In Day-Long Discussion of Economic, Financial Crimes, Over 30 Speakers
Consider Need for New Convention on Money-Laundering with Most Opposed
BANGKOK, 19 April: Activities such as drug trafficking, exploitation of natural resources, corruption and misappropriation of funds from banks affected the economic well-being of the people, the representative of Thailand, the Host Country to the Eleventh United Nations Congress on Crime Prevention and Criminal Justice, told the Congress Committee I Tuesday.
The consequences of such activities, he said, went well beyond financial loss and the economic well-being of society. It was important that people felt they were living in a fair and just society and, if economic and financial crimes were not checked, people would begin to feel increasingly resentful.
He said people who were behind financial crimes were usually smart and sophisticated, making use of financial resources to build extensive connections with law enforcement officials.
Authorities had to fight interference from influential powers, and that was often more difficult than the investigation itself. Strong political will and government commitment was needed to fight such crime. If the perpetrators were members of the government, decisive and swift action would restore society’s confidence in government policy on the issue.
During consideration of Tuesdays topic: “Economic and financial crimes: challenges to sustainable development”, delegates deliberated on the need for a new convention on money-laundering and the need to share national experiences and cooperate internationally in combating the scourge.
Implementation was the one theme he would like to see emerging from the discussion, the representative of the United Kingdom said, referring to the fact that four UN conventions – the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the Convention against Transnational Organized Crime, the Convention against Corruption and the Convention for the Suppression of the Financing of Terrorism – all included provisions to combat money-laundering, but had a poor record in implementation.
On the other hand, Brazils representative said the main obstacle in the fight against international crime was the lack of international cooperation. International cooperation in the fight against international crime seemed to be a kind of taboo. Although his country had received help from Nigeria in solving an important case, there were lots of cases where it could not get cooperation from other countries because of a lack of a “culture of cooperation”.
The representative of the United States drew attention to the fact that apart from the four UN Conventions, which more countries should ratify, there were also the 40 recommendations of the Financial Action Task Force.
They had been endorsed and recognized as the single international standard by the International Monetary Fund and World Bank and embraced by the twentieth special session of the General Assembly as the international standard. – We should not risk creating conflicting guidance and obligations in this area, she said, opposing elaboration of a new convention.
Turkeys representative, however, supported the High-Level Panels recommendation to draft an international convention on money-laundering. Such a convention, he said, could make non-mandatory provisions of other UN conventions mandatory and adherence to the Financial Action Task Force recommendations universal.
Nigerias representative said that corruption, as well as economic and financial crimes, had distorted the image and reputation of his country. He stressed that Nigeria would tolerate the problem no more.
It had charged five of the largest banks for allowing the flourishing of corruption in his country, the biggest problem facing African countries. Nigeria had brought several highly placed people to justice, including the President of the Senate, for embezzlement.
– There is a revolution taking place in Nigeria today, and we are proud of it”, he said. Today, Nigeria was the number one country in fighting corruption and was becoming a sort of model on how to combat economic and financial crimes.
With Tuesdaqys discussion, the Committee I concluded its consideration of economic and financial crimes: challenges to sustainable development.
Background
Committee I of the Eleventh United Nations Congress on Crime Prevention and Criminal Justice had before it a working paper prepared by the Secretariat on Economic and financial crimes: challenges to sustainable development, defining “economic and financial crime” broadly as any non-violent crime that results in a financial loss.
A list of economic crimes includes cartel offences, fraudulent practices, computer crime, violation by a company of standards of security and health concerning employees, fraud to the detriment of creditors, unfair competition and fiscal offences. Technical change has had a significant impact on overall levels of economic and financial crime.
According to the working paper, understanding the impact of economic and financial crime in the current global context, and on developing countries in particular, is complicated by the difficulty of determining an all-encompassing definition of the concept and by the fact that both the extent and costs of such crimes are difficult to measure. There is growing evidence, however, that economic and financial crimes are increasing, mostly in sectors affected by rapid advances in technology.
One area requiring particular attention is money-laundering, given its links not only to other areas of illicit activity in the financial sector, but also because of its use by organized criminal groups involved in a variety of illegal activities.
The High-Level Panel on Threats, Challenges and Change suggests that a global legal instrument is required on money-laundering. That provides a renewed focus on the effectiveness of current arrangements and the viability of possible future arrangements to counter the laundering of criminal proceeds.
Available evidence also suggests that the costs of economic and financial crime, while often eluding exact measurement in the short term, are severe for many societies seeking to achieve sustainable levels of development.
Such practices undermine, in the medium and long term, effective economic management, transparent practices and the rule of law. They also benefit only a few people in society, leaving the majority poorer and with fewer resources.
The working paper recommends that the Congress consider:
– Establishment of mechanisms at the national, regional and international level to improve data collection on economic and financial crimes;
– Ways to improve the global legal framework to counter economic and financial crimes;
– Provision of effective technical assistance to developing countries to improve their capacity to confront the problem;
– Agreement on measures to improve cooperation between government and the private sector in preventing such crimes; and
– Identification of effective measures to curb money-laundering in countries where participation in the “formal” financial system is low, including in the areas of research, training, skills development, technical assistance programmes and regional and international cooperation.
