in previous work, such as the 2006 FATF Typologies study "The Misuse of Corporate Vehicles, including Trust and Company Service Providers" ; from analysis of jurisdictions' responses to a questionnaire developed for this project; as well as case studies obtained from various sources. This report presents issues for consideration that should help to reduce the use of TCSPs for money laundering purposes.

Details: Paris: FATF, 2010. 104p.

Source: Internet Resource: Accessed February 24, 2011 at: http://www.fatf-gafi.org/dataoecd/4/38/46706131.pdf

Year: 2010

Country: International

URL: http://www.fatf-gafi.org/dataoecd/4/38/46706131.pdf

Shelf Number: 120874

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Greenberg, Theodore S.

Title: Stolen Asset Recovery: A Good Practices Guide for Non-Conviction Based Asset Forfeiture

Summary: Non-Conviction Based (NCB) asset forfeiture is a powerful tool for recovering the proceeds of corruption, particularly in cases where the proceeds have been transferred abroad. Because it provides for the restraint, seizure, and forfeiture of tainted assets without the need for a criminal conviction, it can be the best option when the wrongdoer is dead, has fled the jurisdiction, is immune from prosecution, or is too powerful to prosecute — all common in cases of grand corruption. A growing number of jurisdictions have established a system to allow NCB forfeiture, and it has been recommended as a tool for asset recovery at regional and multilateral levels. The United Nations Convention Against Corruption (UNCAC) urges countries to consider taking such measures as may be necessary to allow NCB asset forfeiture in cases in which “the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases.” With this increased focus on the issue, there is a corresponding need for a practical tool that jurisdictions contemplating NCB forfeiture legislation can use. Stolen Asset Recovery: A Good Practices Guide for Non-Conviction Based Asset Forfeiture is that practical tool. It is the first book of its kind on the subject and the first knowledge publication under the Stolen Asset Recovery (StAR) Initiative. A collaborative effort of practitioners of forfeiture and NCB forfeiture, Stolen Asset Recovery identifies the key concepts—legal, operational, and practical —that an NCB asset forfeiture system should encompass to be eff ective in recovering stolen assets. Thirty-six key concepts are explored through practical experiences, examples from cases, and excerpts from NCB asset forfeiture legislation.

Details: Washington, DC: World Bank, 2009. 284p.

Source: Internet Resource: Accessed April 6, 2011 at: http://www.coe.int/t/dghl/monitoring/moneyval/web_ressources/IBRDWB_Guidassetrecovery.pdf

Year: 2009

Country: International

URL: http://www.coe.int/t/dghl/monitoring/moneyval/web_ressources/IBRDWB_Guidassetrecovery.pdf

Shelf Number: 121252

Keywords:
Asset Forfeiture
Corruption
Money Laundering

Author: Australian Crime Commission

Title: Organised Crime in Australia 2011

Summary: The Organised Crime in Australia 2011 report is the third and largest report of its kind that the Australian Crime Commission has produced since 2008. The latest edition provides the most comprehensive unclassified profile of organised crime in Australia, including the characteristics of those involved, what drives them, the activities they are involved in and the extent and impact of organised crime. Most organised criminal activities in Australia are focused on illicit drug markets, although organised crime groups also engage in a wide variety of associated criminal activity including tax evasion, money laundering, fraud, identity crime and high tech crime. The impact of organised crime in Australia is serious and far exceeds the direct harm caused by the specific offences. In fact, the activities of high-threat serious and organised criminal enterprises result in significant harm to the Australian community. There are significant losses to the economy, including the redirection of resources that might otherwise be invested in legitimate business, reductions in tax revenue and increasing costs of law enforcement and regulation. The widespread impact extends to costs associated with longer-term health and social harm. The activities of organised criminal enterprises can also undermine public confidence in the integrity of key business sectors and government institutions.

Details: Canberra: Australian Crime Commission, 2011. 103p.

Source: Internet Resource: Accessed April 21, 2011 at: http://www.crimecommission.gov.au/publications/oca/_files/2011/oca2011.pdf

Year: 2011

Country: Australia

URL: http://www.crimecommission.gov.au/publications/oca/_files/2011/oca2011.pdf

Shelf Number: 121465

Keywords:
Drug Markets
Drug Trafficking
Fraud
Identity Theft
Money Laundering
Organized Crime (Australia)
Tax Evasion

Author: European Banking Federation

Title: EBF Anti Money Laundering Report: 2009

Summary: This report has been drafted by the Anti-Money Laundering and Anti-Fraud Committee of the European Banking Federation (EBF) based on contributions submitted by national banking associations. This extensive document offers an inventory of national regulations on money laundering in more than 25 countries in Europe with a focus on the implementation of Directive 2005/60/EC1 of the European Parliament and of the Council of 26 October 2005 on the Prevention of the use of the Financial System (the” Third EU Anti-Money Laundering Directive”). National legislation are detailed and listed with identical headings (type of legislation, business covered, reporting procedures, identification requirements, etc.) which introduce some valuable elements of comparison among countries. Please note that the Report is based on information collected from August 2008 to March 2009.

Details: Brussels: European Banking Federation, 2009. 225p.

Source: Internet Resource: Accessed May 4, 2011 at: http://www.sff.is/media/ebf/EBF_Anti_Money_Laundering_Report_2009.pdf

Year: 2009

Country: Europe

URL: http://www.sff.is/media/ebf/EBF_Anti_Money_Laundering_Report_2009.pdf

Shelf Number: 121609

Keywords:
Financial Crimes
Money Laundering

Author: Bjelajac, Zeljko Dj.

Title: Contemporary Tendencies in Money Laundering Methods: Review of the Methods and Measures for its Suppression

Summary: Money laundering is not an isolated case, present in a single state or a series of states, but a worldwide phenomenon. Banking represents a useful field for different types of offenses related to money laundering. The utilization of corresponding accounts for the purposes of money laundering has also been perceived as a serious problem. The exploitation of the electronic money transfer for money laundering appears to be the most convenient and frequent method of concealing illegally acquired assets, and this method is today one of the most common and suitable methods of the capital transfer worldwide. Money laundering represents important organized crime activity, that is, its’ typical and characteristic behavior. Traditional financial instruments are increasingly repressed by the use of the new technological systems and replaced by new electronic payment systems. However, the utilization of the new electronic payment systems introduces a variety of risks associated to numerous opportunities of abuse due to money laundering. In order to prevent money laundering and the wrongful consequences it causes in different spheres of society, competent authorities engage in a number of preventive processes and actions, applying specific methods and measures developed for combating this phenomenon.

Details: Athens, Greece: Research Institute for European and American Studies (RIEAS), 2011. 22p.

Source: Internet Resource: RIEAS: Research Paper, No. 151: Accessed May 29, 2011 at: http://www.rieas.gr/images/rieas151.pdf

Year: 2011

Country: International

URL: http://www.rieas.gr/images/rieas151.pdf

Shelf Number: 121763

Keywords:
Financial Crimes
Money Laundering
Organized Crime

Author: Kar, Dev

Title: Illicit Financial Flows from the Least Developed Countries: 1990–2008

Summary: This paper explores the scale and composition of illicit financial flows from the 48 Least Developed Countries (LDCs). Illicit financial flows involve the cross-border transfer of the proceeds of corruption, trade in contraband goods, criminal activities and tax evasion. In recent years, considerable interest has arisen over the extent to which such flows may have a detrimental impact on development and governance in both developed and developing countries alike. This issue has been recognised by the UN as important for development and achievement of the Millennium Development Goals (MDGs). Illicit capital flight, where it occurs, is a major hindrance to the mobilisation of domestic resources for development. In many cases, it significantly reduces the volume of resources available for investment in the MDGs and productive capacities. Through the United Nations, the international community has committed to strengthen national and multilateral efforts to address it. As the deadline for achievement of the MDGs draws closer, it is vital understand more about the nature of this problem and to explore possible policy solutions, especially for those countries furthest off-track towards the MDGs. The study’s indicative results find that illicit financial flows from the LDCs have increased from US$9.7 billion in 1990 to US$26.3 billion in 2008 implying an inflation-adjusted rate of increase of 6.2 percent per annum. Conservative (lower-bound) estimates indicate that illicit flows have increased from US$7.9 billion in 1990 to US$20.2 billion in 2008. The top ten exporters of illicit capital account for 63 percent of total outflows from the LDCs while the top 20 account for nearly 83 percent. Trade mispricing accounts for the bulk (65-70 percent) of illicit outflows from the LDCs, and the propensity for mispricing has increased along with increasing external trade. Empirical research on illicit flows indicates that there are three types of factors driving illicit flows—macroeconomic, structural, and governance-related. The ratio of illicit outflows to Gross Domestic Product (GDP) averages about 4.8 percent but there is wide variation among LDCs. Of the top 10 countries with the highest illicit flows to GDP ratio, four are small island countries, two are landlocked, and four are neither. In some LDCs, losses through illicit capital flows outpace monies received in official development assistance (ODA). Estimating illicit flows from some LDCs is problematic because the underlying macroeconomic or partner-country trade data are either non-existent or spotty due to widespread on-going or recent conflict and/or weak statistical capacity. Complete macroeconomic and partner-country trade data were available for 34 LDCs, while 11 report partial data to the IMF and 3 are nonreporters. The report thus presents an estimate of illicit flows from some of the non-reporting and partially reporting countries based on the assumption that illicit flows from these countries are in the same proportion to GDP as are outflows from other reporting LDCs with complete data. The results of this study are indicative but demonstrate a clear need for further research in this area given the scale of the development challenges which currently face the Least Developed Countries and the need to ‘think outside the box’ and find innovative development solutions. The paper presents a number of useful measures LDCs may wish to consider to curtail the generation and transmission of illicit financial flows. The international community must also play its part. However, even where policy measures are well designed and targeted, lasting improvements in this area can only be achieved when there is the sufficient political will and leadership to tackle corruption and some of the root causes of illicit financial flows. For the Least Developed Countries, policy recommendations include measures to address trade mispricing through for instance systematic customs reform and the adoption of transfer pricing regulations with commensurate increase in enforcement capacity. The implementation of specialised software which helps governments to identify possible incidences of transfer pricing may also be useful to some governments. Measures to reform the tax base through the progressive strengthening and widening of the tax base in order to reduce dependence on indirect taxes which are more difficult to manage and have built-in incentives for tax evasion may also be beneficial. Ultimately tax is the most sustainable source of finance for development and the long-term goal of poor countries must be to replace foreign aid dependency with tax self-sufficiency. However taxation reform must be seen as equitable and fair and must not unduly burden the poorest. The international community must also support LDCs’ efforts to curtail the illicit outflow of capital. This includes specific measures to support LDCs to improve the systematic exchange of tax information between governments on non-resident individuals and corporations while the adoption of globally consistent regulations for transfer pricing could encourage multinational companies to modify their behaviour towards more transparency and accountability. The UN’s Model Income Tax Treaty refers to the importance of automatic exchange of information between national tax authorities in different jurisdictions. In order to stem tax avoidance by multinational corporations, the international community could support the development of an international accounting standard requiring that all multi-national corporations report sales, profits, and taxes paid in all jurisdictions in their audited annual reports and tax returns.

Details: New York: United Nations Development Programme, 2011. 68p.

Source: Internet Resource: Accessed May 19, 2011 at: http://www.gfip.org/

Year: 2011

Country: International

URL: http://www.gfip.org/

Shelf Number: 121767

Keywords:
Corruption
Financial Crimes
Illicit Trade
Money Laundering
Tax Evasion

Author: Financial Action Task Force

Title: Laundering the Proceeds of Corruption

Summary: This typology originates from a practitioners‘ understanding that the fight against corruption is inextricably intertwined with that against money laundering; that the stolen assets of a corrupt public official are useless unless they are placed, layered, and integrated into the global financial network in a manner that does not raise suspicion. In some ways, a public official (known as a politically exposed person, or ―PEP) who gathers vast sums of money through corrupt means is far more vulnerable than some other criminals. A narcotics trafficker may reliably depend on being able to remain anonymous with his vast amount of money; a public official begins to draw unwanted attention as soon as he is associated with significant sums from unknown sources. Thus, the corrupt PEP‘s vulnerability presents an opportunity for those authorities engaged in both anti-money laundering/combating the financing of terrorism (AML/CFT) and anti-corruption (AC) enforcement. This typology differs from other such typologies previously produced by the Financial Action Task Force (FATF) because it draws from publicly available work undertaken by experts. The body of work the project team analyzed represents deep AML expertise possessed by individuals and organisations around the globe. Indeed, the objective was to understand these works to draw conclusions from them. Broadly stated, the goal was to stand on the shoulders of others in order to better understand corruption, its mechanisms and vulnerabilities, through an AML/CFT lens. Part of the mandate of the Working Group on Typologies (WGTYP) is to identify new threats and vulnerabilities and conduct research on money laundering and terrorist financing methods and techniques. FATF typology reports typically reveal, describe, and explain the nature of ML/TF methods and threats, thus increasing global awareness and opportunities for earlier detection. In light of its mandate, the project team focused only on the methods used to launder the proceeds of corruption. It does not attempt to describe the methods by which bribery and other corruption are effectuated, concealed, or discovered; such a discussion would be outside of the scope of this paper. While there may be no internationally recognised legal definition of corruption, it is most commonly functionally defined as the use of public office for private gain. The United Nations, the Organisation for Economic Co-Operation and Development (OECD), and the Council of Europe Conventions establish the offences for a range of corrupt behaviour. The conventions define international standards on the criminalisation of corruption by prescribing specific offences rather than through a generic definition or offense of corruption. The offenses can range from petty or systemic corruption, in which public officials or employees receive money to perform (or refrain from performing) official acts, to ―grand corruption, in which those at the political, decision-making levels of government use their office to enrich themselves, their families, and their associates. Because of time and resource limitations involved in this project, the project team restricted itself to an analysis of grand corruption. While there is no precise threshold -- by official rank or otherwise -- to distinguish grand from systemic corruption, the positions of the PEPs involved in the cases in our report ranged from senior legislators to governors to prime ministers and presidents. All of the cases examined involved behaviour that would constitute offenses falling under any of the relevant international AC conventions, as well as the generic definition described above. Where possible, the case studies identified the type of corrupt act from which the proceeds had been derived. The types of corruption involved bribe taking and kickbacks, of both foreign and domestic officials, but also embezzlement (in which money rightly belonging to the State was siphoned for personal use through a variety of means), extortion (in which the public official uses the threat of official power to receive money) and self dealing (in which the corrupt PEP has a personal financial interest in acts and decisions he makes in his official capacity).

Details: Paris: FATF, 2011. 54p.

Source: Internet Resource: accessed August 5, 2011 at: http://www.fatf-gafi.org/dataoecd/31/13/48472713.pdf

Year: 2011

Country: International

URL: http://www.fatf-gafi.org/dataoecd/31/13/48472713.pdf

Shelf Number: 122313

Keywords:
Corruption
Financial Crimes
Money Laundering
Political Offenses
Terrorism

Author: Doyle, Charles

Title: Mail and Wire Fraud: A Brief Overview of Federal Criminal Law

Summary: It is a federal crime to devise a scheme to defraud another of property, when either mail or wire communications are used in furtherance of the scheme, 18 U.S.C. 1341, 1343. Mail or wire fraud includes schemes to defraud another of honest services, when the scheme involves bribery or a kick back, 18 U.S.C. 1346; Skilling v. United States, 130 S.Ct. 2896 (2010). In order to convict, the government must prove beyond a reasonable doubt that the defendant (1) used either mail or wire communications in the foreseeable furtherance, (2) of a scheme to defraud, (3) involving a material deception, (4) with the intent to deprive another of, (5) either property or honest services. Offenders face the prospect of imprisonment for not more than 20 years, a fine of not more than $250,000 (not more than $500,000 for organizations), an order to pay victim restitution, and the confiscation of any property realized from the offense. Misconduct that constitutes mail or wire fraud may also constitute a violation of one or more other federal crimes. Principal among these are predicate offense crimes, frauds based on jurisdictional factors other than use of mail or wire communications, and other honest services frauds in the form of bribery or kickbacks. The other federal bribery and kickback offenses include bribery of public officials, federal program bribery, extortion under color of official right, and Medicare/Medicaid kickbacks. Mail and wire fraud are money laundering and racketeering predicate offenses. Numbered among the fraud offenses based on other jurisdiction grounds are the false claims and false statement offenses, bank fraud, health care fraud, securities fraud, and foreign labor contracting fraud.

Details: Washington, DC: Congressional Research Service, 2011. 27p.

Source: Internet Resource: R41930: Accessed August 9, 2011 at: http://www.fas.org/sgp/crs/misc/R41930.pdf

Year: 2011

Country: United States

URL: http://www.fas.org/sgp/crs/misc/R41930.pdf

Shelf Number: 122333

Keywords:
Bribery
Extortion
Fraud
Mail Fraud
Money Laundering
Wire Fraud

Author: Schneider, Friedrich

Title: The (Hidden) Financial Flows of Terrorist and Organized Crime Organizations: A Literature Review and Some Preliminary Empirical Results

Summary: The financial means of international terror and organized crime organizations are analysed. First, some short remarks about the organization of international terror organizations are made. Second and in a much more detailed way a literature review is provided about the financing of terrorist and organized crime organizations, their sources and the various methods they use. Third, an attempt is made to estimate the financial means of terror organizations with the help of a latent estimation approach (MIMIC procedure). The figures show that Al Qaeda and other terror organizations have sufficient financial means. Fourth, some remarks are made about the negative effects of terror on the economy in highly developed countries and some strategies are presented to combat (the financing) of terrorism.

Details: Bonn, Germany: IZA, 2010. 44p.

Source: Internet Resource: IZA Discussion Paper No. 4860: Accessed August 12, 2011 at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1584191

Year: 2010

Country: International

URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1584191

Shelf Number: 122381

Keywords:
Money Laundering
Organized Crime
Terrorism
Terrorist Financing

Author: Savona, Ernesto U.

Title: Cost Benefit Analysis of Transparency Requirements in the Company/Corporate Field and Banking Sector Relevant for the Fight Against Money Laundering and Other Financial Crime

Summary: The aims of the study were: 1. To analyse the cost-benefits from the introduction at the EU level of an up-front and ongoing disclosure system in the company/corporate field (from now on, MODEL 1) made up of the following five transparency requirements relevant for the fight against money laundering and other financial crime: •a statutory duty on the registered owner of a shareholding of 10% or more of the issued capital of a private or public unlisted company to confirm to the company their beneficial ownership of such shares or, if not, details of whom they believe the beneficial owner (BO) to be; •a statutory duty on beneficial but not registered owners of a shareholding of 10% or more to notify the company of such beneficial ownership and, for registered and beneficial owners of 10% or more, any changes in details as and when they occur; •a statutory duty on the company to file such data with a central registry within a short period; •the making such information available on-line to LEAs along with actual and historic data on company shareholders and their managers/directors; •making such data available to the public. 2. To highlight: •what EU measures may be appropriate to address those who aid and abet/facilitate corporate money laundering/terrorist financing arrangements, especially professional service providers, to contribute to more effective deterrence or (if not) suitable punishment, and •any issues and approaches revealed in the study likely to help improve the regulation of charities, trusts, associations and foundations with regard to AML and CFT.

Details: Milano, Italy: Transcrime - Joint Research Centre on Transnational Crime, 2007. 691p.

Source: Internet Resource: Accessed August 23, 2011 at: http://transcrime.cs.unitn.it/tc/fso/pubblicazioni/AP/CBA-Study_Final_Report_revised_version.pdf

Year: 2007

Country: Europe

URL: http://transcrime.cs.unitn.it/tc/fso/pubblicazioni/AP/CBA-Study_Final_Report_revised_version.pdf

Shelf Number: 122427

Keywords:
Banking
Cost-Benefit Analysis
Financial Crimes
Money Laundering

Author: Villasenor, John

Title: Shadowy Figures: Tracking Illicit Financial Transactions in the Murky World of Digital Currencies, Peer-to-Peer Networks, and Mobile Device Payments

Summary: The history of the movement of money is as complex and varied as the history of money itself, and includes ships laden with gold bullion, desert caravans carrying salt or cowry shells, armored trucks filled with banknotes, paper checks, and today, a large and quickly growing list of digital transfer methods. Secrecy and anonymity have always played roles in the movement of money, most commonly because they offer a strong measure of privacy and protection against being targeted by thieves, but also because the parties in financial transactions can have other reasons — some legitimate, some not — for keeping a low profile. The combination of the enormous growth in social networks, the complexity of peer-to-peer systems and software, and the number of Internet and wirelessly connected devices is altering the landscape of financial transactions at a rate and to a degree that is unprecedented. Today, such transactions can be conducted not only using traditional, state-backed currencies, but also through purely digital currencies, virtual currencies, and virtual goods. In addition, mobile phone-based money transfer systems enabling traditional currencies to be moved in novel ways are experiencing rapid adoption, particularly in developing nations. Almost no one would argue that governments do not have a right to track and trace digital financial transactions associated with activities such as terrorism and human trafficking. It is less clear, however, how governments can surmount the formidable technical and organizational challenges associated with detecting and monitoring these transactions. The solution will require a combination of self-regulation, government-industry collaboration, and change in both technology and culture within government agencies.

Details: Houston, TX: James A. Baker III Institute for Public Policy, Rice University, 2011. 24p.

Source: Internet Resource: Accessed September 2, 2011 at: http://www.bakerinstitute.org/publications/ITP-pub-FinancialTransactions-082911.pdf

Year: 2011

Country: International

URL: http://www.bakerinstitute.org/publications/ITP-pub-FinancialTransactions-082911.pdf

Shelf Number: 122619

Keywords:
Financial Crimes
Financial Fraud
Money Laundering

Author: Financial Action Task Force. Eastern and Southern Africa Anti-Money Laundering Group

Title: Mutual Evaluation Report Anti-Money Laundering and Combating the Financing of Terrorism

Summary: The Financial Action Task Force (FATF) and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) have jointly assessed the implementation of anti-money laundering and combating the financing of terrorism (AML/CFT) standards in South Africa. Among its major findings were: • South Africa has made good progress in developing its system for combating money laundering (ML) and the financing of terrorism (FT) since its last FATF mutual evaluation in 2003. • The money laundering offence is generally in line with the Vienna and Palermo Conventions, although a lack of comprehensive statistics made it difficult to assess effectiveness. Provisions criminalising the financing of terrorism are comprehensive, although they are not yet tested in practice. • The Financial Intelligence Centre (“the Centre”) is an effective financial intelligence unit. • The confiscation scheme is comprehensive and utilises effective civil forfeiture measures. Since 2003, South Africa has also adopted mechanisms to freeze terrorist-related assets. • The FIC Act imposes customer due diligence, record keeping, and suspicious transaction reporting and internal control requirements. It should be noted that, after the FIC Act came into force, South Africa implemented a program to re-identify all existing customers. The issue of beneficial ownership has not yet been addressed, however, and South Africa also needs to adopt measures dealing with politically exposed persons (PEPs) and correspondent banking. • The FIC Act covers some designated non-financial businesses and professions (DNFBPs); however, South Africa needs to broaden the legislation to cover dealers in precious metals and stones, company service providers, and more broadly cover accountants. • At the time of the on-site visit, there were not adequate powers to supervise and enforce compliance with AML/CFT provisions; however, amendments to FIC Act have been enacted, and when they enter into force this year they will significantly enhance the compliance regime. • South African authorities have established effective mechanisms to co-operate on operational matters to combat ML and FT. South Africa can also provide a wide range of mutual legal assistance, including the possibility to extradite its own nationals.

Details: Paris: FATF-GAFI, 2009. 244p.

Source: Internet Resource: Accessed September 16, 2011 at: http://www.fatf-gafi.org/dataoecd/60/15/42432085.pdf

Year: 2009

Country: South Africa

URL: http://www.fatf-gafi.org/dataoecd/60/15/42432085.pdf

Shelf Number: 122753

Keywords:
Financial Crimes (South Africa
Money Laundering
Terrorism
Terrorist Financing

Author: Navarro, Ignacio A.

Title: Cocaine Cities Exploring the Relationship between Urban Processes and the Drug Trade in South America

Summary: The relationship between the cocaine trade and urban land markets in South America has been overlooked by the mainstream economics and urban studies literature. This paper examines two avenues through which the cocaine trade can have a large impact on urban development in producer countries: (i) through an employment multiplier effect similar to that of other legal exports, and (ii) through money laundering using urban real estate. We test our hypotheses using the Bolivian case and find that urban growth patterns are closely related to fluctuations in cocaine production. Further, even though our estimates suggest that the cocaine trade affects urban growth through the two avenues presented in the paper, we find that formal urban employment generated by the cocaine trade has a modest effect on urban growth and most of the effect seems to be explained by money laundering using real estate and other paths.

Details: Helsinki: United Nations University, World Institute for Development Economics Research, 2011. 15p.

Source: Internet Resource: Working Paper No. 2011/09: Accessed September 21, 2011 at: http://www.wider.unu.edu/publications/working-papers/2011/en_GB/wider-working-papers-2011/

Year: 2011

Country: Bolivia

URL: http://www.wider.unu.edu/publications/working-papers/2011/en_GB/wider-working-papers-2011/

Shelf Number: 122802

Keywords:
Cocaine (Bolivia)
Drug Trafficking
Drugs
Money Laundering
Urban Areas

Author: KPMG

Title: Global Anti-Money Laundering Survey 2011

Summary: This latest Anti-Money Laundering (AML) survey explores where AML fits into the changing risk and regulatory landscape facing the financial sector. It reports the views of the survey participants on their areas of focus and challenge, and also contains commentary from KPMG on what our client work in this space tells us. The highlights of the survey include the following: AML is still on the radar of many banks’ leadership, but is being squeezed by other priorities. AML continues to be a significant and rising expense for banks, but many under-estimate how much it costs. PEPs and sanctions are a major focus for banks and governments alike, however both are far from straightforward to get to grips with. Transaction monitoring policies and systems are generally seen as satisfactory, but with plenty of room for improvement. KYC data is generally collected and updated both robustly and regularly, but there is great variation in the approach used.

Details: London: KPMG, 2011. 76 p.

Source: Internet Resource: Accessed October 4, 2011 at: http://www.kpmg.com/RU/ru/IssuesAndInsights/ArticlesPublications/Documents/AML%20Survey%202011.pdf

Year: 2011

Country: International

URL: http://www.kpmg.com/RU/ru/IssuesAndInsights/ArticlesPublications/Documents/AML%20Survey%202011.pdf

Shelf Number: 122982

Keywords:
Financial Crimes
Money Laundering

Author: Cavanagh, Ben

Title: A Review Of Reinvestment In Financial Investigation From The Proceeds Of Crime

Summary: In January 2010, the Scottish Government provided matched funding of £1 million (£500k from Scottish Government and £500k from the police) to 3 forces to improve their capacity for financial investigation, the range of uses to which it is applied and its overall impact. The funding was intended to increase the number of financial investigators working in police forces with the objective of targeting community level criminal activity. Decisions about the nature of the posts, where they would be based and how they would be tasked and managed, were left for forces to make in light of local needs and priorities. There were however important reference points for senior managers in Force Investigation Units (FIUs) to help inform these decisions. These included a joint Her Majesty's Inspectorate of Constabulary for Scotland (HMICS) and Inspectorate of Prosecution in Scotland (IPS) report about proceeds of crime and financial investigation, with recommendations for the improvement of financial investigation and Proceeds of Crime Act (POCA) systems. They also included a number of training and guidance manuals developed by the National Policing Improvement Agency (NPIA). The stated aims for the reinvestment project were to ‘improve financial investigation’ and ‘increase the number of financial investigators in local force divisions with the objective of targeting community level criminal activity.’ The assessment of the impact of the extra funding is therefore conceived in a number of ways related to these aims including: consideration of how far the new funding supported the achievement of the HMICS/IPS recommendations for POCA and financial investigation, the extent to which police forces realised their own hopes for the local development of financial investigation, and, how far the funding has helped it make its maximum and most efficient contribution to policing outcomes beyond those most directly related to the use of ‘proceeds of crime’ legislation. The research included interviews with senior managers, financial investigators, and officials from other parts of the financial recovery systems, including the Crown Office’s National Casework Division (renamed in March 2011 as the Serious Organised Crime Division) and Civil Recovery Unit, who use the products of financial investigators in their asset recovery work, as well as the collation of available administrative and management data, and analysis of apparent trends.

Details: Edinburgh: Scottish Government Social Research, 2011. 34p.

Source: Internet Resource: Accessed October 25, 2011 at: http://www.scotland.gov.uk/Publications/2011/10/20092612/10

Year: 2011

Country: United Kingdom

URL: http://www.scotland.gov.uk/Publications/2011/10/20092612/10

Shelf Number: 123144

Keywords:
Asset Forfeiture
Criminal Investigation (U.K.)
Financial Investigations
Money Laundering
Organized Crime
Proceeds of Crime

Author: de Willebois, Emile van der Does

Title: The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It

Summary: Corruption is estimated to be at least a $40 billion dollar a year business. Every day, funds destined for schools, healthcare, and infrastructure in the world’s most fragile economies are siphoned off and stashed away in the world’s financial centers and tax havens. Corruption, like a disease, is eating away at the foundation of people’s faith in government. It undermines the stability and security of nations. So it is a development challenge in more ways than one: it directly affects development assistance, but it also undermines the preconditions for growth and equity. This report, The Puppet Masters, deals with the corporate and financial structures that form the building blocks of hidden money trails. In particular, it focuses on the ease with which corrupt actors hide their interests behind a corporate veil and the difficulties investigators face in trying to lift that veil. It serves as a powerful reminder that recovering the proceeds of corruption is a collective responsibility that involves both the public and private sector. Law enforcement and prosecution cannot go after stolen assets, confiscate and then return them if they are hidden behind the corporate veil. All financial centers and developed countries have committed, through the UN Convention against Corruption and international anti-money laundering and countering the financing of terrorism standards, to improving the transparency of legal entities and other arrangements. This StAR report provides evidence of how far we still have to go to make these commitments a reality. Narrowing the gap between stated commitments and practice on the ground has a direct impact on actual recovery of assets.

Details: Washington, DC: The International Bank for Reconstruction and Development / The World Bank, 2011. 284p.

Source: Internet Resource: Accessed October 26, 2011 at: http://www1.worldbank.org/finance/star_site/documents/Puppet%20Masters%20Report.pdf

Year: 2011

Country: International

URL: http://www1.worldbank.org/finance/star_site/documents/Puppet%20Masters%20Report.pdf

Shelf Number: 123150

Keywords:
Corruption
Financial Crimes
Money Laundering
Political Corruption
Stolen Assets

Author: United Nations Office on Drugs and Crime

Title: Estimating Illicit Financial Flows Resulting from Drug Trafficking and other Transnational Organized Crimes: Research Report

Summary: “Always follow the money” has been sound advice in law enforcement and political circles for decades. Nevertheless, tracking the flows of illicit funds generated by drug trafficking and organized crime and analysing the magnitude and the extent to which these are laundered through the world’s financial systems remain daunting tasks. UNODC’s research report, Estimating illicit financial flows resulting from drug trafficking and other transnational organized crimes, attempts to shed light on the total amounts likely to be laundered across the globe, as well as the potential attractiveness of various locations to those who launder money. As with all such reports, however, the final monetary estimates are to be treated with caution. Further research and more systematic collection of data on this topic are clearly required. Prior to this report, perhaps the most widely quoted figure for the extent of money-laundering was the IMF’s ‘consensus range’ of between 2-5 per cent of global GDP, made public in 1998. A study-of-studies, or metaanalysis, conducted for this report, suggests that all criminal proceeds are likely to have amounted to some 3.6 per cent of GDP (2.3 - 5.5 per cent) or around US$2.1 trillion in 2009. The resulting best estimate of the amounts available for money-laundering would be within the IMF’s original ‘consensus range’, equivalent to some 2.7 per cent of global GDP (2.1 – 4 per cent) or US$1.6 trillion in 2009. From this figure, money flows related to transnational organized crime activities represent the equivalent of some 1.5 per cent of global GDP, 70 per cent of which would have been available for laundering through the financial system. The largest income for transnational organized crime seems to come from illicit drugs, accounting for a fifth of all crime proceeds. Research in the area of illicit financial flows generated by one key transnational organized crime sector, the global market for cocaine, was also conducted for this report. The gross profits out of cocaine sales (totaling US$85 billion) were estimated at US$84 billion for the year 2009, compared with about US$1 billion earned by the farmers in the Andean region. Most of the gross profits (retail and wholesale) were generated in North America (US$35 billion) and in West and Central Europe (US$26 billion). The report also reminds us that, contrary to the common misperception that money is neither good nor bad, investments of ‘dirty money’ into licit economies can create problems ranging from distortions of resource allocation to the “crowding out” of licit sectors. In some cases, the influx of tainted money undermines the reputations of local institutions. Significantly, these investments can hamper investment and economic growth. While the situation is less clear for financial centers receiving illicit funds, the long-term consequences may be negative if they fail to actively fight money-laundering. Research also indicates that the socio-economic costs related to drug abuse are twice as high as the illicit income generated by drug trafficking. Indeed, in some countries (for example, the United States and the United Kingdom) the ratio is 3:1. This report argues that the severest consequence of criminal funding is that they perpetuate and promote criminal activities, creating a cycle of organized criminal activity and drug trafficking that leeches off societies. Less than 1 per cent of global illicit financial flows are currently seized and frozen. UNODC’s challenge is to work within the UN system and with Member States to help build the capacity to track and prevent money laundering, strengthen the rule of law and prevent these funds from creating further suffering.

Details: Vienna: UNODC, 2011. 140p.

Source: Internet Resource: Accessed October 29, 2011 at: http://www.unodc.org/documents/data-and-analysis/Studies/Illicit_financial_flows_2011_web.pdf

Year: 2011

Country: International

URL: http://www.unodc.org/documents/data-and-analysis/Studies/Illicit_financial_flows_2011_web.pdf

Shelf Number: 123169

Keywords:
Drug Trafficking
Financial Crimes
Money Laundering
Organized Crime

Author: Kar, Dev

Title: Illicit Financial Flows from Developing Countries Over the Decade Ending 2009

Summary: This report provides estimates of illicit financial flows (IFFs) from developing countries over the decade 2000-2009 based on balance of payments (BoP), bilateral trade, and external debt data reported by member countries to the IMF and the World Bank. It should be noted that estimates of IFFs at the developing world, regional, and country levels presented in this report could differ from those published in the 2010 report due to revisions to underlying data, reported by member countries. The most notable finding in this report is that in 2009 IFFs from developing countries, led by the top ten exporters of illicit capital, most of which are in Asia and the Middle East and North Africa (MENA) region, have declined by 41 percent over the last year. Principal components analysis seems to indicate that this decline was the result of the global economic crisis which tended to reduce the source of funds (new external loans and net foreign direct investments), increase the use of funds and reduce trade mispricing due to lower trading volumes. We find no reason to subscribe the wide-ranging reduction in IFFs to far-reaching economic reform or improvements in overall governance in major emerging markets.

Details: Washington, DC: Global Financial Integrity, 2011. 100p.

Source: Internet Resource: Accessed January 17, 2012 at: http://www.ciponline.org/images/uploads/publications/illicit_financial_flows_from_developing_countries_over_the_decade_ending_2009.pdf

Year: 2011

Country: International

URL: http://www.ciponline.org/images/uploads/publications/illicit_financial_flows_from_developing_countries_over_the_decade_ending_2009.pdf

Shelf Number: 123640

Keywords:
Corrupt Practices
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: FATF-GAFI

Title: Global Money Laundering & Terrorist Financing Threat Assessment

Summary: Since 1989, the FATF has led efforts to counter the abuse of the international financial system by criminals. Over the years, governments, intergovernmental and multi-lateral organisations, the private sector and academics have made great progress in understanding the threats of money laundering (ML) and terrorist financing (TF) and the measures to be taken to make the abuse of the financial system for ML/TF purposes more difficult. But the problem of ML/TF remains and requires ongoing efforts, in particular in the area of detecting and taking enforcement actions against individuals and organisations who conduct these serious illegal activities. The Global Money Laundering and Terrorist Financing Threat Assessment (GTA) report provides an assessment of the global systemic ML/TF threats. The document is aimed at raising the level of understanding of these threats and their negative impact, and help governments to take decisive action to minimise the harms they can cause. The report is based on the in-depth typologies studies and the FATF's Strategic Surveillance Initiative. This initiative was established in 2008, with the following objectives: detect and share information on the types of criminal or terrorist activities that pose an emerging threat to the financial system; develop a more strategic and longer-term view of these threats. This initiative involves the use of a detailed questionnaire which both FATF and FSRB members respond to on a yearly basis. This report was prepared by a team of experts from across the globe. They provided important content, peer review and validation throughout the project with the aim of producing this assessment. The project team comprised members from law enforcement and other agencies responsible for identifying and combating ML/TF from 10 jurisdictions and 8 international organisations.

Details: Paris, France: FATF-GAFI (Financial Action Task Force), 2010. 76p.

Source: Internet Resource: Accessed on January 28, 2012 at http://www.fatf-gafi.org/dataoecd/48/10/45724350.pdf

Year: 2010

Country: International

URL: http://www.fatf-gafi.org/dataoecd/48/10/45724350.pdf

Shelf Number: 123847

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Walters, Julie

Title: Anti-money laundering and counter-terrorism financing across the globe: A comparative study of regulatory action

Summary: Most developed countries across the globe have enacted legislation to proscribe acts of money laundering and financing of terrorism, and to enable the proceeds of crime to be recovered from offenders. Such legislation reflects the principles developed by the Financial Action Task Force’s (FATF-GAFI) 40 plus Nine Recommendations to combat money laundering and the financing of terrorism (FATF-GAFI 2004) to varying degrees. FATF-GAFI was established in 1989 as an international body to examine techniques employed by criminals to launder the proceeds of crime and the approaches taken internationally to counteract such activities, as well as to identify policies to impede money laundering and the financing of terrorism. FATF-GAFI issued 40 Recommendations to combat money laundering in 1990 and expanded these to deal with the problem of financing of terrorism after the 11 September 2001 attacks by adding a further Nine Special Recommendations on terrorism financing.

Details: Australia: Australian Institute of Criminology, 2011. 119p.

Source: AIC Reports, Research and Public Policy Series 113: Internet Resource: Accessed February 12, 2012 at

Year: 2011

Country: Australia

URL:

Shelf Number: 124104

Keywords:
Counter-Terrorism
International Crime
Legislation
Money Laundering
Transnational Crime

Author: Hayes, Ben

Title: Counter-Terrorism, 'Policy Laundering' and the FATF: Legalising Surveillance, Regulating Civil Society

Summary: This new report published by the Transnational Institute and Statewatch examines the global framework for countering-terrorist financing developed by the Financial Action Task Force (FATF) and other international law enforcement bodies. The report includes a thorough examination of the impact of FATF’s ‘Special Recommendation VIII’ on countering the threat of terrorist financing said to be posed by non-profit organisations (NPOs). Developed out of a G7 initiative in 1990, the FATF’s ‘40+9’ Recommendations on combating money laundering (AML) and countering the financing of terrorism (CFT) are now an integral part of the global ‘good governance’ agenda. More than 180 states have now signed up to what is in practice, if not in law, a global convention. The FATF is headquartered at the Organisation for Economic Cooperation and Development in Paris; a further eight regional FATF formations replicate its work around the world. The report argues that a lack of democratic control, oversight and accountability of the FATF has allowed for regulations that circumvent concerns about human rights, proportionality and effectiveness. Countries subject to the FATF’s Anti Money Laundering (AML)/Counter Terrorism Financing (CFT) requirements must introduce specific criminal laws, law enforcement powers, surveillance and data retention systems, financial services industry regulations and international police co-operation arrangements in accordance with FATF guidance. Participating countries must also undergo a rigorous evaluation of their national police and judicial systems in a peer-review-style assessment of their compliance with the Recommendations. Developed out of World Bank and IMF financial sector assessment programmes, this process significantly extends the scope of the Recommendations by imposing extraordinarily detailed guidance – over 250 criteria – on the measures states must take to comply with the 40+9 Recommendations. The rewards for FATF compliance are being seen as a safe place to do business; the sanctions for non-cooperation are designation as a ‘non-cooperating territory’ and international finance capital steering clear.

Details: Amsterdam: Transnational Institute; London: Statewatch, 2012. 68p.

Source: Internet Resource: Accessed March 2, 2012 at: http://www.tni.org/sites/www.tni.org/files/download/fatf_report.pdf

Year: 2012

Country: Europe

URL: http://www.tni.org/sites/www.tni.org/files/download/fatf_report.pdf

Shelf Number: 124338

Keywords:
Counter-Terrorism
Money Laundering
Terrorist Financing (Europe)

Author: Kego, Walter

Title: Russian Organized Crime: Recent Trends in the Baltic Sea Region

Summary: A new criminal landscape is emerging in Europe. A key factor behind the dramatically increasing crime levels is Russian organized crime. While these groups are often comprised of Russians, they are not based solely on eth-nicity, often members are also from former Soviet repub-lics. According to Europol, these groups are among the most dangerous criminal groups operating in Europe to-day. They are involved in every type of illegal activity and excel in exploiting new opportunities in the economic and financial sectors. They make exorbitant amounts of money from illegal activities such as money laundering, human and drug trafficking, smuggling and extortion. Their activities have grown and spread to other countries to such an extent that they pose a serious problem affect-ing all EU member states. This report documents recent trends.

Details: Nacha, Sweden: Institute for Security & Development Policy, 2012. 102p.

Source: Internet Resource: Accessed April 11, 2012 at: http://www.isdp.eu/images/stories/isdp-main-pdf/2012_kego-molcean_russian-organized-crime-recent-trends.pdf

Year: 2012

Country: Europe

URL: http://www.isdp.eu/images/stories/isdp-main-pdf/2012_kego-molcean_russian-organized-crime-recent-trends.pdf

Shelf Number: 124923

Keywords:
Drug Trafficking
Extortion
Money Laundering
Organized Crime (Europe)
Russian Organized Crime
Smuggling

Author: Alliance Against IP Theft

Title: Proving the Connection: links between intellectual property theft and organised crime

Summary: Ever since the Alliance officially launched in the Summer of 1999, announcing £6.4 billion lost to the UK economy through counterfeiting and piracy, we have made references to links between intellectual property (IP) theft and organised crime. Although anecdotal, we knew that these links existed because of the evidence which our members’ anti-piracy units were turning up in the course of enforcing the intellectual property rights (IPR) within their industries. However, none of it was being systematically documented. Then, for the first time, the National Criminal Intelligence Service (NCIS) listed intellectual property theft in its 2000 National Threat Assessment and accorded it a high impact assessment. The report also stated that “money laundering is integral to practically all criminal activities that generate high volumes of cash proceeds.” The connection was reinforced in the following year’s National Threat Assessment, but there were issues surrounding the sharing of confidential operational information which caused a real lack of coordination of any hard facts. The Alliance believed that in various files dotted about industry’s antipiracy units were useful case histories accumulating amongst the miscellaneous press cuttings covering their operational successes. So we set about unearthing this information to produce solid examples to support our claims of the growing attraction of the low risk activity of counterfeiting and piracy to organised crime groups. This report is our first attempt at publishing our findings. It represents the tip of the iceberg. It is indicative of the global nature of the problem that two similar reports have just been published in France and the USA.

Details: London: Alliance Against IP Theft, Undated. 40p.

Source: Internet Resource: Accessed June 7, 2012 at http://www.allianceagainstiptheft.co.uk/downloads/reports/Proving-the-Connection.pdf

Year: 0

Country: United Kingdom

URL: http://www.allianceagainstiptheft.co.uk/downloads/reports/Proving-the-Connection.pdf

Shelf Number: 125331

Keywords:
Money Laundering
Organized Crime (U.K.)
Piracy, Intellectual Property
Theft of Intellectual Property (U.K.)

Author: Realuyo, Celina B.

Title: It’s All about the Money: Advancing Anti-Money Laundering Efforts in the U.S. and Mexico to Combat Transnational Organized Crime

Summary: In the course of examining transnational criminal organizations (TCOs) operating in the U.S. and Mexico, we focus on their most prominent illicit activities like the trafficking of drugs, arms, and persons, and kidnapping, extortion and money laundering. These criminal enterprises leverage global supply chains and weak governance to move their products and services to meet market demand. While the globalization of organized crime is not a new phenomenon, the magnitude, pace and violence accompanying its illicit activities is alarming. In the past five years, Mexico has witnessed unprecedented levels of drug-related violence claiming over 47,000 lives since 2006. According to the U.S. National Drug Intelligence Center, major Mexican-based TCOs and their associates are solidifying their dominance of the U.S. wholesale drug trade and will maintain their reign for the foreseeable future. Their preeminence derives from a competitive advantage based on several factors, including access to and control of smuggling routes across the U.S. border and the capacity to produce (or obtain), transport, and distribute nearly every major illicit drug of abuse in the United States. These TCOs are extremely well funded and well armed: and they are presenting a formidable threat to the security, prosperity, and psyche of the people of Mexico and the United States. For transnational criminal organizations, including those operating in the U.S. and Mexico, “it’s all about the money.” Criminal enterprises seek to maximize profit at every opportunity and minimize their risk of being detected and interdicted. Money is the lifeblood for any organization including governments, private companies, and criminal enterprises. From purchasing goods and services to paying employees, money is the oxygen for any activity, licit or illicit. TCOs engage in money laundering in order to enjoy the spoils from their crimes. Contrary to what some may believe, money laundering is not a victimless crime. The proceeds of crime enrich and empower transnational criminal organizations and allow them to undermine state institutions and economic prosperity. Illegal drug export revenues from Mexico in 2011 were estimated at approximately US$ 6.2 billion, comprised of the major drugs: cocaine (est. $2.8 billion), followed by marijuana ($1.9bn), heroin ($0.9bn) and methamphetamines ($0.6bn). The governments of the U.S. and Mexico recognize that they must attack the economic power of transnational criminal organizations to weaken them. Mexican President Felipe Calderon has said, “The prevention of money laundering and combating financial terrorism is a fundamental part of the state's comprehensive strategy against organized crime." In 2011, the U.S. released its Strategy to Combat Transnational Organized Crime that describes how TCOs and their activities, including money laundering, present a threat to U.S. national security. This paper outlines the use of the economic and financial instruments of national power aimed at degrading transnational criminal organizations in the U.S. and Mexico and increasing their cost of doing business. It will examine the major modes of money laundering employed by the TCOs, describe current U.S. and Mexican anti-money laundering measures, and offer some options for advancing the U.S.-Mexican fight against money laundering. Some options the U.S. and Mexico should consider going forward include:  Make combating money laundering a top priority of their strategies to combat transnational organized crime,  Establish a centralized coordinating mechanism for U.S.-Mexican anti-money laundering activities, such as a TCO Finance Working Group,  Dedicate adequate human, financial, and technological resources to their agencies responsible for combating money laundering,  Enhance bilateral cooperation on money laundering investigations and prosecutions; and  Engage the private and civic sectors in the fight against money laundering and transnational organized crime.

Details: Washington, DC: Woodrow Wilson Center for International Scholars, Mexico Institute, 2012.

Source: Internet Resource: Accessed July 7, 2012 at: http://www.wilsoncenter.org/sites/default/files/Realuyo_U.S.-Mexico_Money_Laundering_0.pdf

Year: 2012

Country: United States

URL: http://www.wilsoncenter.org/sites/default/files/Realuyo_U.S.-Mexico_Money_Laundering_0.pdf

Shelf Number: 125504

Keywords:
Money Laundering
Organized Crime (U.S. - Mexico)
Transnational Crimes

Author: Bagrosky, Michael Patrick

Title: The Triple Border Area: A Re-Conceptualization of the Problem and U.S. Policy

Summary: The Triple Border Area (TBA) between Argentina, Brazil and Paraguay is major hub for international crime that generates billions of dollars annually and is the most important center for financing Islamic terrorism outside the Middle East. The primary criminal activities in the TBA are smuggling and money laundering. The proprietors of these illicit acts include local opportunists, multinational criminal organizations and Middle Eastern terrorist fundraisers. The first argument of this thesis is that the current concept, or view, of the TBA has been too fragmented. There are several different models and theories that address parts of this phenomenon, however, there is no single model that describes how the TBA works and no complete theory that attempts to explain the existence of this phenomenon. The second argument of this thesis is that the U.S.'s policy has been too narrow and the result of this narrowness has contributed to the perpetuation of crime in the TBA. To resolve this problem there needs to be a re-conceptualization of the TBA and U.S. policy.

Details: Washington, DC: Georgetown University, 2009. 185p.

Source: Internet Resource: Thesis: Accessed July 24, 2012 at: https://repository.library.georgetown.edu/handle/10822/553250

Year: 2009

Country: South America

URL: https://repository.library.georgetown.edu/handle/10822/553250

Shelf Number: 125748

Keywords:
Money Laundering
Organized Crime (Brazil, Argentina, Paraguay)
Smuggling
Terrorist Financing

Author: Haigner, Stefan D.

Title: Combating money laundering and the financing of terrorism: A survey

Summary: Policy programs on anti-money laundering and combating the financing of terrorism (AML/CFT) have largely called for preventive measures like keeping record of financial transactions and reporting suspicious ones. In this survey study, we analyze the extent of global money laundering and terrorist financing and discuss the preventive policies and their evaluations. Moreover, we investigate whether more effective tax information exchange would bolster AML/CFT policies in that it reduced tax evasion, thus the volume of transnational financial flows (i.e. to and from offshore financial centres) and thus in turn cover given to money laundering and terrorist financing. We conclude that such a strategy can reduce financial flows, yet due to a "weakest link problem" even a few countries not participating can greatly undo what others have achieved.

Details: Berlin: Economics of Security, DIW Berlin, 2012. 109p.

Source: Economics of Security Working Paper 65: Internet Resource: Accessed August 8, 2012 at http://www.diw.de/documents/publikationen/73/diw_01.c.404013.de/diw_econsec0065.pdf

Year: 2012

Country: United States

URL: http://www.diw.de/documents/publikationen/73/diw_01.c.404013.de/diw_econsec0065.pdf

Shelf Number: 125944

Keywords:
Financing of Terrorism
Money Laundering

Author: Webb, Sarah

Title: The Contribution of Financial Investigation to Tackling Organised Crime: A Qualitative Study

Summary: Financial investigation is one of many specialist investigative approaches employed by law enforcement when tackling organised crime, and it is an increasingly well-established discipline. Financial investigators typically operate within the legal framework of the Proceeds of Crime Act 2002 (POCA), which introduced a number of asset recovery powers, including the use of restraint orders1 and post-conviction confiscation orders and cash seizure and civil forfeiture/recovery. Related policies include the Asset Recovery Incentivisation Scheme, which allows frontline agencies to keep a proportion of assets recovered. Knowledge about, and understanding of, the role that financial investigation can play in tackling organised crime has been identified as a key evidence gap. The current research therefore explores the contribution of financial investigation as one of the specialist investigation approaches used by law enforcement agencies to tackle organised crime. The report sets out its use and benefits, as well as the barriers and implications, for policy and practice. The research explored 60 cases where financial investigation was used to tackle organised crime. Methods were qualitative; 149 semi-structured interviews were carried out with practitioners including financial investigators, investigating officers and Crown Prosecution Service (CPS) representatives. An additional eight interviews were completed with practitioners working in a confiscation order enforcement role. Key Findings -- Financial investigation was used across all aspects of organised crime cases, from identifying criminality, developing intelligence and case building, through to prosecution and confiscation order enforcement. Financial investigations were rarely used to identify organised criminality in the first instance. Financial investigation techniques were applied in more than one-half of the cases studied during the pre- and post-arrest investigation and case-building phase. Where used, financial investigation contributed to the process of case building through: - identifying organised criminality in the first instance; - identifying the extent of an organised crime group; - locating assets owned or used by organised crime group members; - identifying ownership and use of properties; - uncovering evidence of the lifestyle led by those targeted; - tracking the movements of individuals; - placing people at particular places at particular times, thereby linking them to criminality or particular criminal groups; and - identifying additional offences and offenders. In one-half of the cases examined, evidence from the financial investigation was considered to have influenced the prosecution's case. - In 12 cases, a conviction would not have been possible without the financial investigation (these were mainly money laundering or fraud cases). - In 14 cases the financial investigation was able to demonstrate the greater involvement of the accused in the criminal activity. - In five cases the financial investigation revealed additional members of the organised crime group who could be brought into the prosecution. - In seven cases additional offences (particularly money laundering) were brought into the prosecution. Interviewees also suggested that greater collaboration between enforcement and prosecution teams, or even co-location, could improve enforcement understanding of the criminality of organised crime groups.

Details: London: Home Office, 2012.

Source: Internet Resource: Research Report 65: Accessed September 5, 2012 at: http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/crime-research/horr65?view=Binary

Year: 2012

Country: United Kingdom

URL: http://www.homeoffice.gov.uk/publications/science-research-statistics/research-statistics/crime-research/horr65?view=Binary

Shelf Number: 126256

Keywords:
Financial Crimes
Financial Investigations
Money Laundering
Organized Crime (U.K.)

