Commission on Narcotic Drugs
Topic: A
Countering Money-Laundering and
Promoting Judicial Cooperation to
Enhance International Cooperation
CND Topic A
Argentina
Money laundering is a global phenomenon that typically entails the illegal acquisition of
money, passed through a complex scheme of transactions to the launderer’s accomplice.
Afterwards, it is returned, disguised as legally obtained money, to the launderer. 1 “[M]oney
launderers tend to seek out countries...in which there is a low risk of detection due to weak or
ineffective anti-money laundering programmes”2 in addition to unstable economies and locations
offering limited investment opportunities. In 2009, the United Nations Office on Drugs and
Crime found “in 2009, criminal proceeds amounted to 3.6% of global GDP, with 2.7% (1.6
trillion USD) being laundered”.3 Money laundering can generate huge profits, which then are
broken down into smaller amounts and distributed overseas or to places where the money is less
likely to attract attention. “The [UN] Convention [against Corruption of 2003] requires countries
to establish criminal and other offences to cover a wide range of acts of corruption” and money
laundering often covers up other crimes such as drug smuggling and prostitution.
The Argentine government joined The Financial Action Task Force (FATF) in 2000 to help
counter money laundering. In April of 2000, Argentina passed law no. 25,246 for anti-money
laundering. Law no. 25,246 defines money laundering as “an aggravation after the fact of an
underlying crime.” This law pursues anyone who aids the launderer in hiding illicit funds or
helping the launderer evade law enforcement, and does not report the crime. “On September 11,
2007, the Argentine Government enacted through Decree 1225/2007, the National Anti – Money
Laundering and Counter – Terrorism Finance Agenda (National Agenda) to serve as a roadmap
for implementing AML/CFT laws and regulations.” The Lower House of Congress recently gave
1
Mondaq. Mondaq. Web.
<http://www.mondaq.com/x/62582/Money+Laundering/Overview+On+Argentina+Anti+Money+Laundering+AML+And+Combating+Terrorist
+Financing+CFT+Situation>
2
3
Cornell University Law School. Cornell University, Web. <http://www.law.cornell.edu/wex/money_laundering>.
FATF (Financial Action Task Force0. FATF, Web. <http://www.fatf-gafi.org/pages/faq/moneylaundering/>.
CND Topic A
final approval to legislation that pardons tax dodgers who invest undeclared funds in either the
construction industry or to finance increased oil and gas production. The legislations will help
bring $160 billion, which the Argentines have hidden from the authorities, back into the
economy helping it to flourish once again. Argentina’s President Cristina Fernández de Kirchner
announced this plan due to the recent economic free fall. As a way to help build up the economy,
Argentina has essentially asked money launderers from around the world to invest in our
economy with no questions asked.4 “Under no circumstances are the anti-money laundering
norms being suspended,” Robert Feletti, a lawmaker from the ruling coalition said.5 Before the
law was passed, the president's own auditor general asked the Senate not to pass the law
"because of the opening it entails for the possibility of laundering." He also said that this gave
criminal groups the ability to have their funds "legitimized through fictitious companies.”
In order to prevent launderers from finding the “weak link” in the international chain,
countries who are leaders in the prevention of fraud should work with less able countries to
improve their security systems. All countries should monitor wire transfers between banks
overseas as well as all citizens’ major purchases--both easy ways to disguise money laundering-and report any suspicious activity, whether international or domestic. Lastly, stricter regulations
on transferring money must be observed, such as requiring certain documents to transfer a large
sum of money, as lack of these regulations enables money launderers to do so more easily.
4
Cristinanomics. Cristinanomics, Web. <http://www.foreignpolicy.com/articles/2013/06/04/cristina_fernandez_argentina_money_laundering>.
5
Bloomberg. Bloomberg. Web. <http://www.bloomberg.com/news/2013-05-30/argentina-s-congress-approves-tax-amnesty-for-undeclaredsavings.htm
CND Topic A
Japan
Japan recognizes that the use of foreign banks to conceal the origins of illegitimate
capital, also known as “money laundering”, is a serious economic issue that affects not
only the economy of the country of origin, but also its internal standard of living,
because providing a means for ill-gotten cash to hide its trail can serve to promote the
actions that made the cash ill-gotten in the first place. Japan is also extremely cognizant
of the fact that the ideal of exterminating money laundering can only be achieved
through extreme international cooperation between the country that hosts the capital
and the country from which it originated.