Statements
MARY LEE WARREN (United States) concurred with the assessment of the discussion paper regarding the seriousness of transnational economic crime and the harm it caused to the well-being of many people.
Her country had updated existing laws on money-laundering after 11 September. She did not, however, join in the suggestion that there was a compelling need for a new convention on money-laundering. She disagreed that existing mechanisms were inadequate. Four United Nations Conventions currently addressed that matter, including the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the Convention against Transnational Organized Crime, the Convention against Corruption and the Convention on the Suppression of the Financing of Terrorism.
Those instruments covered the spectrum of serious crime, and statistics showed that 163 countries had criminalized money-laundering beyond drugs, and 113 countries had criminalized terrorist financing.
There was still much work to be done with the existing conventions before determining that there was need for yet another convention, she said. That would be premature. Rather, all countries should be encouraged to ratify the existing treaties, implement them and provide the basis for international cooperation.
In addition, the 40 recommendations of the Financial Action Task Force (FATF) were the universally recognized international standards for anti-money-laundering efforts. – We should not risk creating conflicting guidance and obligations in this area, she said.
She said the Tasks Forces 40 recommendations had been endorsed and recognized as the single international standard by the International Monetary Fund and World Bank. At its twentieth special session, the General Assembly had, in resolution S-20/4 embraced the recommendations as the international standard.
Another concern was that the Secretariat had suggested that a money-laundering convention might be too difficult to undertake and that a more limited approach should be taken, one that focused on the Internet. Her country opposed such a piecemeal approach since the focus would be solely on the instrument or conduit used to commit the crime, rather than the type of particular offences.
NUHU RIBADU (Nigeria) said that, in his country, addressing economic and financial crimes had been problematic for a long time. However, those crimes had now been identified as the biggest problem facing the country, and the battle against corruption and economic and financial crimes was on. The Government had established a high-powered commission in 2003 to address the problem.
Tragically, economic and financial crimes and corruption had distorted the image and reputation of Nigeria. His country was one of the largest oil producers in the world, but had a big problem of theft of crude oil, mainly by foreigners. The Commission also addressed that problem.
He stressed that Nigeria would tolerate the problem no more. It had charged five of the largest banks for allowing the flourishing of corruption in his country, the biggest problem facing African countries. Nigeria had brought several highly placed people to justice, including the President of the Senate, for embezzlement.
– There is a revolution taking place in Nigeria today, and we are proud of it, he said. The problem had to be solved to regain the respect of the international community.
He said his country had also developed strong international working relations, among others with the Interpol and the Europol, the United States, South Africa and the United Arab Emirates, because most of the crimes were transnational, and money was being brought out of the country.
Moreover, his country was working with the Financial Action Task Force. Today, Nigeria was the number one country in fighting corruption and was becoming a sort of model on how to combat economic and financial crimes.
PETER STORR (United Kingdom) said it was clear that there were weaknesses, and not only criminals, but also terrorists would exploit them. Criminals targeted those countries where there was an absence of strong regulations. That sent a strong message to those countries about developing such regulations.
There was a lot that the international community could do, and there was no shortage of international regional instruments and forums. Apart from the four UN conventions mentioned by other delegates, there was the Council of Europe money-laundering convention.
There were also regional instruments that laid down the standards for tackling money-laundering, and the 40 recommendations of the Financial Action Task Force had been recognized broadly as the international standard.
He said that his country found it difficult to see what value would be added by elaborating a new UN convention. The international community should avoid seeing new conventions as the automatic solution. If there was one theme he would like to see emerging from the deliberations it was “implementation, implementation and implementation”. The record of implementation was a poor one.
Another way to battle the crime was through the use of financial disincentives, such as the confiscation of criminal assets, he said. There was far more that could be done in that regard, and there was no greater disincentive to organized criminals than the thought of losing the fruits of his activities.
It had taken the United Kingdom three attempts to get its law on the matter working, but it was proving to be successful now. There was an irony about what his country was doing, as a significant portion of seized assets would be plowed back into crime prevention and anti-crime measures. Criminals were now contributing to their own downfall.
HENNING FODE (Denmark) said the result of the work of the UN was a number of important comprehensive conventions, such as the UN convention on narcotics, the Palermo convention, the convention on corruption, and the one on the suppression of the financing of terrorism.
Those conventions were all dealing with various aspects of economic crime, including money-laundering, and had been signed and ratified by a large number of Member States. There were also the 40 Financial Action Task Force recommendations that covered the definition of money-laundering, as well as preventative measures.
In that context, he said, the question of the added value of a new convention on money-laundering could very well be raised. The focus of the United Nations should not be on elaborating a new convention on money-laundering.
Instead, there should be a focus on a rapid and effective ratification of the existing instruments. Further international cooperation was also important, for example in the sense of technical assistance.
Kilde: FNs nyhedstjeneste