Author: Farah, Douglas

Title: Transnational Organized Crime, Terrorism, and Criminalized States in Latin America: An Emerging Tier-One National Security Priority

Summary: The emergence of new hybrid (state and nonstate) transnational criminal/terrorist franchises in Latin America operating under broad state protection now pose a tier-one security threat for the United States. Similar hybrid franchise models are developing in other parts of the world, which makes the understanding of these new dynamics an important factor in a broader national security context. This threat goes well beyond the traditional nonstate theory of constraints activity, such as drug trafficking, money laundering, and human trafficking, into the potential for trafficking related to weapons of mass destruction by designated terrorist organizations and their sponsors. These activities are carried out with the support of regional and extra-regional state actors whose leadership is deeply enmeshed in criminal activity, which yields billions of dollars in illicit revenues every year. These same leaders have a publicly articulated, common doctrine of asymmetrical warfare against the United States and its allies that explicitly endorses as legitimate the use of weapons of mass destruction. The central binding element in this alliance is a hatred for the West, particularly the United States, and deep anti-Semitism, based on a shared view that the 1979 Iranian Revolution was a transformative historical event. For Islamists, it is evidence of divine favor; and for Bolivarians, a model of a successful asymmetrical strategy to defeat the “Empire.” The primary architect of this theology/ideology that merges radical Islam and radical, anti-Western populism and revolutionary zeal is the convicted terrorist Ilich Sánchez Ramirez, better known as “Carlos the Jackal,” whom Chávez has called a true visionary.

Details: Carlisle Barracks, PA: U.S. Army War College, 2012. 95p.

Source: Internet Resource: Accessed September 5, 2012 at: http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1117

Year: 2012

Country: Central America

URL: http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1117

Shelf Number: 126258

Keywords:
Criminal Networks
Human Rrafficking
Money Laundering
National Security
Organized Crime (Latin America)
Terrorism
Transnational Crime
Weapons of Mass Destruction

Author: Global Agenda Council on Organized Crime

Title: Organized Crime Enablers

Summary: The Global Agenda Council on Organized Crime focused on the enablers of organized crime during the 2011-2012 term. This broad concept includes individuals, mechanisms and situations that play an important role in facilitating organized crime activities – whether intentionally or inadvertently – increasing its benefits and scale while reducing its risks. Organized crime exacts a multibillion cost on legitimate business, distorts markets and causes widespread ill-effects on society. Fuelled by the same forces of globalization that have expanded trade, communications and information worldwide, criminal syndicates now have unprecedented reach not only into the lives of ordinary people but into the affairs of multinational companies and governments worldwide. Although law enforcement has long focused on criminal gangs and illicit markets, only recently has it paid greater attention to those factors that enable such activities. This report focuses on the impact of enablers on three critical areas: cybercrime, money laundering and Free Trade Zones. In developing this report, the Council on Organized Crime took into account two main criteria: – continuity with its work in 2010-2011 on cybercrime and on money laundering in real estate – input received by Council on Organized Crime Members during virtual meetings and at the Summit on the Global Agenda in Abu Dhabi in October 2011

Details: Cologny/Geneva Switzerland: World Economic Forum, 2012. 27p.

Source: Internet Resource: Accessed September 13, 2012 at: http://transcrime.cs.unitn.it/tc/fso/pubblicazioni/AP/GAC_Organized_Crime_2307_light_july.pdf

Year: 2012

Country: International

URL: http://transcrime.cs.unitn.it/tc/fso/pubblicazioni/AP/GAC_Organized_Crime_2307_light_july.pdf

Shelf Number: 126325

Keywords:
Computer Crimes
Cybercrimes
Internet Crimes
Money Laundering
Organized Crime

Author: Findley, Michael

Title: Shell Games: Testing Money Launderers' and Terrorist Financiers' Access to Shell Companies

Summary: For criminals moving large sums of dirty money internationally, there is no better device than an untraceable shell company. This paper reports the results of an experiment soliciting offers for these prohibited anonymous shell corporations. Our research team impersonated a variety of low- and high-risk customers, including would-be money launderers, corrupt officials, and terrorist financiers when requesting the anonymous companies. Evidence is drawn from more than 7,400 email solicitations to more than 3,700 Corporate Service Providers that make and sell shell companies in 182 countries. The experiment allows us to test whether international rules are actually effective when they mandate that those selling shell companies must collect identity documents from their customers. Shell companies that cannot be traced back to their real owners are one of the most common means for laundering money, giving and receiving bribes, busting sanctions, evading taxes, and financing terrorism. The results provide the most complete and robust test of the effectiveness of international rules banning untraceable, anonymous shell companies. Furthermore, because the exercise took the form of a randomized experiment, it also provides unique insight into what causes those who sell shell companies to either comply with or violate international rules requiring them to collect identity documents from customers. Just as the random assignment to control (placebo) and treatment groups in drug trials isolates the effect of a new drug, so too the random assignment of low-risk “placebo” emails and different high-risk “treatment” emails isolated the effects of different kinds of risk on the likelihood of (a) being offered a shell company, and (b) being required to provide proof of identity. Key findings include:1 1. Overall, international rules that those forming shell companies must collect proof of customers’ identity are ineffective. Nearly half (48 percent) of all replies received did not ask for proper identification, and 22 percent did not ask for any identity documents at all to form a shell company. 5. Informing providers of the rules they should be following made them no more likely to do so, even when penalties for non-compliance were mentioned. In contrast, when customers offered to pay providers a premium to flout international rules, the rate of demand for certified identity documentation fell precipitously compared to the placebo.

Details: Nathan, Qld: Griffith University, 2012. 29p.

Source: Internet Resource: Accessed September 29, 2012 at: http://www.griffith.edu.au/__data/assets/pdf_file/0008/454625/Global-Shell-Games_CGPPcover_Jersey.pdf

Year: 2012

Country: International

URL: http://www.griffith.edu.au/__data/assets/pdf_file/0008/454625/Global-Shell-Games_CGPPcover_Jersey.pdf

Shelf Number: 126495

Keywords:
Corruption
Financial Crimes
Money Laundering
Organized Crime
Terrorist Financing

Author: Financial Action Task Force

Title: Illicit Tobacco Trade

Summary: The Financial Action Task Force (FATF) Plenary met in Mexico City, during June 2011. It was at said Plenary where a proposal to conduct typology research work into money laundering and terror financing to be associated with the Illicit Trade in Tobacco (ITT) was accepted. March of 2011 also saw the OECD launch the “Oslo Dialogue” with the aim of promoting a whole of government approach to the tackling of financial crimes and illicit flows. This has been augmented by the G20 calling for strengthened inter-agency cooperation to fight illicit activities as well as the FATF adding tax crimes to the list of predicate offences. The proponents of the typology stated that the illicit tobacco trade was prone to money laundering. Trade was considered to be cash intensive and profitable whilst being accompanied by low levels of risk posed to the criminal groupings (in terms of detection, seizures, penalties, criminal procedure) contributing towards the manifestation of the related illicit activities. Key areas of concern included: a) Loss of revenue to the fiscal authorities. b) The use of the illicitly generated proceeds (i.e., to fund other crimes or the financing of terror). c) The ability to distinguish between illicit activities as undertaken by licit and illicit players in the tobacco sector. d) To identify the extent that governments enforcement agencies prioritise the addressing of illicit trade in tobacco when compared to other crimes. It was furthermore mentioned that the project was to augment work already conducted by the FATF, which included Trade Based Money Laundering (June 2006), Laundering the Proceeds of VAT Carousel Fraud (February 2007), ML Vulnerabilities in Free Trade Zones (February 2010) as well as the then recently published Global ML/TF Threat Assessment (June 2010). The identified key objectives were: a) To determine the extent of the Money Laundering and Terror Financing (ML/TF) vulnerabilities associated with illicit trade in tobacco at a global, regional and domestic level. b) To identify relevant case studies and determine trends and patterns from a global, regional and domestic perspective. c) To identify possible indicators which may assist financial and non financial institutions in developing mechanisms to identify, report and counter smuggling activities and the misuse of trade practices. d) To assist jurisdictions and FATF-Style Regional Bodies (FSRBs) in knowledge building and the identification of harms, drivers and measures associated with the illicit trade in tobacco. e) To enhance the efforts aimed at curbing ML and TF associated with the illicit trade in tobacco. This document provides a synopsis of the nature and extent of the ML/TF risks currently associated with the illicit trade in tobacco. It contains an overview of the problem statement and the data provided, as well as an analysis of the predicate offences, extent of associated money laundering and terror financing activities coupled lastly to the various jurisdictional enforcement responses to the curbing of this specific phenomenon.

Details: Paris: FATF, 2012. 80p.

Source: Internet Resource: Accessed october 4, 2012 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Illicit%20Tobacco%20Trade.pdf

Year: 2012

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Illicit%20Tobacco%20Trade.pdf

Shelf Number: 126552

Keywords:
Financial Crimes
Illicit Trade
Money Laundering
Terrorist Financing
Tobacco

Author: Miraglia, Paula

Title: Transnational Organised Crime and Fragile States

Summary: Transnational organised crime (TOC) refers to a fluid and diversified industry that engages in illicit activities ranging from drug and human trafficking to drug smuggling, piracy and money laundering. Although it may affect strong states, conflict-affected and fragile states are especially vulnerable to the dynamics of TOC and may provide more favourable conditions for its development. The implications for those states are many and serious. This paper outlines the ways in which TOC has evolved in recent years and how policy might be adapted to take account of this evolution. It emphasises that TOC today is less a matter of organised cartels established in producer or end-user states, but increasingly characterised by fluid, opportunistic networks that may for example specialise in transport and logistics. The paper recommends tackling the problem through a comprehensive approach that considers TOC as but one element within a greater complex of cause and effect. This would entail a re-evaluation of many current assumptions about TOC and a reformulation of current policies.

Details: Paris: Organisation for Economic Co-Operation and Development, 2012. 36p.

Source: Internet Resource:OECD Development Co-Operation Working Papers, WP 3/2012: Accessed November 24, 2012 at: http://www.clingendael.nl/publications/2012/20121026_briscoe_transnational_organised_crime.pdf

Year: 2012

Country: International

URL: http://www.clingendael.nl/publications/2012/20121026_briscoe_transnational_organised_crime.pdf

Shelf Number: 126988

Keywords:
Drug Trafficking
Human Trafficking
Money Laundering
Piracy
Transnational Organized Crime

Author: Kar, Dev

Title: Illicit Financial Flows from China and the Role of Trade Misinvoicing

Summary: The Chinese economy hemorrhaged US$3.79 trillion in illicit financial outflows from 2000 through 2011, according to a new report [PDF] released today by Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. Amidst increased domestic concern over inequality and corruption, GFI’s study raises serious questions about the stability of the Chinese economy merely two weeks before the once-in-a-decade leadership transition. The research, conducted by GFI Lead Economist Dev Kar and GFI Economist Sarah Freitas, found that the illegal outflows—the proceeds of crime, corruption, and tax evasion—were largely due to a trade-based money laundering technique known as ‘trade misinvoicing ,’ which accounted for US$3.2 trillion, or 86.2%, of the total outflow of illegal capital over the 11 years studied. The trade misinvoicing figures were provided exclusively to The Economist, and appear in the latest edition of the magazine which hits newsstands tomorrow.

Details: Washington, DC: Global Financial Integrity, 2012. 26p.

Source: Internet Resource: Accessed December 17, 2012 at http://www.gfintegrity.org/storage/gfip/documents/reports/ChinaOct2012/gfi-china-oct2012-report-web.pdf

Year: 2012

Country: International

URL: http://www.gfintegrity.org/storage/gfip/documents/reports/ChinaOct2012/gfi-china-oct2012-report-web.pdf

Shelf Number: 127237

Keywords:
Corporate Crime
Corrupt Practices
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Ferragut, Sergio

Title: Organized Crime, Illicit Drugs and Money Laundering: the United States and Mexico

Summary: Organized crime permeates the life of every single country in the 21st century: its global revenues are well above a trillion dollars a year and illicit drugs are a major component of this. Drug prohibition, in effect for almost a century, has not been the deterrent to consumption it was intended to be, and the illicit drug trade has become the most profitable source of revenue for criminal organizations in many countries. This paper reviews the US-Mexican illicit drug landscape and documents the importance of this criminal activity in both countries. The United States is the primary market for illicit drugs in the world and, because of their shared 2,000-mile border, Mexico has become the number one provider of illicit drugs. More than 40 years after a ‘war on drugs’ was declared by President Richard Nixon in 1971, the flow of drugs into the United States has not been eliminated or even reduced. The law of supply-and-demand has prevailed, as should have been expected. The illicit proceeds from drug trafficking in the United States and Mexico, as with those from any criminal activity, must be laundered by criminal organizations so that their assets cannot be traced back to their origins. In recent times anti-money laundering (AML) initiatives have been at the core of the fight against organized crime around the world. Back in the 1980s it was not unusual for a drug trafficker in the United States to walk into a bank with a suitcase full of cash and have it immediately deposited into an account. At that point the money would start a journey from bank to bank and country to country, and tracing its origins became very difficult – the money was effectively laundered. During the past two decades the international financial system has been tightened and today it is much more difficult to launder money through it. However, dirty money continues to be laundered through other channels. The current controls and best practices implemented within the financial system are a necessary condition to combat money laundering; nevertheless, they are not sufficient to curtail it effectively. It is crucial that the authorities look beyond the financial system and into enterprises that accept cash as tender if AML initiatives are to be successful in depriving organized crime of the fruits of its crimes. For at least three decades the laundering of drugs-trade proceeds in Mexico has been transferring economic and political power into the hands of individuals and groups with questionable credentials; billions of dollars have been laundered in the country by drug traffickers and their business partners. This phenomenon poses a potentially serious threat to public and national security in Mexico and the United States; the newly acquired economic strength of these criminal groups positions them to influence the political landscape and acquire significant ownership positions in strategic industries. This paper illustrates how it happens and highlights some of the options available to the authorities to address the challenge.

Details: London: Chatham House, 2012. 30p.

Source: Internet Resource: The views expressed in this document are the sole responsibility of the author(s) and do not
necessarily reflect the view of Chatham House, its staff, associates or Council. Chatham House
is independent and owes no allegiance to any government or to any political body. It does not
take institutional positions on policy issues. This document is issued on the understanding that if
any extract is used, the author(s)/ speaker(s) and Chatham House should be credited,
preferably with the date of the publication or details of the event. Where this document refers to
or reports statements made by speakers at an event every effort has been made to provide a fair
representation of their views and opinions, but the ultimate responsibility for accuracy lies with
this document’s author(s). The published text of speeches and presentations may differ from
delivery.
International Security Programme Paper 2012/01: Accessed January 23, 2013 at: http://www.chathamhouse.org/sites/default/files/public/Research/International%20Security/1112pp_ferragut.pdf

Year: 2012

Country: United States

URL: http://www.chathamhouse.org/sites/default/files/public/Research/International%20Security/1112pp_ferragut.pdf

Shelf Number: 127370

Keywords:
Drug Trafficking
Illicit Drugs (U.S. and Mexico)
Money Laundering
Organized Crime

Author: Kar, Dev

Title: Illicit Financial Flows from Developing Countries: 2001-2010

Summary: The developing world lost US$859 billion in illicit outflows in 2010, an increase of 11% over 2009. The capital outflows stem from crime, corruption, tax evasion, and other illicit activity. The report finds that illicit financial flows. From 2001 to 2010, developing countries lost US$5.86 trillion to illicit outflows. Conservatively estimated, illicit financial flows have increased in every region of developing countries. Real growth of illicit flows by regions over study period is as follows: •Africa 23.8 percent, •Middle East and North Africa (MENA) 26.3 percent, •developing Europe 3.6 percent, •Asia 7.8 percent, and •Western Hemisphere 2.7 percent. Top 10 countries with the highest measured cumulative illicit financial outflows between 2001 and 2010 were: 1.China: US$2.74 trillion 2.Mexico: US$476 billion 3.Malaysia: US$285 billon 4.Saudi Arabia: US$210 billion 5.Russia: US$152 billion 6.Philippines: US$138 billion 7.Nigeria: US$129 billion 8.India: US$123 billion 9.Indonesia: US$109 billion 10.United Arab Emirates: US$107 billion.

Details: Washington, DC: Global Financial Integrity, 2012.

Source: Internet Resource: accessed February 7, 2013 at: http://iff.gfintegrity.org/iff2012/2012report.html

Year: 2012

Country: International

URL: http://iff.gfintegrity.org/iff2012/2012report.html

Shelf Number: 127521

Keywords:
Corruption
Drug Trafficking
Financial Crimes
Money Laundering
Organized Crime
Tax Evasion

Author: Picard, Pierre M.

Title: Bank Secrecy, Illicit Money and Offshore Financial Centers

Summary: International and national institutions regularly put pressure on offshore financial centers and their clients to enforce compliance with anti-money laundering regulations and that in spite of the existence of bank secrecy. This paper discusses the winners and losers of such policies. Surprisingly, aggregate proffits and tax revenues can increase under those policies. In addition, we show that offshore banks can be encouraged to comply with rigorous monitoring of the investor's identity and the origin of his/her funds when the pressure creates sufficiently high risk of reputational harm to this investor. Nevertheless, the effcient pressure policy is dichotomous in the sense that a social planner chooses zero pressure or the pressure that just entices offshore banks to comply. By contrast, the implementation of those pressure policies on an onshore institution may be inefficient. Finally, we show that deeper financial integration fosters compliance by the offshore center while it also gives better incentives for delegated organizations to effectively induce compliance.

Details: Luxembourgh: CREA, University of Luxembourg, and CORE, Université catholique de Louvain, 2009. 38p.

Source: Internet Resource: Paolo Baffi Centre Research Paper No. 2009-45 : Accessed March 20, 2013 at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411584

Year: 2009

Country: International

URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411584

Shelf Number: 128013

Keywords:
Financial Crimes
Money Laundering
Offshore Banking

Author: Schneider, Friedrich

Title: Money Laundering and Financial Means of Organized Crime: Some Preliminary Empirical Findings

Summary: After giving a short literature review, the paper tries a quantification of the volume of money laundering activities, with the help of a MIMIC estimation procedure for the years 1995 to 2006 for 20 highly developed OECD countries. The volume of laundered money was 273 billions USD in the year 1995 for these 20 OECD countries and increased to 603 billions USD in 2006. The overall turnover in organized crime had a value of 595 billion USD in 2001 and increased to 790 billion USD in 2006. These figures are very preliminary but give a clear indication how important money laundering and the turnover of organized crime is nowadays.

Details: Berlin: Economics of Security, c/o Department of International Economics, German Institute for Economic Research, 2010. 30p.

Source: Internet Resource: Economics of Security Working Paper 26: Accessed March 27, 2013 at: http://www.diw.de/documents/publikationen/73/diw_01.c.354167.de/diw_econsec0026.pdf

Year: 2010

Country: International

URL: http://www.diw.de/documents/publikationen/73/diw_01.c.354167.de/diw_econsec0026.pdf

Shelf Number: 128146

Keywords:
Financial Crimes
Money Laundering
Organized Crime

Author: Sukharenko, Alexander

Title: Russian Organized Crime and its Impact on Foreign Economies

Summary: According to Russia’s National Security Strategy (2009), criminalization of the economy is one of the long-term threats to internal security. In 2011, Russia’s shadow economy was probably worth 19 trillion rubles ($632 billion), or 35 percent of gross domestic product. While rising in absolute terms, the figure has fallen from 77 percent of GDP in 1994 and tumbled to as low as 28 percent in 2009-2010. This size is 3.5 times larger than corresponding G-7 economies like the U.S., France, and Canada (GFI, 2013). The World Economic Forum reports on global competiveness show that the level of harm of business caused by Russian organized crime is one of the highest, not only in Europe, but also in the whole world. In 2012, Russia ranks 114th out of 144 countries on this indicator (WEF, 2012). The lack of laws, lax regulation, corruption, and extreme forms of violence have enabled criminal organizations to make substantial inroads into lucrative economic sectors, including energy, metallurgy, construction, banking and retail. The Ministry of Internal Affairs (2012) estimated that some 1,000 different companies are controlled by organized crime. Organized crimes’ success can be attributed in part to the fact that many members of the elite, who are influential in economics and politics, are directly involved in illicit activities. Corrupt officials provide criminal front companies with licenses and quotas, customs exemptions, budgetary funds, municipal and state property. Further, law enforcement officials often help eliminate their competitors, and provide criminal bosses with protection from the law. A significant portion of criminal proceeds are transferred and laundered through offshore banks and shell companies. According to Global Financial Integrity, Russia is the fifth largest exporter of illicit capital over the past decade, behind China, Mexico, Malaysia and Saudi Arabia, respectively (GFI, 2012). The Russian economy lost at least $211.5 billion in illicit financial outflows from 1994 to 2011 (or about US$11.8 billion per annum). These outflows represent the proceeds of crime, corruption, and tax evasion, and have serious negative consequences for the national economy (GFI, 2013). Some of this money has returned to Russia at favorable exchange rates, where it has been reinvested in other illicit schemes or used to purchase real estate, companies, and banks. As a result of this cycle, many criminal bosses made up a significant proportion of the new wealthy class.

Details: Stockholm: Institute for Security and Development Policy, 2013. 3p.

Source: Internet Resource: Policy Brief No. 114, 2013: Accessed May 22, 2013 at: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-sukharenko-russian-organized-crime.pdf

Year: 2013

Country: Russia

URL: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-sukharenko-russian-organized-crime.pdf

Shelf Number: 128775

Keywords:
Money Laundering
Organized Crime (Russia)
Political Corruption
Shadow Economies

Author: Organization of American States

Title: The Drug Problem in the Americas: Studies. The Economics of Drug Trafficking

Summary: Summary and Findings:  While estimating the size of global and hemispheric drug markets presents tremendous challenges, evidence suggests that some two thirds of total revenues are earned at the final, retail level in consuming countries.  Wholesalers and traffickers through transit countries account for another 20-25 percent of revenues, while just under 1 percent of total retail sales finds its way to drug cultivators in the Andes.  In terms of the size of overall drug markets, the most recent UN estimates place total retail sales of illicit drugs at some $320 billion or 0.9 percent of GDP. Other estimates are lower.  The UN estimates annual drug revenues in the Americas at $150 billion or just under half the global total, though other estimates are lower. North America currently occupies a dominant share of the hemispheric total, reflecting higher prices as well as higher drug prevalence, though this could change in future years.  Cocaine estimates enjoy better consensus, with U.S. sales accounting for some $34 billion out of a global retail cocaine market of about $85 billion. Cocaine estimates for the rest of the hemisphere are a small fraction of this figure, but this could change when revised Brazilian data become available.  Estimates of marijuana and methamphetamine revenues suffer particularly high rates of uncertainty.

Details: Washington, DC: OAS, 2013. 46p.

Source: Internet Resource: Accessed May 25, 2013 at: http://www.cicad.oas.org/main/policy/informeDrogas2013/laEconomicaNarcotrafico_ENG.pdf

Year: 2013

Country: International

URL: http://www.cicad.oas.org/main/policy/informeDrogas2013/laEconomicaNarcotrafico_ENG.pdf

Shelf Number: 128797

Keywords:
Drug Markets
Drug Trafficking
Economics of Crime
Illicit Drugs
Money Laundering

Author: Financial Action Task Force (FATF)

Title: National Money Laundering and Terrorist Financing Risk Assessment

Summary: This document is intended to provide guidance on the conduct of risk assessment at the country or national level, and it relates especially to key requirements set out in Recommendation 1 and paragraphs 3-6 of INR 1. In particular, it outlines general principles that may serve as a useful framework in assessing ML/TF risks at the national level. The guidance contained in this document takes into consideration previous FATF work, which is still valid reference material. The general principles contained in this paper are also relevant when conducting risk assessments of a more focussed scope, such as in assessments of a particular financial or DNFBP sector (for example, the securities sector) or of thematic issues (for example, the proceeds of corruption related ML). All of these types of assessments (comprehensive, sectoral or thematic) carried out at the national level may also form the basis for determining whether to apply enhanced or specific measures, simplified measures, or exemptions from AML/CFT requirements. Furthermore, while FATF Recommendation 1 does not create specific risk assessment obligations regarding the financing of proliferation of weapons of mass destruction, the general principles laid out in this guidance could also be used in conducting a risk assessment for this area. The guidance in this document is not intended to explain how supervisors should assess risks in the context of risk-based supervision, although risk-based supervision will likely be informed by a national-level risk assessment. Also, this guidance does not provide further explanation of RBA obligations and decisions for financial institutions and DNFBPs. The FATF has issued separate guidance on implementing the RBA for specific sectors and professions, and that material will be reviewed and, as necessary, modified in light of the revised FATF Recommendations. This guidance document is not a standard and is therefore not intended to designate specific actions necessary to meet obligations under Recommendation 1 and INR 1 or any other Recommendations dealing with the RBA. Criteria for technical compliance and for assessing effectiveness relevant to this and all other FATF Recommendations may be found in the FATF assessment methodology. The practices described in this guidance are intended to serve as examples that may facilitate implementation of these obligations in a manner compatible with the FATF standards. This guidance is structured as follows:  This section (1) lays out the purpose, scope and status of this guidance, along with an outline of the core FATF obligations relevant to ML/TF risk assessments at any level.  Section 2 lays out general principles that should be taken into account when conducting ML/TF risk assessments at the country or national level.  Section 3 discusses how to organise a national-level ML/TF risk assessment, its frequency, and the data and information that could be used while undertaking such an assessment.  Section 4 presents a high-level view of the three main stages involved in the ML/TF risk assessment process (identification, analysis and evaluation).  Section 5 considers the outcome and dissemination of the risk assessment product.  Annexes to this document contain additional information relating to ML/TF risk assessment including summaries of selected national-level assessments.

Details: Paris: FATF, 2013. 60p.

Source: Internet Resource: FATF Guidance: Accessed May 28, 2013 at: http://www.fatf-gafi.org/media/fatf/content/images/National_ML_TF_Risk_Assessment.pdf

Year: 2013

Country: International

URL: http://www.fatf-gafi.org/media/fatf/content/images/National_ML_TF_Risk_Assessment.pdf

Shelf Number: 128840

Keywords:
Financial Crimes
Money Laundering
Risk Assessment
Terrorist Financing

Author: Kar, Dev

Title: Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009

Summary: This report analyses the volume and pattern of recorded and unrecorded capital flows to and from Africa and its various regions and country groups over the period 1980-2009. It also provides the main trends of resource transfers; it does not provide an analysis of the reasons underlying the flows. Further analysis on the dynamics of the flows will need to be based on indepth, country-specific work. For the purposes of this study, recorded “capital flows” are financial and non-financial transactions recorded in the balance of payments, whereas unrecorded capital flows primarily involve the “flight” of capital. The report assumes that unrecorded capital flows are illicit in nature and involve the transfer of money earned through corruption, kickbacks, tax evasion, criminal activities, and transactions of certain contraband goods. Likewise, legal funds earned through legal business but transferred abroad in violation of exchange control regulations also become illicit. More specifically, net recorded transfers (NRecT) are based fully on recorded balance of payments items. The narrow version of this measure, NRecT Narrow, is simply equal to the Financial Account Balance, whereas the broad measure, NRecT Broad, is equal to the Financial Account Balance plus the sum of net current and net capital transfers. Net resource transfers (NRT) are calculated by the difference between NRecT and illicit financial flows (IFF), which also have two versions, normalized (conservative) and non-normalized (robust). Hence, there are four alternate measures of NRT, corresponding to the version of recorded transfers and outflows of illicit capital. These concepts are important as they enable a comparison of NRecT against unrecorded outflows of illicit capital. Results indicate that Africa was a net creditor to the world, as measured by the net resource transfers, to the tune of up to US$1.4 trillion over the period 1980-2009, adjusted for inflation. While there were brief periods in the early 1980s and the 1990s, when Africa received small net resource transfers from the rest of the world, the continent has been a net provider of resources to the world with estimates of real NRT ranging from US$597 billion to US$1.4 trillion, depending on the definition used for the transfers (NRecT, Narrow or Broad, and IFF, normalized or non-normalized). The most optimistic estimate of NRT (or lowest negative NRT of US$597 billion) involves broadly defined recorded transfers net of conservatively estimated illicit outflows (BroadNRTNorm), while the most pessimistic scenario (negative transfers amounting to US$1.4 trillion) involves narrowly defined recorded transfers net of robust estimates of illicit outflows (NarrowNRTNon-norm). If we focus on recorded transfers, that is, not taking account of illicit outflows, we find that, according to the NRecT Narrow measure, there were net inflows to Africa over the period 1980-1999 and a sharp reversal to net outflows in the period 2000-2009. The NRecT Narrow measure shows that African countries received resources amounting to 2.3 percent of GDP in the 1980s and just under 1.0 percent of GDP in the 1990s. However, the continent became a net lender of resources to the world over the decade ending 2009. This sharp reversal from net inflows over the earlier two decades to net outflows over the last decade was mainly due to outflows associated with reserve accumulation, reflecting African countries’ desire to self-insure against financial crisis. The recorded outflows from Africa in the past decade were not evenly distributed across regions. They were largely driven by outflows from North Africa. Considering the period 2000-2009 alone, some US$30.4 billion per annum flowed out of Africa with 83 percent of such outflows originating from North Africa. Within Sub-Saharan Africa, the results from the NRecT Narrow measure were mixed. West and Central Africa experienced considerable outflows, which swamped resource transfers into other regions over the decade ending 2009. NRecT Narrow losses from the West and Central regions were mainly driven by outflows related to repayment of loans and trade credits, rather than reserve accumulation. The distribution of gains and losses of transfers among African countries was asymmetrical, resulting in a net loss of transfers from Africa. The top five countries that gained transfers (NRecT Narrow) over the period 1980-2009 are South Africa, Sudan, Tunisia, Morocco, and Cote d’Ivoire, while Algeria, Libya, Nigeria, Botswana, and Egypt lost such transfers. The volume of transfers lost from the latter five countries far outstripped those gained by the former five. The broader measure of recorded transfers (NRecT Broad) alters the long-run developments in net recorded transfers owing to the impact of current and capital transfers (which principally include remittances and debt relief). Based on the broad measure, Africa’s transfers (NRecT Broad) increased from an average inflow of about US$27 billion per annum in the 1980s and 1990s before declining to US$8.7 billion in the last decade ending 2009. The broad measure does not show that Africa swung from net debtor to net creditor to the world in the 2000s mainly due to substantial current and capital transfers such as remittances, migrant transfers, debt forgiveness and write-offs, and other non-financial transfers which provided off-setting effects. Every region of Sub-Saharan Africa received resources on a net basis throughout the three decades, based on the broad measure of transfers, with the largest gains going to the West and Central Africa region. West and Central Africa received the most resources over the 30-year period, in terms of GDP, increasing from 5.2 percent of GDP per annum in the 1980s to 5.7 percent in the 1990s, before declining to 2.3 percent in the last decade. Recorded transfers were mainly driven by remittances and debt forgiveness, rather than net foreign direct investments. Country resource endowment matters when transfers are measured on a broad basis. For instance, non-fuel exporters came out ahead of fuel-exporters in attracting net recorded transfers measured on a broad basis. Debt-relief also helped low-income countries to recapture some of the resources. Heavily Indebted Poor Countries (HIPC) experienced a modest increase in transfers over the three decades. On an average per annum inflation-adjusted basis, resource inflows to HIPC countries increased from US$14.0 billion in the 1980s to US$14.3 billion in the 1990s, before jumping to US$20.8 billion over the last decade ending 2009. North African countries dominated the top gainers over the 30-year period, based on broad categorization of net recorded transfers. Egypt, Morocco, Tunisia, Kenya, and Ghana were the top five gainers of broad-based recorded resource transfers over the 30-year period 1980-2009; Libya, Algeria, Gabon, Botswana, and Angola were the top five losers of recorded transfers. Illicit financial flows (IFFs) were the main driving force behind the net drain of resources from Africa of US$1.2 - 1.3 trillion on an inflation-adjusted basis. IFFs grew at a much faster pace over the 30-year period 1980-2009 than net recorded transfers, even accounting for the net inflows arising from the broad net recorded transfers. Illicit outflows were dominated by outflows from Sub-Saharan Africa, especially from West and Central Africa. Illicit outflows from Sub-Saharan Africa outstripped those from North Africa by over two times in nominal terms while in real terms, three African regions—West and Central Africa at US$494.0 billion (37 percent), North Africa at US$415.6 billion (31 percent), and Southern Africa at US$370.0 billion (27 percent)—account for 95 percent of total cumulative illicit outflows from Africa over the 30-year period. (See Chart 4 and Table 1). In terms of the volume of illicit financial flows, Nigeria, Egypt, and South Africa led the regional outflows. In West and Central Africa, outflows were largely driven by Nigeria, the Republic of Congo, and Cote d’Ivoire in that order of magnitude while North Africa outflows were dominated by Egypt, Algeria, and Libya respectively. Outflows from Southern Africa were mainly driven by South Africa, Mauritius, and Angola. The study concludes by offering policy recommendations with respect to (i) initiatives to restrict the absorption of illicit financial flows, (ii) policies to curtail illicit financial outflows from Africa, and (iii) policies to boost net recorded transfers by improving the business climate. To ensure greater effectiveness, it is imperative that there is policy alignment between African countries and “absorbing” countries in addressing the issue of illicit financial flows.

Details: Tunis-Belvedère, Tunisia; African Development Bank: Washington, DC: Global Financial Integrity, 2013. 84p.

Source: Internet Resource: Accessed June 21, 2013 at: http://www.gfintegrity.org/storage/gfip/documents/reports/AfricaNetResources/gfi_afdb_iffs_and_the_problem_of_net_resource_transfers_from_africa_1980-2009-web.pdf

Year: 2013

Country: Africa

URL: http://www.gfintegrity.org/storage/gfip/documents/reports/AfricaNetResources/gfi_afdb_iffs_and_the_problem_of_net_resource_transfers_from_africa_1980-2009-web.pdf

Shelf Number: 129037

Keywords:
Financial Crimes (Africa)
Illicit Financial Flows
Money Laundering

Author: Bank for International Settlements. Basel Committee on Banking Supervision

Title: Sound Management of Risks Related to Money Laundering and Financing of Terrorism - Consultative Document

Summary: The Basel Committee has a long-standing commitment to promote the implementation of sound policies and procedures to combat money laundering (ML) and the financing of terrorism (FT). Its commitment to combating ML and FT is fully aligned with its mandate to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. Prudent management of risks related to ML and FT along with effective supervisory oversight are critical in protecting the safety and soundness of banks and the integrity of the international financial system. The inadequacy or absence of sound management can increase the exposure of banks to serious risks, especially reputational, operational, compliance and concentration risks. Recent developments, including robust enforcement actions taken by regulators and the corresponding direct and indirect costs incurred by banks due to their lack of diligence in applying appropriate risk management policies, procedures and controls, have highlighted those risks. These costs and damage could probably have been avoided had the banks maintained effective risk-based policies and procedures to protect against risks arising from ML and FT. In February 2012, the Financial Action Task Force (FATF) released a revised version of the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (the FATF standards), to which the Committee provided input. The Committee's intention in issuing this consultative paper is to support countries' implementation of the FATF standards with respect to their banks and banking groups, by exploring complementary areas and leveraging the expertise available in both organisations. Therefore, these guidelines are intended to be consistent with and to supplement the goals and objectives of the FATF standards. The Committee has included cross-references to FATF standards in this document in order to assist banks in complying with national requirements based on the implementation of those standards.

Details: Basel, Switzerland: Basel Committee on Banking Supervision, 2013. 32p.

Source: Internet Resource: Accessed July 1, 2013 at: http://www.bis.org/publ/bcbs252.pdf

Year: 2013

Country: International

URL: http://www.bis.org/publ/bcbs252.pdf

Shelf Number: 129229

Keywords:
Money Laundering
Terrorist Financing

Author: Financial Action Task Force (FATF)

Title: Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals

Summary: Criminals seek out the involvement of legal professionals in their ML/TF activities, sometimes because a legal professional is required to complete certain transactions, and sometimes to access specialised legal and notarial skills and services which could assist the laundering of the proceeds of crime and the funding of terrorism. The report identifies a number of ML/TF methods that commonly employ or, in some countries, require the services of a legal professional. Inherently these activities pose ML/TF risk. When clients seek to misuse the legal professional’s services in these areas, even law abiding legal professionals may be vulnerable. The methods are: •misuse of client accounts •purchase of real property •creation of trusts and companies •management of trusts and companies •managing client affairs and making introductions •undertaking certain litigation •setting up and managing charities The report also describes red flag indicators of ML/TF which may be useful to legal professionals, self-regulatory bodies (SRBs), competent authorities and law enforcement agencies. In this report, over 100 case studies referring to these and other ML/TF methods were taken into account. Some of these case studies show that not all legal professionals are undertaking client due diligence (CDD) when required. Even where due diligence is obtained, if the legal professional lacks understanding of the ML/TF vulnerabilities and red flag indicators, they are less able to use that information to prevent the misuse of their services. The report also challenges the perception sometimes held by criminals, and at times supported by claims from legal professionals themselves, that legal professional privilege or professional secrecy would lawfully enable a legal professional to continue to act for a client who was engaging in criminal activity and/or prevent law enforcement from accessing information to enable the client to be prosecuted.

Details: Paris: FATF, 2013. 146p.

Source: Internet Resource: Accessed July 3, 2013 at: http://www.fatf-gafi.org/documents/documents/mltf-vulnerabilities-legal-professionals.html

Year: 2013

Country: International

URL: http://www.fatf-gafi.org/documents/documents/mltf-vulnerabilities-legal-professionals.html

Shelf Number: 0

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Friedrich-Ebert-Stiftung

Title: Being Tough Is Not Enough – Curbing transnational organized crime

Summary: The devastating effects and challenges linked to organized crime have become ever more visible in recent years. It is no great news that organized crime is a truly globalized, transnational business. Flows of both its »products« and related illegal funds largely ignore national borders. At the same time, the scope, patterns and effects of organized crime vary locally, nationally and regionally. Any strategy to counter organized crime needs to be tailored to the respective level, while building on international collaboration. But while transnational cooperation of criminal networks is increasing and adapting, government and governance responses remain too static and stuck within the confines of national borders. International and transnational cooperation in curbing organized crime is still in its infancy. However, it is not only the transnational dimension that renders organized crime so difficult to tackle. It is also a multifaceted challenge in terms of its patterns and impact. The immediate threats to human security and the violence related to organized crime – as currently most apparent in the Mexican drug war – are the most visible negative impact. Beyond that, however, organized crime severely undermines statehood and democratic governance through corruption, intimidation or even state capture in many parts of the world. It also fuels existing violent conflicts or re-ignites dormant ones. Not only in Colombia or the Sahel region are the increasing interrelations between conflict parties, terrorist organizations and networks of organized crime a source of destabilization and concern. Adding the negative impact that organized crime has on the legal part of the economy, one begins to understand that addressing organized crime is about more than just more effective law enforcement. Tackling organized crime in a sustainable manner requires the development and implementation of intelligent, multidimensional approaches to untangle networks and address the incentive structures and enabling factors of the various business models. In the context of our work to promote peace and security, the Friedrich-Ebert-Stiftung (FES) aims at facilitating a strategic reflection on comprehensive policy responses to curb organized crime. In February and March 2013, a smaller expert and parliamentary meeting in Brussels and a wider international expert conference in Berlin represented milestones in this endeavor. Beyond discussing recent trends and effects of organized crime in general, the meetings zoomed in on two central aspects: the illegal drug market, which is arguably still the most profitable one for organized crime, and money laundering, the bottom line of organized crime. The meetings were part of a continuous engagement and will be systematically followed up. Some of the analysis and suggestions discussed during the meetings were results of FES’ work in the different regions. For instance, the process that led to the studies and drug policy reform proposals from Latin America were initiated within the framework of an FES regional security policy project. The respective dialogs in the various regions will continue. But during the Berlin conference, it became particularly obvious that there is also more work to be done in Germany. Given that organized crime not only operates in Germany but also compromises German and European policies – for instance in the fields of security, foreign affairs, development and health – Germany needs to engage much more pro-actively in the international development and implementation of comprehensive responses. Against this background, this conference documentation is meant not only to summarize past debates, but also to stimulate future ones. FES remains committed to providing input, facilitating dialog nationally and internationally and further strengthening the network of actors addressing the challenge of organized crime from different angles and in different parts of the world. To be sure, there will be no easy responses to the challenges posed by organized crime, as experience has shown. Curbing organized crime is more than a matter of repressive measures and law enforcement. In this sense, the subtitle of the Berlin conference remains a guiding theme of further debates and a reminder to be creative in designing comprehensive strategies and policies: Being tough is not enough.

Details: Berlin: Friedrich-Ebert-Stiftung, 2013. 52p.

Source: Internet Resource: Conference Report: Accessed July 9, 2013 at: http://library.fes.de/pdf-files/iez/10034-20130603.pdf

Year: 2013

Country: International

URL: http://library.fes.de/pdf-files/iez/10034-20130603.pdf

Shelf Number: 129329

Keywords:
Criminal Networks
Drug Trafficking
Money Laundering
Organized Crime

Author: Kego, Walter

Title: he Threat of Russian Criminal Money: Reassessing EU Anti-Money Laundering Policy

Summary: Since the early 1990s, Russian criminal networks have plagued the European Union. The spread of organized crime groups from Russia, following the break-up of the Soviet Union, has brought with it increased violence and the rise of illicit networks. However, these organized crime groups thrive precisely because the Eastern European member states of the EU continue to allow the illicit money from these groups to pass through their financial institutions. Whether this is because of corruption or an institutional inability to counteract the problem, money laundering persists, which acts to undermine the EU as a whole. In 2005, the EU adopted the Third EU Anti-Money Laundering (AML) Directive, which saw the ushering in of the new risk-based AML regulation strategy. The system has been lauded as a vast improvement to the bureaucratic and inflexible rule-based system utilized before. Nonetheless, eight years later it is necessary to assess the success and failures of the current system, and identify the need for increased government oversight in countries where money laundering continues to be a problem. Trends and evidence indicate that there are Eastern European banks actively involved in laundering illegal money from Russia into the rest of Europe. The Baltic States, for example, are often the first port of call for Russian and Ukrainian illicit and stolen capital. Numerous examples illustrate this continuing problem—the Vanagels Connection, for instance, a cross-border money laundering and offshore network that has concealed the origins of millions of illicit euros, has involved numerous Baltic banks. Governments of the Eastern European member states of the EU have begun to counteract money laundering, but their efforts are lethargic and remain mostly unsuccessful. To combat the continuing spread of money laundering in the EU, three steps must be taken. First, EU banks must do their part to increase compliance with anti-money laundering protocols and not engage in relationships with banks suspected of laundering illicit assets. Second, nations must take responsibility for their financial institutions that are harboring illicit funds. Through their financial intelligence units and justice system, they must ensure financial institutions are reporting money laundering cases, and confiscate illicit capital. Third, in order to ensure 6 Walter Kegö & Alexander Georgieff both of the former steps, the EU must take an active role in ensuring all EU countries not only comply, but also enforce money laundering laws. How these steps should be carried out will be covered in this paper. Russian organized crime continues to be a problem in Europe, and their power and reach will continue to grow if their financial channels are not dismantled. It is up to the EU to stop the rot and compel banks and governments to acknowledge that the long-term risk of being involved with the Russian criminal world is too high.

Details: Stockholm: Institute for Security and Development Policy, 2013. 64p.

Source: Internet Resource: Stockholm Paper: Accessed July 9, 2013 at: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-kego-georgieff-russian-criminal-money.pdf

Year: 2013

Country: Russia

URL: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-kego-georgieff-russian-criminal-money.pdf

Shelf Number: 129331

Keywords:
Money Laundering
Organized Crime (Russia)

Author: Australian Crime Commission

Title: Organised Crime in Australia 2013

Summary: The Organised Crime in Australia 2013 report provides the most comprehensive contemporary profile of serious and organised crime in Australia. The report provides the context in which organised crime operates in Australia and gives an overview of each of the key illicit markets and the activities which fundamentally enable serious and organised crime. The report provides government, industry and the public with information they need to better respond to the threat of organised crime, now and into the future. Organised Crime in Australia is an unclassified version of the Australian Crime Commission's Organised Crime Threat Assessment (OCTA) which is part of the Picture of Criminality in Australia suite of products. The OCTA is a classified assessment of the level of risk posed by various organised crime threats, categorised by activity, market and enabler.

Details: Canberra: Australian Crime Commission, 2014. 72p.

Source: Internet Resource: Accessed April 8, 2014 at: https://www.crimecommission.gov.au/sites/default/files/ACC%20OCA%202013-1.pdf

Year: 2014

Country: Australia

URL: https://www.crimecommission.gov.au/sites/default/files/ACC%20OCA%202013-1.pdf

Shelf Number: 132047

Keywords:
Fraud
Illegal Goods
Money Laundering
Organized Crime

Author: International Monetary Fund

Title: Panama: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism

Summary: This assessment of the anti-money laundering (AML) and combating the financing of terrorism (CFT) regime of Panama is based on the Forty Recommendations 2003 and the Nine Special Recommendations on Terrorist Financing 2001 of the Financial Action Task Force (FATF), and was prepared using the updated AML/CFT assessment Methodology 2004. The assessment team considered all the materials supplied by the authorities, the information obtained on-site during their mission from October 15-29, 2012, and other verifiable information subsequently provided by the authorities. During the mission, the assessment team met with officials and representatives of all relevant government agencies and the private sector. A list of the agencies and entities met is set out in Annex 1 to the detailed assessment report. This report provides a summary of the AML/CFT measures in place in Panama at the time of the mission. It describes and analyzes those measures, sets out Panama's levels of compliance with the FATF 40+9 Recommendations and provides recommendations on how certain aspects of the system could be strengthened.

Details: Washington, DC: IMF, 2014. 348p.

Source: Internet Resource: Accessed April 22, 2014 at: http://www.imf.org/external/pubs/ft/scr/2014/cr1454.pdf

Year: 2014

Country: Panama

URL: http://www.imf.org/external/pubs/ft/scr/2014/cr1454.pdf

Shelf Number: 132120

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Samani, Raj

Title: Digital Laundry: An analysis of online currencies, and their use in cybercrime

Summary: The European Central Bank (ECB) points out notable differences between virtual currency and electronic money schemes. Electronic money uses a traditional unit of currency and is regulated; virtual currencies are unregulated and use an invented currency. Virtual currencies offer a number of benefits to customers: They are reliable, relatively instant, and anonymous. Even when privacy issues have been raised with particular currencies (notably Bitcoin), the market has responded with extensions to provide greater anonymity. Market response is an important point because regardless of law enforcement actions against Liberty Reserve and e-gold, criminals quickly identify new platforms to launder their funds. As a platform grows in popularity, so too will attacks and subsequent law enforcement actions. We saw this recently with Liberty Reserve and e-gold, and the recent cyberattacks against Bitcoin. Increasing popularity also raises the attention of law enforcement officials. Despite such platforms establishing their operations in countries considered as "tax havens," its operators are still subject to investigation, and possibly arrest. This concern recently led to the Russian Foreign Ministry warning its citizens who suspect they may be arrested to avoid countries with extradition treaties with the United States. The warning cited the arrest of Liberty Reserve's founder as an example. Although money laundering and cyberattacks are the focus of this paper, electronic currencies also act as the main method of payment for illicit products such as drugs, as well as for other products and services that enable cybercrime. We discussed products and services in Cybercrime Exposed: Cybercrime-as-a-Service; we'll look at drugs in this paper when we discuss the Silk Road market. The Silk Road is the best known online drug market but it is only the tip of the iceberg, as there are numerous such marketplaces. Regardless of the level of scrutiny by regulators and law enforcement, criminals will continue to migrate activities to alternate platforms. They have done this with Liberty Reserve and e-gold, to name two examples; simply shutting down the leading platform will not solve the problem.

Details: Santa Clara, CA: McAfee, 2013. 17p.

Source: Internet Resource: Accessed May 10, 2014 at: http://www.mcafee.com/us/resources/white-papers/wp-digital-laundry.pdf

Year: 2013

Country: International

URL:

Shelf Number: 132315

Keywords:
Cybercrime
Digital Crime
Financial Crime
Money Laundering
Online Crime

Author: University of Paris 1 Pantheon-Sorbonne

Title: Protecting the Integrity of Sport Competition: The Last Bet for Modern Sport

Summary: The University Paris 1 Pantheon-Sorbonne and the International Centre for Sport Security (ICSS) today released the ground-breaking results of a two-year research programme into sport corruption. It includes startling figures on the scale and scope of the sport-betting market, which is identified as the primary purpose for match-fixing. The report also provides detailed analysis of current efforts to combat corruption and presents guiding principles including practical steps that can be taken by sport, governments and betting. According to the Sorbonne-ICSS Report - 'Protecting the Integrity of Sport Competition: The Last Bet for Modern Sport' - the manipulation of sport competition and betting threatens all countries and regions, with football and cricket the sports most under siege. Other sports affected include: tennis, basketball, badminton and motor racing. The report states that the most manipulated competitions are at a national level but highlights that the 'fixing' of competition and betting is instigated at a transnational level. Size of sport betting market The report shows that manipulation takes place in the context of a growing sports economy, which now accounts for 2% of the global GDP, with a transnational sports-betting market of estimated wagers worth between $200 - 500 billion, more than 80% of which is illegal. The findings reveal: - Asia and Europe represents 85% of the total legal and illegal market - Europe makes up 49% of the legal market, whilst Asia makes up 53% of the illegal market - Legal sports betting currently delivers only $4 billion of official tax revenues for countries - More than 8,000 legal operators offer sports betting - 80% are in territories with a low rate of tax and few inspections. - The number of illegal operators is impossible even to estimate The advent of the internet has led to an unprecedented expansion of sport betting offers, with online betting now representing 30% of the global market. The sports betting market has been transformed into a multi-billion dollar industry with betting exchanges, live betting, betting on more low-profile events and derivative betting formulas, as well as higher return rates for bettors. Significantly though, the evolution of the betting regulatory models hasn't kept up, with authorities often ill-equipped to deal with the illegal and under-regulated betting, together with the related issues of manipulation and money laundering.

Details: Dohar, Qatar: International Centre for Sport Security, 2014. 129p.

Source: Internet Resource: Accessed June 14, 2014 at: http://www.theicss.org/sport-integrity-forum/

Year: 2014

Country: International

URL: http://www.theicss.org/sport-integrity-forum/

Shelf Number: 132453

Keywords:
Corruption
Gambling
Illegal markets
Money Laundering
Organized Crime
Sporting Events
Sports Betting

Author: Harris, Kamala D.

Title: Gangs Beyond Borders: California and the Fight Against Transnational Organized Crime

Summary: Gangs Beyond Borders: California and the Fight Against Transnational Organized Crime, addresses all three emerging pillars of transnational criminal activity: the trafficking of drugs, weapons and human beings; money laundering; and high-tech crimes, such as digital piracy, hacking and fraud. It is the result of extensive research and consultation with federal, state, and local law enforcement, non-governmental organizations, and academia. The report finds that while transnational organized crime is a significant problem, it is not insurmountable. In California, law enforcement at all levels of government have made major strides against these criminal groups, even in the face of declining resources. Law enforcement in foreign countries have made steady in-roads, as well, as demonstrated by the recent arrest in February 2014 of Joaqu�n "El Chapo" Guzman Loera, the reputed head of Mexico's notorious Sinaloa Federation cartel. The report describes the strategies that are working and sets forth recommendations to combat transnational organized crime. A call for sustained law enforcement funding and collaboration between federal, state, and local governments are at the center of these recommendations.

Details: Sacramento: California Attorney General, 2014. 118p.

Source: Internet Resource: Accessed June 20, 2014 at: https://oag.ca.gov/sites/all/files/agweb/pdfs/toc/report_2014.pdf

Year: 2014

Country: United States

URL: https://oag.ca.gov/sites/all/files/agweb/pdfs/toc/report_2014.pdf

Shelf Number: 132534

Keywords:
Computer Crimes
Digital Crimes
Drug Trafficking
Gun Trafficking
Human Trafficking
Internet Crimes
Money Laundering
Organized Crime
Transnational Crime

Author: Baker, Raymond

Title: Hiding in Plain Sight: Trade Misinvoicing and the Impact of Revenue Loss in Ghana, Kenya, Mozambique, Tanzania, and Uganda: 2002-2011

Summary: Illicit flows of capital through developing countries due to trade misinvoicing is one of the most pressing challenges facing policymakers in these countries. The global figure for illicit financial outflows from developing countries is approximately $542 billion per year on average (over a 10-year time series), and trade misinvoicing makes up close to 80 percent of this or $424 billion. Capital flight, facilitated by a global network of secrecy jurisdictions and complex, opaque corporate and account structures, robs governments and societies of needed revenue for domestic investment in the private sector, infrastructure development, and the provision of vital social services. This translates into lost opportunities, lost jobs, and lost potential. This study explores the economic and the policy side of the issue of trade misinvoicing using case studies of Ghana, Kenya, Mozambique, Tanzania, and Uganda. Data on illicit flows for these five countries demonstrate the varying magnitudes, sources, and consequences of trade misinvoicing at the country level and provide hope and warning to other developing countries. We find that trade misinvoicing is a significant source of illicit outflows and inflows of capital in each country, resulting in billions of dollars of lost investment and hundreds of millions of dollars in unrealized domestic resource mobilization. The sources of trade misinvoicing varied across the cases, as did the policy environment in which this misinvoicing occurs. However, we also find significant facets of this issue that apply to all the countries, particularly with regards to customs invoice review procedures and access to on-the-spot information. These challenges represent opportunities for the five countries to improve their economic systems and accountability mechanisms through greater transparency.