Japan has legislation already in place that acts to prevent money laundering, such
as the Anti-Drug Special Law which monitors transactions for suspicious activity that
could be linked to such a scheme, and the Anti-Organized Crime Law which expands
money laundering predicates beyond trafficking and financial crimes to include things
like kidnapping and murder. Japan believes that standardizing these laws internationally
is an enormous step in the right direction towards eliminating this fiscal concealment.
Japan is of the opinion that encouraging greater financial transparency between
countries would be extremely beneficial in preventing pecuniary dissimulation. We
support communication and perhaps a task force (such as our own Financial Action
Task Force) or a separate committee of the United Nations whose purpose is to monitor
these exchanges and detect such schemes before they can be launched. We obviously
recognize the privacy concerns that may arise with a task force monitoring bank
accounts, so we assure the critics of this policy that the programming technique of
CND Topic A
encapsulation should be used with this task force so that it does not have access to
extraneous information.
Japan also strongly believes that the economic implications of money laundering
make it equally harmful whether the capital in question is obtained through drugtrafficking or kidnapping. We believe that it is up to the individual country to enforce laws
against each individual crime internally, however as money laundering affects the global
economy, we wish to strongly suggest that the expanded set of predicates defined in
the Anti-Organized Crime Law that allow the term “money-laundering” to be applied to
kidnapping, blackmail, extortion, aggravated assault, and murder, be adopted
internationally as well to further reduce the amount of global laundering that occurs.
To quickly sum up Japan’s overall stance on this issue: We recognize the threat
money laundering poses to both the economy and internal security. We encourage
transparency with financial exchanges involving multiple currencies and propose the
development of a task force for monitoring these. We also believe that expanded the set
of money-laundering predicate crimes is essential to cutting down on the harmful
impacts of money laundering on the global economy.
CND Topic A
Kuwait
The US Department of the Treasury defines money laundering as the "financial
transaction in which criminals, including terrorist organizations, attempt to disguise the
proceeds, sources, or nature of their illicit activities". Money laundering can have a
negative effect on a nation at political, social, and economic levels. On an economic
level, this unfortunate crime has negative consequences for a country’s financial
stability and macroeconomic performance. This results in welfare losses, the draining of
resources from productive economic activities, and can even have destabilizing effects
on other countries' economies. On a social/political level, money laundering lowers the
effectiveness of the law, as it funds current and future criminal or terrorist activities. In
fact, according to the New York Times, terrorist acts cost next to nothing due to the
funding that can be pulled from money laundering. Therefore, the need for judicial
cooperation among nations to obliterate this criminal practice is substantial.
Studies have shown that money launderers target countries with developing
economies and banking systems. Although this makes many of our Middle Eastern
neighbors targets, Kuwait's stable, oil based economy, means money laundering is not
a widespread issue in our nation. We therefore recognize the importance of preventing
money laundering. The government of Kuwait has therefore taken numerous steps to
prevent the occurrence of this unfortunate crime. In 2013, the Kuwaiti government
passed Law No. 106 (New Law) to combat money laundering and the financing of
terrorism. The New Law took the place of "Old Law" No. 35 of 2002. This action was
prompted by the flaws pointed out by the Middle East and North Africa Financial Action
Task Force (MENAFATF) in their 2011 evaluation of the Old Law. These flaws included
the failure to criminalize terrorist financing and the lack of measures in place to identify
and freeze terrorist assets. Given the plans of the government of Kuwait to create an
international financial center, MENAFTF's advice was adhered to, and the
aforementioned flaws have been corrected, as Article 3 of the New Law criminalizes
money laundering, saying, "A person who can be said to have committed a terrorist
financing crime is any person that has directly or indirectly, willingly and illicitly, collected
funds for committing a terrorist act". Also in accordance with the feedback provided by
MENAFATF, Article 22 under the New Law gives the public prosecutor and authorized
public lawyers the power to freeze or confiscate funds or instruments, provided there is
substantial evidence of criminal activity. Additionally, the Kuwaiti government
implemented the Financial Intelligence Unit (FIU), which will gather information and
monitor suspect funds. The Central Bank of Kuwait also has programs in place to detect
money laundering. These legal measures are a strong start toward eliminating money
laundering in Kuwait to the greatest extent possible. Still, there are yet many barriers
that must be overcome in order to effectively combat money laundering. One of the
most prominent of these, particularly in the Middle East, are Hawaladars, or "Hawala"
agents, which are used by money launderers, as they provide a no-questions-asked
border cash courier service.
