The Global Fight against Money
Laundering and Financing of
Terrorism: Are we doing enough?
Twenty Seventh International Symposium
Economic Crime, Cambridge University
Tuesday, 1th September 2009 (Workshop 3 –
17:30-18:30)
Abstract
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The aims of my dissertation are: (i) to understand the general principles,
causes and effects of the ML phenomenon, (ii) critically discuss the suitability
of the global anti-ML legal framework, (iii) explore legal problems that may
arise in implementing the international crime of ML at the national level, as
well as to suggest how these legal problems can be solved.
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Taking a multi-disciplinary and comparative perspective the research
argues that the definition of the international crime of ML as drafted in the
international conventions is inadequate in dealing with ML, because it is not
uniformly applied in every country. Based on that conclusion, the dissertation
proposes a new and uniform definition of the universal crime of ML. True
unification of the international offence, in my opinion, can only be realized by
the adoption of a uniform act, elaborated in an international convention, that
generates a reconciliation of the different criminal and economic theories of
criminal and economic law, at the international and national levels.
Problems / Research Questions.
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Part I: Extra-legal factors.
Why do criminals choose ML?
Why are some countries more attractive than others as a destination of “dirty”
money? The Argentine example.
Which is the relation between Money Laundering (“ML”) and Financing of
Terrorism (“FT”)?.
Part II: Critical analysis of the international anti-ML legal regime.
Question: Whether the supranational anti-ML regime that have been put in place
to curb ML can indeed make an effective contribution to reach this goal.
Potential solution to this problem: Create an harmonized international regime
against ML to avoid “shopping around the world”.
Part III: A vertical comparative analysis (international level vs domestic
level).
Potential solution to the problem: create a uniform definition of the international
crime of ML, to avoid “shopping around the world” and difficulties on the
requests of information and extradition between each country of the world
(principle of “dual criminality”.
Relation between Money Laundering and Financing of
Terrorism
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Conclusion 1: ML is one (1) of the four (4) economic
channels that terrorist groups can use to finance their
activities.
Conclusion 2: considering that “ML” and “MD” are
concealment processes, terrorist groups probable will
not commit an attach in the same jurisdiction where
they practise ML or MD activities. Their main purpose
is to conceal the movement of their assets.
Cost/Benefit analysis of ML
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First Dilemma: submit or not submit the assets
for a ML process. Cost-benefit analysis based on
significant amount of collected assets and the
characteristics of the jurisdiction where the
criminal is allocated.
Second Dilemma: self-laundering or not selflaundering.
Causes and Effects of ML – Seven variables
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Governments in need of investment.
Countries with weak anti-ML enforcement systems: When
states are weak, but act as if they were strong passing out laws
and regulations purporting to regulate without the will or
capacity to enforce the law, they inevitable create spaces
between reality and legality that can explored by criminals,
terrorists and, therefore, launderers (Bagley, “Globalization
and Latin American and Caribbean Crime”, 2005).
High rates of corruption.
Social, economic and political conflicts.
Vulnerable and open borders.
Countries with inadequate anti-ML norms.
Countries with high rates of informal economy.
Part II: Harmonization or Unification of
anti-ML norms?
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Jurisdictions could have “adequate” or “inadequate” anti-ML norms
IF A adequate and B adequate = 3 stages of ML are harder in both countries.
If A “adequate” and B “inadequate” = ML is easier in jurisdiction “B”, but
also in jurisdiction “A”. Criminals “clean” money in jurisdiction “B” and then
they submit money already “cleaned” in country “A”.
If A “inadequate” and B “inadequate” = the incentive/motivation in
commission of “ML” and “predicate offence” are higher in both jurisdictions.
My potential conclusion: harmonization of
preventive/regulatory anti-ML norms, and
unification of the definition of the international
crime of ML
Part III: Toward a uniform definition of the
international crime of ML
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I propose a new international convention that reconcile
worldwide and universal social and legal “models of law” in
order to succeed in the global fight against ML, that:
Only criminalize intentional ML, admitting a broad definition
(defining the term “suspicious” – dolus eventualis).
Refers to “all offences” as predicate offence (including the crime
of tax evasion but only punishable if the values involved on the
operation of ML are over a specific economic value (e.g.– USD
100,000). We need to reduce the “informal” economy as much as
possible in order to identify and arrest criminal groups.
Also penalize “self-laundering” behaviours.
Conclusions
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In my point of view, anti-ML norms must be called
upon to invent a flexible process of harmonization that
leaves room for believing we can find general
consensus on how to protect common values.
A uniform definition of the international crime of ML
is essential, among other reasons, to enable to achieve
easier and more efficient processes of extradition and
cooperation between countries.