Details: Washington, DC: Global Financial Integrity, 2014. 72p.

Source: Internet Resource: Accessed June 26, 2014 at: http://www.gfintegrity.org/wp-content/uploads/2014/05/Hiding_In_Plain_Sight_Report-Final.pdf

Year: 2014

Country: Africa

URL: http://www.gfintegrity.org/wp-content/uploads/2014/05/Hiding_In_Plain_Sight_Report-Final.pdf

Shelf Number: 132540

Keywords:
Corporate Crime
Corrupt Practices
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Financial Action Task Force

Title: Financial flows linked to the production and trafficking of Afghan opiates

Summary: 1. Drug trafficking is a business, but our understanding of this enterprise and response to it remain limited - less than 0.5% of the total laundered funds are seized. 2. In 2011, the annual volume of the global opiate market was estimated at USD 68 billion (with around USD 60 billion from Afghan opiates). However, no widely agreed method or framework currently exists to map "the business model". Although a number of business modelling methodologies appear to have been created by academics, multilateral bodies and private organisations, the survey responses suggest that it remains unclear if these methodologies have been practically incorporated into law enforcement and FIU's intelligence collection plans and disruption strategies. 3. Terrorists profit from and are engaged in opiate trafficking - over half the Afghan Taliban Senior Leadership listed under United Nations Security Council Resolution (UNSCR) 1988 are involved in drug trafficking. 4. The UN Al Qaida and Taliban Monitoring Team assesses that opiate-financing will imminently be the leading source of income for the Afghan Taliban and thus enable a major threat to the national security of Afghanistan and wider regional stability. 5. International opiate traffickers rely on the services of financial professionals, either unwitting or complicit, to manage their assets but no global system exists to alert countries or the private sector of these individuals and entities, or to freeze the assets of opiate traffickers. 6. At most stages in the enterprise, opiates and associated financial flows do not follow the same routes. 7. The Afghan opiate business is believed to be a mixture of both cartels and multiple markets. There appears to be no single or small group of cartels that control the global opiate trade; but some groups control significant portions of the trade along various routes. However, detailed and reliable information regarding this issue remains limited and this can be considered a key information gap. 8. Between 50-90% of all financial transactions in Afghanistan are conducted via money or value transfer services (MVTS). Illicit use of MVTS appears to be a critical capability for opiate trafficking networks, not only in Afghanistan but also internationally. 9. The majority of illicit funds are likely moved through, and possibly stored in, financial centres. As the region's leading financial centre, the United Arab Emirates' (UAE) financial system appears to be particularly vulnerable to abuse by opiate traffickers, regionally and internationally. 10. Cash, commodity-transfer and MVTS appear to be the leading value transfer instruments at the cultivation and manufacture stages of the enterprise; the formal financial system, MVTS and high-value commodities appear to facilitate international distribution of opiates. 11. Apart from cash, new payment methods (including virtual currencies) are used at consumer and international distribution stages of the Afghan opiate enterprise, albeit less than the above methods but may pose significant challenges to regulators, financial intelligence units (FIUs) and law enforcement agencies. 12. Many similarities exist between financing methodologies of different illicit drugs. Opiate-specific and more generic red flag indicators have been identified and collated. 13. This project was conducted in parallel with the Paris Pact (UNODC) Illicit Financial Flows analysis. The ML/TF threats from illicit groups, vulnerabilities in AML/CFT systems and opportunities identified herein are being used for immediate technical assistance delivery within the framework of the UNODC's current activities.

Details: Paris: Financial Action Task Force, 2014. 77p.

Source: Internet Resource: Accessed July 25, 2014 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Financial-flows-linked-to-production-and-trafficking-of-afghan-opiates.pdf

Year: 2014

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Financial-flows-linked-to-production-and-trafficking-of-afghan-opiates.pdf

Shelf Number: 132781

Keywords:
Drug Markets
Drug Trafficking
Financial Crimes
Heroin
Illicit Drugs
Money Laundering

Author: Riccardi, Michele

Title: The Identification of Beneficial Owners in the Fight Against Money Laundering

Summary: While a proposal for a Fourth EU Anti Money Laundering Directive is being adopted by the EU Commission, lack of data on the ownership structure of EU companies still represents a serious obstacle for the fight against the misuse of corporate entities for financial crime purposes. In order to address this problem, the research project BOWNET (www.bownet.eu), funded by EU Commission, DG Home Affairs, and carried out by an International consortium coordinated by Universit� Cattolica del Sacro Cuore � Transcrime (www.transcrime.it) has:  Understood what information is used by EU competent authorities and intermediaries in investigations as regards the ownership structure of suspicious companies;  Identified their main problems and needs ;  Identified the level of availability of data on the ownership structure of EU companies;  Explored where are these data stored, how they can be accessed, at which cost and in which data format;  Suggested a range of EU policy and regulatory initiatives that could be taken to improve the access to company ownership information;  Suggested a range of IT tools that could ease the identification of beneficial owners of suspicious corporate entities; For doing so, the project has performed surveys on EU Law enforcement agencies, Financial Intelligence Units, financial and non-financial intermediaries; a review of software used in the anti-money laundering (AML) field; a comprehensive analysis of the public business registers of the 27 EU member states; a comprehensive analysis of other 150 public and commercial providers of data on the ownership structure of EU companies.

Details: Milan, IT: Transcrime, 2013. 98p.

Source: Internet Resource: Accessed July 29, 2014 at: http://www.transcrime.it/wp-content/uploads/2013/11/BOWNET3.pdf

Year: 2013

Country: Europe

URL: http://www.transcrime.it/wp-content/uploads/2013/11/BOWNET3.pdf

Shelf Number: 132815

Keywords:
Financial Crimes
Money Laundering

Author: Diallo, Ismaila

Title: A profile of crime markets in Dakar

Summary: Several criminal markets - ranging from drug trafficking to human trafficking, piracy and counterfeiting, trafficking of pharmaceuticals, cybercrime and money laundering - can be found in Dakar, Senegal. This paper profiles those criminal markets currently active in the city and its suburbs, analyzing their structures, operations and transnational dimensions. The expansion of these criminal markets is a matter of considerable concern for West Africa's economic and social development. In every case, 'regardless of the criminal market... the common denominator is always exploitation for profit. This exploitation ultimately affects the entire country: its people and institutions; its' economic prosperity; and its social fabric'.

Details: Pretoria: Institute for Security Studies, 2014. 12p.

Source: Internet Resource: ISS Paper 264: Accessed August 14, 2014 at: http://www.issafrica.org/uploads/Paper264.pdf

Year: 2014

Country: South Africa

URL: http://www.issafrica.org/uploads/Paper264.pdf

Shelf Number: 133050

Keywords:
Counterfeit Medicines
Criminal Networks (South Africa)
Cybercrime
Drug Trafficking
Human Trafficking
Money Laundering
Organized Crime
Pirates/Piracy

Author: Grant Thornton

Title: Illicit Trade in Ireland: Uncovering the cost to the Irish economy

Summary: Although frequently thought of as a victimless crime, illicit trade has a significant impact on the Irish economy. The objective of this report is to provide a detailed assessment of illicit trade in Ireland across a select number of sectors, namely fuel, tobacco, digital media and pharmaceuticals. With regard to each of these sectors, the report seeks to understand the impacts, identify key drivers behind these illicit trades, and where possible, quantifies the losses to the economy. Ultimately this report proposes an integrated approach to tackling the problem of illicit trade in Ireland. What is illicit trade? The most common definition of illicit trade is that used by the World Health Organisation (WHO) which covers many different areas that go beyond the scope of this report. These include money laundering, cash transaction, human trafficking and the trade in illegal drugs. Within the context of this report, the term "illicit trade" is more narrowly defined as: - Intellectual Property Crime (IPC); - Contraband; and - Illegal manufacturing. Importance of intellectual property It is widely accepted that the recognition of Intellectual Property ("IP") plays a vital role in promoting innovation and stimulating the economy in order to foster growth. Therefore, it is vital that appropriate legal recognition, public policies and enforcement is in place to ensure that IP and brands are protected. Illicit Trade in Ireland Despite the importance of IP rights and an increased emphasis on IP protection, significant levels of illicit trade remain in operation throughout the Irish economy. Illicit Trade in Ireland is not confined to a single industry but is present in a broad spectrum of activity across the Irish economy. The scale and scope of illicit trade in Ireland has resulted in significant losses to the Irish economy. The losses suffered include a number of important stakeholders such as right holders, retailers, consumers, the Government and the wider economy. Whilst almost every area of the general economy is subject to losses as a result of illicit trade, this report has narrowed its focus to a number of core areas which are having the most detrimental effect on the Irish economy. To address any problem, the first step should be to understand the problem and in this report we have attempted to do just this. The estimates that we have provided in this report show that illicit trade could be costing right holders as much as L547m per annum and the Irish Exchequer as much as L937m per annum.

Details: Dublin: Retail Ireland, 2013. 73p.

Source: Internet Resource: Accessed August 14, 2014 at: http://www.oireachtas.ie/parliament/media/committees/jobsenterpriseandinnovation/Illicit-Trade-in-Ireland-report.pdf

Year: 2013

Country: Ireland

URL: http://www.oireachtas.ie/parliament/media/committees/jobsenterpriseandinnovation/Illicit-Trade-in-Ireland-report.pdf

Shelf Number: 133069

Keywords:
Contraband
Costs of Crime
Crime Against Businesses
Financial Crimes
Illegal Manufacturing
Illicit Trade
Intellectual Property Theft
Money Laundering
Organized Crime (Ireland)
Retail Crime

Author: Forte, Roberto, ed.

Title: Organised Crime and the Fight Against Crime in the Western Balkans: a Comparison with the Italian Models and Practices. General overview and perspectives for the future

Summary: The project SAPUCCA (Sharing Alternative Practices for the Utilisation of Confiscated Criminal Assets), co-funded by the European Commission's Programme "ISEC 2009 - DG Home Affairs", is aimed at encouraging, promoting and elaborating methods and tools to prevent and fight organised crime, and at experimenting good practices for the re-use of assets confiscated to criminal organisations for social and institutional purposes. As the foremost output of the project, the Policy paper "Organised Crime and the Fight Against Crime in the Western Balkans: a Comparison with the Italian Models and Practices. General overview and perspectives for the future" has been published. The authors are Natale Argiro, Mauro Baldascino, Mario Battello, Atanas Rusev, Luigi Gay, Dafne Papandrea and Domenico Zinzi, and the paper is edited by Roberto Forte. The document offers an overview of the situation of organised crime in the Western Balkans in general and in individual Countries -- Croatia, Macedonia, Serbia and Montenegro -- as well as a focus on the recent legislation on the recovery and management of criminal assets in Bulgaria, used as a term of confrontation with the consolidated approach applied in Italy to such issues. It offers as well a study on the extensibility of the Italian model in Europe, and a feasibility analysis on the extension of the model to the Western Balkans.

Details: Rome?: SAPUCCA: Sharing Alternative Practices for the Utilization of Confiscated Criminal Assets, 2013. 88p.

Source: Internet Resource: Policy Paper: Accessed September 9, 2014 at: http://flarenetwork.org/documents/Sapucca-pubbl-final.pdf

Year: 2013

Country: Europe

URL: http://flarenetwork.org/documents/Sapucca-pubbl-final.pdf

Shelf Number: 133189

Keywords:
Asset Forfeiture
Money Laundering
Organized Crime (Europe)

Author: Alemika, Etannibi E.O.

Title: The Impact of Organised Crime on Governance in West Africa

Summary: There are several types of organised criminal activities and operatives in West Africa. These activities include drug trafficking, advanced fee and internet fraud, human trafficking, diamond smuggling, forgery, cigarette smuggling, money-laundering, arms manufacture, arms trafficking, and armed robbery as well as oil bunkering . Transnational organised criminal activities often involve collaboration among domestic and foreign criminal groups. Organised criminal groups infiltrate governments, businesses, political and economic systems. They undermine the effectiveness of these systems, sometimes through corruption and violence. It is imperative that enough effort is given to the understanding of the impact of organised crime on governance in West Africa. Aim and scope of study In this study, the following issues are addressed: - Variety and trends of organised crime in West Africa; - Impact of organised crime on peace, stability, development and the rule of law; - Transnational linkages of organised crime; and - Linkages between state institutions/politics and organised crime. The focus of the study is different from the prevalent approach to the subject and reports on organised crime in West Africa, which have been more concerned with drug trafficking, human trafficking and scams directed at European and North American countries. Inadequate attention has been paid to other forms of organised crime. More significantly, there has been a lack of attention to the impact of organized crime on the fragile political, economic and social systems of the region. The responses by international, regional and national actors involved in developing and implementing measures against organised crime emphasise developing the capacity of law enforcement and judicial officials to enable effective interdiction and enforce the law. However, experience over the past two decades in many parts of the world indicates that reliance on law enforcement alone may not be an effective and sustainable enough approach. A broader understanding of actors, modes of operation, networks, of the nexus between organised crime and political systems, and the impact of organised criminal activities and actors on the economies and societies of West African countries is a prerequisite for developing a comprehensive and effective response to the activities of criminal networks.

Details: Abuji, Nigeria: Friedrich-Ebert-Stiftung, Regional Office Abuja, 2013. 106p.

Source: Internet Resource: Accessed September 12, 2014 at: http://library.fes.de/pdf-files/bueros/nigeria/10199.pdf

Year: 2013

Country: Africa

URL: http://library.fes.de/pdf-files/bueros/nigeria/10199.pdf

Shelf Number: 133292

Keywords:
Criminal Networks
Drug Trafficking
Human trafficking
Money Laundering
Organized Crime (West Africa)
Smuggling
Tobacco Smuggling
Trafficking in Weapons

Author: Halliday, Terence

Title: Global Surveillance of Dirty Money: Assessing Assessments of Regimes to Control Money-Laundering and Combat the Financing of Terrorism.

Summary: The International Monetary Fund's (IMF, Fund) program on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) has been integrally involved in the global system for AML/CFT in coordination with other key players, particularly the Financial Action Task Force (FATF). AML/CFT assessments, whether by the Fund or other assessor bodies, contribute to the key Fund activities of surveillance, financial support and technical assistance in support of domestic and international financial stability. These evaluations are taken seriously by both assessors and assessed. It is timely to evaluate the IMF's involvement in the AML/CFT system and to reconsider relevant aspects of the FATF standards, methodologies and practices more generally. The Center on Law and Globalization (CLG) obtained agreement from the IMF to conduct an independent critical analysis of IMF Reports on the Observance of Standards and Codes (ROSCs) during the 3rd round with the intent that the appraisal of past practices might inform advances in IMF and FATF methodologies and practices. Findings of the study are based on extensive interviews at the IMF and the FATF, detailed analysis of documents, close examination of four IMF assessments, site visits to three countries, and review of related literatures. This study finds that the IMF has contributed significantly to efforts that will improve the standards and methodology for assessing AML/CFT systems worldwide. The IMF has shown an openness to independent investigation of its practices; a willingness to ask baseline questions about the objectives and efficacy of AML/CFT regimes; a commitment to experimentation in assessment techniques; an impetus to clarify AML/CFT goals and objectives; leadership in the drive for assessments to appraise whether effective outcomes have resulted from implementation of standards; an investment in highly-qualified experienced assessment teams; undertaken initiatives to find new forms of valid and reliable data; intentions to forge tighter linkages between specific AML/CFT tools and targeted problems in financial systems, e.g., tax evasion, corruption; and effectiveness in raising donor moneys to invest in technical assistance to countries in need of reforms.

Details: Chicago: The Center on Law and Globalization (CLG), 2014. 61p.

Source: Internet Resource: accessed November 10, 2014 at: http://www.lexglobal.org/files/Report_Global%20Surveillance%20of%20Dirty%20Money%201.30.2014.pdf

Year: 2014

Country: International

URL: http://www.lexglobal.org/files/Report_Global%20Surveillance%20of%20Dirty%20Money%201.30.2014.pdf

Shelf Number: 134007

Keywords:
Corruption
Financial Crimes
Money Laundering
Tax Evation
Terrorist Financing

Author: Maiga, Aissata

Title: New Frontiers: Russian-Speaking Organized Crime in Latin America

Summary: Russian-speaking organized crime is capitalizing on and flourishing in the "permissive environment" of Latin American countries. Principally involved in drug trafficking and money laundering, it is also colluding effectively with local criminal cartels. The Kremlin has initiated collaborative steps to counter organized crime in the region, but initiatives from EU countries are so far largely lacking in a domain that requires greater international cooperation.

Details: Nacka, Sweden: Institute for Security and Development Policy, 2013. 2p.

Source: Internet Resource: Policy Brief No. 133: Accessed November 13, 2014 at: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-maiga-kego-new-frontiers-russian-organized-crime-in-latin-america.pdf

Year: 2013

Country: Latin America

URL: http://www.isdp.eu/images/stories/isdp-main-pdf/2013-maiga-kego-new-frontiers-russian-organized-crime-in-latin-america.pdf

Shelf Number: 134086

Keywords:
Criminal Cartels
Drug Trafficking
Money Laundering
Organized Crime (Latin America)

Author: United Nations Economic Commission for Africa

Title: Illicit Financial Flow

Summary: The 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development was held in 2011. This Conference mandated ECA to establish the High Level Panel on Illicit Financial Flows from Africa. Underlying this decision was the determination to ensure Africa's accelerated and sustained development, relying as much as possible on its own resources. The decision was immediately informed by concern that many of our countries would fail to meet the Millennium Development Goals during the target period ending in 2015. There was also concern that our continent had to take all possible measures to ensure respect for the development priorities it had set itself, as reflected for instance in the New Partnership for Africa's Development. Progress on this agenda could not be guaranteed if Africa remained over-dependent on resources supplied by development partners. In the light of this analysis, it became clear that Africa was a net creditor to the rest of the world, even though, despite the inflow of official development assistance, the continent had suffered and was continuing to suffer from a crisis of insufficient resources for development. Very correctly, these considerations led to the decision to focus on the matter of illicit financial outflows from Africa, and specifically on the steps that must be taken to radically reduce these outflows to ensure that these development resources remain within the continent. The importance of this decision is emphasized by the fact that our continent is annually losing more than $50 billion through illicit financial outflows.

Details: Addis Ababa, Ethiopia: The Commission, 2015. 126p.

Source: Internet Resource: Accessed February 4, 2015 at: http://www.uneca.org/sites/default/files/publications/iff_main_report_english.pdf

Year: 2015

Country: Africa

URL: http://www.uneca.org/sites/default/files/publications/iff_main_report_english.pdf

Shelf Number: 134532

Keywords:
Financial Crimes (Africa)
Money Laundering
Tax Fraud
Terrorism Financing
White Collar Crime

Author: Goodman, Mary Beth

Title: To Stem the Flow of Illicit Drugs from Afghanistan, Follow the Money

Summary: Corruption poses an existential challenge to Afghanistan's stability, as well as its political and economic development. Under the leadership of President Ashraf Ghani and Chief Executive Abdullah Abdullah, there is an opportunity for the United States to capitalize on the newly expressed political will of Afghanistan's elected leaders to curb corruption. Afghanistan's national unity government has prioritized the fight against the epidemic of graft plaguing the country, and this fight is intricately tied to the production and flow of drugs. Although the United States has invested $8 billion-as of December 30, 2014-in counternarcotics efforts, Afghanistan still leads the world in opium production, and its farmers are growing more opium than ever before. The sale of opium and cannabis - another drug of which Afghanistan is a leading cultivator on the international market - produces huge sums of cash that must be laundered, or made clean, so it can appear legitimate. This parallel market and the illicit financial transactions that sustain it have a debilitating impact on the rule of law in Afghanistan; undermine the legitimacy of government institutions; and ultimately impede the ability of the Afghan government to provide basic services to its citizens. Because no bank outside of Afghanistan denominates in the Afghani-the country's national currency-the state's drug trade runs on the flow of international currencies such as U.S. dollars, euros, and British pounds. Moreover, the weak oversight of anti-money laundering controls coupled with the systemic corruption plaguing Afghan institutions serves to compound the narcotics conundrum. The Afghan drug trade poses an immediate and urgent threat to U.S. interests in Afghanistan and to the integrity of the Afghan state itself. Greater efforts must be made to stem the flow of money derived from the narcotics trade in order to significantly reduce Afghanistan's narcotics production and curb corruption.

Details: Washington, DC: Center for American Progress, 2015. 11p.

Source: Internet Resource: Accessed March 19, 2015 at: https://cdn.americanprogress.org/wp-content/uploads/2015/03/AfghanistanNarcotics-brief.pdf

Year: 2015

Country: Afghanistan

URL: https://cdn.americanprogress.org/wp-content/uploads/2015/03/AfghanistanNarcotics-brief.pdf

Shelf Number: 134975

Keywords:
Drug Markets
Drug Trade
Drug Trafficking
Illegal Drugs
Money Laundering
Narcotics (Afghanistan)

Author: Transparency International UK

Title: Closing Down the Safe Havens: Ending Impunity for Corrupt Individuals by Seizing and Recovering their Assets in the UK

Summary: Corrupt funds that are laundered through the UK represent misery for millions of people. The money has been stolen from health and education budgets, from infrastructure and law enforcement, and many other areas of public spending. This both degrades those services and removes funds that should rightfully be invested in their country of origin. The stolen funds should be identified, frozen, seized and - with proper safeguards - returned to the rightful owners. This is what the recovery of corruptly-obtained assets aims to achieve. The purpose of this paper is to describe the blocks in the system that are preventing recovery of the proceeds of grand corruption located in, or routed through, the UK.

Details: London: Transparency International UK, 2013. 31p.

Source: Internet Resource: Accessed April 7, 2015 at: http://www.transparency.org.uk/publications/15-publications/809-closing-down-the-safe-havens

Year: 2013

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/15-publications/809-closing-down-the-safe-havens

Shelf Number: 135168

Keywords:
Asset Forfeiture
Fraud and Corruption (U.K.)
Money Laundering

Author: Passas, Nikos

Title: Financial intermediaries - Anti-money laundering allies in cash-based societies?

Summary: Many informal cash-based economies run parallel financial systems that are very different to the Western banking concept. Such countries are perceived to have a high risk of money laundering. Looking at Afghanistan, Somalia, and India - where anti-money laundering efforts have yielded mixed results - this paper draws lessons from the operations of financial intermediaries. These countries are considered high risk not only for money laundering and terrorism financing, but also for corruption and political and legal concerns. The issues at hand - risk assessments for remittances, strategies of engaging on the ground, resource management, and alternatives to the existing financial networks - are also valid for other cash-based, low-income societies. In fact, informal remittance channels may provide opportunities to strengthen regulatory and governance capacities.

Details: Bergen, Norway: Chr. Michelsen Institute. U4 Anti-Corruption Resource Centre, 2015. 30p.

Source: Internet Resource: U4 Issue, April 2015, no. 10: Accessed April 29, 2015 at: http://www.u4.no/publications/financial-intermediaries-anti-money-laundering-allies-in-cash-based-societies/

Year: 2015

Country: Afghanistan

URL: http://www.u4.no/publications/financial-intermediaries-anti-money-laundering-allies-in-cash-based-societies/

Shelf Number: 135403

Keywords:
Corruption
Financial Crimes
Money Laundering
Risk Assessment
Terrorist Financing

Author: Kar, Dev

Title: Illicit Financial Flows to and from the Philippines: A Study in Dynamic Simulation, 1960-2011

Summary: This study presents a model of the drivers and dynamics of illicit financial flows to and from the Philippines over the period 1960-2011. Illicit flows through unrecorded balance of payments leakages and trade misinvoicing differ from broad capital flight which also includes flows of "normal" or legitimate capital. The larger implication is that models of capital flight that net out a mix of licit and illicit capital are fundamentally flawed. While legitimate capital flows that are recorded can be netted out, flows that are illicit in both directions cannot as the net result would be conceptually equivalent to net crime, an absurd concept. Hence, we argue that traditional models of capital flight understate the problem facing developing countries and they fail to acknowledge the adverse impact that flows in both directions have on them. In contrast, the narrower focus on illicit flows permits an analysis of inflows and outflows, which are treated as separate but interacting transactions that impact both the official and underground economies. Thereby the study affords a fuller understanding of how illicit flows impact a developing country. Starting with a structural equations model the estimation strategy culminates in a vector error correction procedure that yields four salient findings. First, there exists a clear link between illicit inflows and outflows with the latter possibly financing the former. Second, illicit financial inflows drive the underground economy and hamper tax collection. Third, illicit outflows of about US$4.5 billion per annum on average deplete the country's domestic savings, which could hamper sustainable economic growth in the long run. Finally, illicit flows have on average cost the government US$1.5 billion per year in lost tax revenues over the period of 2001-2011. The loss in revenues, representing about 37 percent of the social benefits budget of the consolidated state and local governments in 2011, is significant.

Details: Washington, DC: Global Financial Integrity, 2014. 56p.

Source: Internet Resource: Accessed June 5, 2015 at: http://www.gfintegrity.org/wp-content/uploads/2014/05/Illicit-Financial-Flows-to-and-from-the-Philippines-Final-Report.pdf

Year: 2014

Country: Philippines

URL: http://www.gfintegrity.org/wp-content/uploads/2014/05/Illicit-Financial-Flows-to-and-from-the-Philippines-Final-Report.pdf

Shelf Number: 131843

Keywords:
Corruption
Financial Crime
Money Laundering
Tax Evasion
White Collar Crime

Author: Wyatt, Tanya

Title: Corruption and wildlife trafficking

Summary: Wildlife trafficking is a growing global concern. It takes place in all regions of the world with those nations with high biodiversity being the source and the consumers of the wildlife as well as transit areas and hubs for smuggled wildlife. It is a significant contributor to biodiversity loss and species extinction. Many if not most developing nations are rich in biodiversity and therefore must contend with wildlife trafficking. It is a critical concern for these nations' environment and economies. It has been documented that corruption is an essential component in the facilitation and perpetration of the illegal wildlife trade, but a comprehensive study into the scale, scope and structure has yet to be undertaken. This U4 Issue paper conducts a meta-study regarding corruption's role in wildlife trafficking from the available literature, interviews with experts and a case study of Vietnam in an attempt to highlight concerns for bilateral donors in regards to conservation, environment and law enforcement programmes.

Details: Bergen, NO: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute, 2015. 48p.

Source: Internet Resource: U4 Issue no. 11: Accessed July 15, 2015 at: http://www.u4.no/publications/corruption-and-wildlife-trafficking/

Year: 2015

Country: Vietnam

URL: http://www.u4.no/publications/corruption-and-wildlife-trafficking/

Shelf Number: 136038

Keywords:
Bribery
Corruption
Money Laundering
Trafficking in Wildlife
Wild Animal Trade
Wildlife Crimes

Author: Europol

Title: Why is Cash Still King? A strategic report on the use of cash by criminal groups as a facilitator for money laundering

Summary: In spite of the rapidly changing face of criminality and the rise of cybercrime, money laundering methods detected by law enforcement remain overwhelmingly traditional. Europol's latest strategic report, 'Why is cash still king?', shows that while cash is slowly falling out of favour with consumers, it is still one of the preferred methods used to launder the proceeds of crime. Almost all crime types make use of cash to facilitate money laundering at some stage, not only traditional crimes which generate cash profits, but also threats now arising from new technologies such as virtual currencies, where cash is used as an instrument to disguise the criminal origin of proceeds. In the EU, the use of cash is the main reason triggering suspicious transaction reports within the financial system, accounting for more than 30% of all reports. Reports on detections of suspicious physical cash movements represent around one third of all contributions to Europol in the area of money laundering. Although the use of cash for payments has experienced a moderate decline in the EU, the demand for high denomination notes not commonly used for payments, such as the EUR 500 note, has been sustained. The EUR 500 note alone accounts for over 30% of the value of all banknotes in circulation (1). This raises questions about the purpose for which they are being used and whether this could be linked to criminal activity, which should be further explored. Linking cash to criminal activities remains a key challenge for law enforcement. "The use of cash by criminals remains one of the most significant barriers to successful investigations and prosecution," says Rob Wainwright, Director of Europol. "It is a threat that has not received sufficient international attention or legislative solutions. A fragmented enforcement approach at national and international level, and the differing regulatory frameworks across the EU Member States, are widely exploited by criminals, who adapt their methods and routes to take advantage of these loopholes. Stepping up efforts to increase international cooperation and information exchange, and establishing a more harmonised approach among EU Member States concerning cash movements within the EU, are crucial if we are to tackle these criminal activities." One of the prevalent methods used by criminals to launder profits remains physical cash smuggling. It is difficult to assess the scale of this criminal activity, but highly conservative estimates based on records received by Europol show that EUR 1.5 billion in cash is detected and/or seized by EU Member State authorities each year. The findings of 'Why is cash still king?' are reflected in a set of recommendations aimed at providing practical solutions which could assist in preventing the use of cash for criminal purposes as well as enabling investigators to achieve higher rates of successful convictions.

Details: Paris: Europol, 2015. 54p.

Source: Internet Resource: Accessed July 15, 2015 at: https://www.europol.europa.eu/content/why-cash-still-king-strategic-report-use-cash-criminal-groups-facilitator-money-laundering

Year: 2015

Country: Europe

URL: https://www.europol.europa.eu/content/why-cash-still-king-strategic-report-use-cash-criminal-groups-facilitator-money-laundering

Shelf Number: 136064

Keywords:
Money Laundering
Organized Crime

Author: Ross, Cameron

Title: It's All About Money: Crime in the Caribbean and Its Impact on Canada

Summary: For most Canadians, the Caribbean is a place to take an idyllic break from winter. Sandy beaches and warm temperatures lure Canadians to the islands. Interaction with the local population is mostly limited to those who work in hotels and bars. What actually happens in the local communities is generally lost on the average Canadian. Appreciating the large Caribbean diaspora in Toronto and Montreal, the connections are dynamic between those sun-baked Caribbean communities and Canadian society. While those linkages are generally positive, there are disturbing trends in crime in the Caribbean. Herculean efforts are being made by the World Bank, the United Nations, and the regional Caribbean Development Bank to build regional capacity in governance and criminal justice systems. There is, however, a lack of political will by some Caribbean leaders to implement recommendations that would greatly improve citizen security and national institutions. Scholarly and professional studies have made recommendations for the security sector that are achievable, but the political will in many countries has been lagging. The Caribbean drug trade has long held the spotlight, but money laundering is increasingly a concern, especially with evidence of linkages between terrorist groups resident in Central America and Venezuela, which have close proximity to the Caribbean Windward Islands. Post-9/11 financial tools, utilized under the U.S. Patriot Act, have been effective in dealing with rogue governments, corrupt officials, and transnational criminal gangs. However, the use of the Internet for financial transactions and the emergence of digital currencies have made regulatory control challenging. This is significant considering the Canadian tourism, banking, and resource development in the region that have caused steady flows of Canadians, money and expertise to the Caribbean. This paper reviews Caribbean crime and its trends and impacts on Canada, money-laundering trends, and highlights policies that could be reinforced to better curb these trends. Crime is a societal problem for which solutions are found within communities. This applies equally to the Caribbean and to Canada. It is in Canada's best interest to accelerate efforts to aid the region, especially in the area of citizen security and reforms of the criminal justice system. Multi-lateral programs aimed at building regional capacities in governance and criminal justice systems are the areas in which Canada can play an important role. The creation of a Canada-Caribbean institute would go a long way in conducting scholarly graduate-level research in fields of security-sector reform.

Details: Calgary: University of Calgary, School of Public Policy, 2014. 23p.

Source: SPP Research Papers, Vol. 7, issue 19: Accessed July 15, 2015 at: http://policyschool.ucalgary.ca/sites/default/files/research/ross-caribbeancrime.pdf

Year: 2014

Country: Caribbean

URL: http://policyschool.ucalgary.ca/sites/default/files/research/ross-caribbeancrime.pdf

Shelf Number: 136072

Keywords:
Corruption
Drug Trafficking
Money Laundering
Terrorism

Author: Chatain, Pierre-Laurent

Title: Protecting Mobile Money against Financial Crimes: Global Policy Challenges and Solutions

Summary: Mobile Money is a booming industry in an increasing number of countries worldwide. The project results from increased demand for guidance and technical assistance from governments after the 2008 publication of an exploratory paper, Integrity in Mobile Phone Financial Services, which discussed mobile money and the application of international anti-money laundering (AML) and combating the financing of terrorism (CFT) standards. For most, how to craft a regulatory regime that expands access to financial services to the poor through the development of mobile phone financial services, but compliant with AML/CFT standards remains elusive. Specific AML/CFT regulations related to mobile money have not been issued in many jurisdictions, mainly due to the lack of awareness of the risks these services can pose if the right controls are not in place. Because the international standards for AML/CFT, the Financial Action Task Force's 40 + 9 Recommendations were designed and issued well before mobile money technology and business models became prevalent, even developed countries have begun to face challenges with their regulation. The project team aims to provide practical guidance to jurisdictions and the Industry on how to draft regulations and internal guidelines that allow them to comply with AML/CFT standards with enough flexibility for mobile money to thrive. Specifically, the paper (1) takes stock of new AML/CFT regulations and practices relevant to Mobile money, (2) design guidelines for drafting AML/CFT regulations that cover mobile money and (3) propose examples of best practices for the Industry to include AML/CFT in their own business model.

Details: Washington, DC: The World Bank, 2011. 195p.

Source: Internet Resource: Accessed July 23, 2015 at: http://elibrary.worldbank.org/doi/abs/10.1596/978-0-8213-8669-9

Year: 2011

Country: International

URL: http://elibrary.worldbank.org/doi/abs/10.1596/978-0-8213-8669-9

Shelf Number: 122702

Keywords:
Financial Crime
Money Laundering
Terrorist Financing

Author: Financial Action Task Force

Title: Money laundering and terrorist financing risks and vulnerabilities associated with gold

Summary: Gold provides an alternative means for criminals to store or move their assets as regulators implement stronger anti-money laundering and counter terrorist financing measures to protect the formal financial sector from abuse. The joint FATF-Asia/Pacific Group on Money Laundering report, money laundering / terrorist financing vulnerabilities associated with gold, identifies the many features that make gold attractive to criminals to use as a vehicle for money laundering: it has a stable value, it is anonymous and easily transformable and interchangeable. The highly lucrative gold market also presents proceed-generating opportunities for criminals at each stage, from mining to retailing. Understanding what makes gold - like other precious metals and stones, such as diamonds - attractive to criminals to legitimise their assets and to generate profits is essential in identifying this sector's money laundering and terrorist financing risks. This report provides a series of case studies and red flag indicators to raise awareness of the key vulnerabilities of gold and the gold market, particularly with anti-money laundering/ countering the financing of terrorism practitioners, and companies involved in the gold industry.

Details: Paris: FATF, 2015. 42p.

Source: Internet Resource: Accessed July 29, 2015 at: http://www.fatf-gafi.org/media/fatf/documents/reports/ML-TF-risks-vulnerabilities-associated-with-gold.pdf

Year: 2015

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/ML-TF-risks-vulnerabilities-associated-with-gold.pdf

Shelf Number: 136240

Keywords:
Gold
Money Laundering
Organized Crime
Precious Metals
Terrorist Financing

Author: European Interdisciplinary Analysis Project

Title: Criminal Money Management as a Cutting Edge between Profit Oriented Crime and Terrorism.

Summary: The strategic orientation of the LKA NRW is adjusted to the future. In this concept it is essential, in particular with respect to the fight against organised criminal groups and terror organisations to act jointly and across national borders - with newest methods like the so-called scenario-technique, to come to a better "pre-thinking" of the criminal future. Once more the LKA NRW sets an initiative in this direction. Beginning in December 2005, the LKA NRW, in cooperation with EUROPOL, the University of Ghent and Turkish National Police (TNP) conducted the inter-disciplinary analysis project EDGE with financial support of the EU `AGIS` funding. In the project, on the one hand the scenario method was examined regarding its usability as an instrument for future oriented strategic planning on the field of law enforcement. On the other hand, the field of `Criminal Money Management` as a cutting EDGE between profit oriented crime and terror-ism was chosen as a relevant topic to conduct this examination. As a result, future scenarios and future robust strategic recommendations were developed. The unique collection and analysis of actual international money flows with an illegal background in Europe and Turkey and the interdisciplinary cooperation of experts from the banking sector, criminological science and law enforcement with a harmonized result have, among others, to be regarded as the relevant outputs of the project.

Details: Ghent, Belgium: Ghent University, Institute for International Research on Criminal Policy, 2005. 125p.

Source: Internet Resource: Accessed August 5, 2015 at: http://www.csd.bg/fileadmin/user_upload/Countries/Germany/EDGE_Final_Results.pdf

Year: 2005

Country: Europe

URL: http://www.csd.bg/fileadmin/user_upload/Countries/Germany/EDGE_Final_Results.pdf

Shelf Number: 136331

Keywords:
Money Laundering
Organized Crime
Terrorism
Terrorist Financing

Author: United Nations Office on Drugs and Crime. Independent Evaluation Unit

Title: Law Enforcement Capacity Building in the Fight against Illicit Drug Trafficking in Selected Countries in West Africa

Summary: This Report provides an independent evaluation of UNODC project XAW/U53, entitled "Law Enforcement Capacity Building in the Fight against Drug Trafficking in Selected Countries in West Africa". This project is a direct response to one of the main thematic priorities of the ECOWAS Political Declaration end resulting "Regional Action Plan to Address the Growing Problem of Illicit Drug Trafficking, Organized Crime and Drug Abuse in West Africa, 2008-2011". The project was implemented by UNODC in 2009-2011, with the support of the Government of Italy. The project objective was to build enhanced capacity of law enforcement agencies to combat illicit drug trafficking to and from beneficiary states, i.e. Guinea Bissau, Mali, Sierra Leone and Senegal. On the basis of preliminary assessment missions conducted in July 2009 beneficiary countries clearly expressed the need for the project to focus on the financial crimes component of drug trafficking and TOC, i.e. money laundering. This would enable the project to usefully complement other assistance initiatives that very much focus on law enforcement capacity building, by providing added value when investigating drug trafficking and organized crime cases. The implementing activities consisted essentially of specialized training and were complemented with the delivery of IT and office equipment to the beneficiaries. An independent evaluation was initiated upon completion of project activities. It consisted of a desk review of relevant documents, followed by a field mission that took place from 10 October to 4 November 2011. The purpose of this evaluation was to assess the impact of project activities, as well as to draw lessons from project implementation and make recommendations. Those could be the basis for instituting improvements when planning, designing and managing UNODC technical assistance in the interrelated fields of law enforcement capacity building, countering drug trafficking and anti money laundering.

Details: Vienna: UNODC, 2011. 46p.

Source: Internet Resource: Accessed August 7, 2015 at: http://www.unodc.org/documents/evaluation/ProEvals-2009/ProEvals-2010/ProEvals-2011/XAW_U53_Final_Report_rev3.pdf

Year: 2011

Country: Africa

URL: http://www.unodc.org/documents/evaluation/ProEvals-2009/ProEvals-2010/ProEvals-2011/XAW_U53_Final_Report_rev3.pdf

Shelf Number: 136345

Keywords:
Drug Trafficking
Money Laundering
Organized Crime
Police Training

Author: Council of Europe. Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

Title: Typologies Report on Laundering the Proceeds of Organised Crime

Summary: 1. The project to examine the laundering methods used by organised crime (OC) was approved by the 41st MONEYVAL Plenary in April 2013. It was agreed that the project team should examine the methods used by organised criminal groups to launder illegally earned profits and should try to assess potential regional vulnerabilities. It was also agreed that trends, methods, red flags and indicators, the means of identification and analysis of organised crime money flows should all be addressed in the report in order to enhance the capabilities of competent authorities in such cases. 2. Two expert meetings were held in the context of this research: the inaugural meeting of delegations was organised in October 2013 in Strasbourg; this was followed by a second meeting, bringing together prosecutors and judges in May 2014 in San Marino. 3. The reason for conducting this research is the recognition that OC presents one of the major threats to the Rule of Law in Europe and globally. A large percentage of all the criminal proceeds that are laundered world-wide are laundered by or on behalf of OC. 4. The report highlights a number of significant challenges to the effective investigation and prosecution of laundering the funds derived from organised crime and achieving final confiscation of assets. Some of these problems arise due to a lack of resources or relevant expertise, some due to reluctance of prosecutors in some jurisdictions to tackle difficult cases and some are caused by the very nature of the laundering techniques themselves. The main problems identified were: - Lack of financial, accounting and IT expertise; - Intelligence gaps; - Lack of adequate risk analysis; - Inadequate domestic coordination; - Failure to use the full range of powers and practices available; - The perception of some prosecutors that they have always to identify a specific predicate offence from which the proceeds are derived for a successful 3rd party prosecution; - Reluctance of prosecutors to tackle difficult cases; - Delay in applying provisional measures rendering any subsequent confiscation orders less effective; - Transnational transactions and difficulties caused by mutual legal assistance; - Exploitation of new technologies by organised crime groups; - Lack of transparency of corporate vehicles. 5. The report sets out a number of recommendations on measures that jurisdictions can adopt in order to improve the investigation and prosecution of OC-related ML and the final confiscation of their criminal proceeds. In particular, the report highlights the need to make full use of the powers available to investigators and prosecutors. The recommended measures include: - Ensuring that there is more high-level commitment to prosecuting OC ML and pursuing deterrent confiscation orders in those cases; - Including any special issues raised by OC in the ML national risk assessment; - Ratifying the Warsaw Convention and implementing the revised Financial Action Task Force (FATF) Recommendations 2012 (in particular Recommendation 30 (Responsibilities of law enforcement and investigative agencies)); - Focusing on confiscation; - Focusing on third party money laundering; - Making full use of FIU powers and expertise; - Using financial profiling, trained specialists and expert witnesses; - Developing national cooperation, coordination and feed-back and improving domestic information exchange; - Expediting international information exchange; - Increasing the transparency of information on the real owners of companies and trusts; - Improving financial supervision; - Utilising media campaigns, particularly in relation to the risks of persons being exploited unintentionally by OC as money mules. 6. The report draws conclusions on trends from the responses received. It is noted that OCGs will in practice use all available means to launder the proceeds of crime and have the ability to adapt quickly to changing law enforcement and AML/CFT environments. Nonetheless, a number of particular trends were identified, including exploitation of poorly regulated financial institutions and DNFBPs, as well as an increasing use of international transactions by OCGs. The main trends are, however, mostly typical of money laundering generally, but specifically in the OC context include: - Exploitation of poorly regulated sectors; - Development of transnational infrastructures to launder funds; - Use of legal persons to hide criminally derived funds; - Use of professionals; - Use of new technologies. 7. The report assesses some of the techniques that have proved successful in investigating and prosecuting the laundering of the proceeds from OC and achieving final confiscations. The analysis considers risk identification as a strategic starting point, ways of detecting potential OC-related transactions (both at the level of FIUs and LEAs), the analytical processes involved, financial investigations and financial profiling and also covers challenges to and best practices for the achievement of convictions and confiscations. 8. It appears that OC and ML are rarely analysed at a strategic level by decision-makers together in jurisdictions. The report suggests that a better collective understanding of the OC vulnerabilities and threats is critical for those who are responsible for overall resource allocation for investigation and prosecution of OC cases. 9. The ability of the reporting entities themselves to detect OCG-related funds for reporting purposes seems limited. Financial institutions rely typically on the information available on the internet or from public and commercial databases. 10. At the FIU level, in order to identify potential OCG indicators, the analysts mostly rely on the number of persons involved in suspicious transaction reports (STR). There are no distinctive procedures for OCG-related STRs but, when recognised, such cases are prioritised and analysed in more detail. 11. Financial investigations are always a key element in ML cases, whether the proceeds result from OC activities or not. This survey revealed that, when deciding upon the initiation of parallel financial investigations, there are no differences between an organised crime case and any other case. 12. In some jurisdictions, the criteria for initiation of a parallel financial investigation is provided by legislation and can be activated automatically in proceeds-generating cases. In other jurisdictions the decision is taken by investigators and prosecutors on a case-by-case basis. There are no special investigative powers dedicated to financial investigations carried out in OC cases. The report concludes that wider use of the power to monitor bank accounts and/or to postpone transactions should increase effectiveness in the asset tracing and freezing processes. 13. One useful tool in asset recovery which has been identified is the use of financial profiles. These are descriptions of the investigated persons' licit income compared with their expenditure and lifestyle. Building such profiles can better assist the authorities to identify unexplained wealth. Nonetheless, such profiles are not routinely conducted in OC financial investigations. In some jurisdictions they are made exclusively in the pre-trial stage and do not always constitute admissible evidence. In order to create accurate profiles, LEAs may need access to a variety of information held by others, including Tax, Customs and the FIU. In some jurisdictions this access is on-line; in others formal requests to another authority need to be made. 14. There appears to be a direct link between the international element of ML cases related to OCG, and the duration of the investigation and prosecution processes. These processes frequently become prolonged because of delays in receiving responses to mutual legal assistance requests. The report notes that prosecutors may sometimes request mutual legal assistance, where the evidence required may be capable of proof in other ways, through the more focused use of domestically available circumstantial evidence. 15. In order to increase timeliness and success of prosecutions, some jurisdictions have introduced special courts and/or prosecutors' offices as part of the judicial system, which have nationwide competences and jurisdiction for a series of specific offenses. This system has the advantage of reducing the possibility of local influence and corruption and deepening specialisation of judges and prosecutors in OC-related cases. 16. The report found that various FIUs and other LEAs, with long-standing experience in the ML area (including in its OC component), are capable individually of addressing the issues related to the fight against the legalisation of OC profits, but that often these efforts are fragmented and the overall outcome is limited. The report identifies obstacles in this area. Some of the most frequently noted difficulties related to obtaining evidence from abroad (especially from offshore jurisdictions) and to the continuing lack of transparency of the ownership of investigated corporate vehicles. The complexity of the financial flows which can be involved create particular challenges for investigators and prosecutors. 17. On a more positive note, valuable tools for OC asset tracing, freezing and confiscation were identified in the course of the research. These include exploitation of the analysis by the FIUs, use of FIU powers (monitoring of transactions, postponement), and use of financial profiling techniques. In addition, the more active use of Joint Investigations Teams (JITs) in appropriate transnational OC investigations is recommended. 18. The report identifies that some jurisdictions achieve success in autonomous ML cases without the necessity to establish precisely from which predicate offenses the laundered property comes. These cases are usually based on inferences drawn from facts and circumstances. This is particularly helpful in OC cases. However, the survey also indicated that there still remains resistance in many jurisdictions to challenging the courts with these types of autonomous and stand-alone cases. The report explains some of the jurisprudence in England and Wales on autonomous and stand-alone ML that has been followed in several other jurisdictions. The case studies also describe some of the successes that have been achieved following this line of jurisprudence. It is strongly recommended that more jurisdictions challenge their courts with cases based on this line of jurisprudence where there are OC connections. 19. The infiltration of financial institutions by OC through corruption (or by other means) is sometimes associated with identified criminal activities, such as illicit waste disposal, trafficking in endangered species, illegal investment in real estate projects, the facilitation of illegal immigration, drug and weapons trafficking, document counterfeiting and crimes which can be facilitated only with the authorisations of local or national administrations. While the incidence of this finding is not measured, it is considered that jurisdictions where the above-mentioned predicate offenses are prevalent, should be more alert to the risks of OC infiltrating financial institutions for ML purposes. 20. Finally the report focuses on typologies of ML cases where OC proceeds were laundered. It appears that the most common proceeds-generating crimes are of a financial nature (all forms of fiscal frauds, including tax evasion and internet-related frauds). The survey revealed that the FIUs' capacity and expertise in financial analysis is underused by law enforcement.

Details: Strasbourg: COE, 2015. 93p.

Source: Internet Resource: Accessed August 7, 2015 at: http://www.coe.int/t/dghl/monitoring/moneyval/Typologies/MONEYVAL(2015)20_typologies_launderingtheproceedsoforganisedcrime.pdf

Year: 2015

Country: Europe

URL: http://www.coe.int/t/dghl/monitoring/moneyval/Typologies/MONEYVAL(2015)20_typologies_launderingtheproceedsoforganisedcrime.pdf

Shelf Number: 136350

Keywords:
Asset Forfeiture
Criminal Investigations
Financial Crimes
Money Laundering
Organized Crime

Author: AsiaPacific Group on Money Laundering

Title: APS Typology Report on Trade Based Money Laundering

Summary: 1. Trade Based Money Laundering (TBML) was recognized by the Financial Action Task Force (FATF) in its landmark 2006 study as one of the three main methods by which criminal organizations and terrorist financiers move money for the purpose of disguising its origins and integrating it back into the formal economy. This method of money laundering (ML) is based upon abuse of trade transactions and their financing. The 2006 FATF Study highlighted the increasing attractiveness of TBML as a method for laundering funds, as controls on laundering of funds through misuse of the financial system (both formal and alternate) and through physical movement of cash (cash smuggling) become tighter. 2. In recent years APG members have continued to highlight vulnerabilities for TBML, but very few cases investigations or prosecutions appear to have been undertaken in the Asia/Pacific region and very few case studies had been shared. 3. The APG's TBML study aims to build on the existing studies, in particular those of the FATF, in order to study the extent of the prevalence of TBML and highlight current methods, techniques and modus operandi for TBML as well as to identify 'red flags' to detect and respond to TBML. 4. In determining the magnitude of TBML, the study considered why so few cases of TBML have been detected since the FATF's 2006 study. The Paper has sought to clarify and furnish explanations for terms and processes of 'trade finance' which are comprehensible to Money Laundering (ML) investigators. 5. This Paper has focused on TBML occurring in the course of international trade in goods. The study does not include in its scope capital flight, tax evasion, trade in services and domestic trade. The features of the dynamic environment that distinguish TBML from other forms of ML are its occurrence through intermingling of the trade sector with the trade finance sector in cross- border transactions. The foreign exchange market and the long supply chain make international trade particularly vulnerable to TBML. 6. The study included circulation of a questionnaire to APG and FATF members seeking statistically significant indicators. The Paper sets out a number of Case Studies to illustrate trends of TBML. Simplified explanations of the terms and processes of trade finance have been attempted through interaction with the private sector. A brief review of the literature on the subject generated by the FATF, FSRBs and other authors has been made. 7. There is a growing concern on how the rapid growth in the global economy has made international trade an increasingly attractive avenue to move illicit funds through financial transactions associated with the trade in goods and services. TBML is a complex phenomenon since its constituent elements cut across not only sectoral boundaries but also national borders. The dynamic environment of international trade allows TBML to take multiple forms.

Details: Sydney: Asia/Pacific Group on Money Laundering, 2012. 93p.