The introduction of the New Law and the FIU are a testimony to Kuwait's
dedication in combatting money laundering. However, in light of the complex nature of
CND Topic A
this issue, no nation can stand alone and hope to eliminate this grievous criminal
activity. The nation of Kuwait therefore requests that all countries belonging to the
United Nations begin taking judicial action to prosecute money launderers, and any who
may assist them, specifically the Hawaladars and helps identify would be moneylaunderers by funding programs such as the FIU. By working together, this issue will not
remain unsolvable. Money laundering is a complex and dangerous cycle toward which
the final goal must be total eradication, worked towards by gradual steps. This need for
action is great, as was illustrated by Secretary General Ban Ki Moon's statement "If we
do not act together, if we do not act responsibly, if we do not act now, we risk slipping
into a cycle of poverty, degradation, and despair".
"Kuwait." IBA Anti-Money Laundering Forum -. N.p., n.d. Web. 07 Oct. 2014.
http://www.anti-moneylaundering.org/middleeast/Kuwait.aspx
"September." KUWAIT: A NEW STANCE ON FINANCIAL CRIME. N.p., n.d. Web. 12 Oct. 2014.
<http://www.tamimi.com/en/magazine/law-update/section-5/september-3/kuwait-a-new-stanceon-financial-crime.html>
http://www.tamimi.com/en/magazine/law-update/section-5/september-3/kuwait-a-new-stanceon-financial-crime.html
"United Nations Office on Drugs and Crime." UNODC and Money-Laundering/Countering the
Financing of Terrorism. N.p., n.d. Web. 12 Oct. 2014
http://www.unodc.org/unodc/money-laundering/
CND Topic A
New Zealand
New Zealand believes that the issue of money laundering is one that is essential to
address. Drug sellers and others are putting billions of dollars into the economy that should
not be there and are ruining small businesses. Corporations that are a front for moneylaundering are able to sell their products at prices lower than production cost, which
reduces the profit of other businesses who cannot afford to lower their prices that much
and eventually can and does force them to go out of business. New Zealand, as a country in
which this has recently occurred, believes that this needs to be stopped or at the very least
mitigated in order to avoid economic damage. In 2009, New Zealand passed the AntiMoney Laundering and Countering Financing of Terrorism Act, which placed obligations
on financial institutions and casinos to detect and deter money-laundering in New Zealand.
New Zealand supports a plan to counter money-laundering by passing resolutions that
increase the collaboration between countries so that money-laundering can be more
quickly detected and hopes that countries will decide to pass legislation pertaining to the
issue.
CND Topic A
Kenya
The issue of money laundering has proven to be a pervasive issue on a global scale, but
has had a particularly profound effect on the Kenyan nation. In recent years, the Republic of
Kenya has been afflicted by accelerating amounts of money-laundering activities. Illicit money
entering Kenya from criminal business activities has increased more than five-fold in the past
decade. The presence of the militant group al-Shabaab and pirate activities in bordering Somalia
has made Kenya a hub for piracy and terrorism-related transactions. As with many nations, illicit
transactions have seriously inhibited economic growth domestically and possibly on a global
scale as well. The Republic of Kenya has been trying to develop a burgeoning financial sector in
recent years, but future growth, which is greatly dependent on an appearance of security to
foreign investors, will be greatly reduced if illegal business practices are not controlled. Having
recognized the threat of money laundering, the Republic of Kenya has taken many meaningful
strides in combating this issue. In 2009, The Proceeds of Crime and Anti-Money Laundering Act
was passed by the Kenyan Parliament, which not only criminalized money-laundering activities,
but also included provisions for freezing, seizing and confiscating of proceeds of crime and
created organizations, such as the Financial Reporting Centre, to help track and end illicit fiscal
activities.