Source: Internet Resource: Accessed August 7, 2015 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Trade_Based_ML_APGReport.pdf

Year: 2012

Country: Asia

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Trade_Based_ML_APGReport.pdf

Shelf Number: 136353

Keywords:
Financial Crime
Illegal Trade
Money Laundering
Organized Crime
Terrorist Financing

Author: Institute for Foreign Policy Analysis

Title: A Comprehensive Approach to Combating Illicit Trafficking

Summary: Responsible for more than $300 billion per year in trade and comprising a wide variety of products shipped over a complex web of interlocking transport routes, illicit trafficking constitutes a major security challenge that no single country or anti-trafficking organization could possibly manage alone. Indeed, the cross-border and transnational nature of the trade, combined with its diversity and the increasing agility and technological sophistication of the traffickers involved, demands a multilateral and multidimensional response from those who hope to combat it. An effective response, moreover, will require much closer coordination between the public and private sectors than exists today, as well as sturdier partnerships between and among the many national, regional, and international agencies - including a host of intergovernmental organizations (IGOs) - now charged with responsibility for one or another dimension of the illicit trafficking challenge. Indeed, pooling the expertise and resources of all the relevant stakeholders in support of an overarching comprehensive approach that leverages their collective capabilities is arguably the only way to make As for the specifics of a comprehensive approach, it must address several underlying characteristics of the current trafficking problem that are not widely understood and remain difficult to manage. First, in addition to the multi-product and inter-regional aspects of illicit trafficking noted above, a comprehensive approach must come to grips with the way in which many legal activities - including those performed by white-collar, middle-class collaborators - are intertwined with and help to facilitate illegal activities in the trafficking realm. Second, such an approach must also understand (and target) the many linkages that exist between and among the various trafficking streams for the shipment of drugs, small arms and light weapons (SALW), chemical, biological, radiological, and nuclear (CBRN) materials, counterfeit products, laundered money, and human beings, as well as the way in which control over the transit route for one type of commodity may allow traffickers to control the flow of other goods, both legal and illegal, that pass along the same route. Third, and on a related note, the anti-trafficking community must fully expect, and prepare for the prospect, that illicit traffickers will try to shift their shipments, if at all possible, from route to route - and from one form of transport to another - in order to avoid detection and interception. Closing off one trafficking flow, therefore, may simply trigger the opening of a new route in a less carefully monitored part of the world. Further on this last point, in today's globalized economy, illicit traffickers are increasingly inclined to base their operations in remote and poorly governed areas, where they can conduct business relatively free of outside interference. They appear to be especially partial to what the head of the UN's Office on Drugs and Crime (UNODC) recently referred to as "geographic blind spots" - that is, largely forgotten areas in failed or failing states that are "out of government control, and too scary for investors and tourists," where radar, satellite, and other forms of surveillance are limited or nonexistent. Operating from such locations, traffickers can run fleets of ships, planes, and trucks loaded with a mix of products with little fear of disruption. Many of these areas, moreover, are burdened with large numbers of unemployed youth who are often all too willing to provide the traffickers with a local workforce that has few alternatives to make money, and is likely to remain compliant. Hence, in addition to better surveillance and interdiction capabilities, any serious effort to stem illicit trafficking must also include a development component aimed at easing (if not eradicating) the socio-economic and political vulnerabilities in "blind spot" territories that traffickers seek to exploit. As suggested above, yet another increasingly important dimension of illicit trafficking to bring under a comprehensive approach is the ever-expanding and more sophisticated use of technology by traffickers. Access to the latest technology, including satellite hook-ups, cell phones, and GPS equipment, is effectively what has empowered loose bands of poor, illiterate Somalis to capture ocean-going vessels operated and/or relied upon by the world's richest and most powerful countries. So, too, cyber crime has allowed traffickers in remote areas to steal the identities of people half a world away, while also facilitating money laundering via lax banks and/or corrupt officials. In the not too distant future, access by traffickers to the technical skills and equipment necessary to handle CBRN-related materials could easily promote a growth in the trade of these key components of weapons of mass destruction (WMD). Getting a better handle on the many ways in which technology is likely to be used by traffickers and their fellow travelers in the years to come, therefore, will require input from a wide array of public- and private-sector technology experts. Equally important, a public-private initiative along these lines holds the best chance of discovering how the anti-trafficking community itself can leverage technology to detect and disrupt smuggling and related crimes. There is also a need for much greater informa eater information sharing between and among anti-trafficking groups with regard to current and emerging trafficking routes, the products and services being trafficked along these routes, the number of traffickers using these routes, and the inter-relationships between and among these traffickers. Closer institutional collaboration on such matters would be particularly helpful within regions (and between adjacent regions) where illicit trafficking is well entrenched, but where intra- and inter-regional cooperation may be hampered by ethnic and sectarian rivalries, unresolved border disputes, and contrasting approaches to law enforcement. Important steps have been taken in this regard, including ongoing efforts to strengthen countersmuggling capabilities along the infamous Great Silk Road via national and IGO support for the Southeast European Cooperative Initiative (SECI) in Romania and the Central Asian Regional Information and Coordination Centre (CARICC) in Kazakhstan. Similar initiatives can and should be pursued in other regions where traffickers now thrive.

Details: Cambridge, MA: Institute for Foreign Policy Analysis, 2010. 202p.

Source: Internet Resource: Accessed August 8, 2015 at: http://www.sipri.org/research/security/transport/files/existing-good-practice/united-states-4

Year: 2010

Country: International

URL: http://www.sipri.org/research/security/transport/files/existing-good-practice/united-states-4

Shelf Number: 136363

Keywords:
Human Trafficking
Illegal Trade
Illicit Trafficking
Money Laundering
Organized Crime
Smuggling

Author: Desta, Tu'emay Aregawi

Title: ISSP-CGCC Joint Baseline Study on Anti-Money Laundering and Countering the Financing of Terrorism in the IGAD Subregion

Summary: Money laundering and terrorist financing are major, interconnected problems for East Africa and the Horn. As the World Bank's World Development Report 2011 makes clear, they pose a significant threat not only to security but also to development. Both the Financial Action Task Force (FATF) and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) have identified a number of states in the subregion as demonstrating weak implementation of international standards on anti-money laundering (AML) and countering the financing of terrorism (CFT). Some states in the subregion (Ethiopia and Kenya) have even been placed within the FATF International Cooperation Review Group (ICRG) process, which can ultimately lead to obstacles to engagement with the international financial system. There is consequently a growing recognition that states in the Intergovernmental Authority on Development (IGAD) subregion stand to benefit in multiple ways from a more concerted effort to combat money laundering and terrorist financing. There is also, however, a chronic limitation of data and knowledge about the problems of money laundering and terrorist financing and about AML/CFT vulnerabilities, risks, and capacities in the subregion. States of the subregion have their own specific vulnerabilities, challenges, weaknesses, and strengths, even as they share certain cross-cutting challenges. In this Baseline Study, the IGAD Security Sector Program (ISSP) and the Center on Global Counterterrorism Cooperation (CGCC) set out with support from the Royal Government of Denmark to provide a more detailed and nuanced analysis of AML/ CFT challenges and opportunities in the IGAD region, to inform a better allocation of resources to risk and to potential return on investment. The study is a joint effort developed in response to repeated requests by the ISSP's and the CGCC's governmental, intergovernmental, private sector, and civil society partners in the subregion who sought assistance in obtaining baseline data about money laundering risks and AML capacity in the region and guidance on the data's potential use for CFT efforts. Throughout the project design and execution, emphasis has been placed on local ownership. Experts from the East African and Horn subregion coordinated and conducted the project and, where appropriate, also drew on outside expertise. This included input from members of the Danish, Malawian, and Nigerian financial intelligence units (FIUs). The study was prepared by a project team of 10 independent researchers with logistical support and analytical guidance from the ISSP and the CGCC and an informal advisory group of interested officials, academics, and business professionals from the subregion, serving in a personal capacity. That advisory group met twice in Addis Ababa: in October 2011 to help frame the project and develop the research methodology and in March 2012 to critique the resulting analysis and a draft version of this report. The final draft report was shared with all IGAD member states for further review, interagency discussion, comment, and revision. The ISSP and the CGCC approved this report before publication. This study does not provide an exhaustive catalogue or review of money laundering and terrorist financing risks or AML/ CFT efforts in the subregion. Also, it does not purport to provide a categorical assessment of specific AML/CFT projects in the subregion or a country's "performance." This study did not set out to replicate the technical proficiency or political legitimacy of a FATF or ESAAMLG assessment or peer review. Instead, this study represents the collected views of stakeholders in the subregion, gathered by a group of independent analysts, convened by the ISSP and the CGCC, and guided by our Advisory Group. Our aim was not to pass judgment but to provide some starting points for an inclusive and, we hope, coordinated and evidence-based discussion in the years ahead among many stakeholders - national, international, private sector, and civil society - regarding strengthening AML/CFT capacities in the IGAD subregion. This study explores AML/CFT efforts in Djibouti; Eritrea; Ethiopia; Kenya; Somalia, including Transitional Federal Government (TFG) and non-TFG efforts; South Sudan; Sudan; and Uganda and at the regional and subregional level (the African Development Bank [AfDB], the African Union [AU], the East African Community [EAC], the East African Development Bank [EADB], the ESAAMLG, and IGAD). Researchers developed desk analysis that was tested through roughly week-long field visits, during which researchers met with relevant local and foreign government officials, civil society actors, private sector entities, and independent analysts. Twenty to 25 interviews were conducted for most jurisdictions - approximately 160 in all - over the course of 60 days of fieldwork. Interviewers used a semistructured format responding to a common set of research questions. The names and institutional affiliations of interviewees have been withheld to ensure confidentiality; a list of institutions that participated may be provided on request. Due to limited resources and concerns about the physical security of the researchers, a methodology not involving field visits by external researchers was used for Eritrea and Somalia. Analysis for these jurisdictions should be read with additional caution, as further verification of the results may be necessary before they can serve as the basis for policy development. A separate chapter of the Baseline Study addresses each of the covered jurisdictions. As far as possible, each chapter addresses similar issues. - Money laundering and terrorist financing risks and vulnerabilities and how they are perceived by different stakeholders. - An overview of AML/CFT efforts, including discussion of capabilities and resources (material, legal, human, financial, and political) and how they are perceived by different stakeholders. - An identification of key entry points for international assistance and support to local stakeholders to promote AML/CFT efforts.

Details: New York; Addis Ababa: Center on Global Counterrorism Cooperation, 2012. 92p.

Source: Internet Resource: Accessed August 19, 2015 at: http://globalcenter.org/wp-content/uploads/2012/11/AML_Report.pdf

Year: 2012

Country: Africa

URL: http://globalcenter.org/wp-content/uploads/2012/11/AML_Report.pdf

Shelf Number: 136482

Keywords:
Counterterrorism
Financial Crimes
Money Laundering
Terrorist Financing

Author: Centre for Security Studies - BH

Title: Study of Organised Crime in Bosnia and Herzegovina

Summary: The Study of Organised Crime in Bosnia and Herzegovina is based on the need to make it easier for decision-makers in government institutions to identify the priority strategic areas in the fight against organised crime. It was initiated by the wish to fill the possible gaps that may appear in the public policies developed solely on the information and data in the possession of government institutions. The analysis of the citizens' views and perceptions of the issues falling within the scope of responsibility of the relevant agencies should be one of the sources of information to which officials will give adequate attention, in particular bearing in mind that it is related to the rule of law and threats to human security. The results presented in this study are the product of the analysis of the qualitative and quantitative data, within a complex approach to the phenomenon of organised crime which had to be examined from various aspects. Hence, the approach to the implementation of the research had to be multi-dimensional, giving the same amount of weight to institutions in the area of justice and security but also to the sources which are not part of government albeit deeply engaged in efforts to fight organised crime through their own activities. This study does not go deep into or draw attention to either completed or still pending investigations of individual criminal activities conducted by relevant institutions. Rather, its goal is to identify, from the civil society perspective, the areas of real threats which should be taken into consideration when developing national strategies, with recommendations for concrete actions plans to fight organised crime. - A diverse array of criminality covered under organised crime, the various forms of its manifestation and a multitude of other characteristics organised crime contains resulted in the absence of the general consensus in either theory or legislation over what the term organised crime encompasses. - Most of domestic and international authors believe that organised crime encompasses the component of the necessary existence of the link between a criminal organisation and the state and its authorities, as an important element of organised crime. - International literature contains the vast array of definitions of organised crime. Prominent among them is the UN definition under which organised crime is: "a large scale and complex criminal activity carried on by groups of persons, however loosely or tightly organised, for the illegal enrichment of those participating at the expense of the community and its members". - The European Union did not accept the model of developing a single definition of organised crime. Rather, it adopted a list of 11 characteristics of organised crime, of which six must be present for any crime to be classified as organised crime. - Under the Criminal Code of Bosnia and Herzegovina, an organised crime group is defined as an organised group of at least three persons, which has existed over a certain period of time, operating for the purpose of committing one or more criminal acts which are punishable by imprisonment for a term not less than three years or a heavier punishment. - The authors from our country and the region share the opinion that the main motivating power of organised crime, as a heterogeneous and complex phenomenon, is financial gain, or more precisely, generation of massive profits quickly, and no risk of exposure in such criminal activities. - Analysing the significant number of international documents treating organised crime-related issues, we can say that there is a huge number of organised crime activities, although among the most dominant are certainly trafficking in drugs, money laundering, trafficking in human beings, and vehicle theft. - Bosnia and Herzegovina's institutional capacities for fighting organised crime exist. They are numerous, ranging across a broad spectrum, from legislative, operational, advisory to controlling capacities. At the level of BiH, there are 142 institutions which have a role to play in fighting organised crime.

Details: Sarajevo: Centre for Security Studies, 2014. 106p.

Source: Internet Resource: Accessed August 20, 2015 at: http://europa.ba/wp-content/uploads/2015/05/delegacijaEU_2014080112003740eng.pdf

Year: 2014

Country: Bosnia and Herzegovina

URL: http://europa.ba/wp-content/uploads/2015/05/delegacijaEU_2014080112003740eng.pdf

Shelf Number: 136503

Keywords:
Drug Trafficking
Human Trafficking
Money Laundering
Organized Crime
Vehicle Theft

Author: Saunders, Jade

Title: EUTR CITES and money laundering: A case study on the challenges to coordinated enforcement in tackling illegal logging

Summary: This paper considers three EU policy mechanisms which have the potential to reduce incentives for illegal exploitation of forest resources in producer countries: the EU Timber Regulation (EUTR), CITES and anti-money laundering legislation. Looking at four EU countries (the Czech Republic, Italy, the Netherlands and the United Kingdom) and two producer countries (Ghana and Indonesia) it describes sanctions regimes and enforcement efforts, and identifies opportunities for improved cooperation by national and EU agencies. While the available data is limited, the paper finds that enforcement has been reasonably successful given the early stage of implementation. There are some synergies between EUTR and CITES, whereas anti-money laundering legislation is not generally relied on to address environmental crimes. The paper finds significant variance between enforcement systems in the EU member states, and concludes that European Commission leadership is essential to establishing the consistency necessary for effective enforcement in the EU market. With regard to the issue of environmental crime generally, the paper concludes that in the case studies, 'criminalization' of environmentally harmful activities has primarily been guided by the nature of the sanctions considered necessary to address the problem in question.

Details: London: Chatham House, 2015. 47p.

Source: Internet Resource: A study for the EFFACE project. Accessed August 21, 2015 at: http://efface.eu/sites/default/files/EFFACE_EUTR%20CITES%20and%20money%20laundering%20A%20case%20study%20on%20the%20challenges%20to%20coordinated%20enforcement%20in%20tacking%20illegal%20logging.pdf

Year: 2015

Country: Europe

URL: http://efface.eu/sites/default/files/EFFACE_EUTR%20CITES%20and%20money%20laundering%20A%20case%20study%20on%20the%20challenges%20to%20coordinated%20enforcement%20in%20tacking%20illegal%20logging.pdf

Shelf Number: 136522

Keywords:
Forests
Illegal Logging
Money Laundering
Offenses Against the Environment
Organized Crime

Author: Galabov, Antoniy

Title: Legislation Meets Practice: National and European Perspectives in Confiscation and Forfeiture of Assets: Comparative Report.

Summary: In order to disrupt organised crime activities it is essential to deprive criminals of the proceeds of crime. Organised crime groups are building largescale international networks and amass substantial profits from various criminal activities. The proceeds of crime are laundered and re-injected into the economy to be legalised. The confiscation/forfeiture and recovery of criminal or illegal assets is considered as a very effective way to fight organised crime, which is essentially profit-driven. Seizing back as much of these profits as possible aims at hampering activities of criminal organisations, deterring criminality and providing additional funds to invest back into law enforcement activities or other crime prevention initiatives. The relevance of this problematic is in removing the economic gain from serious crime (including, but not limited to drug trafficking, corruption, money laundering, organised crime) in order to discourage the criminal conduct. Its importance is evidenced by the number of multilateral treaties that have been concluded and provide obligations for states to cooperate with one another on confiscation, asset sharing, legal assistance, and compensation of victims. Several United Nations conventions and multilateral treaties contain provisions with regard to confiscation and forfeiture. The issue is also a matter of interest at European Union (EU) level with the new legislation adopted. However challenges still remain and should be addressed, so that cooperation can be more effective, since anti-fraud policy should be targeted in a trans-border perspective. The Stockholm programme called upon the Member States and the Commission to make the confiscation of criminal assets more efficient and to strengthen the cooperation between Asset Recovery Offices (AROs)3; EC report on cooperation between AROs (2011) has identified common capacity problems (insufficient personnel and resources, lack of common legislative framework), inadequate access to databases and judicial statistics. In this context, three national chapters of Transparency International, being also EU Member States, (TI-Bulgaria, TI-Italy and TI-Romania) are conducting a 24-month research and independent civil monitoring over the legal, institutional, and operational modes of the Asset Recovery Offices (AROs) and policies to outline their main strong and weak aspects in terms of competencies, capacity, performance and integrity. The aim of the project "Enhancing Integrity and Effectiveness of Illegal Asset Confiscation - European Approaches", funded by the "Prevention of and Fight against Crime" programme carried out by DG Home Affairs of the European Commission, is to support the effectiveness, accountability and transparency of asset confiscation/ forfeiture policies and practices in Europe, allowing for improved cooperation between authorities in Member states (MSs). The research provided for objective understanding of main strong and weak points in asset confiscation/ forfeiture legal, institutional and policy practices in Bulgaria, Romania and Italy. It became the basis for the independent civil monitoring and the exchange of know-how and good practices. The addressed shortcomings and recommendations will trigger improvement of the institutional and procedural capacities of national confiscation/forfeiture authorities at local and EU level, especially regarding transparency, accountability, integrity, modes of operation, human resource management, coherence with other relevant authorities, access to databases, use of expertise in asset assessments, cost effectiveness. The project findings from the monitoring (lessons learnt) will also be disseminated via the Transparency International network on regional, EU and international level. Ultimately, this means strengthened capacities of AROs, better chances for cooperation between MSs and civil society representatives. The publication is based on the work of the three national chapters of Transparency International that analyse and monitor the national models of confiscation/forfeiture of assets in Bulgaria, Italy and Romania. The aim is to provide information on the national approach on confiscation/forfeiture as regulated by the national law as well as to provide information on its implementation, based on civil monitoring on real cases tackled by the national confiscation authorities. The publication includes summaries of the three national models of confiscation/forfeiture of illegal/criminal assets (Bulgaria, Italy and Romania). In this part a critical analysis of the legislation is made to be used as a basis for identification of strong and weak features of each model. This is the basis for concrete recommendation for improvement of each model. The second part of the publication includes summaries of the reports for monitoring of the activities of the national confiscation/forfeiture authorities in the three countries. The actual reports are presented as attachments at the end of the book. Each monitoring report includes specific recommendations for improvement. The analysis of the indicators for transparency, integrity, accountability and efficiency in the work of confiscation authorities, based on the active monitoring, is provided as well. In addition the paper provides for a model for civil monitoring of the activities of national confiscation/ forfeiture authorities, which is irrelevant of the specific national model and could be used by civil society organizations in any country to monitor the activities of institutions in this respect. The presentation gives a special focus on the elaboration of an "ideal model" for confiscation/forfeiture at national level. This model is perceived as a set of common standards which should be applied in all EU MSs, in order to achieve transparency, accountability, integrity, efficiency and human rights protection, when confiscation/forfeiture procedures are at stake. Last but not least, the book provides for recommendations for adoption of more advanced common European standards at EU level in the field of confiscation/forfeiture of assets. Further improvement of the existing EU regulations shall contribute to the more successful work of national authorities.

Details: Sofia: Transparency International Bulgaria, 2015. 132p.

Source: Internet Resource: Accessed August 24, 2015 at: http://www.transparency.bg/media/publications/Final_Report_EN_web.pdf

Year: 2015

Country: Europe

URL: http://www.transparency.bg/media/publications/Final_Report_EN_web.pdf

Shelf Number: 136565

Keywords:
Asset Forfeiture
Drug Trafficking
Money Laundering
Organized Crime
Proceeds of Crime

Author: Fontana, Alessandra

Title: Making development assistance work at home: DfID's approach to clamping down on international bribery and money laundering in the UK

Summary: Corruption will remain a profitable crime in developing countries as long as counterparts in rich countries are willing to hide stolen resources. Working to improve governance in poor countries will only address part of the issues. To disrupt the mechanisms that enable illicit outflows, the UK Department for International Development is funding the City of London Police, the Metropolitan Police and the Crown Prosecution Service to increase investigations on money laundered by senior political figures in the UK. In 4 years, millions of pounds have been frozen and repatriated - indicating a shift in thinking in what counts as development work in a world with global patterns of corruption.

Details: Bergen: Chr. Michelson Institute, Anti- Corruption Resource Centre, 2011. 13p.

Source: Internet Resource: U$ Practice Insight, 2011:5: Accessed August 25, 2015 at; http://www.u4.no/publications/making-development-assistance-work-at-home-dfid-s-approach-to-clamping-down-on-international-bribery-and-money-laundering-in-the-uk/

Year: 2011

Country: United Kingdom

URL: http://www.u4.no/publications/making-development-assistance-work-at-home-dfid-s-approach-to-clamping-down-on-international-bribery-and-money-laundering-in-the-uk/

Shelf Number: 136581

Keywords:
Asset Forfeitures
Bribery
Corruption
Money Laundering
Organized Crime

Author: Center for the Study of Democracy

Title: Overcoming Institutional Gaps to Tackle Illicit Financing

Summary: The EU legal framework requires that all Members States criminalise the financing of organised crime. According to the provisions of Article 2 (a) of the Council Framework Decision 2008/841/JHA of 24 October 2008 on the fight against organised crime "Each Member State shall take the necessary measures to ensure that one or both of the following types of conduct related to a criminal organisation are regarded as offences: (a) conduct by any person who, with intent and with knowledge of either the aim and general activity of the criminal organisation or its intention to commit the offences in question, actively takes part in the organisation's criminal activities, including the provision of information or material means, the recruitment of new members and all forms of financing of its activities, knowing that such participation will contribute to the achievement of the organisation's criminal activities." Nevertheless, criminal justice authorities in Members States rarely make use of these provisions.

Details: Sofia: Center for the Study of Democracy, 2015. 9p.

Source: Internet Resource: Policy Brief No. 50: Accessed August 26, 2015 at: http://www.csd.bg/artShow.php?id=17367

Year: 2015

Country: Europe

URL: http://www.csd.bg/artShow.php?id=17367

Shelf Number: 136589

Keywords:
Financial Crime
Money Laundering
Organized Crime

Author: Spanjers, Joseph

Title: Illicit Financial flows and Development Indices: 2008-2012

Summary: This June 2015 report, the latest in a series by Global Financial Integrity (GFI), highlights the outsized impact that illicit financial flows have on the world's poorest economies. The study looks at illicit financial flows from some of the world's poorest nations and compares those values to some traditional indicators of development-including GDP, total trade, foreign direct investment, public expenditures on education and health services, and total tax revenue, among others-over the period 2008-2012. The report also produces several scatter plots in which illicit flows values for all developing and emerging market nations are compared to key trade indicators and various development indices, such as human development, inequality, and poverty, to determine if correlations exist between the two. By two different measures of poverty, the study reveals a positive correlation between higher levels of poverty and larger illicit outflows. That is, countries with higher levels of illicit financial flows (relative to GDP) tend to struggle with higher levels of poverty.

Details: Washington, DC: Global Financial Integrity, 2015. 56p.

Source: Internet Resource: Accessed September 16, 2015 at: http://www.gfintegrity.org/wp-content/uploads/2015/05/Illicit-Financial-Flows-and-Development-Indices-2008-2012.pdf

Year: 2015

Country: International

URL: http://www.gfintegrity.org/wp-content/uploads/2015/05/Illicit-Financial-Flows-and-Development-Indices-2008-2012.pdf

Shelf Number: 136786

Keywords:
Corruption
Financial Crime
Money Laundering
Poverty
Tax Evasion
White Collar Crime

Author: Voorhout, Jill Coster van

Title: Curbing Illicit Financial Flows: The Post-2015 Agenda and International Human Rights Law

Summary: Corruption, which was identified as a cross-cutting theme in our Institute's program of work for 2013, is not only a problem in its own right but also part of the "larger" issue of illicit financial flows (IFFs). Simply put, IFFs deprive governments in both developed and developing countries of resources that might otherwise be invested in public goods such as health, agriculture, infrastructure, and education. IFFs concern both illicit money and in- and outflows of money, and corruption is both their cause and consequence. Corruption often "generates" the illicit money, which also can stem from fraud or trafficking of persons, drugs, weapons, or other illegal goods. In addition, abuse of entrusted power for private gain - as corruption is commonly defined - often lures in in- and outflows of money - for instance, when illegal money is laundered to leave via the regular financial system or when local authorities negotiate tax concessions and incentives for (foreign) investment for states, companies, or individuals. Often corruption and IFFs are mutually reinforcing, and have a negative spiraling effect on a country's economy, weakens governance, and affects the rule of law. For example, illegal money fuels the commission of further crimes and the potential for in- and outflows of capital, whether legally or illegally "earned", poses opportunities for corruption and other illegal acts. Therefore, we include corruption under the definition of IFFs but exclude the legal practice of tax avoidance (as opposed to tax evasion, which is illegal per se). A comprehensive approach is taken to IFFs at the intersection of peace, security and justice, by combining perspectives of conflict prevention, rule of law, and global governance. The result is two policy recommendations: (i) to incorporate the rule of law in the post-2015 agenda, also under draft goal 12e aimed at tackling IFFs, and (ii) to use human rights obligations and responsibilities to curb IFFs. These recommendations are made to three audiences: (a) policymakers, who work at the national and international level and through multilateral institutions such as the Organisation for Economic Co-operation and Development (OECD), the World Bank, and the International Monetary Fund (IMF), (b) business representatives, who can contribute both positively and negatively to IFFs and their control, and (c) "facilitators" of IFFS such as lawyers and accountants. Our ultimate aim with these recommendations is to encourage post-2015 funding by a coalition of public-private and state-nonstate financiers, and promote human rights obligations for states and responsibilities for businesses, including law and accountancy firms, and "facilitators" of IFFS.

Details: The Hague: The Hague Institute for Global Justice, 2014. 20p.

Source: Internet Resource: Policy Brief 8: Accessed September 21, 2015 at: http://www.globalinitiative.net/download/financial-crime/global/Hague%20Institute%20for%20Global%20Justice%20-%20Curbing%20Illicit%20Financial%20Flows%20Post%202015%20-%20May%202014.pdf

Year: 2014

Country: International

URL: http://www.globalinitiative.net/download/financial-crime/global/Hague%20Institute%20for%20Global%20Justice%20-%20Curbing%20Illicit%20Financial%20Flows%20Post%202015%20-%20May%202014.pdf

Shelf Number: 136840

Keywords:
Corruption
Financial Crimes
Money Laundering

Author: Great Britain. HM Treasury

Title: UK national risk assessment of money laundering and terrorist financing

Summary: This is the UK's first money laundering and terrorist financing national risk assessment (NRA). In conducting this assessment the aim is to identify, understand and assess the money laundering and terrorist financing risks faced by the UK. Money laundering can undermine the integrity and stability of our financial markets and institutions. It is a global problem. The European Commission's 2013 impact assessment of the EU anti-money laundering/counter terrorist financing legislative framework points to global criminal proceeds potentially amounting to some 3.6% of GDP; around US$2.1 trillion in 2009. The best available international estimate of amounts laundered globally would be equivalent to some 2.7% of global GDP or US$1.6 trillion in 2009. Both money laundering itself, and the criminality which drives the need to launder money, present a significant risk to the UK. The laundering of proceeds of overseas corruption into or through the UK fuels political instability in key partner countries. The NCA judges that billions of pounds of suspected proceeds of corruption are laundered through the UK each year. Money laundering is also a key enabler of serious and organised crime, the social and economic costs of which are estimated to be $24 billion a year. Taken as a whole, money laundering represents a significant threat to the UK's national security. The government's 2013 Serious and Organised Crime Strategy set out plans to make it harder for criminals to move, hide and use the proceeds of crime. There is a marked overlap between money laundering and terrorist financing - both criminals and terrorists use similar methods to store and move funds. However, the motive for generating and moving funds differs. Terrorists ultimately need money to commit terrorist attacks. Unlike criminal gangs, terrorist groups involve disparate individuals coming together through a shared motivation and ideology. Finance is an essential aspect of enabling terrorist groups to function, recruit and commit terrorist acts. A lack of funds can have a direct effect on the ability of terrorist organisations and individuals to operate and to mount attacks. There is evidence of terrorist financing activity in the UK and terrorist financing poses a significant threat to the UK's national security. The UK recognises that countering terrorist financing is important in protecting national security. Countering terrorist financing forms a key part of the UK's CONTEST counter-terrorism strategy with the aim being to reduce the terrorist threat to the UK and its interests overseas by depriving terrorists and violent extremists of the financial resources and systems required for terrorism-related activity.

Details: London: HM Treasury and Home Office, 2015. 110p.

Source: Internet Resource: Accessed October 15, 2015 at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/468210/UK_NRA_October_2015_final_web.pdf

Year: 2015

Country: United Kingdom

URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/468210/UK_NRA_October_2015_final_web.pdf

Shelf Number: 136990

Keywords:
Money Laundering
Organized Crime
Terrorism
Terrorist Financing

Author: Global Financial Integrity

Title: Illicit Financial Flows: The Most Damaging Economic Condition Facing the Developing World

Summary: The book features five condensed and updated quantitative country studies on illicit financial flows (IFFs) from India, Mexico, Russia, the Philippines, and Brazil by GFI Chief Economist Dr. Dev Kar, as well as chapters written by GFI President Raymond Baker and Managing Director Tom Cardamone. Dr. Thomas Pogge, Leitner Professor of Philosophy and International Affairs at Yale University, writes on the human rights impact of illicit financial flows. The relationship between illicit flows and development is considered by Erik Solheim, the chair of the OECD's Development Assistance Committee.

Details: Washington, DC: Global Financial Integrity, 2015. 192p.

Source: Internet Resource: accessed October 28, 2015 at: http://www.gfintegrity.org/wp-content/uploads/2015/09/Ford-Book-Final.pdf

Year: 2015

Country: International

URL: http://www.gfintegrity.org/wp-content/uploads/2015/09/Ford-Book-Final.pdf

Shelf Number: 137168

Keywords:
Bribery
Developing Countries
Financial Crimes
Money Laundering
Tax Evasion

Author: Financial Action Task Force

Title: Mutual Evaluation of Mexico. Interim Follow-Up Report

Summary: The level of compliance of Mexico's anti-money laundering and counter-terrorist financing (AML/CFT) regime with the FATF 40+9 Recommendations was evaluated in 2008 by a team conformed by representatives from the Financial Action Task Force (FATF), the FATF-Style Regional Body for South America (GAFISUD) and the International Monetary Fund (IMF). The evaluation led to the country's Mutual Evaluation Report (MER), which was adopted by the FATF Plenary in October 2008. The MER identified several strengths in the country's AML/CFT regime, but also areas of opportunity for its improvement in full consistency with the FATF Recommendations. In this sense, specific observations were made to the case of Mexico, and the country entered into a regular follow-up process. In terms of the FATF regular follow-up process, the Government of Mexico (GOM) has kept the FATF and its members informed of its actions and achievements to fully comply with the observations included in the country's MER. The GOM has previously submitted follow-up reports in October 2010 and October 2011. The GOM is now submitting its Third Follow-up Report. This report intends to provide the FATF and the international community with a comprehensive overview of the overall progress that the GOM has made in the prevention and combating of ML/FT during the past four years. Since the MER was adopted, the GOM has substantially increased its efforts in the fight against ML/FT. These efforts have resulted in important actions to establish a complete and sound AML/CFT legal and institutional framework. As a result, we are convinced that Mexico's current AML/CFT regime is far more advanced than it was before, when the MER was conducted.

Details: Paris: FATF, 2012. 192p.

Source: Internet Resource: Accessed November 9, 2015 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Interim%20Follow-up%20Report%20Mexico.pdf

Year: 2012

Country: Mexico

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Interim%20Follow-up%20Report%20Mexico.pdf

Shelf Number: 137220

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Ayogu, Melvin D.

Title: Illicit Financial Flows and Stolen Assets Value Recovery

Summary: Value recovery of stolen assets is both an enforcement of anti-money laundering laws and a potent weapon against corruption. When obtainable, it represents society's credible commitment to ensure that "crimes do not pay." We explore these linkages by reviewing international experiences on the implementation of value recovery. Lessons suggest country-level studies that are more likely to strengthen local initiatives, leading to regional strategies capable of improving negotiations for assistance and cooperation at the global level.

Details: Amherst, MA: University of Massachusetts Amherst, Political Economy Research Institute, 2014. 34p.

Source: Internet Resource: Working Paper Series, No. 364: Accessed November 9, 2015 at: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP364.pdf

Year: 2014

Country: Africa

URL: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP364.pdf

Shelf Number: 149108

Keywords:
Asset Forfeiture
Corruption
Financial Crimes
Money Laundering

Author: Kao, Albert L.

Title: Increased Anti-Money Laundering Banking Regulations and Terrorism Prosecutions

Summary: After 9/11, anti-money laundering banking regulations were increased to counter terrorism finance. This study attempts to identify whether increasing banking regulations has countered terrorism finance by reviewing terrorism prosecutions. This study looked at federal terrorism prosecutions from January 2004 through April 2009. The study reviewed court documents and case backgrounds for indicators that anti-money laundering banking regulations were useful to the terrorism prosecution by either detecting terrorism financing or by supporting other charges, such as money laundering. The study did not find that banking regulations detected terrorist financing. The avoidance of banking regulations was used to support money laundering charges in two cases; however, pre-9/11 regulations would have sufficed. The study found that increasing anti-money laundering banking regulations had limited effects on countering terrorism financing. How anti-money laundering banking regulations are implemented within a counterterrorism finance regime should be reevaluated.

Details: Monterey, CA: Naval Postgraduate School, 2013. 1090p.

Source: Internet Resource: Thesis: Accessed November 9, 2015 at: https://www.hsdl.org/?view&did=736328

Year: 2013

Country: United States

URL: https://www.hsdl.org/?view&did=736328

Shelf Number: 137763

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Sharma, Saswot Raj

Title: Terrorist, White Collar and Organized Crime Financing Case Study and Forensic Audit

Summary: Terrorism, white collar crime and organized crime usually are inevitable fact and black truth on human civilization. They need funds for operation and all the illicit money gathered cannot be used for operation until and unless it is cleaned by the means on Money laundering. Money laundering usually occurs in three steps: Placement is the transfer of illegal activities' proceeds into financial systems without attracting the attention of financial institutions and government authorities. Money launderers accomplish this by dividing their tainted cash into small sums and executing transactions that fall beneath banks' regulatory reporting levels. Layering is the process of generating a series of transactions in order to distance the proceeds from their illegal source and to obfuscate the audit trail. Common layering techniques include outbound electronic funds transfers, usually directly or subsequently into a - bank secrecy haven,- or a jurisdiction with lax recordkeeping and reporting requirements, and withdrawals of already placed deposits in the form of highly liquid monetary instruments, such as money orders or travelers checks. Integration, the final money laundering stage, is the unnoticed reinsertion of successfully laundered, untraceable proceeds into an economy. This is accomplished through a variety of spending, investing and lending techniques and cross-border, seemingly legitimate transactions. Independent auditors have a responsibility under SAS no. 54, Illegal Acts by Clients, to be aware of the possibility that illegal acts may have occurred, indirectly affecting amounts recorded in an entity's financial statements. If an accountant believes the consequences of the money laundering have not been properly accounted for or disclosed on the financial statements, SAS 54 states that the auditor should Criminal Financing Forensic Audit 5 Saswot Raj Sharma /ICAI/ Feb 14 express a qualified or adverse opinion on the financial statements. If the client refuses to accept the auditor's modified report, the auditor should resign. Punishment: Generally internationally the punishment is usually as follows: (a) A person who finances in terrorist activities shall be punished by an imprisonment up to five years and a fine equal to the amount used in offence and where such amount is not identified up to five hundred thousand rupees. (b) A person who commits money laundering offence under Chapter-2 of the AMLA except one mentioned in Sub-Section (1) shall be punished by an imprisonment between one and four years and a fine equal to the amount used in the offence. (c) An additional punishment of ten percent shall be awarded where a public official or the chief or official of a bank, financial institution or non-financial institution is involved in the offence.

Details: Kirtipur, Nepal: Tribhuvan University, 2014. 81p.

Source: Internet Resource: Accessed November 9, 2015 at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2664340

Year: 2014

Country: International

URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2664340

Shelf Number: 137580

Keywords:
Financial Crimes
Money Laundering
Organized Crime
Terrorism
Terrorist Financing
White-Collar Crime

Author: Ayogu, Melvin D.

Title: Governance and Illicit Financial Flows

Summary: Insofar that it corrodes governance, engendering opportunistic crimes, grand corruption lies at the core of the problem of illicit financial flows. We identify at least two likely antagonistic circles in the illicit flow process - a virtuous circle and a vicious circle - both rooted in one common factor, namely, the strategic complementarity between corruption and governance. Also, we consider the scope of global governance architecture in encouraging banks to "do the crime, pay the fine, and do no time." Given this structure, the observed, rampant impudence of banks' participation in illicit financial flows is understandable and society would not be shocked should global mega-banks increasingly resemble a police establishment run by ex-convicts. Curbing illicit flows in such a circumstance would be daunting. Therefore, civil society must live up to its civic responsibilities by displacing the vicious cycle first through creating the right incentives for politicians to identify negatively with illicit financial flows.

Details: Amherst, MA: University of Massachusetts Amherst, Political Economy Research Institute, 2014. 38p.

Source: Internet Resource: Working Paper Series, No. 366: Accessed November 11, 2015 at: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP366.pdf

Year: 2014

Country: Africa

URL: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP366.pdf

Shelf Number: 137229

Keywords:
Asset Forfeiture
Corruption
Financial Crimes
Money Laundering

Author: Transparency International UK

Title: Combating Money Laundering and Recovered Looted Gains: Raising the UK's Game

Summary: As an anti-corruption body, Transparency International UK (TI-UK) is concerned with preventing money laundering since the facility to launder the proceeds of corruption gives rise to the commission of bribery and corruption offences in the first place. TI helped international banks to establish the Wolfsburg Principles (the global anti-money laundering guidelines for private banking) in 2000. Reports by TI-UK in 2003 and 2004 focused on corruption and money laundering in the UK and the regulation of trust and company service providers, respectively. This report focuses on the following main areas: - Strengthening the UK's defences against dirty money with particular emphasis on improving due diligence by financial and other institutions and organisations required to conduct due diligence on Politically Exposed Persons; - Criminal and civil mechanisms for the recovery of assets that are the proceeds of corruption; and - Bolstering the efforts of the UK's law enforcement agencies and improving the UK's ability to help developing countries in identifying and recovering stolen assets through more efficient processes and procedures.

Details: London: Transparency International UK, 2015. 72p.

Source: Internet Resource: Accessed November 14, 2015 at: http://www.transparency.org.uk/publications/15-publications/154-combating-money-laundering-and-recovering-looted-gains-raising-the-uks-game/154-combating-money-laundering-and-recovering-looted-gains-raising-the-uks-game

Year: 2015

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/15-publications/154-combating-money-laundering-and-recovering-looted-gains-raising-the-uks-game/154-combating-money-laundering-and-recovering-looted-gains-raising-the-uks-game

Shelf Number: 137766

Keywords:
Asset Forfeiture
Corruption
Money Laundering
Proceeds of Crime

Author: Transparency International UK

Title: Gold Rush: Investment visas and corrupt capital flows into the UK

Summary: In this report "Gold rush: Investment visas and corrupt capital flows into the UK" Transparency International UK highlights how the UK's Tier 1 Investor scheme can be vulnerable as a tool to launder the proceeds of corruption from around the world. In particular, it is highly likely that substantial amounts of corrupt wealth stolen from China and Russia have been laundered into the UK through the UK's 'golden' visa programme. In return for $2m of qualifying investments, a foreign investor can receive a UK golden visa and, after five years, permanent residency in the UK. Our analysis shows that, out of 3,048 golden visas granted by the UK since the scheme began in 2008, 60% have been awarded to Chinese and Russian nationals. The Tier 1 Investor scheme is open to abuse through the lack of effective, up-front and transparent checks on Tier 1 Investor visa applicants by the UK authorities. If illicit money has entered the UK economy through the golden visa scheme, there are also widespread doubts as to whether the UK's system of anti-money laundering checks can be relied on to ensure that suspicions of money laundering of corrupt wealth are reported and acted upon in an effective manner. According to the Government's own assessment, the UK's anti-money laundering system has significant weaknesses in its supervisory structure and in terms of the level of compliance and reporting standards across relevant private sectors. To help prevent corrupt wealth from entering the UK through the golden visa scheme, we recommend that the UK Government: -Establish greater integrity and transparency in the Tier 1 Investor visa scheme -Improve mechanisms for international cooperation to identify and recover corrupt assets -Improve law enforcement capacity and the effectiveness of AML supervision in the UK

Details: London: Transparency International UK, 2015. 25p.

Source: Internet Resource: Accessed November 14, 2015 at: http://www.transparency.org.uk/publications/15-publications/1347-gold-rush-investment-visas-and-corrupt-capital-flows-into-the-uk

Year: 2015

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/15-publications/1347-gold-rush-investment-visas-and-corrupt-capital-flows-into-the-uk

Shelf Number: 137767

Keywords:
Corruption
Financial Crimes
Illegal Assets
Money Laundering

Author: Spain. Ministry of Interior

Title: White Paper on Best Practices in Asset Recovery. CEART Project

Summary: The recovery of assets with a criminal origin is one of the priorities of criminal policy within the European Union, as reflected in several legal instruments on this topic that have been adopted in recent years. The CEART Project, which tries to be a small contribution to the efforts carried out by the European Union in this field, had some ambitious objectives that could not have been reached without the unconditional support of its partners: Rey Juan Carlos University, Europol and the Asset Recovery Offices from Belgium, Scotland (United Kingdom), Hungary and Poland. With the publication of this White Paper on Best Practices in Asset Recovery, a compendium of the most effective current practices in the asset recovery field, in both the European Union and United States and Canada, one of the main goals of the CEART project has been achieved. The exchange of best practices is already included as a key point in Decision 2007/845/JHA, of 6 December 2007 concerning co-operation between Asset Recovery Offices of the Member States in the field of tracing and identifying proceeds from, or other property related to crime, a regulation that represents one of the cornerstones in the field of asset recovery in the European Union. Likewise, the CEART Project has given great importance to the training of the people working in this field. Without these two key points, training and the exchange of best practices, it is difficult to improve the effectiveness of the efforts of the Member States in the tracing and identification of assets coming from crime. Both topics were already highlighted in the Communication from the Commission to the European Parliament and the Council of 20 November 2008 - Proceeds of organized crime: ensuring that "crime does not pay".

Details: Madrid: Ministry of Interior, 2012. 292p.

Source: Internet Resource: Accessed November 14, 2015 at: http://vangogh.fcjs.urjc.es/~jesus/Home_files/WBoBPiAR_CEART_2012.pdf

Year: 2012

Country: International

URL: http://vangogh.fcjs.urjc.es/~jesus/Home_files/WBoBPiAR_CEART_2012.pdf

Shelf Number: 137295

Keywords:
Asset Forfeiture
Financial Crimes
Money Laundering
Proceeds of Crime

Author: Financial Action Task Force

Title: Emerging Terrorist Financing Risks

Summary: The Emerging Terrorist Financing Risks' report, the result of the call for further research into terrorist financing, provides an overview of the various financing mechanisms and financial management practices used by terrorists and terrorist organisations. It explores the emerging terrorist financing threats and vulnerabilities posed by foreign terrorist fighters (FTFs), fundraising through social media, new payment products and services, and the exploitation of natural resources. The terrorist financing risks identified in the FATF's 2008 Terrorist Financing report, while still evolving, are as relevant today, as they were back then. However, developments since 2008 have created new terrorist financing risks. The issue of FTFs is not a new phenomenon, but the recent scale of the issue in relation to the conflict in Syria and Iraq is disturbing. FTFs are now considered one of the main forms of material support to terrorist groups. This report sets out the funding needs, sources and methods of FTFs and the challenges associated with combatting them. New technologies have also introduced new terrorist financing vulnerabilities. The broad reach and anonymity associated with social media and new payment methods could make these attractive tools for terrorists and terrorist organisations to use in their financial activities. All terrorists and terrorist groups, particularly large terrorist organisations, will require a financial management strategy to allow them to obtain, move, store and use their assets. Understanding these financial management strategies is essential in developing effective measures counter terrorist financing. This report is not a comprehensive study but rather, aims to provide a snapshot of current terrorist financing risks to raise awareness among FATF members and the private sector. Many of the issues raised in this report require further in-depth research. The report highlights the importance of genuine private/public partnerships to enhance awareness of, and responses to, emerging terrorist financing risks. Such a partnership will facilitate the identification of FTFs and their facilitation networks. Accurate and forward-looking guidance to the private sector, will further improve their monitoring and screening processes and reporting-time on sensitive transactions which may relate to terrorist financing.

Details: Paris: FATF, 2015. 50p.

Source: Internet Resource: Accessed November 16, 2015 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Emerging-Terrorist-Financing-Risks.pdf

Year: 2015

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Emerging-Terrorist-Financing-Risks.pdf

Shelf Number: 137284

Keywords:
Money Laundering
Terrorism
Terrorist Financing

Author: McFarland, Charles

Title: Jackpot! Money Laundering through Online Gambling

Summary: The ingenuity of criminals never ceases to amaze us. Whether it's the things they steal or the way they steal them, creativity reigns. That cleverness also flows to converting their ill-gotten gains into "clean" money. Modern money laundering is said to have started during Prohibition in the United States, when the proceeds from illegal alcohol sales needed to be converted into cash flowing from a legitimate business. They took advantage of common, large cash-flow businesses with anonymous, difficult-to-trace transactions - taxi services, restaurants, laundries, foreign currency exchanges come to mind - and many seemingly legitimate fortunes were built as a result. Indeed, several prominent American families trace their financial success to the sale of alcohol during Prohibition. That same basic money-laundering model - taking advantage of accessible, high-volume businesses with anonymous, difficult-to-trace transactions - is applied today by the modern cyber-thief. In this report, we highlight one such example: the use of online gambling sites to launder dirty money. Like criminals during Prohibition, cyber-thieves employing this method depend on anonymity, access, and the river of money that typically flows through an online gambling site.

Details: Santa Clara, CA: McAfee Labs, 2014. 16p.

Source: Internet Resource: Accessed November 16, 2015 at: http://www.mcafee.com/us/resources/white-papers/wp-jackpot-money-laundering-gambling.pdf

Year: 2014

Country: International

URL: http://www.mcafee.com/us/resources/white-papers/wp-jackpot-money-laundering-gambling.pdf

Shelf Number: 137764

Keywords:
Cybercrimes
Gambling and Crime
Money Laundering
Online Gambling

Author: Kar, Dev

Title: Flight Capital and Illicit Financial Flows to and from Myanmar: 1960-2013

Summary: Myanmar is the most porous economy we have studied in depth. Long isolation, trade restrictions, and attempts to regulate currency exchange rates have combined to drive a substantial part of the economy underground. Totaling the flight capital numbers indicates that Myanmar has experienced largely unregulated financial movements of nearly US$120 billion over the period (a small portion of flight capital may be licit), while total illicit flows amounted to almost US$100 billion. In 2013 alone, unregulated financial inflows totaled some US$10 billion, over 20 percent of GDP. Purely illicit inflows were on a similar scale in that year, at 17 percent of GDP. And these numbers do not include the smuggling of drugs, timber, precious stones, and other goods, transported across various routes and mountain passes to and from India and China, as indicated by a brief selection of satellite images included in the pages following. Interestingly, the greater part of what we can analyze as illicit flows have been inward, in reaction to import controls and to escape import levies. Undervalued and smuggled imports have sustained the weakened economy through years of insularity, isolation, and instability. Tax collection to GDP at seven percent is one of the lowest in the world, undermining the ability of the state to provide adequate health and education services. Corruption, according to Transparency International's Perceptions Index, places Myanmar among the bottom 20 in the world. These are extremely serious challenges for a nation just beginning, haltingly, to emerge from its shadows. Within our focus on financial transparency concerns, we recommend that Myanmar 1) make concerted efforts to adopt and enforce Financial Action Task Force anti-money laundering and combatting terrorist financing regulations, 2) provide its Customs Department with real-time world market trade pricing data, 3) greatly improve its statistical capabilities, and 4) enhance border security and curtailment of smuggling. For this the nation will need sustained external financial and technical assistance for years to come.

Details: Washington, DC: Global Financial Integrity, 2015. 64p.

Source: Internet Resource: Accessed November 24, 2015 at: http://www.gfintegrity.org/wp-content/uploads/2015/09/Myanmar-Report-Final-1.pdf

Year: 2015

Country: Burma

URL: http://www.gfintegrity.org/wp-content/uploads/2015/09/Myanmar-Report-Final-1.pdf

Shelf Number: 137330

Keywords:
Border Security
Financial Crimes
Money Laundering
Smuggling
Tax Evasion
Terrorist Financing

Author: Ribadu, Nuhu

Title: Show Me the Money: Leveraging Anti-Money Laundering Tools to Fight Corruption in Nigeria. An Insider Story

Summary: The Financial Action Task Force was created during the 1989 G-7 summit in Paris in response to growing concerns over money laundering. It is an intergovernmental body that develops policies and measures to prevent criminals from using the financial system. It studies money laundering and terrorism financing trends and techniques, develops and promotes adequate measures to fight these financial crimes, and monitors its 34 member countries' progress implementing these measures. In 1990, the task force published a plan of action to fight money laundering embodied in a set of 40 recommendations. These recommendations were revised in 1996, and again in 2003, to reflect the evolution of money laundering techniques. Following the attacks of September 11, 2001, the FATF mandate was expanded to support the global fight against terrorism. In October 2001, the Task Force published another set of eight recommendations, dealing specifically with terrorism financing. Another recommendation was added in October 2004, completing what is now known as the FATF's 40+9 Recommendations. These recommendations cover the criminal justice system and law enforcement, the financial system and its regulations, and international cooperation. They are meant to prevent financial institutions from becoming safe havens for criminal activities. In the late 1990s, the FATF cast its net beyond its members with an initiative seeking to identify major weaknesses in anti-money laundering systems worldwide. The idea was to encourage countries identified as weak links to implement international standards. In 2000 and 2001, the task force reviewed laws and regulations in 47 countries, selected on the basis of FATF members' experience. The review pitted rules and practices in these countries against 25 criteria. Of the 47 countries, 23 were found to be severely lacking and were declared non-cooperative. Nigeria was one of these 23 black sheep. In June 2001, following the lack of response to its letters, the FATF concluded that Nigeria was unwilling or unable to cooperate in the review of its system, and therefore should be blacklisted. The task force noted a lack of obligation from financial institutions to identify their clients or report suspicious transactions, inadequate criminalization of money laundering, incompetence or corruption within government, judicial or supervisory authorities, and an obvious unwillingness to respond constructively to requests. In 2002, the U.S. Treasury followed suit and issued an advisory warning to its financial institutions to use extra caution and scrutiny when dealing with transactions involving Nigeria. This was bad news for Nigeria. Being branded as non-cooperative meant that Western financial markets held up their noses. Financial institutions around the world, and particularly those in major financial centers, further scrutinized transactions involving Nigeria, resulting in crippling delays. Nigerian banks had trouble dealing with foreign counterparts. Nigerians wanting to do business abroad faced extra hurdles and were viewed with suspicion. Foreign banks were hesitant to grant letters of credit or loans to Nigerians. The country was becoming a financial pariah. Unlike the high echelons of government, which were blissfully unaware of the FATF decision for a while, local banks and businesses were directly affected and knew all about it. At the same time, Nigerian authorities were keen to obtain relief from the $30 billion in foreign debt owed to the Paris Club of creditors. In a country blessed with such mineral wealth, this crippling debt was another symptom of the mismanagement and corruption that had plagued Nigeria for decades. With the FATF frowning at Nigeria's financial practices and safeguards - or lack thereof - donors were unlikely to be in a debt-forgiving mood. Failure to correct course could result in escalating measures from the FATF. The original blacklisting meant that foreign financial institutions were advised to use extra caution when dealing with Nigeria. But continued failure to cooperate could result in FATF member countries adopting further countermeasures, which could ultimately result in the suspension of all financial transactions with Nigeria.

Details: Washington, DC: Center for Global Development, 2010. 76p.

Source: Internet Resource: Accessed February 2, 2016 at: http://siteresources.worldbank.org/EXTPUBLICSECTORANDGOVERNANCE/Resources/Showmethemoney.pdf?resourceurlname=Showmethemoney.pdf

Year: 2010

Country: Nigeria

URL: http://siteresources.worldbank.org/EXTPUBLICSECTORANDGOVERNANCE/Resources/Showmethemoney.pdf?resourceurlname=Showmethemoney.pdf

Shelf Number: 137739

Keywords:
Corruption
Financial Crimes
Money Laundering
Proceeds of Crime
Terrorist Financing

Author: Center for Global Development

Title: Unintended Consequences of Anti-Money Laundering Policies for Poor Countries

Summary: Money laundering, terrorism financing and sanctions violations by individuals, banks and other financial entities are serious offenses with significant negative consequences for rich and poor countries alike. Governments have taken important steps to address these offenses. Efforts by international organizations, the US, UK and others to combat money laundering and curb illicit financial flows are a necessary step to increase the safety of the financial system and improve security, both domestically and around the world. But the policies that have been put in place to counter financial crimes may also have unintentional and costly consequences, in particular for people in poor countries. Those most affected are likely to include the families of migrant workers, small businesses that need to access working capital or trade finance, and recipients of life-saving aid in active-conflict, post-conflict or post-disaster situations. And sometimes, current policies may be self-defeating to the extent that they reduce the transparency of financial flows.

Details: Washington, DC: Center for Global Development, 2015. 100p.

Source: Internet Resource: Accessed February 4, 2016 at: http://www.cgdev.org/sites/default/files/CGD-WG-Report-Unintended-Consequences-AML-Policies-2015.pdf

Year: 2015

Country: International

URL: http://www.cgdev.org/sites/default/files/CGD-WG-Report-Unintended-Consequences-AML-Policies-2015.pdf

Shelf Number: 137758

Keywords:
Financial Crimes
Money Laundering
Terrorist Financing

Author: Financial Action Task Force

Title: Specific Risk Factors in Laundering the Proceeds of Corruption: Assistance to Reporting Institutions

Summary: 1. Laundering the Proceeds of Corruption, the first FATF Working Group on Typologies (WGTYP) effort in the area of corruption, discussed the interrelationship between corruption and money laundering, discovered the most common methods used to launder the proceeds of corruption, and highlighted the vulnerabilities leading to an increased risk of corruption-related money laundering. It listed some of the most significant grand corruption cases and created a useful historical understanding and reference point for further work in understanding the interrelationships between corruption and money laundering. Laundering the Proceeds of Corruption ultimately concluded that significant acts of corruption are fruitless without the politically exposed person (PEP) involved having a secondary capability to move and disguise the proceeds of his crime. 2. Laundering the Proceeds of Corruption identified areas in which future work could be done, including gaining an understanding of the correlation between certain risk factors and corruption. It also concluded that while effective anti-money laundering and countering the financing of terrorism (AML/CTF) systems can assist in the detection of the proceeds of corruption and prevent the perpetrators of corruption-related offences from enjoying the proceeds of corruption, historically, reporting institutions have not been effective in detecting corruption-related proceeds. This has occurred for a number of reasons, including that in a number of instances, reporting institutions have failed to engage in appropriate customer identification or otherwise failed to apply AML/CFT controls effectively. In some instances, they were actually complicit, and sometimes willfully blind, in the laundering of funds. 3. This paper is written to assist reporting institutions - those financial and non-financial institutions that have a legal obligation to file suspicious transaction reports, or otherwise engage in AML/CFT due diligence - to better analyse and better understand specific risk factors that may assist them in identifying situations posing a heightened risk of corruption-related money laundering risk. It seeks to answer the question: Are there specific types of business relationships, customers, or products which should lead a reporting institution to pay particular attention to the risk of corruption-related money laundering? As with all FATF typology projects, we seek to answer the question by looking to reported cases to see if we can detect commonalities. In addition, we draw on the industry's and academia's best thinking about risk, as reflected in the published literature, to determine what situations truly represent risk. 4. Within the FATF standards3, Recommendation 12 requires a reporting entity to have in place appropriate risk management systems to determine whether a customer or beneficial owner is a PEP. It must also take specific measures, in addition to performing normal customer due diligence measures for business relationships, with foreign PEPs: senior management approval for establishing (or continuing) business relationships, take reasonable measures to establish the source of wealth or funds, and conduct enhanced ongoing monitoring. For domestic PEPs and persons entrusted with a prominent function by an international organisation, reporting institutions are required to apply the specific enhanced due diligence (EDD) measures set out in Recommendation 12 where there is a higher-risk business relationship. This scrutiny stands at the forefront of the effort to detect and deter the laundering of proceeds of corruption and is certainly necessary. The premise behind the effort is clear: customers in these categories can pose an inherently high risk for money laundering. 5. Understanding risk within the Recommendation 12 context is important for two reasons: First, Recommendation 12 requires a reporting entity to have "appropriate" risk management systems in place to determine whether the customer or the beneficial owner is a foreign PEP, and take "reasonable measures" to determine whether a customer or beneficial owner is a domestic PEP or an individual entrusted with a prominent function by an international organisation. To gauge whether a system is "appropriate," or whether "reasonable measures" have been taken, requires an assessment of risk. Second, understanding risk is important after identifying domestic PEPs or relevant individuals from international organisations, in order to assess what level of EDD is necessary. 6. Moreover, experience teaches us that combating corruption-related money laundering must be more than simply ensuring that PEPs receive an appropriate level of scrutiny. Rather, an effective AML scheme requires an assessment of corruption-related risk and protecting against the laundering of corruption proceeds across the spectrum of customers and business relationships, regardless of whether a FATF-defined PEP is involved. 7. Such an approach acknowledges the realities of the methods of laundering the proceeds of corruption. It is a rare case (although not unheard of) for a PEP to enter a financial institution and deposit (or transfer) significant amounts of suspicious money; such action would likely create unacceptable risks to the PEP of detection by reporting institutions. Instead, as Laundering the Proceeds of Corruption noted, corrupt PEPs will take great pains to disguise the identity and the source of the funds in order to place corrupt money in the financial system without suspicion. PEPs use corporate vehicles, sophisticated gatekeepers, cash, and countries with weak money laundering controls to disguise their funds. Their corrupt transactions will often involve an intermediary of some kind, (including family members and close associates), whether within the PEP's jurisdiction or beyond. In some cases, corrupt PEPs will also try to control the mechanisms of detection and regulation within their home jurisdiction to "game the system" in order to disguise the proceeds before the money gets to another jurisdiction. In such cases, implementation of Recommendation 12 by other jurisdictions is necessary, but is not sufficient to detect and deter the movement of corrupt proceeds.

Details: Paris: FATF, 2012. 48p.

Source: Internet Resource: Accessed February 8, 2016 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Specific%20Risk%20Factors%20in%20the%20Laundering%20of%20Proceeds%20of%20Corruption.pdf

Year: 2012

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Specific%20Risk%20Factors%20in%20the%20Laundering%20of%20Proceeds%20of%20Corruption.pdf

Shelf Number: 137796

Keywords:
Corruption
Financial Crimes
Money Laundering
Proceeds of Crime
Terrorist Financing

Author: United Nations Office on Drugs and Crime. Independent Evaluation Unit

Title: Anti-organized crime and counter-narcotics enforcement in Cape Verde Project (ANTRAF)

Summary: Cape Verde is an archipelago consisting of 10 islands (being one uninhabited) located at 500 kilometres off the coast of Senegal. According to 2010 Census, the country is home to almost 492 thousand people, out of which 39% is less than 18 years old. Most of the population (62%) now lives in the urban centres. In the early 2000s, Cape Verde was identified as a transit route for drug trafficking between Latin America and Europe. In the same period, internally, drug trafficking and abuse as well as all sorts of criminal behaviour were on the rise. In 2002, Cape Verde requested UNODC assistance to tackle drug trafficking and organized crime, which had turned into a real concern in the archipelago. The CAVE INTECRIN Programme (Cape Verde Integrated Crime and Narcotic Programme) was signed in 2005, as the result of a constructive dialogue developed with the relevant national authorities in 2003 and 2004. The objectives have been set out with a view to meeting both the request for technical assistance of the Government of Cape Verde and the overall mandates of UNODC, particularly in relation to its three main areas of operations, viz. anti-trafficking, reduction of uncivil behaviours, and rule of law. The ANTRAF project (CPV/S28) - subject of this evaluation - was part of the CAVE INTECRIN programme. The Government of Cape Verde and UNODC signed the CPV/S28 in September 2005, with an approved duration of 30 months (from January 2006 to March 2008) and a total budget of USD 5.8 million. As of 31 December 2011, the project had undergone to four revisions (one in 2009, two in 2010 and one in 2011), and it has been extended up to December 2014. The overall purpose for this evaluation is to assess whether the implementation of the CAVE ANTRAF CPV/S28 project has been contributing to meet the project's objectives, outcomes and outputs, so that lessons can be drawn and recommendations made, which in turn will constitute the basis for making decisions regarding instituting improvements to project planning, implementation, design and management. The evaluation used a mix of qualitative and quantitative approaches in order to analyse data, assess the status of outputs and outcomes, and triangulate evidence. The methods utilized in the evaluation were: desk review of relevant documents, interviews with key stakeholders, field visits, data analysis and focus group discussion. The main constraints of the evaluation were related to the availability of data; the time available for conducting the evaluation; the geographical coverage for the field visits that were limited to the capital of the country; the lack of inputs to perform an outcome and impact evaluation; and the political constraints related to the project's thematic areas.

Details: Vienna: UNODC, 2012. 70p.

Source: Internet Resource: Accessed February 12, 2016 at: https://www.unodc.org/documents/evaluation/Independent_Project_Evaluations/2012/CPVS28_Eval_Report_Final_edited.pdf

Year: 2012

Country: Cape Verde

URL: https://www.unodc.org/documents/evaluation/Independent_Project_Evaluations/2012/CPVS28_Eval_Report_Final_edited.pdf

Shelf Number: 137855

Keywords:
Drug Enforcement
Drug Trafficking
Money Laundering
Organized Crime

Author: Bridgewater, Kevin

Title: Don't Look, Won't Find: Weaknesses in the Supervision of the UK's Anti-Money Laundering Rules

Summary: Radical overhaul of the UK's anti-money laundering system is needed, if the UK is to close the door to the billions of pounds in corrupt money coming into the country every year, according to a new report by Transparency International UK (TI-UK). A system not fit for purpose: -Poor oversight - The majority of sectors covered in this research are performing very badly in terms of identifying and reporting money laundering. Major problems have been identified in the quality, as well as the quantity, of reports coming out of the legal, accountancy and estate agency sectors. One supervisor even admitted it carried out no targeted AML monitoring at all during 2013. -Lack of transparency - 20/22 supervisors fail to meet the standard of enforcement transparency demanded by the Macrory standards of effective regulation. -Ineffective sanctions - Low fines, in relation to the amounts being laundered, failing to be effective deterrents. Of the 7 HMRC regulated sectors, that includes estate agents, the total fines in 2014/15 amounted to just $768,000. -Independence questioned - Just 7/22 supervisors control for institutional conflicts of interest, whilst 15 are also lobby groups for the sectors they supervise. The research highlights that: -A third of banks dismissed serious money laundering allegations without adequate review -In the accountancy sector, at least 14 different supervisors have some responsibility - leading to widespread inconsistency and variations. -In property, only 179 cases deemed suspicious by estate agents in 2013/14. -Just 15 suspicious cases reported through art and auction houses.

Details: London: Transparency International UK, 2015. 76p.

Source: Internet Resource: Accessed February 22, 2016 at: http://www.transparency.org.uk/publications/dont-look-wont-find-weaknesses-in-the-supervision-of-the-uks-anti-money-laundering-rules/

Year: 2015

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/dont-look-wont-find-weaknesses-in-the-supervision-of-the-uks-anti-money-laundering-rules/

Shelf Number: 137923

Keywords:
Financial Crimes
Money Laundering
White Collar Crime

Author: Financial Action Task Force

Title: Anti-money laundering and counter-terrorist financing measures: Italy. Mutual Evaluation Report

Summary: The International Monetary Fund (IMF) conducted an assessment of Italy's anti-money laundering and counter-terrorist financing (AML/CFT) system, based on the 2012 FATF Recommendations, and using the 2013 Methodology. The assessment is a comprehensive review of the effectiveness of Italy's AML/CFT system and its level of compliance with the FATF Recommendations. Italy has a strong legal and institutional framework to fight ML and TF. Authorities have a good understanding of the money laundering (ML) and terrorist financing (TF) risks the country faces. There is generally good policy cooperation, coordination, and financial intelligence gathering and use. The authorities are able to successfully undertake large and complex money laundering and terrorist financing investigations and prosecutions, and beneficial ownership information is generally accessible to authorities. There are areas where improvements are needed. Italy should enhance its ML investigative and prosecutorial action on risks associated with self-laundering, stand-alone money laundering, and foreign predicate offenses, and the abuse of legal persons. Italy should enhance the accessibility of relevant information and dissemination of analysis by its FIU, strengthen sanctions, and improve financial sectors' and DNFBPs' understanding and implementation of requirements for beneficial ownership identification

Details: Paris: FATF, 2016. 230p.

Source: Internet Resource: Accessed February 29, 2016 at: http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-Italy-2016.pdf

Year: 2016

Country: Italy

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-Italy-2016.pdf

Shelf Number: 137998

Keywords:
Financial Crimes
Money Laundering
Terrorism
Terrorist Financing

Author: Connery, David

Title: A Web of Harms: Serious and organised crime and its impact on Australian interests

Summary: This special report examines transnational, serious and organised crime and the harms it causes to Australia's interests. The report aims to encourage a reinvigorated discussion among Australians about this critical matter. The harms include negative impacts upon individuals and the community and unfair competition for some legitimate businesses. Serious and organised crime - whether transnational or domestic - also imposes costs on Australian governments and denies them revenue. What's more, serious and organised crime groups acting overseas work against Australia's foreign policy interests and increase risks to Australians (and others) who live, invest and travel abroad. There's an urgent need for the Australian community to discuss the criminal threats facing it in a more deliberate and broader-reaching way. That�s because dealing with serious and organised crime is not a task for government alone: the Australian public and business have key roles. After all, consumer demand creates illicit markets that serious and organised crime seeks to supply. Additionally, the internet is increasing the speed, reach and depth of penetration by serious and organized crime into the lives of all Australian families and businesses. Simply put, you don't need to go to nightclubs in red-light districts to meet organised crime: you need go only as far as your computer. It's also worth examining better ways to increase the roles of non-law-enforcement agencies, business and the community in efforts to address serious and organised crime. We should bring the full range of social, education, regulatory and health instruments into the fight, and subdue the potential of internet-enabled financial crime to damage our current and future prosperity. International cooperation in this fight is essential, especially given the role of overseas actors in our crime challenge.

Details: Barton, ACT, AUS: Australian Strategic Policy Initiative, 2015.

Source: Internet Resource: Accessed march 9, 2016 at: https://www.aspi.org.au/publications/a-web-of-harms-serious-and-organised-crime-and-its-impact-on-australian-interests/SR81_Web_Harms.pdf

Year: 2015

Country: Australia

URL: https://www.aspi.org.au/publications/a-web-of-harms-serious-and-organised-crime-and-its-impact-on-australian-interests/SR81_Web_Harms.pdf

Shelf Number: 138147

Keywords:
Financial Crimes
Internet Crimes
Money Laundering
Organized Crime

Author: United Nations Office of Drugs and Crime

Title: Strengthening the Sahel against Crime and Terrorism: Progress Report January 2016

Summary: This report provides information on the results achieved and activities implemented by the United Nations Office on Drugs and Crime (UNODC) in the context of its Contribution to the United Nations Integrated Strategy for the Sahel (UNISS) from the start of its implementation in January 2014 to November 2015. The objective of the contribution of UNODC to UNISS (short: Sahel Programme) is to strengthen the capacity of governments in the Sahel region to combat drug trafficking, illicit trafficking, organized crime, terrorism and corruption and to enhance the accessibility, efficiency and accountability of criminal justice systems. UNODC has unique expertise in helping Member States of the United Nations address organized crime and related illicit trafficking and terrorism through legislative, criminal justice and law enforcement advisory services, technical assistance, as well as promoting regional and international cooperation

Details: Vienna: UNODC, 2016. 48p.

Source: Internet Resource: Accessed march 14, 2016 at: https://www.unodc.org/documents/westandcentralafrica/Sahel_Programme_Progress_Report_January_2016.pdf

Year: 2016

Country: Africa

URL: https://www.unodc.org/documents/westandcentralafrica/Sahel_Programme_Progress_Report_January_2016.pdf

Shelf Number: 138218

Keywords:
Drug Trafficking
Human Smuggling
Money Laundering
Organized Crime
Political Corruption
Terrorism

Author: Financial Action Task Force

Title: Money Laundering Risks Arising from Trafficking in Human beings and Smuggling of Migrants

Summary: Criminals are increasingly turning to the trafficking of human beings and the smuggling of migrants given the high profitability of these illegal activities. The money generated by such activities finds its way into the financial system. The FATF has carried out a study which describes the money flows related to these two distinct problems and attempts to assess their scale. The key objectives of the report are the following: - To assess the scale of the problem; - To identify different trends in trafficking in human beings/ migrant smuggling; - To identify from case studies where money laundering is occurring and what form it is taking; - To inform law enforcement agencies on the laundering of funds coming from human trafficking/ migrant smuggling; - To identify red flag indicators to assist financial institutions in their identification of money laundering from human trafficking/ migrant smuggling, and in the reporting of suspicious transaction reports; - To increase the possibility of the proceeds of human trafficking/migrant smuggling being identified and confiscated, and thereby discouraging the activity of human trafficking or migrant smuggling.

Details: Paris: FATF, 2011. 86p.

Source: Internet Resource: Accessed March 15, 2016 at: http://www.fatf-gafi.org/media/fatf/documents/reports/Trafficking%20in%20Human%20Beings%20and%20Smuggling%20of%20Migrants.pdf

Year: 2011

Country: International

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/Trafficking%20in%20Human%20Beings%20and%20Smuggling%20of%20Migrants.pdf

Shelf Number: 138243

Keywords:
Financial Crimes
Human Smuggling
Human Trafficking
Migrant Smuggling
Migrants
Money Laundering

Author: European Parliament. Directorate-General for Internal Policies. Policy Department A Economic and Scientific Policy

Title: Wildlife Crime

Summary: Wildlife crime poses not only a real threat to biodiversity, but has also come to be regarded as a security issue in some source countries. While the latter is also relevant to the EU as part of the international community, the EU is first and foremost one of the main global markets for wildlife trade. The present study gives an overview over the state of wildlife crime in Europe based on available documents, data from the EU-TWIX database which centralises data on seizures reported by the EU Member States, and empirical research including interviews with experts. It has to be noted that any overview on this topic is limited by the fact that comprehensive data on illegal activities are not available; even where data on wildlife crime could be obtained they are not always reliable and coherent. Illegal wildlife trade within the EU The EU is both a destination and a transit region for wildlife products. Although European countries seem to have become less important consumers in the trade with African mammals, many countries still seem to have a very important role as a trading hub in that trade. This trade is conducted via the major trade hubs (airports and ports) but new trade hubs (e.g. smaller European airports with direct connections to Africa and Asia) are also emerging. On the other hand, European countries still seem to be very important consumers and importers of pets, especially of reptiles and birds. As this trade is often not conducted via the main trade hubs, but via the Eastern European land borders and the Mediterranean and Black Sea, enforcement is even more challenging. Moreover, the demand for alternative medicinal products very often produced in Asia from endangered wildlife appears to have increased in Europe. The available information on trade routes is not very detailed, but the following four important trade routes could be identified: - Large mammals like elephants, rhinos and big cats from Africa and South America to major trade hubs and for further transit to Asia - Coastal smuggling of leeches, caviar, fish, as well as reptiles and parrots for the pet trade in Europe - Endangered birds from South Eastern Europe to Southern Europe - Russian wildlife and Asian exports via Eastern European land routes. The overall trend in wildlife crime measured in the number of seizures has been roughly constant in recent years. Seizures are concentrated in countries with large overall trading volumes like Germany, the Netherlands, Spain and France. Overall the UK, Germany and Netherlands are responsible for more than 70% of seizures in 2007-2014. The high number of seizures may also be attributable to well developed enforcement in these countries. The most frequently seized species are reptiles, mammals, flowers and corals. About half of the seizures are carried out at airports (e. g. London Heathrow, Paris Charles de Gaulle, Frankfurt a. M. and Amsterdam Airport Schiphol). Mailing centres are expected to become more important in the coming years. Most of the products confiscated are reported as imports in the EU-TWIX database although it is not clear whether parts of these imports are destined for re-selling to other countries. For the illegal trade in wildlife and its products the internet is becoming an increasingly important place.

Details: Brussels: European Parliament, 2016. 124p.

Source: Internet Resource: Accessed March 25, 2016: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/570008/IPOL_STU(2016)570008_EN.pdf

Year: 2016

Country: Europe

URL: http://www.europarl.europa.eu/RegData/etudes/STUD/2016/570008/IPOL_STU(2016)570008_EN.pdf

Shelf Number: 138414

Keywords:
Illegal Wildlife Trade
Money Laundering
Offenses Against the Environment
Organized Crime
Wildlife Crime
Wildlife Smuggling
Wildlife Trafficking

Author: Queensland Organised Crime Commission of Inquiry

Title: Report

Summary: The Commission commenced on 1 May 2015, by Commissions of Inquiry Order (No. 1) 2015, to make inquiry into the extent and nature of organised crime in Queensland and its economic and societal impacts. The otherwise very broad nature of such an inquiry was somewhat narrowed by the Terms of Reference within the Order in Council, which focused the Commission on four key areas: - the major illicit drug and/or precursor markets - online child sex offending, including the child exploitation material market - financial crimes, primarily investment/financial market fraud and financial data theft - the relationship between organised crime and corruption in Queensland. The Commission was also required to investigate the extent to which organised crime groups use various enabling mechanisms or services: in particular, money laundering, cyber and technology-enabled crime, identity crime, professional facilitators, violence and extortion. In carrying out the Inquiry, the Commission was to examine the adequacy and appropriateness of current responses to organised crime by law enforcement, intelligence, and prosecution agencies, as well as the adequacy of legislation and of the resources available to such agencies. The six-month timeframe given for the Inquiry was limited, given the areas required to be examined.

Details: Sydney: The Commission, 2015. 578p.

Source: Internet Resource: Accessed March 30, 2016 at: https://www.organisedcrimeinquiry.qld.gov.au/__data/assets/pdf_file/0017/935/QOCCI15287-ORGANISED-CRIME-INQUIRY_Final_Report.pdf

Year: 2015

Country: Australia

URL: https://www.organisedcrimeinquiry.qld.gov.au/__data/assets/pdf_file/0017/935/QOCCI15287-ORGANISED-CRIME-INQUIRY_Final_Report.pdf

Shelf Number: 138491

Keywords:
Child Sexual Exploitation
Corruption
Cybercrime
Drug Markets
Drug Trafficking
Financial Crimes
Identity Theft
Money Laundering
Motorcycle Gangs
Organized Crime

Author: Cirlig, Carmen-Cristina

Title: EU-US cooperation on justice and home affairs - an overview

Summary: The United States is the key partner of the European Union in the area of justice and home affairs (JHA), including in the fight against terrorism. While formal cooperation on JHA issues between the US and the EU goes back to the 1995 New Transatlantic Agenda, it is since 2001 in particular that cooperation has intensified. Today, and for the period up until 2020, the key areas of transatlantic efforts in the JHA field are personal data protection, counter-terrorism and countering violent extremism, migration and border controls, tracing of firearms and explosives, money laundering and terrorism financing, cybercrime, drugs and information exchange. Regular dialogues at all levels, extensive operational cooperation and a series of legal agreements demonstrate the development of the transatlantic partnership on JHA. Assessments state that cooperation on law enforcement and counter-terrorism has led to hundreds of successful joint operations each year, and many foiled terrorist plots. Nevertheless, important challenges remain, in particular in light of the revelations of US mass surveillance activities and the resultant growth in EU concerns about US standards for data privacy. The European Parliament is making use of its extended powers in the JHA field, by urging a high level of data protection as well as effective and non-discriminatory means of redress for EU citizens in the US over improper use of their personal data.

Details: Strasbourg: European Parliamentary Research Service, 2016. 12p.

Source: Internet Resource: Briefing: Accessed April 8, 2016 at: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/580892/EPRS_BRI(2016)580892_EN.pdf

Year: 2016

Country: Europe

URL: http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/580892/EPRS_BRI(2016)580892_EN.pdf

Shelf Number: 138606

Keywords:
Border Security
Counter-Terrorism
Cybercrime
Data Protection
Drug Trafficking
Extremist Groups
Information Sharing
Money Laundering
Partnerships
Terrorism
Violent Extremism

Author: Rice, Matthew

Title: Empowering the UK to Recover Corrupt Assets: Unexplained Wealth Orders and other new approaches to illicit enrichment and asset recovery

Summary: This report addresses the ongoing problem of corrupt wealth being laundered through the UK, finding that the current AML (Anti-Money Laundering) regime is not fit for purpose

Details: London: Transparency International UK, 2016. 54p.

Source: Internet Resource: accessed April 9, 2016 at: http://www.transparency.org.uk/publications/empowering-the-uk-to-recover-corrupt-assets/

Year: 2016

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/empowering-the-uk-to-recover-corrupt-assets/

Shelf Number: 138616

Keywords:
Asset Forfeiture
Asset Recovery
Money Laundering
Proceeds of Crime

Author: Europol

Title: The THB Financial Business Model: assessing the current state of knowledge

Summary: Europol's Report on Trafficking in Human Beings (THB) Financial Business Model 2015 is now available online. This document has been prepared by experts at Europol and is oriented towards explaining the current crime situation, providing an overview of all relevant factors e.g. organised crime groups (OCGs), criminal markets, and geographical dimension. The main key findings detailed in the report show how OCGs involved in THB tend to work independently from other groups and launder their own criminal proceeds with little use of experts. These OCGs are mainly small and based on family and ethnic ties. The family cell is used to support trafficking operations and money laundering activities. There are no new methods of money laundering specific to THB groups, but the exploitation of innovative technologies is increasing. Financial institutions, money service businesses and other types of financial providers are at most risk of being exploited by the money laundering activities of OCGs.

Details: The Hague: Europol, 2015. 14p.

Source: Internet Resource: Accessed April 13, 2016 at: https://www.europol.europa.eu/content/trafficking-human-beings-financial-business-model

Year: 2015

Country: Europe

URL: https://www.europol.europa.eu/content/trafficking-human-beings-financial-business-model

Shelf Number: 138650

Keywords:
Financial crimes
Human Trafficking
Money Laundering
Organized Crime
Proceeds of Crime

Author: Goodrich, Steve

Title: Paradise Lost: Ending the Uk's role as a safe haven for corrupt individuals, their allies and assets

Summary: Paradise Lost is a thorough analysis of the UK's role in global corruption, outlining the multitude of ways in which the UK is enabling corrupt individuals to enjoy luxury lifestyles and cleanse their reputations. This includes: -The ability to buy UK property anonymously through foreign companies. -The UK's Overseas Territories offering secretive company ownership -Lack of powers for law enforcement to seize stolen assets. -Role of UK based accountants, lawyers, estate agents and other "professional enablers" in making it easy for corrupt individuals to hide their cash. -An anti-money laundering system that is easy to bypass in order to launder money with impunity. Key recommendations include: -Ensure the UK's Overseas Territories and Crown Dependencies introduce centralised public registers of beneficial ownership, and ensure corrupt individuals cannot buy UK property with impunity. -Act on unexplained wealth by increasing the capabilities of the UK's asset recovery regime to seize corrupt funds. -Fix the flaws in the UK's anti-money laundering regime - overhauling the supervision of the rules, and prosecuting complicit professional enablers. The Panama Papers and the UK's complicity: -Of the 214,000 corporate entities exposed, over half were registered in the British Virgin Islands. -Our research showed 36,000 properties in London are owned by companies registered in offshore jurisdictions. -The UK was the second most popular place for the Mossack Fonseca firm to operate. According to the ICIJ, Mossack Fonseca worked with 1,924 UK professional enablers to set up companies, foundations and trusts for customers.

Details: London: Transparency International UK, 2016. 16p.

Source: Internet Resource: Accessed April 13, 2016 at: http://www.transparency.org.uk/publications/paradise-lost/

Year: 2016

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/paradise-lost/

Shelf Number: 138652

Keywords:
Corruption
Financial crimes
Money Laundering

Author: Great Britain. Home Office

Title: Action plan for anti-money laundering and counter-terrorist finance

Summary: This document sets out the government's plan to stop money laundering and the funding of terrorism. The document outlines: - actions the government will introduce to stop money laundering - when the actions are due to be completed - what the government has done so far - how the government will implement the action plan As part of the action plan, the government is seeking views on: - potential changes to legislation - options to reform the anti-money laundering and counter-financing of terrorism regime

Details: London: Home Office, 2016. 66p.

Source: Internet Resource: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517993/6-2118-Action_Plan_for_Anti-Money_Laundering__print_.pdf

Year: 2016

Country: United Kingdom

URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/517993/6-2118-Action_Plan_for_Anti-Money_Laundering__print_.pdf

Shelf Number: 138787

Keywords:
Money Laundering
Terrorist Financing

Author: Victorian Law Reform Commission

Title: Use of Regulatory Regimes in Preventing the Infiltration of Organised Crime into Lawful Occupations and Industries - Consultation Paper

Summary: Referral to the Commission 1.1 On 29 October 2014, the then Attorney-General, the Hon. Robert Clark, MP, asked the Victorian Law Reform Commission, under section 5(1)(a) of the Victorian Law Reform Commission Act 2000 (Vic), to review and report on the use of regulatory regimes to help prevent organised crime and criminal organisations entering into or operating through lawful occupations and industries. 1.2 Lawful occupations and industries may be used to enable or facilitate organised crime and to conceal or launder the proceeds of crime. In 2014, the Parliament of Victoria Law Reform, Drugs and Crime Prevention Committee recommended that the Victorian Government investigate the appropriateness of using administrative regulatory measures to reduce the opportunities available to organised crime groups for engaging in illegal activities in Victoria. 1.3 Regulatory regimes are the laws, regulations, policies and instruments that regulate particular occupations and industries; for example, laws that provide that only fit and proper people can obtain licences to operate in particular occupations or industries. Regulatory regimes may assist in preventing the infiltration of organised crime groups into lawful occupations and industries. 1.4 There are other legal responses to organised crime under Victorian and Commonwealth law which are, in general, not focused on specific occupations or industries. These include anti-association laws, anti-fortification laws, tools for the investigation and prosecution of criminal offences committed by organised crime groups, anti-money laundering laws, laws allowing for the forfeiture or confiscation of the proceeds of crime, and "unexplained wealth" laws. Scope of the review 1.5 The Commission's review is determined by the terms of reference. The terms of reference ask the Commission whether a framework of principles can be established for: - assessing the risks of organised crime infiltration of different lawful occupations or industries - developing suitable regulatory responses. 1.6 The Commission's report will present recommendations for these two sets of principles. In establishing these principles, the Commission has been asked to consider, among other matters: - the experience of Victoria and other jurisdictions in using occupational and industry regulation to help prevent organised crime infiltration of lawful occupations or industries - the implications for the overall efficiency and effectiveness of regulatory regimes of using such regimes to help prevent organised crime infiltration of lawful occupations or industries - the costs and benefits of regulatory options to assist in preventing organised crime infiltration of lawful occupations or industries.

Details: Melbourne: The Commission, 2015. 88p.

Source: Internet Resource: Accessed April 23, 2016 at: http://www.lawreform.vic.gov.au/sites/default/files/VLRC_Regulatory_Regimes_consultation_paper_%20for_web.pdf

Year: 2015

Country: Australia

URL: http://www.lawreform.vic.gov.au/sites/default/files/VLRC_Regulatory_Regimes_consultation_paper_%20for_web.pdf

Shelf Number: 138790

Keywords:
Asset Forfeiture
Money Laundering
Organized Crime
Proceeds of Crime

Author: Council of Europe. Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

Title: Anti-money laundering and counter-terrorist financing measures: Armenia

Summary: This report provides a summary of the AML/CFT measures in place in Armenia as at the date of the on-site visit (25 May to 6 June 2015). It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Armenia's AML/CFT system, and provides recommendations on how the system could be strengthened. Key Findings - Armenia has a broadly sound legal and institutional framework to combat money laundering (ML) and financing of terrorism (FT). Armenia's level of technical compliance is generally high with respect to a large majority of FATF Recommendations. - Armenia is not an international or regional financial centre and is not believed to be at major risk of ML. The predicate offences which were identified by the 2014 national risk assessment (NRA) as posing the biggest threat are fraud (including cybercrime), tax evasion, theft and embezzlement. The findings of this assessment indicate that corruption and smuggling also constitute a ML threat. The real estate sector, the shadow economy and the use of cash all constitute significant ML vulnerabilities. Competent authorities have assessed and demonstrated an understanding of some, but not all, ML risks in Armenia. - The NRA concludes that the risk of FT is very low. Although Armenia shares a border with Iran, which is considered by the FATF to pose a higher risk of FT, the evaluation team found no concrete indications that the Armenian's private sector and non-profit organisations (NPOs) are misused for FT purposes. There have never been any investigations, prosecutions and convictions for FT. There is an effective mechanism for the implementation of Targeted Financial Sanctions (TFS). No terrorist-related funds have been frozen under the relevant United Nations Security Council Resolutions (UNSCRs). - The financial intelligence unit (FIU) has access to a wide range of information sources and is very effective in generating intelligence for onward dissemination to LEAs. Law enforcement access to information is somewhat restricted by a combination of issues connected with the legislation dealing with law enforcement powers to obtain information held by financial institutions and law enforcement ability to successfully convert intelligence into evidence. Law enforcement authorities (LEAs) did not demonstrate that they make effective use of FIU notifications to develop evidence and trace criminal proceeds related to ML. - The number of ML investigations and prosecutions has increased in the period under review. However, it appears that LEAs target the comparatively easy self-laundering cases mainly involving domestic predicate offences. One ML conviction (described as autonomous) was secured, although the judiciary appears to have based its ruling on the admission that the predicate offence had been committed. Overall, law enforcement efforts to pursue ML are not fully commensurate with the ML risks faced by the country. - Seizure and confiscation of criminal proceeds, instrumentalities and property of equivalent value are not pursued as a policy objective. It is doubtful whether LEAs are in a position to effectively identify, trace and seize assets at the earliest stages of an investigation, since proactive parallel financial investigations for ML and predicate offences are not conducted on a regular basis. - The banking sector is the most important sector in terms of materiality. Banks understand the risks that apply to them according to the FATF Standards and the AML/CFT Law. However, they have not demonstrated that they have incorporated the risks identified in the NRA into their internal policies. The real estate sector, notaries and casinos pose a relatively higher risk compared to other DNFBPs. Their understanding of risk - The application of customer due diligence (CDD), record-keeping and reporting measures by financial institutions is adequate. Major improvements are needed by the DNFBP sector with respect to preventive measures. - The approach of the Central Bank of Armenia (CBA) to anti-money laundering/counter financing of terrorism (AML/CFT) supervision is to some extent based on risk. Developments in this area are on-going. Adequate procedures for the imposition of sanctions are in place. However, the level of fines could be improved. The supervision of the DNFBP sector was found to be in need of improvement relative to casinos and notaries, and inadequate relative to real estate agents, dealers in precious metals and stones, lawyers and accountants. - Most basic information on legal persons is publicly available through the State Register. All legal persons in Armenia are required to disclose the identity of their beneficial owners to the State Register upon registration and, inter alia, whenever there is a change in shareholding. Information on beneficial ownership of legal entities is also ensured through the application of CDD measures by banks. - While all the banks understand that they have to apply freezing of funds to proliferation financing and there is an innovative system in place in financial institutions to ensure that matches are detected, there is a concern that the legal framework based on the AML/CFT Law could be open to legal challenge. Coordination between the different competent authorities involved in this area needs to be further developed.

Details: Strasbourg: Council of Europe, 2015. 182p.

Source: Internet Resource: Fifth Round Mutual Evaluation Report: Accessed April 26, 2016 at: https://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round5/MONEYVAL(2015)34_5thR_MER_Armenia.pdf

Year: 2015

Country: Armenia

URL: https://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round5/MONEYVAL(2015)34_5thR_MER_Armenia.pdf

Shelf Number: 138814

Keywords:
Banks
Financial Crime
Money Laundering
Terrorist Financing

Author: Carlisle, David

Title: Targeting Security Threats Using Financial Intelligence: The US Experience in Public-Private Information Sharing since 9/11

Summary: Since the founding of the Financial Action Task Force (FATF) in 1989, global efforts on anti-money laundering and counter-terrorist financing have rested on the principle that co-operation between the public and private sectors is essential in generating financial intelligence. Recently, however, a consensus has emerged in both the public and private sectors that the frequency and quality of financial information sharing is inadequate. Observers argue that governments do not supply the private sector with sufficient detail about key threats, such as terrorism, for financial institutions to generate high-quality financial intelligence (FININT). On the other hand, private sector reporting of FININT through the traditional Suspicious Activity Reports (SARs) process is often slow and inefficient, hindering the ability of governments to act against criminals or terrorists. Fortunately, one relatively longstanding model for public-private information sharing does exist. Shortly after the 9/11 attacks, in October 2001, President George W Bush signed into law the USA PATRIOT Act. One aim of the Act was to elevate the role of FININT in identifying and disrupting security threats. Two sections of the Act have particular relevance for promoting public-private information sharing to this end: Sections 314 and 311. Set alongside the traditional SARs regime, Sections 314 and 311 help to sustain a robust, if still maturing, public-private partnership aimed at protecting the US financial system against a broad array of illicit finance threats. This paper offers an overview of the aims of US policy, an examination of the US experience in implementing Sections 314 and 311 of the PATRIOT Act, and a consideration of the advantages and disadvantages of the US approach. It also draws lessons from US experience and provides seven principles for policy-makers to consider when developing public-private information-sharing arrangements at the national or international level.

Details: London: Royal United Services Institute for Defence and Security Studies, 2016. 42p.

Source: Internet Resource: Occasional Paper, 2016: Accessed May 2, 2016 at: https://rusi.org/sites/default/files/201604_op_financing_patriot_act_final.pdf

Year: 2016

Country: United States

URL: https://rusi.org/sites/default/files/201604_op_financing_patriot_act_final.pdf

Shelf Number: 138894

Keywords:
Counter-Terrorism
Financial Crimes
Money Laundering
Patriot Act
Terrorist Financing

Author: Heggstad, Kari

Title: How Banks Assist Capital Flight from Africa: A Literature Review

Summary: Systematic studies of the banking sector's involvement in facilitating capital flight from developing countries are limited. This paper was commissioned by Norad's Anti-Corruption Project (ANKOR) for the purpose of summarising key lessons from the existing literature and to identifying knowledge gaps. It focuses on capital flight from Africa and how much needed public finances are hidden abroad. The study is a desk study, based on a review of library and online literature databases and reports and documentation from national and international organisations. The material reviewed does not provide the information necessary to draw firm conclusions as to what constitutes "best practice" in providing donor support for better regulation of banks and financial institutions in Africa. The term "best practice" itself is unclear and depends much on the environment within which finance institutions work. The review shows that banks should not be disregarded as passive players when analysing capital flight. Banks play an active role in facilitating capital flight from Africa. However, to improve the regulation of the banking and finance sectors, there is a need for more detailed knowledge on how banks actually operate as facilitators and the mechanisms applied.

Details: Bergen, Norway: Chr. Michelsen Institute, 2010. 33p.

Source: Internet Resource: Accessed May 3, 2016 at: http://www.cmi.no/file/?972

Year: 2010

Country: Africa

URL: http://www.cmi.no/file/?972

Shelf Number: 138905

Keywords:
Corruption
Financial Crimes
Money Laundering
Tax Evasion

Author: U.S. Government Accountability Office

Title: Financial Institutions: Fines, Penalties, and Forfeitures for Violations of Financial Crimes and Sanctions Requirements

Summary: Over the last few years, billions of dollars have been collected in fines, penalties, and forfeitures assessed against financial institutions for violations of requirements related to financial crimes. These requirements are significant tools that help the federal government detect and disrupt money laundering, terrorist financing, bribery, corruption, and violations of U.S. sanctions programs. GAO was asked to review the collection and use of these fines, penalties , and forfeitures assessed against financial institutions for violations of these requirements - specifically, BSA/AML, FCPA, and U.S. sanctions programs requirements . T his report describes (1) the amounts collected by the federal government for these violations , and (2) the process for collecting these funds and the purposes for which they are used. GAO analyzed agency data, reviewed documentation on agency collection processes and on authorized uses of the funds in which collections are deposited, and reviewed relevant laws. GAO also interviewed officials from Treasury (including the Financial Crimes Enforcement Network and the Office of Foreign Assets Control ), Securities and Exchange Commission, Department of Justice, and the federal banking regulators. GAO is not making r ecommendations in this report

Details: Washington, DC: GAO, 2016. 42p.

Source: Internet Resource: GAO-16-297: Accessed August 2, 2016 at: http://www.gao.gov/assets/680/675987.pdf

Year: 2016

Country: United States

URL: http://www.gao.gov/assets/680/675987.pdf

Shelf Number: 139943

Keywords:
Criminal Fines
Economic Crimes
Financial Crime
Money Laundering

Author: Financial Action Task Force of Latin America

Title: Analysis of Regional Threats on Money Laundering

Summary: The XXX GAFILAT Plenary approved the implementation of a regional study of threats on money laundering (ML) and terrorist financing (TF) of the member countries of the Financial Action Task Force on Latin America with the financial support of the European Union. The pursued objective is for countries to achieve greater effectiveness in mitigating risks and that the resources allocated for this purpose are used more efficiently.

Details: s.l.: Cocaine Route Program, European Union, 2016. 53p.

Source: Internet Resource: The European Union's Instrument Contributing to Stability and Peace: The Cocaine Route Programme: Accessed August 2, 2016 at: http://www.cocaineroute.eu/wp-content/uploads/2016/01/Analysis-of-Regional-Threats-on-Money-Laundering-.pdf

Year: 2016

Country: Latin America

URL: http://www.cocaineroute.eu/wp-content/uploads/2016/01/Analysis-of-Regional-Threats-on-Money-Laundering-.pdf

Shelf Number: 139951

Keywords:
Cocaine
Drug Trafficking
Money Laundering
Terrorism
Terrorist Financing

Author: Proctor, Nathan

Title: Anonymity Overdose: Ten cases that connect opioid trafficking and related money laundering to anonymous shell companies

Summary: Opioid deaths now exceed those from motor vehicle accidents. It's clear we need to do more. Fair Share Education Fund's latest report, "Anonymity Overdose," connects opioid trafficking and the subsequent crisis with the activities of anonymous shell companies - companies formed with no way of knowing who is actually in charge. Because they shield the owners from accountability, anonymous shell companies are a common tool for disguising criminal activity and laundering money, and are also at heart of the Panama Papers. "Anonymity Overdose" found 10 case studies that show the connection between the use of anonymous shell companies and opioid trafficking and related money laundering. In one such example, Kingsley Iyare Osemwengie and his associates were found to use call girls and couriers to transport oxycodone, and then move profits through an anonymous shell company aptly named High Profit Investments LLC. Meanwhile, the crisis is taking an increasing toll on the nation. According to the Centers for Disease Control (CDC) , in 2014 there were approximately one and a half times more drug overdose deaths in the United States than deaths from motor vehicle crashes. Since 2000, the rate of deaths from opioid related overdoses has increased 200%. The CDC refers to the opioid crisis as an epidemic. The report uses perspectives provided by law enforcement officials as well as federal court cases to highlight the role that ending anonymous shell companies could play in addressing the crisis.

Details: Washington, DC: Fair Share, 2016. 20p.

Source: Internet Resource: Accessed August 6, 2016 at: http://www.fairshareonline.org/sites/default/files/AnonymityOverdose_Aug1_2016.pdf

Year: 2016

Country: United States

URL: http://www.fairshareonline.org/sites/default/files/AnonymityOverdose_Aug1_2016.pdf

Shelf Number: 139975

Keywords:
Drug Addition
Drug Cartels
Drug Trafficking
Money Laundering

Author: Rosemont, Hugo

Title: Public-Private Security Cooperation: From Cyber to Financial Crime

Summary: Over the past two years, there has been considerable focus in the UK on developing a strategic and tactical partnership between the public and private sectors in order to achieve a step-change in the country's response to financial crime. Speaking at RUSI in June 2014, Theresa May, the then home secretary, emphasised the importance of the partnership between private sector companies and law enforcement to tackling financial crime, preventing money laundering and recovering the proceeds of crime. The result: the formation of the Financial Sector Forum and the creation of the Joint Money Laundering Intelligence Taskforce (JMLIT), a public-private partnership dedicated to collaboration in order to enhance the national response to financial crime. While this nascent effort appears to be gaining traction, and the JMLIT is being moved to a permanent footing, it is certainly not the first such initiative to be established. This paper from RUSI's Centre for Financial Crime and Security Studies considers lessons that can be learnt from the establishment of previous public-private partnerships, in particular the Cyber-security Information Sharing Partnership (CiSP). The author stresses the importance of establishing measurable objectives that are co-designed and agreed upon from the outset. Too often such partnerships, established in good faith and with undoubted commitment, fade as the initial enthusiasm wanes, staff are reassigned, and those contributing time and resources question the value of their commitment. As the UK's JMLIT emerges from its pilot phase, the longevity of this initiative will be challenged as its initial momentum fades. It is therefore critical that the JMLIT draws on the experience of other, similarly important public-private sector security partnerships in order to anticipate and address the challenges it might face as it matures.

Details: London: Royal United Services Institute for Defence and Security Studies, 2016. 33p.

Source: Internet Resource: RUSI Occasional paper: Accessed September 2, 2016 at: https://rusi.org/sites/default/files/op_201608_rosemont_public-private_security_cooperation1.pdf

Year: 2016

Country: United Kingdom

URL: https://rusi.org/sites/default/files/op_201608_rosemont_public-private_security_cooperation1.pdf

Shelf Number: 140119

Keywords:
Cybercrime
Financial Crime
Money Laundering
Partnerships
Private Security
Security

Author: Forest Trends

Title: European Trade Flows and Risk

Summary: Illegal logging, as defined in the EU Timber Regulation (EUTR), is the harvesting of timber in contravention of the laws and regulations of the country of harvest. Illegal logging is a global epidemic with significant negative economic, environmental and social impacts. Recent studies indicate that illegal logging accounts for 50-90 percent of the volume of all timber production in key producer tropical countries in the Amazon Basin, Central Africa, and Southeast Asia, and 15-30 per cent globally. In economic terms illegal logging results in lost revenues from taxes and other duties that could be used by producer countries for sustainable development purposes and other benefits. In environmental terms illegal logging is associated with deforestation, water pollution, spread of disease, climate change and a loss of biodiversity due to habitat destruction. In social terms illegal logging can be linked to conflicts over land and other resources, the disempowerment of local and indigenous communities, the loss of lives and livelihoods, human rights violations, corruption, and armed conflicts. Illegal logging also undermines international security, supports organized crime and money laundering activities, and leads to unfair competition in the marketplace that negatively impacts the sincere efforts of responsible operators in Europe and other regions of the world to comply with the law.

Details: Washington, DC: Forest Friends, 2013. 28p.

Source: Internet Resource: Accessed September 17, 2016 at: http://forest-trends.org/documents/files/doc_4085.pdf

Year: 2013

Country: Europe

URL: http://forest-trends.org/documents/files/doc_4085.pdf

Shelf Number: 140329

Keywords:
Deforestation
Forests
Illegal Logging
Money Laundering
Natural Resources
Offenses Against the Environment
Organized Crime

Author: KPMG

Title: Global Anti-Money Laundering Survey: 2014

Summary: KPMG launched its online survey in November 2013. The survey was distributed to AML and compliance professionals in the top 1,000 global banks, according to the 2013 edition of The Banker Magazine, as well as to KPMG's AML contacts in over 40 countries. The overarching aims of this year's global AML survey include: - Identifying emerging trends, opportunities and threats; - Capturing industry perceptions on regulation, cost, and effectiveness; and - Benchmarking AML efforts in the financial services industry. In addition to the topics covered in our previous surveys, the 2014 survey also asked respondents to consider money laundering in relation to the following: - Trade Finance - FATCA andTax Evasion - Insurance Sector - Asset Management Sector

Details: London: KPMG, 2014. 56p.

Source: Internet Resource: Accessed September 21, 2016 at: https://www.kpmg.com/KY/en/IssuesAndInsights/ArticlesPublications/PublishingImages/global-anti-money-laundering-survey-v3.pdf

Year: 2014

Country: International

URL: https://www.kpmg.com/KY/en/IssuesAndInsights/ArticlesPublications/PublishingImages/global-anti-money-laundering-survey-v3.pdf

Shelf Number: 145588

Keywords:
Financial Crimes
Money Laundering

Author: Zhilla, Fabian

Title: Organised crime risk assessment in Albania: Executive summary

Summary: This study focuses on the organised crime activities in Albania, as well as those conducted by Albanian criminal networks in the region and beyond. The study analyses organised crime activities such as trafficking in persons, illicit drugs and arms, smuggling of migrants, extortion, contract killings, organised cybercrime and money laundering. In some cases, so as to be able to clearly identify them, comparisons were made between various criminal activities and groups, despite the difficulties encountered with resources and the method applied. Various sources are used (both primary and secondary), including national official reports, and European and international agencies fighting organised crime. In addition, 44 interviews were conducted with experts that have a direct or indirect relation with the fight against organised crime, for instance, serious crime judges, prosecutors, lawyers, investigative journalists, civil society representatives and experts of organised cyber-crime. The total duration of recorded interviews is 24 hours and 12 minutes. Our findings and the opinions of the interviewees suggest that the elements that have stimulated organised crime in the country are of a social, economic and political nature: �- Transition from a totalitarian regime with a stringent policy on crime, to a fragile democracy with weak and unconsolidated institutions, and staff without sufficient education and/or experience; �- Chaotic situation post-1997 with the collapse of the pyramid schemes; �- Institutions that are subject to reform, with staff turnover due to changes in government; �- Lack of institutional independence, and endemic corruption in the police and law-enforcement agencies; �- Albania's favourable geographical position - with drug-producing and supplier countries such as Afghanistan and Turkey in the East, and high-consumption countries in the West; �- International nature of organised crime and the impact of globalisation; �- Lack of political stability in the country for more than two decades; �- Weak economy with high levels of unemployment and insufficient earnings per capita (one of the lowest in the continent); �- Dismantling of social structures, adversely affecting the family as the nucleus; �- Continuous immigration waves, importing experiences and criminal connections obtained abroad; �- Support from members of the Albanian diaspora; �- Conflicts in the region, with 'golden opportunities' to obtain money from the trafficking of arms, smuggling activities, etc; �- Use of technology and advanced communication tools

Details: Tirana, Albania: Open Society Foundation for Albania, 2016. 16p.

Source: Internet Resource: Accessed September 22, 2016 at: https://www.osfa.al/sites/default/files/press_permbledhje_english_0.pdf

Year: 2016

Country: Albania

URL: https://www.osfa.al/sites/default/files/press_permbledhje_english_0.pdf

Shelf Number: 140410

Keywords:
Cybercrime
Drug Trafficking
Extortion
Human Trafficking
Money Laundering
Organized Crime

Author: Briscoe, Ivan

Title: Illicit Networks and Politics in Latin America

Summary: Organized criminal networks are global phenomena that distort local and global economic markets, bring violence and blur the role of the state in providing basic services, all in the interest of increasing their wealth. The main weapon used by such networks is corruption - of politicians and of many of the state apparatuses in the countries in which they operate. This undermines the basic principles of democracy and puts the state at the mercy of illicit economic interests. This is a global challenge. Latin America has particularly suffered from these issues for a number of reasons. The strong presence of illicit networks dedicated to illegal mining, the trafficking of exotic species, arms trafficking and, in particular, the production and sale of illegal drugs such as cocaine has created a massive inflow of illicit money. Together with the high cost of political activity in the region and difficulties in controlling political contributions, this has allowed organized crime to penetrate the political landscape. However, efforts made in different Latin American countries to confront these networks have seen significant achievements. There is a wealth of positive and negative experience on how these problems can be confronted that will be useful for countries in the same region and on other continents. This book focuses on experiences in Colombia, Ecuador, Guatemala, Honduras and Peru. The authors draw on research that illustrates how relationships are forged between criminals and politicians. They identify numerous mechanisms for tackling these relations, and discuss both the achievements and the challenges concerning their practical application.

Details: The Hague: Netherlands Institute for Multiparty Democracy (NIMD) and Netherlands Institute of International Relations (Clingendael), 2014. 305p.