The Republic of Kenya is well aware that money-laundering is not a domestic issue, but a
global issue. In our efforts to battle illegal transactions, we have sought to engage in international
efforts. Kenya is a member of the Eastern and Southern Africa Anti-Money Laundering Group
(ESAAMLG), a regional organization that analyzes trends in fiscal laundering activities and
provides nations with assistance in the fight against such activities.
Although the Republic of Kenya is committed to fighting criminal activities within our
nation, a lack of resources has beleaguered strides toward reformation. Technological limitations
have made it more difficult to effectively counter illicit transactions, especially as many
transactions take place electronically. If the issue of money laundering is to be fought effectively
within our borders, international assistance is required. It is in the best interest of countries
around the world to assist one another and coordinate their efforts in the fight against moneylaundering, as such an issue is multi-national in nature. The Republic of Kenya, in spite of the
need for international cooperation, also stresses the importance of national sovereignty. The
Republic of Kenya strongly recommends the pursuance of an international exchange of
intelligence and resources in order to effectively prevent, pursue, and incriminate money
laundering. It is the opinion of the Republic of Kenya that such cooperative measures will not
only help alleviate the issue of money laundering, but will also help facilitate greater
international cooperation in the future.
CND Topic A
Pakistan
Established by the Economic and Social Council, the committee on narcotic drugs aims to with
deal with international drug trade, prevent drug abuse and stop illicit drug trafficking. The trade and
abuse of narcotic drug may cause multiple problems such as crimes and public health problems. A
country already tormented by regional insurgencies, Pakistan is facing a serious problem of drug
addiction. According to the statistic of United Nations Office on Drugs and Crime (UNODC), there are
about seven million people used drug last year, among which 4 millions are addicted. Such a high drug
dependent rate helps the improvement of the drug industry greatly: 2 billion is believed to be generated
from drug trade. This huge amount of money, through money laundering, makes a huge profit for the
drug traders.
Pakistan has realized this problem. In such a country full of insurgencies, many terrorists and
their activities rely on the money from drug trades. Not so worry about concealing the origin of the
money as terrorist, they use money laundering to help prevent their use of money being found. The
abuse of the charitable sector, smuggling, trade-based money laundering, hawala, and physical crossborder cash transfers are the common methods used to launder money and finance terrorism in
Pakistan. Pakistani criminal networks play a central role in the transshipment of narcotics and smuggled
goods from Afghanistan to international markets. The state bank of Pakistan has made vigorous effort to
control the money laundering activities inside the nation, including enhancement of diligence
procedures, recording retentions, prohibition of shell banks and reporting of suspicious transaction.
Financial institutions are required to “know your customer” and to report within three days any funds
they believed are money laundering activity. However, despite the efforts of the state bank, money
laundering is still common practice because of the numerous illegal organizations in the country. Certain
methods such as madrassas also make detecting money laundering even harder. International support is
necessary in such situation.
CND Topic A
Korea
The Republic of Korea is excited to come to the CND to discuss how it can work to end
the problem of money laundering that is so rampant in the world. Traditionally it has taken a
very strong stance against any aspect of drugs, employing very harsh punishments against those
that commit any sort of drug related crime. It is lauded among the world as one of the places in
the world with one of the most successful anti-drug programs of any country in the world.
However, the problem of money laundering is still very much at large in Korea, and similarly it
is very difficult to track. In attempting to ensure that the global economy is a market with
honesty and integrity, the Republic of Korea is prepared to take a strong stance against the issue.
We are fully committed to allocating many of our resources to eliminating such a caustic
problem, and believe that its elimination will result in the long term prosperity of both Korea,
and the world at large.
During this conference, we anticipate that papers will be passed to ensure that the GPML
is implemented in many countries that are commonly involved in the process of money
laundering. Additionally, papers may be passed to encourage the allocation of resources such as
international policemen and standardized policies on punishments for money laundering.
Korea thanks all delegates for being here to discuss this weighty issue, and is looking
forward to a future in which laundering money from drug related crimes is not such an
international problem.
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