Source: Internet Resource: Accessed September 26, 2016 at: http://www.idea.int/publications/illicit-networks-and-politics-in-latin-america/en.cfm

Year: 2014

Country: Latin America

URL: http://www.idea.int/publications/illicit-networks-and-politics-in-latin-america/en.cfm

Shelf Number: 140463

Keywords:
Criminal Networks
Drug Trafficking
Illegal Mining
Illicit Networks
Money Laundering
Organized Crime
Political Corruption
Wildlife Trafficking

Author: Felbab-Brown, Vanda

Title: Human Security and Crime in Latin America: The Political Capital and Political Impact of Criminal Groups and Belligerents Involved in Illicit Economies

Summary: Organized crime and illegal economies generate multiple threats to states and societies. But although the negative effects of high levels of pervasive street and organized crime on human security are clear, the relationships between human security, crime, illicit economies, and law enforcement are highly complex. By sponsoring illicit economies in areas of state weakness where legal economic opportunities and public goods are seriously lacking, both belligerent and criminal groups frequently enhance some elements of human security of the marginalized populations who depend on illicit economies for basic livelihoods. Even criminal groups without a political ideology often have an important political impact on the lives of communities and on their allegiance to the State. Criminal groups also have political agendas. Both belligerent and criminal groups can develop political capital through their sponsorship of illicit economies. The extent of their political capital is dependent on several factors. Efforts to defeat belligerent groups by decreasing their financial flows through the suppression of an illicit economy are rarely effective. Such measures, in turn, increase the political capital of anti-State groups. The effectiveness of anti-money laundering measures (AML) also remains low and is often highly contingent on specific vulnerabilities of the target. The design of AML measures has other effects, such as on the size of a country‟s informal economy. Multifaceted anti-crime strategies that combine law enforcement approaches with targeted socioeconomic policies and efforts to improve public goods provision, including access to justice, are likely to be more effective in suppressing crime than tough nailed-fist approaches. For anti-crime policies to be effective, they often require a substantial, but politically-difficult concentration of resources in target areas. In the absence of effective law enforcement capacity, legalization and decriminalization policies of illicit economies are unlikely on their own to substantially reduce levels of criminality or to eliminate organized crime. Effective police reform, for several decades largely elusive in Latin America, is one of the most urgently needed policy reforms in the region. Such efforts need to be coupled with fundamental judicial and correctional systems reforms. Yet, regional approaches cannot obliterate the so-called balloon effect. If demand persists, even under intense law enforcement pressures, illicit economies will relocate to areas of weakest law enforcement, but they will not be eliminated.

Details: Miami: Florida International University, Western Hemisphere Security Analysis Center, 2011. 57p.

Source: Internet Resource: Accessed October 6, 2016 at: https://www.brookings.edu/wp-content/uploads/2016/06/09_latin_america_crime_felbab_brown.pdf

Year: 2011

Country: Latin America

URL: https://www.brookings.edu/wp-content/uploads/2016/06/09_latin_america_crime_felbab_brown.pdf

Shelf Number: 147800

Keywords:
Illicit Economies
Money Laundering
Organized Crime
Police Effectiveness
Police Legitimacy

Author: International Monetary Fund

Title: Canada: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism

Summary: This report provides a summary of the anti-money laundering and combating the financing of terrorism (AML/CFT) measures in place in Canada as at the date of the onsite visit (November 3 to 20, 2015). It analyzes the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Canada's AML/CFT system, and provides recommendations on how the system could be strengthened

Details: Washington, DC: International Monetary Fund, 2016. 217p.

Source: Internet Resource: Country Report No. 16/294: Accessed October 7, 2016 at: https://www.imf.org/external/pubs/ft/scr/2016/cr16294.pdf

Year: 2016

Country: Canada

URL: https://www.imf.org/external/pubs/ft/scr/2016/cr16294.pdf

Shelf Number: 145109

Keywords:
Financial crime
Money Laundering
Terrorism Financing

Author: Caribbean Financial Action Task Force

Title: Anti-money laundering and counter-terrorist financing measures Trinidad and Tobago Mutual Evaluation Report

Summary: 1. This report provides a summary of the anti-money laundering (AML)/ countering the financing of terrorism (CFT) measures in place in Trinidad and Tobago as at the date of the on-site visit of January 12-23, 2015. It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Trinidad and Tobago's AML/CFT system, and provides recommendations on how the system could be strengthened. A. Risks and General Situation 2. Trinidad and Tobago is currently undertaking its National Risk Assessment (NRA) in relation to money laundering (ML)/ terrorist financing (TF). At the time of the on-site, Trinidad and Tobago had commenced, but not completed its NRA. Draft sector reports had been compiled and preliminary results had been communicated to the relevant sectors, however the Authorities advised that the draft reports could not be shared with the Assessors at that time. The National Anti-Money Laundering and Counter Financing of Terrorism Committee (NAMLC) advised that Trinidad and Tobago was in the process of reviewing, consulting on and finalizing the collated Report before sending to the World Bank. The different Competent Authorities (CAs) including law enforcement authorities (LEAs) have indicated to the Assessors that they are aware of the risk ML and predicate offences pose to the jurisdiction. However no documentation was produced to substantiate the information provided by law enforcement in this regard. The Financial Intelligence Unit of Trinidad and Tobago (FIUTT) produced information to show that the predicate offences of Tax Evasion, Fraud and Drug Trafficking are some of the highest generators of the proceeds of crime as a result of the suspicious transaction reports (STRs)/ suspicious activity reports (SARs) submitted to the FIUTT. The Assessors were informed that the location of the jurisdiction and its nexus to international trade also makes it vulnerable to cross-border ML risks. The information reflected the volume of currency declarations that were submitted by the Customs and Excise Division to the FIUTT along with the number of cash seizures that occurred throughout the port. The information provided to the Assessors shows that Money Value Transfer Service (MVTS) providers are second only to the banks in filing STRs/SARs to the FIUTT. The large volume of currency declarations being reported to the FIUTT by the Customs and Excise Department coupled with the increasing amount of reports the FIUTT has been receiving from the MVTS providers and the monetary value of cash seized by the Customs and Excise Division are indicators that significant amount of monies are being moved across the border. 3. The offence of Terrorism is not unknown to the jurisdiction. Law Enforcement and Intelligence Officials have indicated that nationals of Trinidad and Tobago are currently being held in Venezuela on suspected terrorist activity offences. The information provided to the Assessors also indicated that Trinidad and Tobago has extradited one of its nationals to New York, USA for terrorist related activities. Currently, LEAs and other intelligence agencies within the jurisdiction have intelligence information to suggest that its nationals are travelling to places such as Syria to fight with terrorist organisations such as ISIS/ISIL. The FIUTT has received information in the form of STRs/SARs which may indicate that some legal entities are engaged in conducting businesses with entities that may be involved in terrorism activities. B. Key Findings Overall Level of Compliance and Effectiveness - Identifying, assessing and understanding risk: Trinidad and Tobago is currently conducting its NRA in collaboration with the World Bank. This assessment is being spearheaded by NAMLC. The Assessors note that Trinidad and Tobago's understanding of risk is limited and there has been varied assessments of such risk by CAs. The NRA, therefore, would be helpful in assisting Trinidad and Tobago with identifying, assessing and mitigating the risk posed by ML/TF. - The Limited Use of Financial Intelligence: Trinidad and Tobago has robust legislation that allows for LEAs to gather financial intelligence and information to investigate ML, TF and associated predicate offences. These enactments being the POCA and the ATA also provides for the LEAs to trace, restrain and confiscate the proceeds of crime. The FIUA allows for the FIUTT to receive, analyse and disseminate financial information to the relevant LEAs. The FIUTT has disseminated several Intelligence Reports (IRs) to LEAs as part of its mandate. Three of these reports have led to the arrest and prosecution of five individuals for ML offences. However, the Assessors observed that a large number of SARs received by the FIUTT are still awaiting analysis or have been filed for intelligence purposes. It should also be noted that a number of the IRs disseminated to the Financial Investigations Branch (FIB) are still under investigation. The Assessors were informed that there has been an improvement in the quality of IRs submitted by the FIUTT as of 2014. - Money Laundering Investigation and Prosecution: LEAs in Trinidad and Tobago considered the risk associated with ML as being medium to high. The jurisdiction has recorded three cases of ML that have resulted in charges being brought against five individuals. The cases are currently pending before the Court. The information provided indicates that these cases were as a result of parallel investigations conducted between the FIB and the Fraud Squad. There are no arrests for stand-alone ML. The investigation of ML is not properly prioritized by LEAs. The lack of ML arrests coupled with the risks associated with the jurisdiction along with the lack of priority given to investigation suggests that the offence of ML is not properly investigated. Furthermore, none of the cases for which persons have been charged with ML have been adjudicated by the Court and this therefore creates a difficulty in determining whether these cases have been properly investigated. In the absence of convictions for ML, it is not possible to say conclusively that matters are being properly investigated. The absence of convictions for the offence of ML means that no sanctions have been applied by the Court. The offence of ML is not given priority within the Court system. - Confiscation: Confiscation is not treated with priority within Trinidad and Tobago. Trinidad and Tobago does not have any confiscation proceedings pertaining to ML, TF or any predicate offences. Recent changes to the POCA have created a loophole whereby confiscation may not be possible if the criminal ML conduct is not linked to a specified offence. - The Seized Assets Fund (SAF) which is for monies seized under the POCA and the ATA has not been properly established as persons have not been appointed to the Seized Assets Committee and Regulations governing the management and operation of the fund have not as yet been developed. - Terrorist Financing: The offence of terrorist financing has been adequately criminalised in the ATA and related regulations. The FIUTT has mandated in its Standard Operating Procedures (SOP) that STRs relating to TF are to be given priority and outlines the procedure upon receipt of these STRs. The Assessors were informed that these IRs were delivered to the relevant person within the Trinidad and Tobago Police Service (TTPS). There has been no feedback to the FIUTT in relation to these IRs. The Assessors note that a report of TF was submitted since 2013 and there is no evidence to suggest that any actions have been taken against the individuals or entities mentioned in the report. There is no indication that TF is prioritized and properly investigated by LEAs as there has been no designation of entities or persons as terrorists, no assets restrained nor any arrests or convictions for TF offences. The framework for targeted sanctions related to the financing of terrorism needs to be significantly tightened up. There are not adequate sanctions or prohibitions in respect of making funds or facilities available to designated persons and all the requirements for freezing funds are not covered in the ATA. There is no comprehensive policy on the proliferation of financing of weapons of mass destruction and there is no adequate legislation on this issue. There does not appear to be a thorough appreciation of the risk of TF amongst the relevant authorities. There are inadequate resources to effectively investigate and prosecute TF. - Non Profit Organisations (NPOs): NPOs are required to register with the Registrar General's Department however there is no proper AML/CTF policy in relation to the management, supervision and monitoring of these entities. A targeted risk assessment for these entities has not been done as yet, neither are there adequate laws to address this area which means that for most intents and purposes the sector is not being sufficiently regulated. - Preventive Measures - The regulatory framework in relation to preventive measures is largely in place as demonstrated by the level of technical compliance by Trinidad and Tobago. However, significant gaps exist in the manner in which FIs and listed businesses (LBs) in Trinidad and Tobago implement these requirements. Gaps exist in understanding risk, applying enhanced due diligence to PEPS, internal controls and performance of CDD measures based on risk. - Supervision - The supervisory regime undertaken by the Central Bank of Trinidad and Tobago (CBTT) is robust and well developed given that it has had significantly more years of experience than the other CAs. Supervision performed by the CBTT is sound. Additionally, the FIUTT as a supervisor has demonstrated its capabilities while the Trinidad and Tobago Securities and Exchange Commission (TTSEC) has only recently begun direct AML/CFT supervision. Except for the CBTT there are issues of resources and expertise. Across the board, Regulators have not demonstrated sufficient understanding of risk and applied that understanding to how they regulate on a risk sensitive basis. Sanctions imposed by supervisors have been limited and the range of sanctions available have not been utilised adequately by supervisors. Supervisors need to consider wider use of those powers as well as seeking additional powers such as the ability to impose monetary administrative penalties. - National AML/CFT Policies and Coordination - There is an overall AML/CFT framework in place. The framework is coordinated by the NAMLC. Domestic coordination occurring amongst the key stakeholders has resulted in a number of positive strides within the AML/CFT framework. However, all sectors have not been covered in terms of articulation and thorough dissemination of the AML/CFT policy and in assessing and understanding the country-wide risks. There is need for greater resources to be invested so that all the key agencies are sufficiently funded. - Legal Persons and Legal Arrangements - Trinidad and Tobago is a thriving centre for commercial activity. It has a very active Registrar General's Department (RGD) that oversees the registration of companies, NPOs and the registration of business names amongst other functions. A publicly searchable electronic database for general records of the RGD has been invaluable in increasing accessibility to basic information on companies. Some beneficial ownership information is kept and made available but the accuracy of this is questionable since there is no requirement in the Companies Act to demand and maintain such information. Trinidad and Tobago is not a major centre for legal arrangements. Recent improvements in the filing of annual returns has improved the accuracy of records within the RGD and the verification process but there is still significant room for improvement. No risk analysis pertaining to legal arrangements has been done. - International Cooperation - FIUTT has been working effectively to use mechanisms to share, exchange and respond to requests for information. The FIUTT is able to share information spontaneously. LEAs have not maximised the possibility of exchanging information with their foreign counterparts. Both the BIR and the Customs and Excise Division have limitations in providing or obtaining information from foreign counterparts. Requests for information are not always processed in a timely manner. All the provisions of the Vienna Convention, the Merida Convention, the Terrorist Financing Convention and the Palermo Convention need to be given effect to. A proper case management system does not exist for either mutual legal assistance or extradition cases. There are some limitations in the Mutual Legal Assistance Act that may affect the provision of information.

Details: Trinidad & Tobago, West Indies: Caribbean Financial Action Task Force, 2016. 173p.

Source: Internet Resource: Accessed October 15, 2016 at: http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/cfatf-4mer-trinidad-tobago.pdf

Year: 2016

Country: Trinidad and Tobago

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/mer-fsrb/cfatf-4mer-trinidad-tobago.pdf

Shelf Number: 140758

Keywords:
Financial Crime
Money Laundering
Terrorist Financing

Author: GAFISUD

Title: GAFISUD - 2010 Regional Typologies

Summary: The document: "REGIONAL TYPOLOGIES - GAFISUD 2010" was drafted by the International Financial Action Task Force of South America [Grupo de Accion Financiera Internacional de Sudamerica] - GAFISUD, in cooperation with the GAFISUD- European Union Project. It is classified as a document of PUBLIC KNOWLEDGE. Consequently, its content may be consulted and utilized by any person, with copyright limitations. As a result of the aforesaid, its reproduction, copy, distribution, etc., in whole or in part, requires GAFISUD's previous authorization. The pertinent request may be addressed to the email: contacto@gafisud.info This document presents some of the mostly used money laundering and terrorist financing methodologies, with the aim of helping the region's reporting entities and the society as a whole in the preventive actions of behaviours associated with money laundering and the financing of crime organizations. This information will allow designing better instruments of control and red flags that will enable authorities to devise or adjust control mechanisms with the purpose of protecting themselves against money launderers or the financing of terrorist groups. The descriptions and examples are based on real facts. However, all such data that may identify situations, individuals or places and additional elements have been amended in order to avoid any search and seizure, damage or breach of material rights. The statements on economic activities do not constitute a conjecture or forecast about truthful and permanent bonds with activities tied to money laundering and terrorist financing. The described behaviour or typology only shows a tendency and the existing risk within the economic activity of being used by individuals engaged in money laundering or terrorist financing.

Details: s.l. GAFISUD, 2010. 54p.

Source: Internet Resource: Accessed October 17, 2016 at: http://www.cocaineroute.eu/wp-content/uploads/2015/10/Regional-Typologies-2010.pdf

Year: 2010

Country: South America

URL: http://www.cocaineroute.eu/wp-content/uploads/2015/10/Regional-Typologies-2010.pdf

Shelf Number: 144869

Keywords:
Financial Crime
Money Laundering
Terrorist Financing

Author: AUSTRAC

Title: Australia's Superannuation Section: Money Laundering and Terrorism Financing Risk Assessment

Summary: AUSTRAC assesses the overall money laundering and terrorism financing (ML/TF) risk for the superannuation sector as MEDIUM. This rating is based on an assessment of the criminal threat environment, the vulnerabilities within the sector, and the consequences or harms associated with the criminal threat. This assessment relates to superannuation funds regulated by the Australian Prudential Regulation Authority (APRA). The criminal threat environment is varied and multifaceted, ranging from opportunistic offences conducted by individual members, to complex and sophisticated attacks executed by organised crime groups, including from entities based overseas. The size of the superannuation sector ($1.26 trillion in assets)1 makes it an attractive target for money laundering and associated predicate crimes. Fraud is by far the most prevalent predicate crime, with many reported cases of falsified documents and attempted illegal early release of superannuation savings. Many cases of fraud are enabled by cybercrime, with funds observing regular and sophisticated hacking attempts. Terrorism financing is a limited but emerging threat. Foreign terrorist fighters (FTFs), who are generally self funded, have accessed superannuation accounts to finance their activities. The specific characteristics of the superannuation sector that make it vulnerable to ML/TF and predicate crimes include: • the extremely large number of member accounts and volume of transactions • low levels of member engagement, which hampers timely detection of fraud • post-preservation accounts which have few restrictions on making transactions to and from the accounts • voluntary contributions to accumulation accounts by members, where the source of money is difficult to verify • payments to members and outgoing rollovers that are vulnerable to fraud and illegal early release • the growing reliance on online delivery of products and services, resulting in less face-toface interaction with customers and increasing online data storage.

Details: West Chatswood, NSW: AUSTRAC, 2016. 24p.

Source: Internet Resource: Accessed December 10, 2016 at: http://austrac.gov.au/sites/default/files/super-annuation-risk-assessment-WEB.pdf

Year: 2016

Country: Australia

URL: http://austrac.gov.au/sites/default/files/super-annuation-risk-assessment-WEB.pdf

Shelf Number: 140411

Keywords:
Financial Crime
Money Laundering
Risk Assessment
Terrorist Financing

Author: Financial Action Task Force (FATF)

Title: Anti-money laundering and counter-terrorist financing measures: United States. Mutual Evaluation Report

Summary: 1. This report provides a summary of the anti-money laundering and combating the financing of terrorism (AML/CFT) measures in place in the United States at the date of the on-site visit (18 January 2016 to 5 February 2016). It analyses the level of compliance with the FATF 40 Recommendations, the level of effectiveness of its AML/CFT system, and makes recommendations on how the system could be strengthened. A. Key Findings  The AML/CFT framework in the U.S. is well developed and robust. Domestic coordination and cooperation on AML/CFT issues is sophisticated and has matured since the previous evaluation in 2006. The understanding of money laundering (ML) and terrorist financing (TF) risks is well-supported by a variety of ongoing and complementary risk assessment processes, including the 2015 National Money Laundering Risk Assessment (NMLRA) and National Terrorist Financing Risk Assessment (NTFRA), which were both published. The national AML/CFT strategies, key priorities and efforts of law enforcement and other agencies seem to be driven by these processes and are coordinated at the Federal level across a vast spectrum of agencies in a number of areas.  The financial sectors bear most of the burden in respect of required measures under the Bank Secrecy Act (BSA). Financial institutions (FIs), in general, have an evolved understanding of ML/TF risks and obligations, and have systems and processes for implementing preventive measures, including for on-boarding customers, transaction monitoring and reporting suspicious transactions.  However, the regulatory framework has some significant gaps, including minimal coverage of certain institutions and businesses (investment advisers (IAs), lawyers, accountants, real estate agents, trust and company service providers (other than trust companies). Minimal measures are imposed on designated non-financial businesses and professions (DNFBPs), other than casinos and dealers in precious metals and stones, and consist of the general obligation applying to all trades and businesses to report transactions (or a series of transactions) involving more than USD 10 000 in cash, and targeted financial sanctions (TFS) requirements. Other comprehensive AML/CFT obligations do not apply to these sectors. In the U.S. context the vulnerability of these minimally covered DNFBP sectors is significant, considering the many examples identified by the national risk assessment process.  Law enforcement efforts rest on a well-established task force environment which enables the pooling of expertise from a wide range of law enforcement agencies (LEAs), including prosecutors, to support quality ML/TF investigation and prosecution outcomes. Overall, LEAs have access to a wide range of financial intelligence, capabilities and expertise allowing them to trace assets, identify targets and undertake expert financial ML/TF investigations. There is a strong focus on following the money in predicate offence investigations at the Federal level. A similar focus on identifying terrorist financiers in terrorism-related investigations applies. The U.S. investigates and prosecutes TF networks aggressively in line with its risk profile. International cooperation in these areas is generally effective though improvements are underway to further improve the timely handling of (a large volume) of mutual legal assistance (MLA) and extradition requests.  Lack of timely access to adequate, accurate and current beneficial ownership (BO) information remains one of the fundamental gaps in the U.S. context. The NMLRA identifies examples of legal persons being abused for ML, in particular, through the use of complex structures to hide ownership. While authorities did provide case examples of successful investigations in these areas, challenges in ensuring timely access to and availability of BO information more generally raises significant concerns, bearing in mind risk and context.  At the Federal level, the U.S. achieves over 1 200 ML convictions a year. Many of these cases are large, complex, white collar crime cases, in line with the country’s risk profile. Federal authorities have the lead role in all large and/or international investigations. There is however no uniform approach to State-level AML efforts and it is not clear that all States give ML due priority. The AML system would benefit from ensuring that a range of tax crimes are predicate offenses for ML.  The Federal authorities aggressively pursue high-value confiscation in large and complex cases, in respect of assets located both domestically and abroad. The authorities effectively resort to criminal, civil and administrative tools to forfeit assets. At State and local levels, there is little available information, though it appears that civil forfeiture is vigorously pursued by some States.  The U.S. authorities effectively implement targeted financial sanctions for both terrorism and proliferation financing purposes, though not all U.N designations have resulted in domestic designations (mainly on the basis of insufficient identifiers). Most designations take place without delay, and are effectively communicated to the private sector. The U.S. Specially Designated Nationals and Blocked Persons List (SDN List) is used by thousands of FIs across the U.S. and beyond which gives the U.S sanctions regime a global effect in line with the size, complexity and international reach of the U.S. financial system. The U.S has had significant success in identifying the funds/other assets of designated persons/entities, and preventing them from operating or executing financial transactions related to terrorism and proliferation. Only minor improvements are needed in this area.  AML/CFT supervision of the banking and securities sectors appears to be robust as a whole, and is evolving for money services businesses (MSBs) through greater coordination at the State level. The U.S. has a range of sanctions that it can and does impose on FIs as well as an array of dissuasive remedial measures, including informal supervisory actions. These measures seem to have the desired impact on achieving the supervisory objectives. The most significant supervisory gap is lack of comprehensive AML/CFT supervisory processes for the DNFBPs, other than casinos.

Details: Paris, FATF, 2016. 266p.

Source: Internet Resource: Accessed December 14, 2016 at: http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-United-States-2016.pdf

Year: 2016

Country: United States

URL: http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-United-States-2016.pdf

Shelf Number: 140443

Keywords:
Financial Crimes
Money Laundering
Risk Assessment
Terrorist Financing

Author: U.S. House. Committee on Financial Services

Title: Stopping Terror Finance: Securing the U.S. Financial Sector

Summary: Terrorist financing describes a form of financial crime in which an individual or entity solicits, collects, or provides funds "with the intention that [these funds] may be used to support terrorist acts or organizations." While terrorists can benefit from big donations of deep-pocketed financiers sympathetic to their cause, terrorist financing often involves relatively small-dollar amounts and itself is just a subset melting into the larger stream of all financial crime occurring in the international financial system. The threat to national security from terrorist financiers is real, so while U.S. policymakers have long recognized the idea that "following the money" through the retail banking system can help combat terrorism and related forms of illicit finance, new financing technologies have arisen since the September 11, 2001, terror attacks that require constant renewal of detection and disruption methods. In December 2015, the intergovernmental Financial Action Task Force (FATF) warned that "further concerted action urgently needs to be taken … to combat the financing of … serious terrorist threats...." Two months later, in February 2016, FATF noted that the scope and nature of terrorist threats had "globally intensified considerably." According to the U.S. Department of the Treasury (Treasury Department), these threats collectively represent a source of risk generally to the United States, and to the financial system in particular. Specifically, Treasury concludes: [t]he central role of the U.S. financial system within the international financial system and the sheer volume and diversity of international financial transactions that in some way pass through U.S. financial institutions expose the U.S. financial system to TF [terrorist financing] risks that other financial systems may not face. The bipartisan Task Force to Investigate Terrorism Financing of the Financial Services Committee (Task Force) was authorized for two six-month terms during the 114th Congress to probe the growing terrorist financing problem. The Task Force held eleven hearings, and its 21 Members systematically examined how select terror groups and actors acquire and move funds illicitly. The hearings featured expert testimony from current and former U.S. government employees, with witnesses from both the U.S. and overseas, on a wide range of topics. The Task Force recently concluded its work with two wrap-up hearings, one of which featured testimony from two senior Treasury Department officials on how the agency is coordinating its efforts to fight terrorist financing.

Details: Washington, DC: U.S. House of Representatives, Committee on Financial Services, 2016. 191p.

Source: Internet Resources: Accessed December 21, 2016 at: http://financialservices.house.gov/uploadedfiles/terror_financing_report_12-20-2016.pdf

Year: 2016

Country: United States

URL: http://financialservices.house.gov/uploadedfiles/terror_financing_report_12-20-2016.pdf

Shelf Number: 147795

Keywords:
Financial Crimes
Money Laundering
Terrorism
Terrorist Financing

Author: Collin, Matthew

Title: The Impact of Anti-Money Laundering Regulation on Payment Flows: Evidence from SWIFT Data

Summary: Regulatory pressure on international banks to fight money laundering (ML) and terrorist financing (TF) increased substantially in the past decade. At the same time there has been a rise in the number of complaints of banks denying transactions or closing the accounts of customers either based in high risk countries or attempting to send money there, a process known as de-risking. In this paper, we investigate the impact of an increase in regulatory risk, driven by the inclusion of countries on an internationally-recognized list of high risk jurisdictions, on subsequent cross-border payments. We find countries that have been added to a high risk greylist face up to a 10% decline in the number of cross border payments received from other jurisdictions, but no change in the number sent. We also find that a greylisted country is more likely to see a decline in payments from other countries with weak AML/CFT institutions. We find limited evidence that these effects manifest in cross border trade or other flows. Given that countries that are placed on these lists tend to be poorer on average, these impacts are likely to be more strongly felt in developing countries.

Details: Washington, DC: Center for Global Development, 2016. 52p.

Source: Internet Resource: Working Paper 445: Accessed January 27, 2017 at: http://www.cgdev.org/sites/default/files/impact-anti-money-laundering-SWIFT-data.pdf

Year: 2016

Country: International

URL: http://www.cgdev.org/sites/default/files/impact-anti-money-laundering-SWIFT-data.pdf

Shelf Number: 145092

Keywords:
Financial Crime
Money Laundering
Terrorist Financing
White Collar Crime

Author: Hicks, Tristram

Title: Model Approach for Investigating the Financing of Organised Crime

Summary: The financing of organised crime is a horizontal issue for all criminal markets, although it rarely falls in the focus of law enforcement agencies. The intelligence gathering of law enforcement agencies has traditionally been focused on uncovering the members of crime groups and tracing the illicit goods or services. Financial transactions are traced mainly for the purposes of money laundering investigations, where the focus is on the proceeds and not on the investments related to the criminal activities. The reason for this is that currently criminal prosecution procedures in all Member States are entirely focused on collecting evidence in regards to possession, transporting, manufacturing or sale of illicit products or services. Financing of organised crime is also often passed over in threat assessments and strategic analyses of organised crime.

Details: Sofia, Bulgaria: Center for the Study of Democracy, 2015? 16p.

Source: Internet Resource: Accessed February 13, 2017 at: http://www.csd.bg/artShow.php?id=17318

Year: 2015

Country: Europe

URL: http://www.csd.bg/artShow.php?id=17318

Shelf Number: 145770

Keywords:
Criminal Investigation
Illicit Products
Money Laundering
Organized Crime

Author: United Nations Office on Drugs and Crime (UNODC)

Title: UNODC Regional Programme in support of the CARICOM Crime and Security Strategy: Preventing and Countering Illicit Trafficking and Organized Crime for Improved Governance, Justice and Security

Summary: The Caribbean is situated in the midst of some of the world's major drug trafficking routes, between the worlds main drug producing countries to the South and the major consumer markets of the North. The geographic location of the region, the general lack of adequate law enforcement capacities to effectively monitor vast coastlines, as well as its susceptibility to exogenous shocks, are some of the factors explaining the Caribbean's extreme vulnerability to the threat of transnational organized crime and its various manifestations. The nature of these challenges makes regional cooperation and a coordinated response key factors in addressing the increasing plague of transnational crime, which threatens not only regional security, but also sustainable development and growth. 2. The UNODC Regional Programme (2014-2016) in support of the CARICOM Crime and Security Strategy serves as an overarching policy framework for UNODC’s technical assistance to the Caribbean region. The Caribbean Community (CARICOM) 'Crime and Security Strategy 2013' (CCSS) clearly illustrates the areas of greatest concern regarding regional security and outlines a set of Strategic Goals aimed at strengthening the region's capacity to combat transnational organized crime and its manifestations. In an effort to support the region in achieving these Goals, UNODC has worked closely with the CARICOM Secretariat and its Implementation Agency for Crime and Security (IMPACS) to align technical assistance in such a way that these main areas of priority are adequately addressed, while avoiding any duplication of initiatives. 3. The Regional Programme consists of the following five sub-programmes, which not only reflect the range of thematic areas covered by the UNODC mandate, but also directly target the priority goals of the CARICOM Strategy: (i) Countering transnational organized crime, Illicit Trafficking and Terrorism; (ii) Countering Corruption and Money Laundering; (iii) Preventing Crime and Reforming Criminal Justice; (iv) Drug Use, Prevention and Treatment and HIV/AIDS and (v) Research, Trend Analysis and Forensics. These sub-programmes will guide the development of concrete UNODC projects and initiatives to be implemented in the region. The indicative budget of the Regional Programme, for its 3-year timeframe, stands at US$ 11,690,257. 4. The direct responsibility for the implementation of the initiatives included in this Regional Programme will lie with the UNODC Regional Office for Central America and the Caribbean in Panama (ROPAN). Standard UNODC rules and procedures will be observed, so as to ensure the appropriate level of internal oversight and evaluation. Furthermore, in line with the regional consensus on programme management, UNODC will adhere closely to agreed coordination and oversight mechanisms, through the submission of annual reports to the CARICOM Council of Ministers for Security and Law Enforcement (CONSLE), which will provide strategic guidance to and oversight of the Regional Programme’s implementation, so as to ensure adequate coordination in the implementation of activities at the regional level. . 1CARICOM Crime and Security Strategy 2013, Chapter 1 (Strategic Security Environment), paragraph 1.6. 2 The CARICOM Crime and Security Strategy 2013 was adopted at the Twenty-Fourth Inter-Sessional Meeting of the Conference of Heads of Government of CARICOM, 18-19 February 2013, Port-au-Prince, Haiti. The Strategy, which is based on a 3-year timeframe, is the authoritative reference and guiding document for security issues within CARICOM. 5. This Regional Programme (2014-2016) is an over-arching policy framework defining the joint priorities for UNODC’s technical assistance to Caribbean Member States, in alignment with and in support of the implementation of the CCSS. In their "Political Declaration on Combating Illicit Drug Trafficking, Organized Crime, Terrorism and other Serious Crimes in the Caribbean", which was approved by the Caribbean Member States during a Ministerial Conference on 'Illicit Drug Trafficking, Transnational Organized Crime and Terrorism as Challenges for Security and Development in the Caribbean' (Santo Domingo, 17-20 February 2009), the participating Member States requested “UNODC to prepare, in coordination with regional and sub-regional partners, thematic programmes identified by the region, covering the priority concerns”. UNODC's Regional Programme constitutes the key element of UNODC's response to this request as well as to the more recent calls by Member States in the region for a revitalized engagement of the Office in the Caribbean. These requests are a consequence of the perception, by Governments in the region, of the increased threats that are posed to Caribbean societies and institutions by transnational organized crime. There is a strong recognition that, in order to prevent and counter the problem of illicit drugs and organized crime affecting the Caribbean, there is a need for enhanced technical cooperation and assistance by UNODC. 6. The Programme has been developed in close collaboration with the CARICOM Secretariat, the CARICOM Implementation Agency for Crime and Security (IMPACS), the Regional Security System (RSS), the Caribbean Aviation Safety and Security Oversight System (CASSOS), as well as Member States in the region (through programming missions as well as discussions with Permanent Missions), and reflects the key priorities of regional and national stakeholders. Substantively, the Regional Programme is underpinned by and alligned with the Strategic Goals outlined in the CCSS. 7. The Regional Programme also draws significant elements from the Caribbean Community Action Plan for Social and Development Crime Prevention 2009-2013, as it fully incorporates its main pillars and updates its priorities for the period 2014-2016. 8. In the context of the CCSS, this Regional Programme will therefore cover Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent & the Grenadines, Suriname and Trinidad & Tobago. Strategic and programmatic synergies will also be sought with Cuba and the Dominican Republic in the framework of CARIFORUM. 9. The Regional Programme is designed as a strategic tool that reflects the region's main priorities for action, and ensures complementarity with the various on-going and future initiatives of UNODC and its main partners in the region in the area of justice and security. It provides a roadmap towards providing required expertise, technical tools and services to enhance national and regional capabilities to prevent and counter organized crime, including drug trafficking and terrorism, by building stronger societies based on the rule of law and human rights. It promotes regional cooperation and integration, and supports regional and country-level capacity building, as determined by existing national needs, priorities and specificities. 10. The overall vision is that, by the year 2016, countries of the region will be in a position to count on strengthened institutions and cooperate in an effective and sustainable manner to counter the destabilizing impact of organized crime. While the ultimate attainment of this vision depends on the commitment of countries in the region and their international partners, UNODC, through the development of this Regional Programme, reiterates its commitment to support the realization of this vision through its engagement at the regional, sub-regional, national and local levels, in close collaboration with the CARICOM Secretariat, CARICOM IMPACS and other relevant regional security insitutions, such as the RSS and CASSOS.

Details: New York: UNODC, 2013. 79p.

Source: Internet Resource: Accessed February 18, 2017 at: https://www.unodc.org/documents/ropan/UNODC_Regional_Programme_Caribbean/UNODC_Regional_Programme_for_the_Caribbean_2014-2016_in_support_of_the_CARICOM_Crime_and_Security_Strategy_2013.pdf

Year: 2013

Country: Caribbean

URL: https://www.unodc.org/documents/ropan/UNODC_Regional_Programme_Caribbean/UNODC_Regional_Programme_for_the_Caribbean_2014-2016_in_support_of_the_CARICOM_Crime_and_Security_Strategy_2013.pdf

Shelf Number: 146652

Keywords:
Drug Trafficking
Drug-Related Crime
Money Laundering
Organized Crime
Terrorist Financing

Author: Kowalczyk-Hoyer, Barbara

Title: Top Secret: Countries Keep Financial Crime Fighting Data to Themselves

Summary: Financial systems depend on trust from citizens and businesses to function. A vital part of this trust is the belief that banks are not holding funds on behalf of corrupt individuals and organisations, criminals, or terrorists. In recent years, the financial sector has provided ample reason to question this belief. The majority of large-scale corruption scandals, from Ukraine to Brazil, have featured banks transferring or managing funds for the perpetrators and their associates. An analysis of 200 cases of grand corruption by Global Witness has identified 140 banks involved in handling a total of at least US$56 billion in corrupt proceeds. Following the Petrobras corruption scandal in Brazil, for example, Switzerland’s attorney general froze US$400 million held at more than 30 Swiss banks with suspected ties to the case3 . Corruption and money laundering (ML) – the act of disguising the origin of illegal and corrupt proceeds – undermine the basic rule of law, weaken democratic institutions and damage economies and societies. In 2013 alone, developing countries lost an estimated US$ 1.1 trillion to Illicit Financial Flows – illegal movements of money from one country to another. Effective anti-money laundering measures, in both developed and developing countries, are essential to end these illicit flows. Experience in recent years has time and again shown that the financial sector cannot be relied upon to police itself when it comes to dirty money in the system, requiring strong consistent and effective anti-money laundering (AML) supervision by authorities. Just like health and safety inspectors in restaurants, national financial supervisors have the power to visit and inspect banks (on-site monitoring), identify and record failings in their systems, and impose sanctions where necessary. Prosecutors also have the power to investigate and prosecute money laundering cases, including requesting information across borders, and judges have the power to sanction individuals and corporate entities found guilty of crimes. Public scrutiny is essential for the accountability of these mechanisms, but this report shows that in countries hosting major financial centres, data on anti-money laundering prevention and enforcement is treated as if it were Top Secret. Just one in three basic anti-money laundering indicators drawn from internationally accepted guidelines is available to the public and up to date across 12 countries hosting major financial centres, including the U.S., the U.K., Germany, Switzerland and Luxembourg. This low level of public data availability is a major obstacle to any independent monitoring of the effectiveness of anti-money laundering by civil society and the media.

Details: Berlin: Transparency International, 2017. 41p.

Source: Internet Resource: Accessed February 22, 2017 at: https://financialtransparency.org/wp-content/uploads/2017/02/Top-Secret-financial-data-report.pdf

Year: 2017

Country: International

URL: https://financialtransparency.org/wp-content/uploads/2017/02/Top-Secret-financial-data-report.pdf

Shelf Number: 144841

Keywords:
Financial Crimes
Money Laundering
Proceeds of Crime

Author: Muggah, Robert

Title: Securing the Border: Brazil's

Summary: Brazil is at a crossroads in the fight against transnational organized crime. For one, Brazil is claiming a wider involvement in the international peace and security agenda and pursuing priorities overseas. At the same time, the country is adopting what might be described as a "South American first" approach to dealing with narco-trafficking, arms smuggling, money laundering and cybercrime. It consists of investing in subregional institutions and discrete bilateral agreements in its near abroad. This more localized approach is contributing to the consolidation of Brazilian state institutions in its hinterland. But what direction will Brazil take in the coming decade? This Strategic Paper offers an overview of the scope and scale of organized crime in Latin America and Brazil more specifically. It critically reviews Brazil's normative and institutional responses – both regional and national – and considers likely future security postures.

Details: Rio de Janeiro: Igarapé Institute, 2013. 29p.

Source: Internet Resource: Strategic Paper 5: Accessed March 4, 2017 at: https://igarape.org.br/wp-content/uploads/2013/05/AE-05_EN_Securing-the-border.pdf

Year: 2013

Country: Brazil

URL: https://igarape.org.br/wp-content/uploads/2013/05/AE-05_EN_Securing-the-border.pdf

Shelf Number: 146410

Keywords:
Arms Smuggling
Border Security
Cybercrime
Drug Trafficking
Money Laundering
Organized Crime

Author: Miller, Rena S.

Title: Anti-Money Laundering: An Overview for Congress

Summary: Anti-money laundering (AML) refers to efforts to prevent criminal exploitation of financial systems to conceal the location, ownership, source, nature, or control of illicit proceeds. Despite the existence of longstanding domestic regulatory and enforcement mechanisms, as well as international commitments and guidance on best practices, policymakers remain challenged to identify and address policy gaps and new laundering methods that criminals exploit. According to United Nations estimates recognized by the U.S. Department of the Treasury, criminals in the United States generate some $300 billion in illicit proceeds that might involve money laundering. Rough International Monetary Fund estimates also indicate that the global volume of money laundering could amount to as much as 2.7% of the world's gross domestic product, or $1.6 trillion annually. Money laundering is broadly recognized to have potentially significant economic and political consequences at both national and international levels. Despite robust AML efforts in the United States, the ability to counter money laundering effectively remains challenged by a variety of factors. These include:  the scale of global money laundering;  the diversity of illicit methods to move and store ill-gotten proceeds through the international financial system;  the introduction of new and emerging threats (e.g., cyber-related financial crimes);  the ongoing use of old methods (e.g., bulk cash smuggling);  gaps in legal, regulatory, and enforcement regimes, including uneven availability of international training and technical assistance for AML purposes; and  the costs associated with financial institution compliance with global AML guidance and national laws. AML Policy Framework In the United States, the legislative foundation for domestic AML originated in 1970 with the Bank Secrecy Act (BSA) of 1970 and its major component, the Currency and Foreign Transaction Reporting Act. Amendments to the BSA and related provisions in the 1980s and 1990s expanded AML policy tools available to combat crime, particularly drug trafficking, and prevent criminals from laundering their illicitly derived profits. Key elements to the BSA’s AML legal framework, which are codified in Titles 12 (Banks and Banking) and 31 (Money and Finance) of the U.S. Code, include requirements for customer identification, recordkeeping, reporting, and compliance programs intended to identify and prevent money laundering abuses. Substantive criminal statutes in Titles 31 and 18 (Crimes and Criminal Procedures) of the U.S. Code prohibit money laundering and related activities and establish civil penalties and forfeiture provisions. Moreover, federal authorities have applied administrative forfeiture, non-conviction based forfeiture, and criminal forfeiture tools. In response to the terrorist attacks on the U.S. homeland on September 11, 2001, Congress expanded the BSA's AML policy framework to incorporate additional provisions to combat the financing of terrorism (CFT). Although CFT is not the primary focus of this CRS report, post- 9/11 legislation provided the Executive Branch with greater authority and additional tools to counter the convergence of illicit threats, including the financial dimensions of organized crime, corruption, and terrorism. Policy Outlook for the 115th Congress Although CFT will likely remain a pressing national security concern for policymakers and Congress, some see the beginning of the 115th Congress as an opportunity to revisit the existing AML policy framework, assess its effectiveness, and propose regulatory and statutory changes. Such efforts could further address issues raised in hearings and proposed legislation during the 114th Congress, including beneficial ownership, the application of targeted financial sanctions, and barriers to international AML information sharing. Drawing from past legislative activity, the 115th Congress may also revisit proposals to require the Executive Branch to develop a roadmap for identifying key AML policy challenges and balancing AML priorities in a national strategy. Some observers have gone further to propose broader changes to the BSA/AML regime. The 115th Congress may also seek to address tensions that remain in balancing the policy objectives of improving financial services access and inclusion while also accounting for money laundering risks and vulnerabilities that may result in the exclusion (or "de-risking") of others from the international financial system.

Details: Washington, DC: Congressional Research Service, 2017. 30p.

Source: Internet Resource: CRS Report R44776: Accessed March 6, 2017 at: https://fas.org/sgp/crs/misc/R44776.pdf

Year: 2017

Country: United States

URL: https://fas.org/sgp/crs/misc/R44776.pdf

Shelf Number: 145581

Keywords:
Financial Crimes
Money Laundering
National Security
Organized Crime
Proceeds of Crime
Terrorist Financing

Author: Hunter, Marcena

Title: Follow the Money: Financial Flows Linked to Artisanal and Small-Scale Gold Mining in Sierra Leone: A Case Study

Summary: Artisanal and small-scale gold mining (ASGM) has largely been dismissed as an economically insignificant, subsistence based activity in Sierra Leone. This is in sharp contrast to the artisanal diamond sector, which has historically been seen as a much more significant livelihood option. As one Mining Ministry agent stated: it's different with diamonds, you understand. If you are in diamonds, you want the license, because it's worth so much. But with gold, not so much: it's small and quick and just for survival. However, an investigation into the sector reveals that Sierra Leone's ASGM sector is not only active and vibrant, but also generating significant economic value. Despite government and civil society efforts at formalisation, Sierra Leone's ASGM remains largely in the informal sector. Investigations reveal most of Sierra Leone's gold never enters the formal supply chains within its borders. Rather, gold is mined, bought, sold and exported through informal networks that only occasionally and selectively intersect with formal supply and value chains prior to crossing the border. Consequently, the country records minimal gold exports and the Government of Sierra Leone (GoSL) reaps little benefit from the gold sector through formal channels of taxation. This is not to say the sector is not benefitting the people of Sierra Leone. ASGM is providing rural communities a critical livelihood option across Sierra Leone. Sierra Leone registers some of the most challenging development and poverty statistics in the entire world, ranking 181 out of 188 countries on the Human Development Index. The Ebola crisis (2014 - 2016) seriously exacerbated these challenges, extracting a massive socio-economic toll on the country. ASGM has evolved in this context as a strong economic magnet, drawing in old stakeholders and new entrants alike. In addition, ASGM plays a vital economic function in many communities, providing investment opportunities, an economic social safety net, an avenue to social mobility, and contributing to local economic growth. While a number of positive attributes can be linked to ASGM in Sierra Leone, the informality of the sector also results in undesirable outputs and impacts including: value from the ASGM sector is not equitably distributed; evidence of bribery and corruption of traditional and government officials; negligible protections against environmental degradation; and opportunity for money laundering and criminal exploitation. In turn, while there are a number of short-term benefits to informality, persistent informality has the potential to undermine long-term development and governance aims. The informality of Sierra Leone's gold sector is perpetuated and exacerbated by downstream illicit financial flows (IFFs). Defined as 'money illegally earned, transferred or used', IFFs are paradoxically dualistic. On the one hand, IFFs linked to ASGM serve a critical economic function, fuelling an informal sector which plays an important role in poverty alleviation and economic development in Sierra Leone. On the other hand, IFFs are facilitating complicated layers of exploitation and victimisation by opportunistic actors along the value chain. In the Sierra Leonean context, many upstream financial transactions (i.e. those which take place at the mine site) are better characterised as informal transactions, while those that take place further downstream (i.e. the buying and selling of smuggled gold) are IFFs. Upstream actors who engage in IFFs tend to reinvest profits back into the ASGM sector, thus perpetuating supply chains and financial relationships reliant on informal and illicit activity at all levels. In turn, IFFs are a bulwark against ASGM sector formalisation efforts in Sierra Leone. Any attempt must acknowledge the complex nature and impacts of IFFs if they are to hope to be successful without further marginalizing vulnerable populations. Without appreciating the extent and efficiency of ASGM and related IFFs to meet local economic needs, formalisation efforts will fail to replace them, and at worst could have devastating consequences. As a government agent stated, gold mining is a livelihood activity, so it is difficult to strongly enforce laws that are perceived to be harmful to local people (GOV080716c).

Details: Geneva: Global Initiative against Transnational Organized Crime, 2017. 56p.

Source: Internet Resource: Accessed March 8, 2017 at: http://globalinitiative.net/wp-content/uploads/2017/03/sierra-leone_06.03.17.compressed.pdf

Year: 2017

Country: Sierra Leone

URL: http://globalinitiative.net/wp-content/uploads/2017/03/sierra-leone_06.03.17.compressed.pdf

Shelf Number: 146411

Keywords:
Financial Crimes
Gold Mining
Illicit Gold
Money Laundering
Organized Crime
Poverty
Smuggling
Socioeconomic Conditions and Crime

Author: Jackson, James K.

Title: The Financial Action Task Force: An Overview

Summary: The National Commission on Terrorist Attacks Upon the United States, or the 9/11 Commission, recommended that tracking terrorist financing "must remain front and center in U.S. counterterrorism efforts" (see The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States, U.S. Government Printing Office, July, 2004. p. 382). As part of these efforts, the United States plays a leading role in the Financial Action Task Force on Money Laundering (FATF). The independent, intergovernmental policymaking body was established by the 1989 G-7 Summit in Paris as a result of growing concerns among the summit participants about the threat posed to the international banking system by money laundering. After September 11, 2001, the body expanded its role to include identifying sources and methods of terrorist financing and adopted nine special recommendations on terrorist financing to track terrorists' funds. The scope of activity of FATF was broadened as a result of the 2008-2009 global financial crisis, since financial systems in distress can be more vulnerable to abuse for illegal activities. More recently, the FATF added the proliferation of financing of weapons of mass destruction as one of its areas of surveillance. In April, 2012, the member countries adopted a remodeled set of Forty Recommendations and renewed the FATF's mandate through December 31, 2020. This report provides an overview of the task force and of its progress to date in gaining broad international support for its recommendations.

Details: Washington, DC: Congressional Research Service, 2017. 19p.

Source: Internet Resource: RS21904: Accessed March 30, 2017 at: https://fas.org/sgp/crs/misc/RS21904.pdf

Year: 2017

Country: United States

URL: https://fas.org/sgp/crs/misc/RS21904.pdf

Shelf Number: 144646

Keywords:
Counter-Terrorism
Money Laundering
Terrorist Financing

Author: Cengiz, Mahmut

Title: Amped in Ankara: Drug trade and drug policy in Turkey from the 1950s through today

Summary: KEY FINDINGS Drug trafficking in Turkey is extensive and has persisted for decades. A variety of drugs, including heroin, cocaine, synthetic cannabis (bonsai), methamphetamine, and captagon (a type of amphetamine), are seized in considerable amounts there each year. Turkey is mostly a trans-shipment and destination country. Domestic drug production is limited to cannabis, which is produced mainly for domestic consumption, and small amounts of captagon. An effective poppy cultivation licensing scheme in the 1970s ended illegal poppy cultivation and the diversion of opiates into the illegal trade. Since the 1970s, Turkish drug trafficking groups have grown in terms of their power, global reach, and market control. They are also among Europe's most powerful organized crime groups when it comes to heroin trafficking. Moreover, other international drug trafficking groups also operate in Turkey. The civil wars in Iraq and Syria have reshaped drug smuggling routes in the Middle East. Syrian drug traffickers now play a significant role in Turkey's illegal drug trade. The illegal drug trade in Turkey is a complex and multidimensional issue that poses public safety, national security, and public health threats and risks. The Kurdistan Workers' Party (PKK) is strongly involved in drug trafficking and closely connected to terrorism in the region. Meanwhile, Turkish drug trafficking groups have also become involved in human smuggling, cigarette smuggling, and antiquities trafficking. Turkey's drug policy under-emphasizes treatment, prevention, and harm reduction approaches, while overemphasizing drug seizures. Tens of thousands of people have been charged with drug trafficking for possession and sale of cannabis. POLICY RECOMMENDATIONS To improve its drug policies, Turkey should take a more balanced, evidence-based, comprehensive, and integrated approach. It should focus on and expand resources for reducing both demand and harm. Turkey should strengthen the capacity and independence of law enforcement and the judiciary through better laws, investigative procedures, and bolstered capacities. The government should improve anti-money laundering and anti-corruption capacities, regional counter-narcotics cooperation, border security, and the vetting of migrants and refugees in Turkey for connections to terrorism and organized crime.

Details: Washington, DC: Drug Policy at Brookings, 2017. 20p.

Source: Internet Resource: Accessed April 17, 2017 at: https://www.brookings.edu/wp-content/uploads/2017/04/fp_201704_turkey_drug_policy.pdf

Year: 2017

Country: Turkey

URL: https://www.brookings.edu/wp-content/uploads/2017/04/fp_201704_turkey_drug_policy.pdf

Shelf Number: 144986

Keywords:
Drug Policy
Drug Trafficking
Illegal Drug Trade
Money Laundering
Organized Crime

Author: D'Angelo, Elena

Title: Organized Crime and the Legal Economy: The Italian Case

Summary: Italy's economy is one of the largest, not only in Europe but also with reference to the global context. Its financial and industrial sectors are significant. In addition, domestic organized crime groups, especially the Camorra, the 'Ndrangheta, and the Cosa Nostra, operate across numerous economic sectors, both in Italy and abroad, and their illicit proceeds represent the main source of laundered funds. Illicit markets remain the main source of profit for organized crime groups in Italy, and more broadly in Europe. There have been various attempts to estimate the total revenue of organized crime in Italy. For example, the U.S. Department of State (2015) estimated Italy's black market to be to 12.4% of the country's GDP, approximately $250 billion. The Italian Parliament's Antimafia Commission estimated that the total turnover of endogenous organized crime in Italy valued at L150 billion in 2012. However, the border between illegal and legal activities of organized crime is hard to define. Financial as well as human resources are increasingly being circulated from one sector to the other, without interruption. While maintaining their interests in traditional fields of action related to illicit trade, organized crime groups have been expanding their presence and influence into the legal economy - creating threats to society on an array of levels. Research Questions Two main research questions (RQs) guide the present study: 1. How does organized crime infiltrate the legal economy? 2. What is the impact of organized crime infiltration in the legal economy? The qualitative section of the report answers the first RQ, further detailed in the following subquestions: 1. What are the main reasons behind the diversification of investments into the legal sector? 2. Which is organized crime's modus operandi? 3. How does organized crime exploit existing vulnerabilities and what are the facilitating factors?

Details: Torino, Italy: United Nations Interregional Crime and Justice Research Institute (UNICRI), 2016. 111p.

Source: Internet Resource: Accessed May 3, 2017 at: http://files.unicri.it/UNICRI_Organized_Crime_and_Legal_Economy_report.pdf

Year: 2016

Country: Italy

URL: http://files.unicri.it/UNICRI_Organized_Crime_and_Legal_Economy_report.pdf

Shelf Number: 145251

Keywords:
Illegal Markets
Illicit Trade
Money Laundering
Organized Crime
Proceeds of Crime

Author: Enough Project

Title: Sudan's Deep State: How Insiders Violently Privatized Sudan's Wealth, and How to Respond

Summary: The report details how President al-Bashir and his ruling National Congress Party have transformed Sudan into a system of violent kleptocracy that has endured for almost three decades. Regime elites, along with their enablers and facilitators, have amassed personal fortunes by looting and corrupting the country's oil, gold, and land resources in particular, along with other natural resource wealth, productive sectors of the economy, state assets, and the governing institutions that had been in place and largely functioned before this regime took power. For nearly three decades, President al-Bashir has maintained his position at the pinnacle of Sudan's political order after seizing power through a military coup in 1989. During his rule, the government of Sudan has perhaps been best known for providing safe haven to Osama bin Laden and other Islamic militants in the 1990s, for committing genocide and mass atrocities against its citizens in Darfur, for the secession of South Sudan in 2011, and for ongoing armed conflict-marked by the regime's aerial bombardment of civilian targets and humanitarian aid blockade-in South Kordofan and Blue Nile states. Often portrayed as a country wracked by intractable violence and hampered by racial, religious, ethnic and social cleavages, Sudan ranks consistently among the most fragile or failed states. At the same time, Sudan has considerable natural resource wealth and significant economic potential. Political standing and proximity to the country's ruling elites most often determines on which side of the poverty line a Sudanese citizen lives. The idea that Sudan is a classic failed state is not fully accurate. Sudan is a failed state for the millions of displaced people living in IDP camps in Darfur, for those living in conflict areas and cut off from humanitarian assistance in South Kordofan and Blue Nile, and for those struggling in marginalized communities in eastern Sudan or in the sprawling informal settlements outside Khartoum. However, Sudan is an incredibly successful state for a small group of ruling elites that have amassed great fortunes by looting the country's resources for personal gain. In that sense, Sudan is more of a hijacked state, working well for a small minority clique but failing by all other measures for the vast majority of the population. To more effectively support peace, human rights, and good governance in Sudan, U.S. policymakers should work with a range of Sudanese and other international partners to construct a new policy approach to counter Sudan's system of violent kleptocracy.

Details: Washington, DC: Enough Project, 2017. 64p.

Source: Internet Resource: Accessed May 3, 2017 at: http://www.enoughproject.org/files/SudansDeepState_Final_Enough.pdf

Year: 2017

Country: Sudan

URL: http://www.enoughproject.org/files/SudansDeepState_Final_Enough.pdf

Shelf Number: 145254

Keywords:
Illicit Financial Flows
Looting
Money Laundering
Political Corruption

Author: Tavares, Cynthia

Title: Money laundering in Europe Report of work carried out by Eurostat and DG Home Affairs

Summary: Statistics on crime and criminal justice represent one of the newest areas of Eurostat's activities. The collection of data on this subject from the Member States began in response to the mandate issued by the European Council in the Hague Programme in 2004: ... the European Council welcomes the initiative of the Commission to establish European instruments for collecting, analysing and comparing information on crime and victimisation and their respective trends in Member States, using national statistics and other sources of information as agreed indicators. Eurostat should be tasked with the definition of such data and its collection from the Member States1. In response to this challenge, Eurostat has established contact with the organisations principally responsible for crime statistics in each of the European Union Member States. These organisations have contributed substantially to the development of an international collection of crime statistics within the framework of the European Statistical System. Eurostat wishes to thank the colleagues concerned in these organisations for their co-operation in this field. The progress made to date may be followed on the Eurostat website and in successive issues of the series Statistics in Focus. It has always been evident that comparable information on 'traditional' types of crime such as theft and assault would be easier to obtain than in so-called 'new areas' such as for example cybercrime, human trafficking, fraud and corruption. For such types of offence (which are often associated with the concept 'organised crime') the absence of an international framework of methods and definitions has necessitated a far more intensive process of conceptual development. This process has been undertaken in active collaboration with the Member States and according to the strategy set out in the Action Plan adopted by the Commission to implement the Hague Programme. The present publication represents the first fruits of this process. The specific crime of money-laundering is among the priority areas identified in the Action Plan and data has been collected by Eurostat from the Member States in several stages, followed each time by a careful analysis of the figures received and subsequent adjustment of the methodology. The contribution to this process of the Commission's Directorate-General for Home Affairs is gratefully acknowledged. It is recognised that the current state of the results does not entirely comply with the stringent requirements of the European Statistics Code of Practice. Further development is planned to improve data quality in future collections. Nevertheless the political demand for this information is such that it seems opportune to make it available at this stage in the form of a Eurostat Working Paper. This implies that suitable caution should be exercised in interpreting the figures, and that the methodological notes and caveats provided should be rigorously taken into account in all subsequent analysis.

Details: Luxembourg: Publications Office of the European Union, 2010. 92p.

Source: Internet Resource: Accessed May 10, 2017 at: http://ec.europa.eu/eurostat/documents/3888793/5846749/KS-RA-10-003-EN.PDF/d6540680-3944-4c22-9b8b-8109ec0b6d92?version=1.0

Year: 2010

Country: Europe

URL: http://ec.europa.eu/eurostat/documents/3888793/5846749/KS-RA-10-003-EN.PDF/d6540680-3944-4c22-9b8b-8109ec0b6d92?version=1.0

Shelf Number: 145400

Keywords:
Crime Statistics
Cybercrime
Financial Crimes
Money Laundering
Organized Crime

Author: Magalingam, Pritheega

Title: Complex network tools to enable identification of a criminal community

Summary: Retrieving criminal ties and mining evidence from an organised crime incident, for example money laundering, has been a difficult task for crime investigators due to the involvement of different groups of people and their complex relationships. Extracting the criminal association from enormous amount of raw data and representing them explicitly is tedious and time consuming. A study of the complex networks literature reveals that graph-based detection methods have not, as yet, been used for money laundering detection. In this research, I explore the use of complex network analysis to identify the money laundering criminals' communication associations, that is, the important people who communicate between known criminals and the reliance of the known criminals on the other individuals in a communication path. For this purpose, I use the publicly available Enron email database that happens to contain the communications of 10 criminals who were convicted of a money laundering crime. I show that my new shortest paths network search algorithm (SPNSA) combining shortest paths and network centrality measures is better able to isolate and identify criminals' connections when compared with existing community detection algorithms and k-neighbourhood detection. The SPNSA is validated using three different investigative scenarios and in each scenario, the criminal network graphs formed are small and sparse hence suitable for further investigation. My research starts with isolating emails with 'BCC' recipients with a minimum of two recipients bcc-ed. 'BCC' recipients are inherently secretive and the email connections imply a trust relationship between sender and 'BCC' recipients. There are no studies on the usage of only those emails that have 'BCC' recipients to form a trust network, which leads me to analyse the 'BCC' email group separately. SPNSA is able to identify the group of criminals and their active intermediaries in this 'BCC' trust network. Corroborating this information with published information about the crimes that led to the collapse of Enron yields the discovery of persons of interest that were hidden between criminals, and could have contributed to the money laundering activity. For validation, larger email datasets that comprise of all 'BCC' and 'TO/CC' email transactions are used. On comparison with existing community detection algorithms, SPNSA is found to perform much better with regards to isolating the sub-networks that contain criminals. I have adapted the betweenness centrality measure to develop a reliance measure. This measure calculates the reliance of a criminal on an intermediate node and ranks the importance level of each intermediate node based on this reliability value. Both SPNSA and the reliance measure could be used as primary investigation tools to investigate connections between criminals in a complex network.

Details: Melbourne: School of Mathematical and Geospatial Sciences, College of Science, Engineering and Health, RMIT University, 2015. 129p.

Source: Internet Resource: Dissertation: Accessed May 13, 2017 at: https://researchbank.rmit.edu.au/eserv/rmit:161407/Magalingam.pdf

Year: 2015

Country: Australia

URL: https://researchbank.rmit.edu.au/eserv/rmit:161407/Magalingam.pdf

Shelf Number: 145462

Keywords:
Criminal Investigation
Criminal Networks
Geospatial Analysis
Money Laundering
Network Analysis
Organized Crime

Author: Levi, Michael

Title: Drug Law Enforcement and Financial Investigation Strategies

Summary: Since the 1980s, there has been a major push in rhetoric and institution-building, emphasizing the centrality of attacking the financial lifeblood of drug trafficking networks and organised economic crimes. Much progress has been made in legislation and the creation of financial intelligence units. However, there are volumes of commentary and legal analysis, but almost nowhere in the world is there any systematic analysis of law enforcement or criminal justice inputs or outputs, let alone of outcomes in terms of reduced crimes of any kind or reduced harms arising from the 'organised' nature of crime. Much depends on how plausible it is that the sources of funds can be represented as being licit when saving or investing: but a global, well-advertised set of financial intermediaries exist upon whom to experiment, and expectations of being reported following failed attempts may be quite low. Judging from the continued involvement of major banks in negligently or actively facilitating a variety of suspected illicit activities, and the relative impunity of institutions that are 'too big to be prosecuted', normal risk perceptions of relevant parts of financial institutions are not nearly high enough to deter all serious noncompliance to AML regulation, though without increasing perceived and/or actual detection risks and reducing elapsed time to action, raising sanctions alone may not work. This report makes no claim to be offering a certain route to success, but is offering an overview of some better and some false steps that have been undertaken in the field of drug law enforcement and financial investigation strategies.

Details: London: International Drug Policy Consortium, 2013. 20p.

Source: Internet Resource: Modernising Drug Law Enforcement Report 5: Accessed May 18, 2017 at: https://www.tni.org/files/MDLE-5-drug-law-enforcement-financial-investigation-strategies_0.pdf

Year: 2013

Country: International

URL: https://www.tni.org/files/MDLE-5-drug-law-enforcement-financial-investigation-strategies_0.pdf

Shelf Number: 131377

Keywords:
Drug Enforcement
Drug Policy
Drug Reform
Drug Trafficking
Financial Investigations
Money Laundering
Organized Crime

Author: Savona, Ernesto U.

Title: Assessing the risk of money laundering in Europe: final report of project IARM

Summary: Project IARM develops an exploratory methodology for assessing the risk of money laundering (ML). In particular, it develops a composite indicator of money laundering risk: - at geographic area level - at business sector level The methodology is tested in three pilot countries (Italy, the Netherlands and the United Kingdom) and follows 7 methodological steps, which include: - identifying ML risk factors across areas and sectors; - operationalising risk factors into a set of proxy variables to allow measurement; - combining the variables, through various statistical techniques, into a final indicator of ML risk; - validating the indicator through a sensitivity analysis and comparison with other measures of ML. IARM adopts a quantitative approach which complements the qualitative perspective of most existing national and supranational ML risk assessments (NRA and SNRA). It responds to the need, stressed by regulatory developments at both EU and national level, to develop objective and robust methodologies for ML risk assessment. Risk factors In each of the three pilot countries, a country-specific set of risk factors is identified on the basis of: - the relevant international and national literature (e.g. FATF guidelines, FIU reports, judiciary evidence, academic literature); - interviews with experts (e.g. FIU officers, investigators, policy-makers, private sector); - data availability: because it is not possible to find the same data and variables in all the three countries. Risk factors are distinguished between ML threats and vulnerabilities, as suggested by FATF and as depicted in Figures 1 and 2.

Details: Milano: Transcrime - Universita Cattolica del Sacro Cuore, 2017. 184p.

Source: Internet Resource: Accessed June 13, 2017 at: http://www.transcrime.it/wp-content/uploads/2017/05/ProjectIARM-FinalReport.pdf

Year: 2017

Country: Europe

URL: http://www.transcrime.it/wp-content/uploads/2017/05/ProjectIARM-FinalReport.pdf

Shelf Number: 1406083

Keywords:
Financial Crimes
Money Laundering
Organized Crime

Author: Hayes, Ben

Title: The impact of international counter-terrorism on civil society organisations: Understanding the role of the Financial Action Task Force

Summary: This report examines the impact of international counterterrorism frameworks on the work of civil society organisations. In particular, it explains the role of the Financial Action Task Force in setting international standards that affect the way in which civil society organisations are regulated by nation-states, their access to financial services, and their obligations to avoid proscribed organisations and other entities deemed to pose a 'terrorism' risk. The introduction to the report frames these developments in the context of the 'shrinking space' of civil society organisations. This narrative describes a new generation of restrictions and attacks on the legitimacy and actions of non-profits and social justice organisations. Chapter two introduces the counterterrorism frameworks that have most affected civil society. This includes UN Security Council measures on combating terrorism, the new international CVE (Countering Violent Extremism) agenda, the FATF's counterterrorist financing requirements, and the EU's development and implementation of these measures. Chapter three examines the worldwide proliferation of restrictive civil society laws and their relationship to the FATF's recommendations on the regulation of the non-profit sector. It draws on existing research showing how these have been used as a vehicle for the imposition of restrictive legislation across the globe, and augments this discourse with new evidence, examples and case studies. It also considers the prospects for reform, and the potential for the FATF to engage proactively in preventing further restrictions. Chapter four addresses a relatively newer phenomenon: the financial exclusion of civil society organisations and resulting from the 'due diligence' obligations mandated by the FATF. Driven by ever-tighter demands on financial institutions to scrutinise their customers for links to terrorism, crime and corruption - and underscored by substantial fines for failures due diligence - banks and intermediaries are cutting ties with non-profits and refusing to process "suspicious" cross-border transactions. This is a process that economists have termed 'de-risking'. While more research is needed, examples show how financial exclusion can fundamentally compromise the ability of affected non-profits to implement their programmes and fulfil their mandates. Chapter five examines the impact of terrorist 'blacklisting' and sanctions regimes more widely on activities such as peacebuilding and the provision of humanitarian assistance. It shows how the rigid interpretation of states' obligations by the FATF is exacerbating what have become often intractable problems for conflict resolutions organisations and NGOs working at close proximity to conflict zones or 'suspect communities'. The report draws three main conclusions. First, without fundamental reform to the FATF's non-profit sector recommendations, the proliferation and legitimisation of restrictive counterterrorism laws is likely to continue unabated. Second, the FATF is undermining international law by directly promoting laws that contravene states' human rights obligations, even where the draft laws have been criticised by UN mandate holders. Third, a rights-based approach to financial services in which the onus is on the banks and regulators to service non-profits and process transactions is the only way to address this particular problem of de-risking. The report makes 11 recommendations to civil society organisations, national and regional parliamentary committees, national governments and the FATF. It also encourages civil society organisations concerned about the developments described in this report to join the international coalition of organisations established to engage with the FATF and create and 'enabling environment' for civil society.

Details: Berlin: Bread for the World - Protestant Development Service Protestant Agency for Diakonie and Development, 52p.

Source: Internet Resource: Analysis 68: Accessed June 24, 2017 at: https://www.brot-fuer-die-welt.de/fileadmin/mediapool/2_Downloads/Fachinformationen/Analyse/Analysis_68_The_impact_of_international_counterterrorism_on_CSOs.pdf

Year: 2017

Country: International

URL: https://www.brot-fuer-die-welt.de/fileadmin/mediapool/2_Downloads/Fachinformationen/Analyse/Analysis_68_The_impact_of_international_counterterrorism_on_CSOs.pdf

Shelf Number: 146364

Keywords:
Counter-Terrorism
Countering Extremism
Financial Crimes
Money Laundering
Terrorist Financing
Violent Extremism

Author: U.S. Government Accountability Office

Title: Anti-Money Laundering: U.S. Efforts to Combat Narcotics-Related Money Laundering in the Western Hemisphere

Summary: Proceeds from narcotics-related illicit activities are one of the most common sources of money laundering in the United States. Though difficult to accurately determine, in 2015, Treasury estimated that drug trafficking generated about $64 billion annually from U.S. sales. Moreover, the Western Hemisphere accounts for about a third of the jurisdictions designated by State as of primary concern for money laundering. GAO was asked to provide information on U.S. efforts to impede illicit proceeds from drug trafficking from entering the financial systems of the United States and other Western Hemisphere countries. This report describes (1) U.S. agency oversight and monitoring of compliance with the BSA, including collaboration with counterparts in other Western Hemisphere countries, and (2) State's and Treasury's efforts to build capacity in other Western Hemisphere countries to combat narcotics-related money laundering. GAO reviewed laws and regulations; interviewed experts and U.S. officials; reviewed documents and examined State's and Treasury's budget data for fiscal years 2011 through 2015, the most recent at the time of the review, for anti-money laundering activities. GAO selected Colombia, Mexico, and Panama - three principal recipients of AML support - for site visits, in part, because each country was designated a major drug transit or illicit drug-producing country from fiscal years 2014 through 2016.

Details: Washington, DC: GAO, 2017. 67p.

Source: Internet Resource: GAO-17-684: Accessed September 11, 2017 at: http://www.gao.gov/assets/690/686727.pdf

Year: 2017

Country: United States

URL: http://www.gao.gov/assets/690/686727.pdf

Shelf Number: 147217

Keywords:
Anti-Money Laundering
Drug Trafficking
Financial Crime
Money Laundering
Proceeds of Crime

Author: Schneider, Friedrich

Title: Restricting or Abolishing Cash: An Effective Instrument for Fighting the Shadow Economy, Crime and Terrorism?

Summary: This paper has four goals: First, the use of cash as a possible driving factor of the shadow economy is investigated. Second, the use of cash in crime, here especially in corruption, is also econometrically investigated. The influence is somewhat larger than on the shadow economy, but it is certainly not a decisive factor for bribery activities. Some figures about organized crime are also shown; the importance of cash is diminishing. Third, some remarks about terrorism are made and here a cash limit doesn't prevent terrorism. Fourth, some remarks are made about the restriction or abolishment of cash on civil liberties, with the result that this will extremely limit them. The conclusion of this paper is that cash has a minor influence on the shadow economy, crime and terrorism, but potentially a major influence on civil liberties.

Details: Paper presented at International Cash Conference 2017 - War on Cash: Is there a Future for Cash? 25 - 27 April 2017, Island of Mainau, Germany. 39p.

Source: Internet Resource: Accessed September 13, 2017 at: https://www.econstor.eu/bitstream/10419/162914/1/Schneider.pdf

Year: 2017

Country: International

URL: https://www.econstor.eu/bitstream/10419/162914/1/Schneider.pdf

Shelf Number: 147226

Keywords:
Bribery
Civil Liberties
Corruption
Financial Crimes
Money Laundering
Organized Crime
Proceeds of Crime
Shadow Economy
Terrorist Financing

Author: Zerzan, Andrew

Title: Policing Financial Services: Surveying the Anti-Money Laundering Regulatory Regime

Summary: The anti-money laundering and combating the financing of terrorism international (AML/CFT) standards were created over twenty years ago by the world's biggest economies. Since then, the standards have become increasingly implemented globally. They have established a regulatory regime in which many different public institutions play a role. The majority of these public institutions are not traditionally involved in crime fighting or counter-terrorism so certain challenges exist, especially for those in developing countries. For instance, the AML/CFT rules dictate how people of all types can connect - or not connect - to the financial sector. The paper provides an overview of what the standards mean for public institutions and highlights challenges that have surfaced to date. The intended audience is the development community so that it is better informed in its efforts to improve the application and revision of the standards, which is currently underway. High-level findings: The regime that countries must put in place is complex and there are many interdependencies. The effectiveness of the system relies highly on ensuring that all key elements are in place. If one part of the system is missing, it is likely to greatly hinder effectiveness of the rest. Interaction between the standard setter and developing countries, especially the poorest, is very little. There has been some improvement in dialogue via intermediary organizations but a direct link has not been established. This will have an impact on how the standards are written as well as their effectiveness in these countries. Interpretation of the standards has prompted countries to create regulatory frameworks that are highly data-driven. This means that effectiveness hinges greatly on a country's ability to both collect data from a great number of sources as well as analyze it. Whether this is the right approach for developing countries with low capacity needs to be assessed.

Details: London: GSMA, 2011. 33p.

Source: Internet Resource: Accessed September 30, 2017 at: http://www.t.gsma.com/mobilefordevelopment/wp-content/uploads/2012/06/policingfinancialservicessurveyingtheantimoneylaunderingregulatoryregime2011.pdf

Year: 2011

Country: International

URL: http://www.t.gsma.com/mobilefordevelopment/wp-content/uploads/2012/06/policingfinancialservicessurveyingtheantimoneylaunderingregulatoryregime2011.pdf

Shelf Number: 147516

Keywords:
Counter-terrorism
Financial Crime
Money Laundering
Terrorist Financing

Author: Eastern and Southern Africa Anti-Money Laundering Group - ESAAMLG

Title: A Special Typologies Project Report on Poaching, Illegal Trade in Wildlife and Wildlife Products and Associated Money Laundering in the ESAAMLG Region

Summary: 1. The majority of ESAAMLG member countries have vast resources in wildlife, which during the last few years have seen unprecedented targeting by both individuals and syndicates involved in poaching and other illegal wildlife activities. This typology project focused on poaching and illegal trade in wildlife and wildlife products and associated money laundering in the ESAAMLG Region. 2. Illicit wildlife trafficking is one of the most lucrative types of transnational organized crime today, with annual revenues estimated to be between USD 7.8 billion and USD 10 billion per year1 (excluding fisheries and timber). These illegal proceeds are suspected to be laundered into the financial systems worldwide. 3. Common to wildlife poaching is its localized and cross-border phenomenon which is often orchestrated by well organised, sophisticated and at times heavily armed poachers. The cross border nature of poaching puts the illegal activity beyond the capacities of most governments in the Region. Poaching invariably transcends into illegal wildlife trade which has been associated with well organised crime groups which through the unlawful trade and complex laundering means of the proceeds have amassed a lot of resources. The resources include immediate large amounts of disposable cash, modern technology and established corrupt transportation routes. 4. The Independent newspaper, a daily publication in Britain, reported on 6 February 2014 that the dangerous criminal networks that run the global wildlife trade have been allowed to persist and prosper as a result of "chronic government failures" to treat them seriously. The report further states that the industry (dealing in illegal wildlife business) is the world's fourth biggest illegal trade after narcotics, human trafficking and counterfeiting. Feedback from regional wildlife NGOs (using former Police officers as consultants), indicated that the criminal networks involved in smuggling drugs, humans, extra are almost always the same networks involved in smuggling wildlife products. This is because they already have an established "network" - and the wildlife product is just a different product. 5. The ESAAMLG region, given its vast resources in wildlife is uniquely placed to study and uncover the illegal trends in this industry, in an effort to assist governments of its member states and other stakeholders in setting up an informed policy framework on wildlife resources. 6. The findings in this report also confirms that despite arresting traffickers and seizing illegal wildlife products, law enforcement have failed to arrest or convict, let alone confiscate/forfeit illegally acquired assets by the criminal masterminds wreaking havoc in this area across Africa. A report by the Environmental Investigation Agency (EIA), which has been investigating illegal wildlife trade for more than three decades states; "Despite record seizures of illegal ivory, not a single criminal kingpin involved in the international illegal trade of ivory has been prosecuted and convicted to date. That is a damning indictment. With less than 3,500 wild tigers left, elephant numbers plummeting and rhinos under attack again, we need to get it right,". 7. Azzedine Downes, a researcher on wildlife poaching, in an article titled; "When it comes to poaching, hate the crime not the criminal", highlights factors contributing to wildlife poaching being: the amounts of money generated, low risk of arrest, lenient penalties, killing and thefts done quickly, inexpensive and little social stigma associated with the crime (compared to other crimes such as murder, robbery, kidnapping, etc). The ESAAMLG Region, through this study found indications which may support the above factors as contributing to the ever increasing incidences of wildlife poaching and associated wildlife illegal trade in the region. 8. The ramifications of poaching and other wildlife crimes and illegal trade are horrendous. ESAAMLG member countries' future generations stand the possible risk of not seeing the wonderful wildlife which the Region has been naturally enriched with. This study found that cultural beliefs which do not have their origin in the ESAAMLG Region and the huge financial benefits derived from wildlife illegal trade and their successful laundering could be some of the factors fuelling poaching of wildlife in the Region. In summary the study, among other things, presents indications, trends and typologies to help understand how these crimes are organised, identify the players, proceeds generated and their movement with specific attention being paid to the laundering trends of the illegal proceeds. Ultimately the study is intended to influence policy change by the ESAAMLG member countries in their approach to combatting illegal wildlife activities and mitigate the gaps in combating wildlife crimes and laundering of the generated illegal proceeds. 9. The project was approved by the ESAAMLG Council of Ministers at its meeting in Luanda, Angola, in September 2014. The project team consisted of Mozambique, Zambia, Kenya, Tanzania, Botswana, Zimbabwe, South Africa and Namibia. Namibia was the project chair. C. Executive summary 10. This typology report primarily looks at the poaching, trafficking and the proceeds thereof (illegal trade), in the ESAAMLG member countries and Africa as a secondary part of the scope. Given the significant demand for wildlife and wildlife products harvested in member countries, it is clear that there are significant financial flows associated with these crimes. Such financial flows constitute proceeds of crime, and thus fall within the ambit of money laundering, and to a certain extend these financial flows may in one way or the other be used to support terrorist financing activities in Central Africa. 11. The major finding is that wildlife crimes, particularly rhino and elephant poaching are escalating at alarming levels, with extinction being a reality. The study further found that a number of vulnerabilities in wildlife crime combatting frameworks across the various member countries are exploited by syndicates committing these crimes. The most common shortcoming highlighted by member countries as a hindrance to adequate and effective combative efforts is the general lack of resources for the various wildlife crime combative stakeholders aided by corrupt public officials. 12. The report aims to provide an overview on the: - Predicate offences of wildlife crimes; - Syndicates and persons committing these crimes and their methods of operation; - Notable trends and typologies in the flow of finances related to these crimes; - Notable preventative measures in place to mitigate these wildlife crimes and related financial flows; - Areas within combative and intelligence frameworks that may need improvement;  Destination countries (regions) of poached wildlife products. 13. The study found that there is a growing demand for wildlife and wildlife products mostly in the Asian countries and U.S.A. In an effort to supply this demand, it came to the fore that organized transnational criminal syndicates have created networks that facilitate the execution of poaching and related wildlife crime activities and the trafficking of wildlife and wildlife products from mainly African countries to consumer destinations in Asia and U.S.A. These networks involve recruitment of locals who are in the ESAAMLG region into poaching activities for minimal financial rewards, the bribing of authorities at crucial points of entry and exits such as border posts and airports to help facilitate the smuggling of wildlife and wildlife products, ultimately compromising the border security. 14. It is however worth noting that despite the case studies indicating a lucrative business with significant financial gains in trading wildlife products such as ivory, almost all ESAAMLG member countries could not provide details on financial flows such as methods and techniques used to fund poaching activities in cases investigated. This is compounded by the fact that most ESAAMLG member countries' economies are predominantly cash based. Additionally, the study could not obtain data and information related to methods used to pay for the wildlife and wildlife products by end users and/or kingpins of the organized criminal syndicates, in the consumer countries. This lack of information in itself may explain why authorities in member countries did not paint successful wildlife crime combatting efforts as per information requested for this study. 15. The study equally found that the FIUs in member countries are hardly involved in investigative operations (tactically or strategically) concerning wildlife crimes. Apart from South Africa, LEAs in other member countries such as the police and the various environmental authorities do not have engagements through formal MoUs with the resident FIUs, let alone foreign FIUs, in an effort to coordinate and benefit from the strengths of one another. It goes without saying that despite the transnational nature of wildlife crimes, countries generally reported poor international cooperation as an area of concern in the combatting of wildlife crimes. 16. The study equally reviewed counter wildlife trafficking efforts in Asian countries, as destinations of wildlife and wildlife products. It is worth noting that information requested from most of the countries identified as the largest consumers of illegal wildlife products harvested from ESAAMLG member countries has to date not been provided by the relevant authorities in those countries. In two of the countries where wildlife and wildlife products from ESAAMLG member countries are consumed, it was surprising to find that these countries have only criminalised possession of wildlife and wildlife products, if same is originating from within their jurisdictions. This means, in these countries, being found in possession of wildlife and wildlife products from Africa is not a criminal offence. 17. Despite the various counter wildlife trafficking laws in most Asian countries advocating for investigative authorities to liaise with and involve the countries of origin of the wildlife and wildlife products seized or found in their jurisdictions, there were hardly any cases provided by such jurisdictions to show if this is indeed happening. In almost all cases provided for this study, by Asian countries, the wildlife crime investigations do not engage with relevant African authorities and the seized wildlife products such as rhino horns and elephant tusks are destroyed, if not reserved for local state museums. These factors may point a need to strengthen international cooperation, with the aim of enhancing combative efforts both locally and in consumer jurisdictions.

Details: Dar es Salaam - United Republic of Tanzania: ESAAMLG Typologies Working Group, 2016. 131p.

Source: Internet Resource: Accessed November 8, 2017 at: https://www.esaamlg.org/userfiles/Typologies%20Report%20on%20the%20Wildlife%20Crimes%20and%20Related%20ML.pdf

Year: 2016

Country: Africa

URL: https://www.esaamlg.org/userfiles/Typologies%20Report%20on%20the%20Wildlife%20Crimes%20and%20Related%20ML.pdf

Shelf Number: 148054

Keywords:
Animal Poaching
Illegal Wildlife Trade
Ivory
Money Laundering
Organized Crime
Terrorist Financing
Trafficking in Wildlife
Wildlife Crime
Wildlife Trafficking

Author: The Sentry

Title: The Terrorists' Treasury: How a Bank Linked to Congo's President Enabled Hezbollah Financiers to Bust U.S. Sanctions.

Summary: The same banks used by kleptocratic governments to divert state assets can also be used by terrorist financing networks. This is what has taken place at one prominent bank in the Democratic Republic of the Congo (DRC). Individuals and entities subject to U.S. sanctions, in connection with Hezbollah, used the bank to move money through the international banking system, despite several warnings from bank employees that doing so could violate U.S. sanctions. This was not just any bank. BGFIBank DRC, the institution that processed the transactions, is run by President Joseph Kabila's brother and has been mentioned in a recent scandal in Congo involving the alleged diversion of public funds from state-owned mining companies and the national electoral commission. As set out in this report, in 2011 bank employees at BGFIBank DRC raised the alarm with senior officials at the bank, in writing, about a series of transactions. The concern was that the transactions involved companies linked to financiers of Hezbollah, a Lebanon-based terrorist group and political party. The main entities in question were subsidiaries of Kinshasa-based business conglomerate Congo Futur, a company under U.S. Department of the Treasury sanctions. Among the recipients of the warnings was Francis Selemani Mtwale, the bank's CEO and brother of President Joseph Kabila. But the bank's relationship with Hezbollah-linked companies continued. BGFIBank DRC even went so far as to request that certain transactions be unblocked by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) after other banks refused to process them. And BGFIBank DRC continued to engage in correspondence with Congo Futur-affiliated company representatives in 2016. This raises major questions about the bank's ability and willingness to fulfill its sanctions and anti-money laundering compliance obligations. BGFIBank DRC has been reported to have been used to divert significant public funds in Congo, including millions of dollars in withdrawals by Congo's electoral commission, and transfers of $8 million in cash in irregular "tax advances" from Congo's largest state-owned mining company, Gecamines. Published reports raise serious questions about the bank's regulatory and compliance regime. Inadequate anti-money laundering compliance and sanctions enforcement standards at banks can empower a wide range of criminal groups and corrupt actors�and ultimately undermine governance and contribute to instability in Congo and elsewhere. Members of civil society have suggested that business interests could be part of the reason Kabila, who has sparked a violent nationwide political crisis by recently overstaying his presidential term limits, has maintained an iron grip on the presidency. In the example profiled in this report, BGFIBank DRC's approach to enforcing sanctions has allowed Kassim Tajideen - described by the U.S. government as "an important financial contributor" who "has contributed tens of millions of dollars to Hizballah" - and his network to maintain access to the global financial system despite being placed under U.S. sanctions in 2009 and 2010. The documents reviewed by The Sentry also show links between Congo Futur and other firms under Kassim Tajideen's control. These documents indicate that Congo Futur subsidiaries used BGFIBank DRC to operate accounts and make wire transfers after both Congo Futur and Kassim were placed under U.S. sanctions, despite warnings from bank employees that the bank should not do so. This is despite repeated public assertions from both Kassim and one of his brothers who is not under U.S. sanctions, Congo Futur General Manager Ahmed Tajideen, that the Kinshasa-based conglomerate had no links to any of the Tajideens under U.S. sanctions. Congo Futur has continued to thrive in Congo despite U.S. sanctions; it even maintains financial ties to the Congolese government and has received government contracts. These continued relations raise serious questions about the Congolese government's reliability in the fight against global terrorism, transnational crime, and illicit finance. Congo Futur has risen and remained prominent despite facing sanctions and the Kabila regime's decreasing legitimacy. BGFIBank DRC has been used to facilitate Congo Futur's access to the U.S. financial system, despite sanctions.

Details: Washington, DC: The Sentry Project, 2017. 43p.

Source: Internet Resource: Accessed November 9, 2017 at: https://cdn.thesentry.org/wp-content/uploads/2016/09/TerroristsTreasury_TheSentry_October2017_final.pdf

Year: 2017

Country: Congo, Democratic Republic

URL:

Shelf Number: 148095

Keywords:
Financial Crimes
Money Laundering
Terrorism
Terrorist Financing

Author: Eastern and Southern Africa Anti-Money Laundering Group - ESAAMLG

Title: Typologies report on money laundering related to illicit dealings in and smuggling of motor vehicles in the ESAAMLG region

Summary: Motor vehicles play a vital role in the economic and social growth of every country. However, motor vehicles have recently become instruments and a source of illegally obtained financial gains for criminal syndicates and individuals. This study was aimed at identifying vulnerabilities of money laundering and terrorist financing associated with illicit dealing in and motor vehicle smuggling through case studies from the region in order to identify the trends and methods used to launder the proceeds generated from the illicit dealing in and smuggling of motor vehicles. The study further identifies gaps and efforts put in place by governments and other stakeholders to address illicit dealing in and motor vehicle smuggling. The study also identifies the role played by those involved in the illicit dealing in and motor vehicle smuggling and its economic and social impact thereof, the source and destination of smuggled vehicles, the licensing and supervision of motor vehicle dealers and the modus operandi. The study establishes how the illicit generated proceeds are or have previously been laundered and whether proceeds can be linked with the funding of other crimes including funding of terrorist activities. Based on the case studies, it is clear that bonded warehouses and Financial Institutions are being misused to facilitate money laundering activities with the real estate being the most vulnerable area where the proceeds are used. The study has also shown that insurance companies are widely affected by fraudulent claims made by motor vehicle owners who illegally export their vehicles and later report them stolen.

Details: Dar es Salaam - United Republic of Tanzania: ESAAMLG, 2012. 27p.

Source: Internet Resource: Presented at the 24th Joaquim Chissano International Conference Centre ESAAMLG Task Force of Senior Officials Meeting 24 - 30 August 2012 Maputo, MozambiqueAccessed November 10, 2017 at: http://www.esaamlg.org/userfiles/Illicit%20Dealings%20in%20and%20Smuggling%20of%20Motor%20Vehicles%20Report.pdf

Year: 2012

Country: Africa

URL: http://www.esaamlg.org/userfiles/Illicit%20Dealings%20in%20and%20Smuggling%20of%20Motor%20Vehicles%20Report.pdf

Shelf Number: 148125

Keywords:
Automobile Theft
Money Laundering
Smuggling of Goods
Terrorist Financing
Vehicle Theft

Author: AUSTRAC

Title: Stored Value Cards: Money Laundering and Terrorism Financing Risk Assessment

Summary: AUSTRAC assessed the overall ML/TF risk associated with the use of stored value cards (SVCs) to be medium, and their vulnerability to criminal misuse to be high. The report found that the risk level of individual SVCs varies significantly depending on the features of the specific product. Travel cards that can be reloaded and redeemed offshore in cash carry significantly higher levels of risk than low value retail gift cards. The most common crime-types in which SVCs are implicated are money laundering and cyber-enabled fraud. Of particular concern is the use of SVCs for terrorism financing purposes. The risk assessment contains detailed information to assist industry understand the risks associated with SVCs and how they can mitigate these risks.

Details: Canberra: AUSTRAC, 2017. 30p.

Source: Internet Resource: Accessed November 20, 2017 at: http://www.austrac.gov.au/sites/default/files/stored-value-cards-risk-assessment-WEB.pdf

Year: 2017

Country: Australia

URL: http://www.austrac.gov.au/sites/default/files/stored-value-cards-risk-assessment-WEB.pdf

Shelf Number: 148274

Keywords:
Credit Card Fraud
Financial Crime
Money Laundering
Risk Assessment
Terrorist Financing

Author: Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA)

Title: Typologies Report on Cash Transactions and Cash Couriers in West Africa

Summary: The geographical territory of West Africa is occupied by fifteen countries that make up the Economic Community of West African States (ECOWAS): Benin, Burkina Faso, Cape Verde, Cote D'Ivoire, (The) Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. Of these fifteen (15) countries, eight (8)belong to a common currency zone known as the Union Economique Monetaire de l'Afrique de l Ouest (UEMOA), which has common monetary regulations. The economy of the West Africa region is largely cash-based, characterised by a large and growing unregulated informal sector which is vulnerable to money laundering and terrorist financing. Money Laundering (ML) is a process whereby the origin and ownership of funds generated by illegal means is concealed. The process of ML usually involves three stages: (1) the introduction of the proceeds of crime into the financial system (placement); (2) transactions to convert or transfer the funds to other locations or financial institutions (layering); and, (3) reintegrating the funds into the legitimate economy as "clean" money and investing it in various assets or business ventures. Terrorist financing (TF), on the other hand, is the direct or indirect financial support provided to criminals for the purpose of carrying out acts that involve violence and or intimidation of populations. Such funds could be derived from either legitimate or illegitimate sources. Although there are factual differences between money laundering (ML) and terrorist financing (TF), both processes may use common intermediaries such as cash transactions. Indeed, money laundering and terrorist financing are a threat to international peace and security. Nature and Types of Cash Transactions Cash transactions are a particular problem, especially in developing economies where the formal payment systems are inadequate or where the populace has little confidence in their use. Even in some developed economies, cash transactions constitute a specific money laundering and terrorist financing problem. For example, about 52% of case files transmitted to prosecutorial authorities by the Belgian Financial Intelligence Unit (FIU) in 2005 featured cash transactions. The types and patterns of cash transactions that are at risk of money laundering and terrorist financing include the following : - exchange transactions, involving the exchange of one currency into another or the conversion of smaller denominations into bigger ones; - money remittance transactions, within or outside the country, often for mutual settlement. One of the potential risks here is that false identities may be used, thus making regulation, even where it does exist, difficult; - cash deposits on bank accounts, either by the account owners or by a third party; - cash withdrawals from accounts; and - cross-border transport of physical cash concealed in items such vehicle spare parts, pockets, commercial airlines parcels, suitcases and handbags.

Details: s.l.: GIABA, 2007. 36p.

Source: Internet Resource: Accessed December 1, 2017 at: http://www.giaba.org/media/f/107_typologies-report-november-2007.pdf

Year: 2007

Country: Africa

URL: http://www.giaba.org/media/f/107_typologies-report-november-2007.pdf

Shelf Number: 148672

Keywords:
Cash Transactions
Money Laundering
Proceeds of Crime
Terrorist Financing

Author: Global Initiative Against Transnational Organized Crime

Title: Transnational Organized Crime and the Impact on the Private Sector: The Hidden Battalions

Summary: his paper is based on a detailed review of the scale and nature of organised crime's infiltration of the private sector. These findings are a 'call to arms' for the international private and public sectors to transform their co-operation and teamwork. We have adopted a practical definition of organized crime as that which is carried out by a group of people, suspected of serious criminal offences, over a prolonged period, motivated by profit or power. In our analysis of six major private sector industries, six specific forms of organised crime stood out as either having material impact on the private sector, or using the private sector as facilitators. Money laundering is the process of making dirty money look clean. One estimate puts it at 2% of global GDP - c.$1.5 trillion. Money-laundering is an 'enabling crime', facilitating organized crime (as well as terrorism) with social and economic costs. Asset misappropriation refers to stealing from businesses. For example, cargo thefts cost as much as $30 billion in losses each year worldwide. Counterfeiting and contraband, whilst thought of as being a consumer goods crime, is rife in a broad range of sectors, in particular technology products and pharmaceuticals, to devastating effect. It is estimated by OECD at $461billion, or 2.5% of world trade. Fraud and extortion remain strongly present in the financial, construction and real estate industries. In construction extortion could account for of 20-30 per cent of lost project value. Human trafficking. High volume, low skilled labour enterprises such as construction and building, have the highest penetration of trafficking incidence in the private sector. Cyber Crime. Hacking attacks cost the average American firm $15.4 million per year over. In 2015 68,000 URLs containing child sexual exploitation and abuse (CSEA) images were hosted online on 1,991 domains. The reputational impact means major tech companies apply significant collaborative resources to weeding out criminal, terrorist and CSEA activity. Finding#1: The Scale and Impact of Crime in the Private Sector is Truly Staggering. A conservative estimate of the value of organized crime was $3.6-$4.8 trillion, in 2015/2016, 7% of global GDP. The broader impact of organized crime is difficult to assess as it is multi-dimensional, and shared across the private, public sector, and society itself. The impact on the private sector only - in terms of revenue loss - is estimated at c$130 billion. The Institute of Economics and Peace (IEP) calculated the financial cost of terrorism at over $52 billion in 2014. A conservative estimate of total transnational organized crime is $870 billion a year. This is more than six times the amount of official development assistance and close to 7% of the world's exports of merchandise Finding #2 Private sectors are either facilitators or targets. Crimes are either done 'to' private sector organisations, or 'through' them. Sectors are either the targets of fraud or asset theft themselves, particularly in construction, consumer goods ($460 billion counterfeit goods), and financial card fraud, or they facilitate crime unwittingly, through use of technology networks by fraudsters to target victims, e.g. the real estate sector laundering dirty funds or the transport industry moving illicit goods. Regulation varies between the 'victim' and 'enabling' industries. Laws are in place to criminalise the use of the private sector for technology or money laundering crime. The victim industries, however, often are reliant on existing laws around theft, or copyright infringement, which are not tailored to the activities of TOC groups and tend to have lower penalties for infringement. Finding #3 Organized crime's impact on the private sector is growing not shrinking. Counterfeit goods have risen from $250 billion to $461 billion in the last 8 years. Asset theft in the transport and logistics theft rose by over 90% 2015 to 2016. There is a sense that regulation is not working: money laundering seizures equated to 0.2% of all laundered funds in one study; and after the dark web's Silk Road was taken down, many sites sprung up to take on and indeed grow the trade. Finding #4 Direct impact of Crime Disproportionately felt in the global south. Sweatshops flourish in South Asia; trafficking of labour and sex workers originates predominantly in Africa, Asia and Eastern Europe; corruption in natural resources damages production in Africa and the Caucasus; technology fraud is driven from eastern and southern Europe, West Africa and the Middle East. Whereas in developed economies counterfeit drugs may comprise less than 0.2 percent of the market developing markets are often beset by 30% fakes, as a UNODC report showed for anti-malarial drugs in Africa. Globalization is increasing the 'attack surface' for TOC groups. The abuse of the often weaker regulatory regimes in the Global South by TOC groups further increases the risk for the private sector operating in these areas. Finding #5 Responses re confrontational rather than collaborative. There are very few examples of successful public and private sector co-operation against TOC groups. Private sector organisations complain that communication with the law enforcement sector is one-way and that the regulatory reporting burden, designed to combat crime, can act as a deterrent to co-operation. Tangible results have been seen when industries take the lead on disrupting the work of TOC groups, such as TAPA the Transported Asset Protection Association

Details: Geneva, SWIT: The Global Initiative, 2017. 84p.

Source: Internet Resource: accessed December 7, 2017 at: http://globalinitiative.net/wp-content/uploads/2017/12/gitoc_tocprivatesector_web-1.pdf

Year: 2017

Country: International

URL: http://globalinitiative.net/wp-content/uploads/2017/12/gitoc_tocprivatesector_web-1.pdf

Shelf Number: 148755

Keywords:
Cargo Theft
Contraband
Counterfeit Goods
Cybercrime
Extortion
Human Trafficking
Illicit Trade
Money Laundering
Organized Crime
Private Sector
Stolen Property
Theft of Goods

Author: Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA)

Title: The Nexus between Small Arms and Light Weapons and Money Laundering and Terrorist Financing in West Africa

Summary: 1. This presents the findings of field research on the nexus between illicit trafficking in Small Arms and Light Weapons (SALW) and Money Laundering (ML) in West Africa on the one hand; and illicit trafficking in SALW and Terrorist Financing (TF) in West Africa on the other in all 15 member States of the Economic Community of West African States (ECOWAS). 2. Following a comprehensive desk research and analysis of relevant laws and regulations related to SALW and money laundering and terrorism financing, fieldwork was conducted in the form of interviews on the basis of confidentiality with relevant stakeholders in public, private, and civil society sectors. Further analysis of research data was conducted by consultants. 3. The study is divided into eight chapters. Chapter 1 provides the background and spells out the objectives of the study. It also includes a brief explanation of the methodology used. Chapter 2 focuses on typologies, prevalence, and impact of small arms and light weapons (SALW) trafficking and proliferation in West Africa. It focuses on the trends and patterns of illicit trafficking in SALW in the region, with particular focus on the internal and external drivers of SALW, the nature of the firearms deals, the types of firearms trafficked, and the types of SALW that are manufactured locally in the region, including the countries that have the most thriving local SALW manufacturing industries. 4. Chapter 3explores the nexus between illicit small arms and light weapons (SALW) trafficking and money laundering in West Africa, particularly on the likely sources of funds for financing illegal arms importation into West Africa by non-state actors. This chapter also examines how illicit profits from illicit SALW trafficking and proliferation deals are laundered. The laundering methods are through local and international banks, real estate investments, and small retail business. Chapter 4 examines the nexus between illicit trafficking in SALW and terrorist financing in West Africa. It examines the methods through which proceeds generated from SALW trafficking are used to fund activities of terrorist and extremist groups in the region. Chapter 5 provides an analysis of existing laws and regulations, and the institutional mechanisms for preventing and combating illicit trafficking in SALW, and for regulating ML/TF. It examines, among other things, the ECOWAS Convention on Small Arms and Light Weapons, the regional administrative measures for combating illicit trafficking in SALW and the regional administrative measures against ML and TF. Chapter 6 provides the findings of the study, while chapters 7 and 8 deal with general conclusions and recommendations, respectively.

Details: s.l.: GIABA, 2013. 63p.

Source: Internet Resource: Accessed December 7, 2017 at: http://www.giaba.org/media/f/613_519_GIABA%20SALW%20Nexus-final.pdf

Year: 2013

Country: Africa

URL: http://www.giaba.org/media/f/613_519_GIABA%20SALW%20Nexus-final.pdf

Shelf Number: 148758

Keywords:
Arms Trafficking
Money Laundering
Terrorist Financing
Trafficking in Arms

Author: Transparency International

Title: Hiding in Plain Sight: How UK companies are used to launder the proceeds of corruption

Summary: In April 2016 the Panama Papers - a major leak of 11.5 million files from a Panamanian law firm - gave a unique insight into the secretive global corporate networks that help to facilitate corruption. The Paradise Papers - the latest expose on the offshore world, covering 13.4 million files - continue to shine a light on how opaque structures conceal the identities of individuals as well as the origin of their wealth. These scandals highlight the importance of anonymous 'shell' companies to these schemes, as well as the individuals and businesses which create complex networks of these corporate vehicles to aid high-end financial crime. Much attention has been paid to Mossack Fonseca and Appleby - the firms at the centre of these two scandals - which have helped to set-up and manage hundreds of thousands of companies. However, the UK was the second most popular destination for intermediaries and middlemen used by Mossack Fonseca to create and maintain this network, and it is easy to see why. The UK is home to a thriving company formation industry and is a hub for professional corporate services. It is also one of the easiest places in the world to start a company, making it attractive to legitimate and illegitimate business alike. Costing as little as $12 and taking around 15 minutes to complete the forms, UK companies can be created on a large scale for a fraction of the price of those registered in other financial centres. UK companies also carry a veneer of legitimacy due to the country's well established global status. Alongside a range of corporate vehicles, the UK's company formation industry also offers a variety of services, from so-called 'nominee directors' and mailing addresses - giving companies a layer of secrecy - to offshore bank accounts allowing access to the global financial system. Often there will be no trail whatsoever to indicate who sold companies which then go on to be misused. These factors have contributed to the UK featuring as a central location in which to set-up companies for laundering illicit wealth. Using open-source analysis, we have identified 51 major money laundering schemes made possible by the use of UK companies. Financially these scandals could amount to $80 billion or more in illicit wealth, with some of them threatening the financial stability of whole economies. The human damage inflicted on the victims of these crimes is still being counted. By analysing the Trust and Company Service Provider (TCSP) sector and past money laundering cases we have found that, far from being the first line of defence against money laundering, some of these businesses have either been unwitting accomplices or complicit enablers for financial crime. Central to government's recent efforts to tackle money laundering has been introducing public access to information about who really controls companies incorporated in the UK. This constitutes real progress and has put the UK at the forefront of global corporate transparency. Yet this threatens to be undermined by three key issues we have identified during our research into the TCSP sector: Insufficient controls on company formation: there are practically no barriers to UK companies being incorporated by money launderers and no way of tracing their use after they have been established. Lack of checks on the UK company register: Companies House has neither the power nor the resources it needs to ensure the integrity of the UK company register, allowing inaccurate and misleading information being submitted by those wishing to hide illicit activity. Inadequate anti-money laundering (AML) supervision: the UK's patchwork of AML supervisors is not providing a credible deterrent to money laundering failings, which is allowing poor levels of compliance within the TCSP sector covered by the UK's Money Laundering Regulations (MLR). There is also a whole industry of overseas professionals setting-up and managing UK companies who are subject to little or no AML supervision. In this paper we have sought to analyse the potential nature, scale and impact of these problems by looking at the available evidence of what is going wrong. What we have found is that light-touch regulation is coming at a cost, both to the UK's international reputation as a responsible place to do business, and in countries like Ukraine and Azerbaijan who suffer from rampant corruption facilitated by UK companies. We have proposed ten recommendations in three themes that, if implemented, could help end the use of UK companies in laundering corrupt wealth and ensure the UK remains a world leader when it comes to corporate transparency.

Details: London: Transparency International, 2017. 51p.

Source: Internet Resource: Accessed January 20, 2018 at: http://www.transparency.org.uk/publications/hiding-in-plain-sight/#.WmNkMKinHcs

Year: 2017

Country: United Kingdom

URL: http://www.transparency.org.uk/publications/hiding-in-plain-sight/#.WmNkMKinHcs

Shelf Number: 148889

Keywords:
Corporate Crime
Corruption
Financial Crimes
Money Laundering

Author: United Nations Economic Commission for Africa

Title: Illicit Financial Flows: Report of the High Level Panel on Illicit Financial Flows from Africa

Summary: The 4th Joint African Union Commission/United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development was held in 2011. This Conference mandated ECA to establish the High Level Panel on Illicit Financial Flows from Africa. Underlying this decision was the determination to ensure Africa's accelerated and sustained development, relying as much as possible on its own resources. The decision was immediately informed by concern that many of our countries would fail to meet the Millennium Development Goals during the target period ending in 2015. There was also concern that our continent had to take all possible measures to ensure respect for the development priorities it had set itself, as reflected for instance in the New Partnership for Africa's Development. Progress on this agenda could not be guaranteed if Africa remained overdependent on resources supplied by development partners. In the light of this analysis, it became clear that Africa was a net creditor to the rest of the world, even though, despite the inflow of official development assistance, the continent had suffered and was continuing to suffer from a crisis of insufficient resources for development. Very correctly, these considerations led to the decision to focus on the matter of illicit financial outflows from Africa, and specifically on the steps that must be taken to radically reduce these outflows to ensure that these development resources remain within the continent. The importance of this decision is emphasized by the fact that our continent is annually losing more than $50 billion through illicit financial outflows.

Details: Addis Ababa, Ethiopia: The Commission, 2015. 126p.

Source: Internet Resource: Accessed February 7, 2018 at: https://www.uneca.org/sites/default/files/PublicationFiles/iff_main_report_26feb_en.pdf

Year: 2015

Country: Africa

URL: https://www.uneca.org/sites/default/files/PublicationFiles/iff_main_report_26feb_en.pdf

Shelf Number: 149020

Keywords:
Financial Crimes
Flow of Funds
Illicit Financial Flows
Money Laundering

Author: African Union Commission. Department of Economic Affairs

Title: Mobilisation of Domestic Resources: Fighting against Corruption and Illicit Financial Flows

Summary: Illicit financial flows and corruption have long been at the centre of discussions on development in Africa, particularly due to the existence of a wide consensus on their negative impacts on development financing in Africa. It is now so widespread that Africa loses USD 50 billion annually. However, this figure is well below reality due to the difficulty in obtaining reliable statistics, and the secretive nature of such funds. The African Union's initiative to dedicate the year 2018 to combatting corruption under the theme "Winning the Fight against Corruption: A Sustainable Path for Africa's Transformation" is eloquent proof of the willingness of the African Union to combat poor financial governance, which affects the Continent's inclusive socio-economic development of the, as illicit financial flows are obstacles to productive investments, resulting in distortions in allocations of budgetary resources, and systematically increasing inequalities. The mobilization of adequate resources is essential in order for Africa to emerge from its weak economic conditions, and increase the level of development of its populations. Indeed, after two decades (80s and 90s) of weak growth with a nearly zero average, Africa has experienced strong economic growth, despite the recent downturn observed with the decline in commodity prices. The average growth rate has been around 5% since 2000, with considerable heterogeneity in growth patterns between countries, at a time when other regions have experienced a decline or stagnation in their economic activity. However, this growth has not substantially reduced poverty and inequality or led to job creation. The processes for industrialization, economic diversification and the modernization of agriculture have also been very limited. Despite progress made, more than 50% of the African population is living on less than USD 1.9/day, that is, about 389 million people (World Bank, 2016). In terms of income distribution, six of the top ten most unequal countries in the world were located in Africa, particularly in Southern Africa, with a GINI coefficient increasing from 0.42 to 0.46 between 2000 and 2010 (African Development Bank, 2012). Africa's infrastructure needs range from USD 130 to 170 billion per year (Authorized Economic Operator, 2018). On the basis of these findings and in view of the current limited budgetary resources and the scarcity of development aid, African countries should explore options for mobilizing domestic resources to finance productive activities, generate growth and mitigate the increasing social demands as a result of the continuing unprecedented population growth. This should start with the recovery of funds lost through illicit financial flows to invest in the social sectors (education, health, social safety nets, etc.) in order to rapidly harness the demographic dividend, and to place the Continent on the path to rapid, inclusive and sustainable growth. The African Union could address the issue at political level by putting in place a common continental strategy on which national strategies will be anchored, and by advocating for the strengthening of international cooperation in combatting tax evasion, money laundering, crime, corruption, false invoicing and mispricing of imported or exported goods practices. This paper takes stock of illicit financial flows and corruption in Africa, with a detailed presentation at regional and country levels. It is structured as follows: the first part essentially discusses the importance of domestic resource mobilization, and combatting corruption and illicit financial flows (IFFs) to ensure the sustainable development of Africa. The second part takes stock of the IFFs in Africa based on data provided by the organization, Global Financial Integrity (GFI). The third part addresses the issue of corruption and financial mismanagement in Africa, and the last part proposes recommendations

Details: African Union (Addis Ababa ), 2018. 24p.

Source: Internet Resource: Accessed April 25, 2018 at: http://iffoadatabase.trustafrica.org/iff/paper_2018_mobilization_of_domestic_resources_fighting_against_corruption_iff_english_0.pdf

Year: 2018

Country: Africa

URL: http://iffoadatabase.trustafrica.org/iff/paper_2018_mobilization_of_domestic_resources_fighting_against_corruption_iff_english_0.pdf

Shelf Number: 149884

Keywords:
Corruption
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA)

Title: Money Laundering Resulting from the Counterfeiting of Pharmaceuticals in West Africa

Summary: This study was aimed at understanding the nature and magnitude of the money- laundering phenomenon resulting from the counterfeiting of pharmaceuticals in West Africa. The methodology employed involved the selection of four countries (Côte d'Ivoire, Nigeria, Senegal and Togo) for the purpose of in-depth country level study, while the remaining countries responded to a questionnaire. From the country reports and the responses provided by the member States to the questionnaire and the case studies provided by law enforcement authorities, the linkage between Money Laundering (ML) and counterfeiting of pharmaceuticals was analysed.

Details: s.l.: GIABA, 2017. 56p.

Source: Internet Resource: Typologies Report: Accessed April 26, 2018 at: https://www.giaba.org/media/f/1038_GIABA_Typologies%20Report%20on%20ML%20and%20Counterfeit%20Pharmaceutical.pdf

Year: 2017

Country: Africa

URL: https://www.giaba.org/media/f/1038_GIABA_Typologies%20Report%20on%20ML%20and%20Counterfeit%20Pharmaceutical.pdf

Shelf Number: 149896

Keywords:
Counterfeit Drugs
Financial Crimes
Money Laundering

Author: Salcedo-Albaran, Eduardo

Title: The Lava Jato Network: Corruption and Money Laundering in Brazil

Summary: The "Lava Jato" Operation is an on-going Federal Police investigation executed for dismantling corruption and money laundering schemes that involved Petrobras, the Brazilian State-managed oil company, Electrobras, the Brazilian state-managed nuclear company, among other Brazilian public institutions. From 2014 to mid-2017, this operation has developed 41 phases of investigation involving various public and private companies, politicians, businesspersons, doleiros, and drug traffickers, among other types of agents. Since the initial complaint filed by Hermes Freitas Magnus, who owned the Brazilian company "Dunel", along with Maria Teodora Silva, a series of investigations began, which allowed identifying four large criminal groups led by the currency exchange operators Carlos Habib Chater, Alberto Youssef, Nelma Mitsue Penasso Kodama and Raul Henrique Srour. As a result of these investigations, Brazilian officials discovered that those four criminal organizations operated together between 2005 and 2014 to launder money through alliances between companies and to obtain contracts with Petrobras through bribe payments to public officers of the company, and politicians with the power of keeping the officials on their positions. The evidence gathered and analyzed for this report revealed a major scheme of corruption and money laundering in Brazil, involving more than 220 Brazilian and foreign companies, 170 business persons, and 100 public servants. Considering the institutional impact of the criminal scheme installed initially at Petrobras, and how it engaged on corruption across Latin America and money laundering across the Western Hemisphere and beyond, this document is the centralized analysis of this complex criminal structure, according to the sources listed below. This document has five sections. The first part is this introduction; the second is a description of the methodology and the concepts related to Social Network Analysis and additional protocols of analysis, which is the methodological approach herein applied; the third is a brief presentation of the criminal structure referenced here as "Petrobras Criminal Network", as well as the sources gathered and processed to model the structure; the fourth is an analysis of the characteristics of the criminal structure, which includes a description of the types of nodes/agents, the types of interactions established, and the nodes/agents concentrating direct interactions and the capacity to arbitrate resources across the network; and the fifth part includes conclusions related to the characteristics of the analyzed network.

Details: Bogota, Colombia/Sao Paulo, Brazil: Humanitas360 and Vortex Foundation 2018. 106p.

Source: Internet Resource: The Global Observatory of Transnational Criminal Networks - Working Paper No. 29. VORTEX Working Paper No. 43; Accessed May 11, 2018 at: http://docs.wixstatic.com/ugd/522e46_fcb25fe62d8f4776982f1fc39200e1f2.pdf

Year: 2018

Country: Brazil

URL: http://docs.wixstatic.com/ugd/522e46_fcb25fe62d8f4776982f1fc39200e1f2.pdf

Shelf Number: 150158

Keywords:
Bribery
Corruption and Fraud
Criminal Networks
Financial Crime
Money Laundering

Author: Hunter, Marcena

Title: Measures that Miss the Mark: Capturing proceeds of crime in illicit financial flows models

Summary: Illicit financial flows (IFFs) are generally viewed as the financial side of criminal activity, and there is widespread agreement IFFs are a global threat. There is also agreement that IFFs, particularly prevalent and damaging in the context of weak, developing and fragile states, are a threat to sustainable development. International recognition of IFFs as a development threat include Sustainable Development Goals (SDGs) target 16.4, which states: "[b]y 2030, significantly reduce illicit financial flow". However, the concept remains vague and its content controversial. Furthermore, misalignment between terminology used to define IFFs and methodology to measure the scale of IFFs has troubling implications for policy response. Terminology encompasses a wide variety of illicit flows, while existing measures tend to be narrower and inherently give greater weight to IFFs linked to the classifications of commerce, as compared to those generated by crime and corruption. Furthermore, IFFs from the least developed states are at high risk of being undervalued. This paper examines how terminology and measurement frameworks can better reflect the form and scale of IFFs linked to crime.Due to the complex nature of the phenomenon, a more accurate and multifaceted approach to defining and measuring crime-related IFFs is critical to better reflect the detrimental impact these types of flows have on development and to formulating effective responses. Continuing to treat IFFs as a single, indivisible phenomenon inhibits the development of comprehensive and effective responses. Disaggregation of analysis and measures of IFF types is therefore essential.Key recommendations: Develop more accurate terminology and definitions, including better accounting for elements especially relevant to developing nations and crime IFFs; Represent estimates of IFFs more accurately and transparently; Adopt a multi-step model that makes use of both crime- and country-specific assessments and the gravity model, as well as information from both quantitative and qualitative sources; and, Utilize assessment frameworks that go beyond monetary values and account for harm.

Details: Geneva: Global Initiative against Transnational Organized Crime, 2018. 39p.

Source: Internet Resource: Accessed June 29, 2018 at: http://globalinitiative.net/wp-content/uploads/2018/06/TGIATOC-Illicit-Financial-Flows-report-1941-hi-res-2-1.pdf

Year: 2018

Country: International

URL: http://globalinitiative.net/wp-content/uploads/2018/06/TGIATOC-Illicit-Financial-Flows-report-1941-hi-res-2-1.pdf

Shelf Number: 150735

Keywords:
Financial Crimes
Money Laundering
Organized Crime
Proceeds of Crime

Author: Veen, H.C.J. van der

Title: National Risk Assessment on Money Laundering for the Netherlands

Summary: Dutch policy to prevent and combat money laundering is based on the recommendations of the Financial Action Task Force (FATF) and EU directives and regulations. The FATF - an intergovernmental body set up by the G7 in 1989 - focuses on global prevention of money laundering, terrorist financing and other related threats to the integrity of the international financial system. The majority of the FATF's recommendations has been adopted into the fourth EU Anti-Money Laundering Directive, applicable to all EU member states. In short, Article 7 of this directive obliges EU member states to implement a risk-based policy against money laundering and terrorist financing and to establish a National Risk Assessment (NRA). The goal of this NRA is to identify the ten most significant risks relating to money laundering in terms of their potential impact and to assess the 'resilience' of the policy instruments designed to prevent and combat money laundering. Resilience entails the functioning of policy instruments (including legislation), whereby the following is applicable: the greater the resilience, the more the risks are combatted. This initial NRA also describes a number of lessons learned that could be taken into account in the process of subsequent NRAs.

Details: The Hague: WODC, 2017. 105p.

Source: Internet Resource: Cahier 2017-13a: Accessed July 2, 2018 at: https://english.wodc.nl/binaries/Cahier%202017-13a_2689c_Full%20text_tcm29-328683.pdf

Year: 2017

Country: Netherlands

URL: https://english.wodc.nl/binaries/Cahier%202017-13a_2689c_Full%20text_tcm29-328683.pdf

Shelf Number: 150759

Keywords:
Economics and Crime
Financial Crime
Money Laundering
Risk Assessment
Terrorist Financing
Underground Banking

Author: Coyne, John

Title: I can see clearly now! Technological innovation in Australian law enforcement: a case study of anti-money laundering

Summary: The Australian government's technological monopolies have ended. Technological developments, especially those that have been disruptive, have been driven primarily by private corporations for at least the past ten years. Meanwhile, legislative responses to those changes, be they disruptive or otherwise, have been increasingly delayed. Acceleration in the development and use of technology has been matched by changes in the capability of those who would do us harm. In the face of rapid social change, governments have lost more than a technological edge, as the very conceptualisations of sovereignty and geographical jurisdictions are being challenged. Law enforcement agencies' traditional business models for dealing with organised crime are under significant pressure from threat actors that are able to operate more agile decision-making cycles and exploit seams between jurisdictions and in law enforcement agencies' capabilities. In this context, Australian law enforcement agencies face an increasing number of challenges from emergent technologies. A key policy challenge underpinning these issues relates to the limited capacity of law enforcement to introduce innovative strategies in response to disruptive technology. Another is how to make cross-jurisdictional cooperation simpler and easier. This report explores technological innovation in law enforcement through a specific crime type case study of anti-money laundering (AML) provisions. It analyses the factors that support or restrict technological innovation in federal law enforcement's AML efforts and argues that the current ecosystem for innovation for AML needs to be enhanced to engage with the dual challenge of disruptive technology, and the integration of existing pockets of AML excellence into a holistic whole-of-government innovation program. The initial steps for responding to this challenge should include an analysis of the central assumptions that underpin innovation, policy-making, strategy and finance in this space.

Details: Barton, ACT: Australian Strategic Policy Institute, 2018. 35p.

Source: Internet Resource: Accessed July 31, 2018 at: https://s3-ap-southeast-2.amazonaws.com/ad-aspi/2018-07/SR%20123%20I%20can%20see%20clearly%20now.pdf?jLRQZUtiZ44.o66ipdnFVjoXF2plYehv

Year: 2018

Country: Australia

URL: https://s3-ap-southeast-2.amazonaws.com/ad-aspi/2018-07/SR%20123%20I%20can%20see%20clearly%20now.pdf?jLRQZUtiZ44.o66ipdnFVjoXF2plYehv

Shelf Number: 150983

Keywords:
Anti-Money Laundering
Financial Crime
Money Laundering
Organized Crime
Police Technology

Author: Global Financial Integrity

Title: Kenya: Potential Revenue Losses Associated with Trade Misinvoicing

Summary: Trade misinvoicing is a reality impacting Kenya and every other country of the world. Imports coming into a country can be over-invoiced in order to shift money abroad. Or imports can be under-invoiced in order to evade or avoid customs duties or VAT taxes. Similarly, exports going out of a country can be under-invoiced in order to shift money abroad. And exports are occasionally over-invoiced, for example in order to reclaim VAT taxes. Global Financial Integrity finds that trade misinvoicing is the most frequently utilized mechanism facilitating measurable illicit financial flows. Misstating import and export values has become normalized in much of commercial trade, and the same facilitating shadow financial system is used to move money of criminal and corrupt origin. We are dealing with a systemic problem that merits serious concerted attention. Parties to trade who engage in misinvoicing do so because it is profitable to them. That is, they will incur some costs (including the expected cost of getting caught) but do so because the expected benefits to them of misinvoicing are larger than their expected costs. While those parties benefit from misinvoicing, there are additional social costs to nations affected by such activity. Trade misinvoicing redirects economic resources away from their most productive use (i.e., it is a type of "rent-seeking" activity) and that can result in social inefficiencies in the allocation and distribution of resources. While any country may be affected by misinvoicing, the problem is particularly acute for developing countries where productive capacities may already be limited. The social costs of misinvoicing can undermine sustainable growth in living standards in developing countries as well as exacerbate already pronounced inequities in the distribution of income and wealth. Moreover, by depressing government revenues and exacerbating inequality, those social costs can also impede progress in the developing world on important social goals, such as poverty reduction. In this analysis we seek to provide an approximate measure of revenues lost to the Kenyan government due to trade misinvoicing. We illustrate this in the first section of the report for 2013 (the last year for which comprehensive data for Kenya are available). For that year, we can reasonably identify potential revenue losses in excess of US$907 million, or about 8 percent of total Kenyan government revenues. That is a conservative figure, as it does not encompass many aspects of trade misinvoicing and other illicit financial flows that do not show up in official statistics. Moreover, the detailed data available for estimating trade misinvoicing in Kenya comprise a fraction of all of that country's trade flows. Furthermore, we take one aspect of this problem - import under-invoicing - and subject it to detailed analysis utilizing detailed bilateral trade data. We find that Kenyan imports of cereal from Pakistan, mineral fuels from India and, more generally, imports from China to be particularly prone to potential revenue loss to the government of Kenya due to under-invoicing. All researchers on this issue of trade misinvoicing are constantly seeking better data and better analytical methodologies. Even as we work toward these goals, what is most important is to appreciate the order of magnitude of the problem and the potential for development revenues if the problem is curtailed. Recognizing the shortcomings in data, Global Financial Integrity has developed GFTrade, a database of current world market prices of 80,000 categories of goods in the Harmonized System, as traded by 30 of the largest global economies. This enables emerging market and developing country customs and revenue authorities to assess instantly the risk that trade misinvoicing may be a reality in transactions as they are coming in or going out. GFTrade is in use in Africa now.

Details: Washington, DC: Global Financial Integrity, 2018. 32p.

Source: Internet Resource: Accessed October 10, 2018 at: https://www.gfintegrity.org/wp-content/uploads/2018/10/GFI-Kenya-Potential-Revenue-Losses-Associated-with-Trade-Misinvoicing.pdf

Year: 2018

Country: Kenya

URL: https://www.gfintegrity.org/wp-content/uploads/2018/10/GFI-Kenya-Potential-Revenue-Losses-Associated-with-Trade-Misinvoicing.pdf

Shelf Number: 152890

Keywords:
Corporate Crime
Corrupt Practices
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Transparency International

Title: European Getaway: Inside the Murky World of Golden Visas

Summary: Burgundy passports are turning gold, as EU governments sell residency and citizenship to the ultra-rich. By their nature, these schemes pose inherent risks for corruption, as people who steal money from their home countries need other jurisdictions to escape to when the going gets tough. Golden visa schemes offer fast-track citizenship and/or residency to foreign nationals in exchange for lots of cash. European golden visas are particularly appealing, as they give their owners free reign to move throughout the EU, unconstrained by interference or checks. There are numerous examples of high-risk business people and oligarchs enjoying all the benefits that golden visas have to offer. Finding safe haven through these schemes is simpler than you might think if you have a lot of money to spare. Despite the risks posed by golden visa schemes, several of the governments selling residency and citizenship do not seem to question where applicants' money comes from. This perhaps contributes to the EU: Welcoming over 6,000 new citizens and close to 100,000 new residents through golden visas schemes in the last decade. Attracting around �25 billion in foreign direct investment through golden visas over the last ten years. While some nations are profiting from the sales of golden visas, all EU citizens take the sizeable hit due to the ethical implications and risks embedded in the current practice. Nonetheless, secrecy continues to obscure even basic information about these schemes and EU citizens do not have the information necessary to decide whether selling residency or citizenship is a risk worth taking. We have worked with Transparency International to change this, investigating publicly available sources and reaching out to national governments for additional information. In our latest report, we are able to shine some light on the shady situation, revealing a telling though still incomplete picture of the golden visa scheme. RECOMMENDATIONS: With Transparency International, we call upon EU institutions to: Set EU-wide standards for golden visa schemes, including enhanced due diligence and transparency; Identify and regularly assess the risks posed by schemes for the EU as a whole and mitigate accordingly; Seek to broaden anti-money laundering rules so they apply to all players in the golden visa industry; Establish mechanisms for collecting and coordinating information on applications, investment and rejections; Start legal proceedings against member states whose schemes could undermine the collective security of EU nations.

Details: Berlin: Transparency International and Global Witness, 2018. 88p.

Source: Internet Resource: Accessed October 12, 2018 at: https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/european-getaway/

Year: 2018

Country: International

URL: https://www.globalwitness.org/en/campaigns/corruption-and-money-laundering/european-getaway/

Shelf Number: 152914

Keywords:
Financial Crimes
Illegal Trade
Money Laundering
Passports
Security

Author: Global Financial Integrity

Title: A Scoping Study of Illicit Financial Flows Impacting Uganda

Summary: Insufficient levels of financial transparency-globally and domestically-and government accountability in Uganda, coupled with a regulatory system that can incentivize financial crimes, are helping to drive high levels of illicit financial inflow and outflows in the country, which are undermining development efforts. Uganda will struggle to meet its goal of rising to middle income status and reducing its reliance on foreign debt unless it increases efforts to combat the commercial tax evasion, corruption, and money laundering of criminal proceeds and terrorist financing. Three policy areas should be the central focus for the government: eliminate the allowance and use of anonymous companies in the economy, reduce the ease and volumes of trade misinvoicing, and enforce anti-money laundering laws, particularly within the banking sector. Illicit financial flows (IFFs) in Uganda are part of a broader political economy dynamic where continued economic growth and development are hampered by corruption, impunity, and an opaque extractive sector. The growth in Uganda's economy and its role as a haven for legal and illegal activities stemming from neighboring countries like South Sudan, create perverse opportunities for illicit financial flows. The central government has a decent capacity to combat these opportunities for IFFs on paper, but its willingness or capacity to act to curtail IFFs is lagging. Trade misinvoicing is the most significant area of illicit financial flows in Uganda that can be estimated using publicly available data. From 2006-2015, the latest years for which the necessary data are available, potential trade misinvoicing amounted to roughly 18 percent of total Ugandan trade over the ten-year period. The figure for possible outflows is some 10 percent of total trade, and for possible inflows it is around 8 percent of total trade (2006-2015). Viewed in dollar terms, the potential over- and under-invoicing of imports from 2006-2015 was approximately US$4.9 billion, and over- and under-invoicing of exports may have reached US$1.7 billion. Uganda's laws and regulations on financial transparency and anti-money laundering have the strongest influence on illicit financial flows, and there are notable gaps in the framework the Government of Uganda has in place to address the sources, transfer methods, and motivations of IFFs in the country. In particular, laws governing corporations in Uganda are generally weak in so far as they do not require the official identification of the beneficial owners of companies or the complete identity of all shareholders in a company. The government's anti-money laundering regime mostly exists on paper and could do with strengthening. The Financial Intelligence Authority, which was only recently established, acknowledges this shortcoming and is working to enhance its performance in helping to prevent, track, and prosecute money laundering in the country. Uganda's extractive sector and the presence of numerous transnational crime markets add to the importance of both financial transparency and anti-money laundering.

Details: Washington, DC: GFI, 2018. 80p.

Source: Internet Resource: accessed October 16, 2018 at: https://www.gfintegrity.org/wp-content/uploads/2018/10/A-Scoping-Study-of-Illicit-Financial-Flows-Impacting-Uganda.pdf

Year: 2018

Country: Uganda

URL: https://www.gfintegrity.org/wp-content/uploads/2018/10/A-Scoping-Study-of-Illicit-Financial-Flows-Impacting-Uganda.pdf

Shelf Number: 152979

Keywords:
Corporate Corruption
Corporate Crime
Financial Crime
Illicit Financial Flows
Money Laundering
Tax Evasion
Terrorist financing

Author: Global Financial Integrity

Title: Nigeria: Potential Revenue Losses Associated with Trade Misinvoicing

Summary: Analysis of trade misinvoicing in Nigeria in 2014 shows that the potential loss of revenue to the government was approximately $2.2 billion for the year, according to a new study by Global Financial Integrity. To put this figure in context, this amount represents four percent of total annual government revenue as reported to the International Monetary Fund. Put still another way, the estimated value gap of all imports and exports represents approximately 15 percent of the country's total trade. The report, titled Nigeria: Potential Revenue Losses Associated with Trade Misinvoicing, analyzes Nigeria's bilateral trade statistics for 2014 (the most recent year for which sufficient data are available) which are published by the United Nations Comtrade. The detailed breakdown of bilateral Nigerian trade flows in Comtrade allowed for the computation of trade value gaps that are the basis for trade misinvoicing estimates. Import gaps represent the difference between the value of goods Nigeria reports having imported from its partner countries and the corresponding export reports by Nigeria's trade partners. Export gaps represent the difference in value between what Nigeria reports as having exported and what its partners report as imported. The portion of revenue lost due to the misinvoicing of exports was $1.3 billion during the year which was related to a reduction in corporate income taxes. The portion of revenue lost due to the misinvoicing of imports was $880 million. This amount can be further divided into its component parts: uncollected VAT tax ($100 million), customs duties ($365 million), and corporate income tax ($415 million). Lost revenue due to misinvoiced exports was $1.3 billion for the year which is related to lower than expected corporate income and royalties. "The practice of trade misinvoicing has become normalized in many categories of international trade" according to GFI President Raymond Baker. "It is a major contributor to poverty, inequality, and insecurity in emerging market and developing economies. The social cost attendant to trade misinvoicing undermines sustainable growth in living standards and exacerbates inequities and social divisions, issues which are critical in Nigeria today." Examination of the underlying commodity groups which comprise Nigeria's global trade show that a large amount of lost revenue ($200 million) was related to import under-invoicing of just five product types. Those products and the related estimated revenue losses include: vehicles ($100 million), iron and steel products ($40 million), electrical machinery ($20 million), ceramics ($20 million), and aluminum products ($20 million). Lost revenue due to mispriced exports ($1.3 billion) may be related to the mineral fuels trade given this category of goods makes up over 90 percent of all exports. Trade misinvoicing occurs in four ways: under-invoicing of imports or exports, and over-invoicing of imports or exports. In the case of import under-invoicing fewer VAT taxes and customs duties are collected due to the lower valuation of goods. When import over-invoicing occurs (i.e. when companies pay more than would normally be expected for a product), corporate revenues are lower and therefore less income tax is paid. In export under-invoicing the exporting company collects less revenue than would be anticipated and therefore reports lower income. Thus, it pays less income tax. Corporate royalties are also lower. Total misinvoicing gaps related to imports can be broken down by under-invoicing ($2.4 billion) and over-invoicing ($1.9 billion). It should be noted that these figures represent the estimated value of the gap between what was reported by Nigeria and its trading partners. The loss in government revenue is a subset of these amounts and is based on VAT tax rates (5 percent), customs duties (15.2 percent), corporate income taxes (22.4 percent), and royalties (.2 percent) which are then applied to the value gap. Export misinvoicing gaps were a massive $5.9 billion for export under-invoicing and $5.6 billion for export over-invoicing. Lost corporate income taxes and royalties are then applied to export under-invoicing amounts to calculate lost government revenue.

Details: Washington, DC: GFI, 2018. 32p.

Source: Internet Resource: Accessed November 3, 2018 at: https://www.gfintegrity.org/wp-content/uploads/2018/10/Nigeria-Report-2018.pdf

Year: 2018

Country: Nigeria

URL: https://www.gfintegrity.org/wp-content/uploads/2018/10/Nigeria-Report-2018.pdf

Shelf Number: 153244

Keywords:
Corporate Crime
Corrupt Practices
Financial Crimes
Illicit Financial Flows
Money Laundering
Tax Evasion

Author: Neumann, Vanessa

Title: The many criminal heads of the Golden Hydra: How the Tri-Border Area's Interlocking Arcs of Crime Create LatAm's #1 International Fusion Center

Summary: The Tri-Border Area ('TBA') that straddles the intersection of Argentina, Paraguay and Brazil is considered the 'Golden Hydra,' as it is the lucrative regional entry point of many 'heads' of transnational criminal organizations (TCOs) and foreign terrorist organizations (FTOs) that all lead to the underworld of illicit trade for more than forty years. This is partly a consequence of its ethnic composition and open borders, set by a policy to facilitate immigration from the Middle East, and also the connecting infrastructure to facilitate cross-border trade. The TBA gained notoriety in the 1990s after the bombings of the Israeli embassy (1992) and the AMIA center (1994), both in Buenos Aires, by Lebanese Hezbollah militants. The money, operatives and bomb parts all moved through the TBA. After 9/11, it again became the target of US counter-terrorism surveillance, as a 'safe haven' for terrorists from groups like Al Qaeda and Hamas, in addition to Hezbollah. With the world's attention firmly focused on the Middle East since then, the TBA has grown into a mini-state that benefits a corrupt elite while maintaining a large and efficient money laundering center for the world's organized crime and terrorist groups, not just in the region, but throughout the world, yielding TCOs and FTOs an estimated US$ 43 billion a year. Illicit trade of all sorts (including the illicit trade in tobacco products, 'ITTP') has been growing rapidly in recent years, corrupting good governance in all three countries and exploiting the degrading security and economic situation in both Argentina and Brazil. The TBA has become a regional crime fusion center where corrupt politicians work with drug cartels from Bolivia, Colombia, Mexico and Brazil, as well as organized crime groups from China, in conjunction with a large Lebanese merchant community, part of which gives support to Hezbollah. Though illicit funding for Hezbollah is generally high on the US agenda, that is not the case for the countries of the TBA. For historical reasons, Hezbollah is on the political agenda of Argentina. Brazil, however, does not consider Hezbollah a terrorist group; it considers only three groups as terrorists: the Taliban, Al Qaeda and ISIS. Paraguay considers Lebanese Hezbollah a group that poses a problem for its neighbors Argentina and Brazil, but not for Paraguay. authorities and mandates, Paraguay is constitutionally structured for corruption and illicit trade. Despite its smaller population and economy, it is the source and economic driver of illicit trade and money laundering affecting the other two countries. At the heart is Paraguay's lame-duck president, Horacio Cartes, the architect of the region's ITTP; he is the owner of Tabesa tobacco company. Furthermore, the removal of Cart�s from the presidency and its assumption by his successor (and fellow party member) Mario Abdo Benitez , will not reduce this illicit trade: Cartes will continue to wield tremendous power as a senator; several of his close friends will also enter the Senate, and his party won the presidency in the April 2018 elections. Security is the highest-ranked agenda item in Brazil's upcoming presidential elections in October 2018. This is primarily because of the military operations in Rio's favelas, where the criminal group Comando Vermelho (CV) and its affiliates are so widespread and heavily-armed, they are challenging the state for supremacy. The CV is enabled and funded by drugs and weapons that come mainly from Paraguay. This growing illicit trade has also turned Brazil into a prime export point for narcotics from South America to North America, Europe, Asia and Africa. Because of the complexity of the TBA's organized crime cluster, as well as the weakness of regional counter-terrorist protocols, we recommend engaging international authorities with regional mandates over the core crimes of corruption, money laundering, and proceeds of crime, with the aim of dismantling the source from the fusion centre. These authorities include: the IMF, UNODC, UN CTED, and FATF. Given that the US is largely absent from the region, it is recommended to open pathways to the US and European enforcement communities and the aforementioned authorities through well-structured workshops in Washington, DC and other key cities to build awareness. The other way to influence regional ITTP is to become a larger stakeholder in the Paraguayan tobacco industry.

Details: New York: Counter Terrorism Project, 2018. 119p.

Source: Internet Resource: Accessed Dec. 12, 2018 at: https://www.counterextremism.com/sites/default/files/The%20Many%20Criminal%20Heads%20of%20the%20Golden%20Hydra%20%28May%202018%29.pdf

Year: 2018

Country: South America

URL: https://www.counterextremism.com/sites/default/files/The%20Many%20Criminal%20Heads%20of%20the%20Golden%20Hydra%20%28May%202018%29.pdf

Shelf Number: 154457

Keywords:
Illicit Tobacco
Illicit Trade
Money Laundering
Organized Crime
Proceeds of Crime
Smuggling
Terrorists
Tobacco

Author: Intergovernmental Action Group Against Money Laundering in West Africa

Title: Typologies Report on Laundering the Proceeds of Illicit Trafficking in Narcotics Drugs and Psychotropic Substances in West Africa

Summary: EXECUTIVE SUMMARY I Drug trafficking is the largest source of illicit funds globally. This is largely due to the wide gap between production cost and the final price the consumer pays, especially in Western Europe and North America. For the trafficker, profit is the motive and is largely determined by the risk they are willing to take to deliver the drugs to the highest paying consumer. Locally, massive cannabis cultivation and consumption has been a source of major concern in the not only because of the illegal money it generates but also due to the associated health hazards. In recent years, West Africa has been targeted by drug traffickers from Latin America with large consignment of cocaine which is warehoused in the region and mostly shipped in small quantities to Europe and other destinations using local couriers. The problem has attracted attention at the highest level in the region as well as globally. There are ongoing regional initiatives to address the problem. II As a contribution to that initiative, and in order to have a good understanding of the relationship between money laundering and drug trafficking in the region, this typologies exercise was conducted. The study analyses various facets of the legal and enforcement environment of AML and Drug trafficking in ECOWAS member States. It looked at the vulnerabilities of the region and why West Africa has become a target for drug traffickers. It also looked at the techniques, methods, mechanisms and instruments used by drug traffickers to launder the proceeds of drug trafficking by reviewing relevant case studies and identifying typologies. III Twelve out of fifteen ECOWAS countries were involved in the study. One expert was identified in each of the 12 countries who helped to administer the two questionnaires developed for the study and produced a country report. A typologies workshop was held where country reports were reviewed, including case studies. IV The findings of the study indicates that drug traffickers employ complex means to launder money generated from drug trafficking including the use of lawyers, bureau de change, trade, cash couriers,, front companies, purchase of real estate, etc. V With regard to legal framework, most of the AML laws are quite recent compared to the drug trafficking laws. In some countries, the penalty for drug offences is not proportionate and dissuasive. There is general lack of effectiveness with regard to the enforcement of AML laws across board. Capacity to carry out effective AML investigation is generally low and many ML predicate offences are not investigated for ML. The domination of the informal sector and cash transaction of the economy of the region are obstacles to effective enforcement/implementation of AML measures. The disparity in AML capacity among member States is a source of concern and need to be urgently addressed. VI A number of recommendations were made which, if implemented will help to improve the overall implementation of AML measures both at the member States and at the regional levels. Summary of Findings VII The following is the summary of the major findings of the exercise: A. All countries in West Africa are extremely vulnerable to drug trafficking and related money laundering. The vulnerability is related to geographical, political, legal, institutional, economic and social factors. The large sea coast is either partly or completely unmanned in most parts of the region. Generally, inland borders are porous and not effectively manned across the region. B. Most of the countries have AML laws that were enacted not more than 4 years earlier, and the necessary infrastructure and human capacity to support the execution of the law are still being put in place. In a number of the countries, this process has been stalled by lack of resources. C. The trafficking tends to concentrate in countries with unstable political, social and economical situation and weak controls (legal, enforcement, prosecutorial and judicial). D. The laundering of the money generated from drug trafficking tend to be carried out in stable countries with relatively fair economy in the region where cash dominates transactions and is difficult for authorities to monitor cash inflows and outflows, as well as some in countries outside the region (largely countries where the heads of the networks operate from and the countries of some of the drug couriers from outside of the region). E. Corruption appears to play an important part in the cross-border movement of proceeds of crime as cash or when converted into goods. F. The general lack of capacity to interdict illicit drugs especially cocaine and heroin, makes money laundering almost inevitable due to the prevailing opportunities for money laundering in the informal sector. G. There is general lack of capacity for money laundering investigation in most of the countries coupled with the fact that money laundering investigation has not been fully integrated in drug trafficking investigation in most of the countries. Investigating money laundering during drug investigation does not appear to be a top priority as indicated by the apparent absence of asset seizure and confiscation despite convictions obtained of drug traffickers in most of the countries and the significant drug seizures made. H. Coordination between the investigating agencies and FIUs during drug trafficking related money laundering investigation is very week. The trust factor remains an important element in this lack of coordination. I. Over emphasis of money laundering through the formal financial system undermines overall AML/CFT efforts especially in West Africa where the cash dominated informal sector is the preferred channel for laundering the proceeds of crime, including drug trafficking. J. Reporting entities do not appear to be providing STRs commensurate with the level of the drug trafficking problems in most of the countries. This may be as a result of lack of expertise in ML risk analysis or lack of interest in providing such information. K. Most of the FIUs do not have sufficient analytical expertise to detect drug trafficking related money laundering. Emphasis appears to be placed more on corruption related ML by the FIUs. L. Cross border information sharing both in the control of drug trafficking and related money laundering is virtually absent except where there is a public incidence that affect countries.

Details: Dakar, Senegal: GIABA, 2010. 82p.

Source: Internet Resource: Accessed January 14, 2019 at: https://www.giaba.org/media/f/118_final-drugs-typologies-report-dev071811---english.pdf

Year: 2010

Country: Africa

URL: https://www.giaba.org/media/f/118_final-drugs-typologies-report-dev071811---english.pdf

Shelf Number: 154138

Keywords:
Anti-Money Laundering
Cocaine
Corruption
Drug Traffickers
Drug Trafficking
Drug Typologies
ECOWAS
FIU
Illicit Drugs
Money Laundering
West Africa

Author: C4ADS

Title: Sandcastles: Tracing Sanctions Evasion Through Dubai's Luxury Real Estate Market

Summary: Executive Summary Illicit actors, whether narcotics traffickers, nuclear proliferators, conflict financiers, kleptocrats, large-scale money launderers, or terrorists, all share a common need: they must move the proceeds of their criminal endeavors from the illicit marketplace into the licit financial system in order to use them effectively. Luxury real estate has become a significant pathway for this conversion, facilitated by imperfect information regarding ownership and the details behind these substantial financial transactions. This vulnerability affects major real estate markets around the world, including, but not limited to, London, Toronto, Hong Kong, New York, Singapore, Doha, Sydney, and Paris. Dubai, the largest city in the United Arab Emirates (UAE), has become a favorable destination for these funds due in part to its high-end luxury real estate market and lax regulatory environment prizing secrecy and anonymity. While the UAE has taken steps to address this issue, its response thus far has failed to fully confront the underlying drivers enabling the manipulation of its real estate market. The permissive nature of this environment has global security implications far beyond the UAE. In an interconnected global economy with low barriers impeding the movement of funds, a single point of weakness in the regulatory system can empower a range of illicit actors. Our research shows that lax regulatory and enforcement environments � in Dubai, but also in other financial centers � have attracted criminal capital from around the world and offered a pathway into the international financial system for illicit actors and funds. In this report, we examine seven individuals and organizations, their associated corporate networks, and their real estate holdings. We identify 44 properties worth approximately $28.2 million directly associated with sanctioned individuals, as well as 37 properties worth approximately $78.8 million within their expanded networks. Each of these people has been sanctioned by the United States (US), and many have also been designated by the European Union (EU) and EU member states. These networks are, therefore, deserving of particularly intense regulatory scrutiny. However, our research reveals that they have invested millions of dollars in luxury UAE real estate while continuing to engage in illicit activity within the last few years.

Details: Washington, DC: 2018. 58p.

Source: Internet Resource: Accessed January 18, 2019 at: https://www.c4reports.org/sandcastles/

Year: 2018

Country: United Arab Emirates

URL: https://static1.squarespace.com/static/58831f2459cc684854aa3718/t/5b1fd4bf575d1ff600587770/1528812745821/Sandcastles.pdf

Shelf Number: 154241

Keywords:
Conflict Financiers
Dubai
Financial Crime
Illicit Actors
Illicit Networks
Luxury Real Estate
Money Laundering
Real Estate
Terrorists
UAE

Author: Center for the Study of Democracy

Title: Financing Organised Crime: Human Trafficking in Focus

Summary: The report Financing of Organised Crime: Human Trafficking in Focus contributes to a better understanding of the financial aspects of this infamous phenomenon. The analysis explores the sources and mechanisms of the financing of trafficking in human beings, settlement of payments, access to financing in critical moments, costs of business, and the management of profits. The report draws on the findings of nine in-depth country case studies in Belgium, Bulgaria, Italy, France, Germany, the Netherlands, Romania, Spain, and the United Kingdom. Based on the results of the analysis and the examination of the current practices with regards to financial investigations, the report also suggests recommendations for tackling this crime. The chapters of this report have been written by: Introduction - Atanas Rusev; Chapter 1 - Atanas Rusev, Nadya Stoynova, Fiamma Terenghi, Andrea Di Nicola, and Jelle Janssens; Chapter 2 - Fiamma Terenghi and Andrea Di Nicola; Chapter 3 - Atanas Rusev, Mois Faion, Nadya Stoynova, Anton Kojouharov, and Marian Sabev; Chapter 4 - Sigrid Raets and Jelle Janssens; Chapter 5 - Sigrid Raets and Jelle Janssens; Implications for Policy - Atanas Rusev and Nadya Stoynova.

Details: Sofia, Bulgaria: The Center, 2019. 448p.

Source: Internet Resource: Accessed January 23, 2019 at: http://www.csd.bg/artShow.php?id=18388

Year: 2019

Country: Europe

URL: http://www.csd.bg/artShow.php?id=18388

Shelf Number: 154385

Keywords:
Financial Investigations
Human Trafficking
Money Laundering
Organized Crime

Author: Global Financial Integrity

Title: Illicit Financial Flows to and from 148 Developing Countries: 2006-2015

Summary: This is the latest in a series of reports, issued on a roughly annual basis by Global Financial Integrity (GFI), which provides country-level estimates of the illicit flows of money into and out of 148 developing and emerging market nations as a result of their trade in goods with advanced economies, as classified by the International Monetary Fund. Such flows - hereafter referred to as illicit financial flows (IFFs)-are estimated over the years from 2006 to 2015, the most recent ten year period for which comprehensive data are available. In addition to updating the estimated IFFs GFI has presented in the past, this report widens the scope of its research and uses a more detailed database published by the United Nations (UN) along with updated measures from the International Monetary Fund (IMF) data it has used previously. This report presents estimates of IFFs based on both data sets. GFI defines IFFs as "money that is illegally earned, used or moved and which crosses an international border." Currently, the World Bank, IMF, UN, and the OECD use a similar definition. This study underscores the point that trade-related IFFs appear to be both significant and persistent features of developing country trade with advanced economies. As such, trade misinvoicing remains an obstacle to achieving sustainable and equitable growth in the developing world.

Details: Washington, DC: GFI, 2019. 56p.

Source: Internet Resource: Accessed February 18, 2019 at: https://www.gfintegrity.org/wp-content/uploads/2019/01/GFI-2019-IFF-Update-Report-1.29.18.pdf

Year: 2019

Country: International

URL: https://www.gfintegrity.org/wp-content/uploads/2019/01/GFI-2019-IFF-Update-Report-1.29.18.pdf

Shelf Number: 154642

Keywords:
Corporate Corruption
Corporate Crime
Financial Crime
Illicit Financial Flows
Money Laundering
Tax Evasion
Terrorist financing
Trade Misinvoicing

Author: Durner, Tracey

Title: Untangling a Marriage of Convenience: Anti-Money Laundering and Countering the Financing of Terrorism

Summary: Within the realm of policy discussions, anti-money laundering (AML) and countering the financing of terrorism (CFT) efforts are generally treated as a package deal. The Financial Action Task Force (FATF), the FATF Recommendations, and related guidance documents represent today's international AML and CFT standards and are mirrored in laws and initiatives around the world. Given the "obvious similarities and differences between money laundering and terrorism financing," FATF notes "the risks (of both) are often assessed and managed using the same information flows between public and private sector institutions." This convergence between the types of information and stakeholders relevant to money laundering and terrorism financing is, in part, behind the unification of AML and CFT efforts. From a policy-making standpoint, the combination makes sense. Financial intelligence units (FIUs) already analyze suspicious financial activity, including potential instances of money laundering, often triggered by reports from the private sector resulting from frontline compliance and transaction monitoring procedures. It seems logical to incorporate the deterrence, detection, and tracking of terrorism financing into existing AML frameworks. In practice, critics have argued this "marriage" places undue burden on the private sector to understand the intent of criminals behind the actual transactions.2 Others contend that the very premise of CFT policies are misguided, resulting in ineffective and even harmful outcomes. With the rise of the Islamic State of Iraq and the Levant (ISIL) and the preponderance of low-cost, lone-actor attacks in North America and Europe, international attention once again has focused on CFT as a central tenet in the fight against terrorism. In 2016, FATF issued a consolidated strategy on CFT, followed by the adoption of an operational plan in 2018. CFT-specific entities such as the Counter ISIL Financing Group have emerged, and the French government in 2018 convened a high-level international conference focused on combating the financing of ISIL and al-Qaida, with a second conference scheduled for Australia in mid-2019. This brief examines where and how AML frameworks are fit for purpose relative to CFT and considers where additional CFT-specific efforts are necessary. It begins with a brief summary of the evolution of money laundering and terrorism financing policies, discussing the unification of the two fields and the key differences between the motivations and typologies of money laundering and terrorism financing crimes. Against that backdrop, it explores the four objectives of CFT efforts (prevent, detect, freeze, and trace) to identify areas where existing unified AML/CFT frameworks are working and areas where more nuance is required to effectively combat threats specific to terrorism financing. Although particular attention is given to the United States and United Kingdom as international financial centers, similar approaches and convergences between AML and CFT policies and practices occur worldwide. The brief concludes with recommendations on how current CFT policy discourse and evolution can meaningfully support broader counterterrorism objectives.

Details: Washington, DC: Global Center on Cooperative Security, 2019. 14p.

Source: Internet Resource: Accessed February 22, 2019 at: https://www.globalcenter.org/wp-content/uploads/2019/01/GCCS-PB-Untangling-Marriage-Convenience-AML-CFT-2018.pdf

Year: 2019

Country: International

URL: https://www.globalcenter.org/wp-content/uploads/2019/01/GCCS-PB-Untangling-Marriage-Convenience-AML-CFT-2018.pdf

Shelf Number: 154691

Keywords:
Counter-terrorism
Financial Crimes
Financing of Terrorism
Money Laundering
Terrorism
Terrorism Financing

Author: Dalla Pellegrina, Lucia

Title: Detecting the Fifty Shades of Grey: Local Crime, Suspicious Transaction Reporting and Anti-Money Laundering Regulation

Summary: This paper investigates the efficiency of the suspicious transaction reporting (STR) activity to the Financial Intelligence Unit (FIU) as a means to deter money laundering. A baseline theoretical model is used as a framework to guide the empirical analysis of the relationship between STR and the vulnerability of Italian provinces to money laundering in the 2008-2013 period. Instrumental variables are used to limit the problems stemming from the endogenous nature of the number of reports to the FIU with respect to vulnerability. Results provide a positive assessment of the risk-based mechanism of reporting suspicious operations to the FIU.

Details: Milan: Universita Bocconi, 2018. 37p.

Source: Internet Resource: BAFFI CAREFIN Centre Research Paper No. 2018-93: Accessed April 12, 2019 at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3280307

Year: 2018

Country: Italy

URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3280307

Shelf Number: 155370

Keywords:
Financial Crimes
Money Laundering

Author: Scognamiglio, Annalisa

Title: When the Mafia Comes to Town

Summary: This paper investigates the effect of diffusion of organized crime on local economies by examining a legal institution that operated in Italy between 1956 and 1988. The law allowed Public Authorities to force mafiosos to resettle to another town. Using variation in the number of resettled mafia members across destination provinces in a differences-in-differences setting, I find no conclusive evidence on the effect of the policy on crime or homicides, while there is a very robust positive impact on employment in the construction sector. Results are consistent with mafia exploiting these new locations mainly for money laundering.

Details: Naples, Italy: Centre for Studies in Economics and Finance, 2015. 30p.

Source: Internet Resource: Accessed May 23, 2019 at: https://ideas.repec.org/p/sef/csefwp/404.html

Year: 2015

Country: Italy

URL: https://ideas.repec.org/p/sef/csefwp/404.html

Shelf Number: 156028

Keywords:
Homicides
Italy
Mafia
Mafiosos
Money Laundering
Organized Crime

Author: Economist Intelligence Unit

Title: The Global Illicit Trade Environment Index. Overall Results

Summary: Behind most every major headline, every major story in the news, lies another potential headline and another story about some form of illicit trade. From the refugee crises in the Mediterranean and South-east Asia, where the chaos is providing cover for human traffckers, to North Korea, a criminal state that couldn't survive if it didn't trade in arms, illicit cigarettes and counterfeit currency. Even the investigation into Russian interference in the 2016 US presidential election has led to indictments on money laundering, which is both a product of illicit trade and a facilitator of it. To measure how nations are addressing these and other issues related to illicit trade, the Transnational Alliance to Combat Illicit Trade (TRACIT) has commissioned the Economist Intelligence Unit to produce the Global Illicit Trade Environment Index. The global index expands upon an Asia-specifc version, originally created by The Economist Intelligence Unit in 2016 to score 17 economies in Asia on the extent to which they enabled or prevented illicit trade. This year's updated and expanded version now includes 84 economies, providing a global perspective and new insights on the trade's societal and economic impacts. Key fndings from the index are: - With a score of 85.6 (out of 100), Finland ranks frst in the overall index, besting the United Kingdom by only 0.5 points. The rest of the top 10 is rounded out by a handful of European countries (Sweden, Austria, Netherlands, Denmark and Germany), along with the United States, Australia and New Zealand. - At the bottom of the overall index is a group of developing economies from all regions of the globe. Libya ranks 84th out of 84 economies, with a score of 8.6, and is joined by Iraq in 83rd place, scoring less than six points better. Faring slightly better, but still poorly, are a group of economies that score in the twenties and thirties in the index: Myanmar (82nd), Laos (81st), Venezuela (80th), Cambodia (79th), Kyrgyzstan (78th), Belize (77th), and Ukraine (76th) and Trinidad and Tobago (75th). - Regionally, Europe (34 economies in the index), which includes the EU-28 plus six other countries, earns the highest the average score (68.0). The Asia-Pacifc (21 economies) comes second at 56.0 and the Americas (19 economies), including the US and Canada, is in third at 54.0. The Middle East and Africa (10 economies) is last among the regions, mainly due to low scores on the "supply and demand" and the "transparency and trade" indicators. - Among the four categories in the index, the highest average score (69.0) across all 84 economies is in "customs environment," which measures how effectively an economy's customs service manages its dual mandate to facilitate licit trade while also preventing illicit trade. - The lowest average score (50.0) is in the "supply and demand" category, which measures the domestic environment that encourages or discourages the supply of and demand for illicit goods. A close look at the global environment that enables illicit trade can prove a somewhat dispiriting exercise. The average overall score in the Global Illicit Trade Environment is a shade under 60.0. Where economies aren't underresourced in customs or law enforcement, they may otherwise be indifferent or actively neglect illicit practices in order to continue reaping the economic benefits of being a global financial centre (like the UK) or a regional logistics hub (like Singapore, Dubai and Panama) or one of the world's factories (like China and Vietnam) or a main source of narcotics (like Colombia). Or they may just be corrupt; corruption is far more pervasive than people appreciate and it is by no means limited to the developing world, as investigations in the US and elsewhere have recently shown. As we noted in our 2016 paper, however, and emphasise again in this year's edition, there is an international community of people- observers, experts, private sector executives and government offcial- who have identified the many ways in which illicit trade, in all it various forms, can be combatted. The solutions they propose range from the quotidian to the more extreme. Few, if any, are unrealistic. What the index, this paper and all the other papers published alongside it as part of the larger project, proposes is that economies that are laggards on the issue can start small and build towards a better environment for preventing illicit trade. And the economies that are leaders should lead.

Details: London: Author, 2018. 44p.

Source: Internet Resource: Accessed June 24, 2019 at: https://www.tracit.org/uploads/1/0/2/2/102238034/eiu_global_illicit_trade_whitepaper_final.pdf

Year: 2018

Country: International

URL: https://www.tracit.org/uploads/1/0/2/2/102238034/eiu_global_illicit_trade_whitepaper_final.pdf

Shelf Number: 156605

Keywords:
Economic Crimes
Illicit Cigarettes
Illicit Products
Illicit Trade
Money Laundering

Author: Financial Action Task Force

Title: Anti-Money Laundering and Counter-Terrorist Financing Measures: People's Republic of China, Mutual Evaluation Report

Summary: China has undertaken a number of initiatives since 2002 that have contributed positively to its understanding of ML/TF risk, although some important gaps remain. Its framework for domestic AML/CFT co-operation and co-ordination is well established. China's de-centralised FIU arrangement consisting of CAMLMAC, AMLB and 36 PBC provincial branches has high potential to produce financial intelligence that supports the operational needs of competent authorities but its current functioning results in incomplete access by all parts of the FIU to all data, a fragmented analysis and disseminations, and limits the development of a holistic view. Therefore, major improvements are needed. LEAs have access to and use a wide range of financial intelligence throughout the lifetime of an investigation, but financial intelligence is not driving ML investigations. When using financial intelligence, LEAs identify predicate criminal behaviours and actively investigate these. Predicate crime investigation outcomes reflect that China has capable LEAs that are skilled in the investigation of complex financial crime and associated predicate crime. Effective, proportionate, and dissuasive sanctions are available and are applied for ML. China has an institutional framework in place to investigate and prosecute TF activities, in line with its understanding of TF risks and in line with its strategy to prevent TF and disrupt TF channels. Since the implementation of a new counterterrorism law in 2015 and related interpretations, the number of TF prosecutions and convictions has increased. The implementation of TF and PF targeted financial sanctions is negatively affected by three fundamental deficiencies, related to (i) scope of coverage of the requirements and a lack of a prohibition covering all persons and entities; (ii) the types of assets and funds of designated entities that can in practice be frozen, and the type of transactions that can be prohibited; and (iii) a lack of implementation without delay for non-domestic designations. That said, the CTL and relevant PBC Notice are a good starting point for future updates to the legal system in line with revised FATF standards, and to improve effective implementation. While not covered by the FATF standards, authorities have taken measures in relation to other aspects of UNSCRs related to DPRK. f) While FIs have a satisfactory understanding of their AML/CFT obligations, they have not developed a sufficient understanding of risks. Measures implemented to mitigate risk are generally not commensurate with different risk situations. China's AML/CFT supervisory system is almost exclusively focused on the financial sector, as there are no effective preventive or supervisory measures in respect of the DNFBP sector. The PBC has an inadequate understanding of risks overall. Although their understanding of risk impacting the financial sector is adequate, its understanding of institution specific risk seems to be largely based on the FIs' own risk assessment rather than that of the authorities. China handles MLA and extradition requests in accordance with the procedures and standards for approval stipulated by domestic laws, bilateral treaties and multilateral conventions, but due to a complicated decision-making structure for providing MLA or executing extradition requests, it is often a protracted process. At the same time, China can arrange an expedited procedure for urgent requests or cases. There is an effective cooperation in some areas between China and some of its neighbours, however, there is a lack of data that would establish effective implementation of ML/TF related co-operation.

Details: Paris: Fourth Round Mutual Evaluation Report, 2019. 280p.

Source: Internet Resource: Accessed August 15, 2019 at: http://www.fatf-gafi.org/media/fatf/documents/reports/mer4/MER-China-2019.pdf

Year: 2019

Country: China

URL: http://www.fatf-gafi.org/publications/mutualevaluations/documents/mer-china-2019.html

Shelf Number: 157000

Keywords:
Anti-Money Laundering
Financial Crimes
Financial Sanctions
Illicit Flows
Money Laundering

Rutgers - School of Law, Newark

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