Still beating the drum

Still beating the drum

Article Type: Editorial From: Journal of Money Laundering Control, Volume 16, Issue 1

The Thirtieth International Symposium on Economic Crime took place at Jesus College in the University of Cambridge during the first week of last September. Despite or perhaps as result of the present financial crisis the attendance was a diverse and as strong as in recent years. During a week over 250 presentations and 60 workshops well over 1,100 participants passed through the gates of the college from 93 different countries. The symposium was initially established, at Jesus College, to promote and facilitate better co-operation between governments in identifying the risks of crime and misconduct in the financial sector and in better preventing and managing them. Over the years the symposium has addressed an ever broader spectrum of issues focussing on the economic motivation of criminals and the threats presented to economies by activity that undermines their stability and development. The Thirtieth Symposium dramatically typified this by taking as its central theme the fall out from the recent banking and credit crisis and the impact, occasionally unintended, of measure that have been taken to stabilise the financial sector and wider economy.

While the over-arching title of the symposium was simply – surviving the fall – myths and realities, as might be predicted when some 350 international experts ranging from ministers and governors of central banks to chief justices and senior police and intelligence officers are invited to address issues which in the main they select themselves as pertinent, the range of issues and perspectives was of such diversity as to make any attempt to distil or summarise the formal proceedings impossible, let alone take proper account of the wealth of discussion and analysis that took place in closed workshops, over meals and around the cloisters. However, as in previous years a good many of the papers that are susceptible to public dissemination will be carried in the pages of this journal and our sister publication the Journal of Financial Crime.

From the very first symposium in 1981 the importance of attacking acquisitive and economically motivated crime and abuse, at least in part, by focussing on the interdiction of the proceeds of such activity has never been in doubt, there is increasing scepticism as to the effectiveness, simply in terms of a cost benefit analysis, of the legal regimes that have been created and imposed throughout the world. Attacking criminal property and in particular terrorist related wealth through the traditional criminal justice system has probably attained its optimum in terms of success, at least in the more developed jurisdictions. The perception that this hardly justifies the panoply of legal and regulatory devices that have been imposed on the financial and business sectors, has led to not only the goal posts being moved, but far greater reliance being placed on alternative mechanisms for interdiction and, of course, disruption. While tax law has always had a role to play, it has its limits particularly in economies where taxation is indirect. The development of deployment of intelligence where there are not meaningful devices in the relevant legal system to achieve a lawful result in terms of interdiction is equally problematic. Perhaps as a consequence of these effective limitations in the reach and certainly the efficacy of the jurisprudence that has been created largely to serve the Western economies, more focus is being placed on pursuing the proceeds of corruption as a justification for maintaining and developing the edifice of controls that throw up the sort of information that ever tax hungry democracies appear to require. Certainly the imposition of surveillance over the world’s PEPs would then to support a degree of cynicism.

One issue that was given a great deal of attention at the symposium was the extent to which civil proceedings, as opposed to the use of criminal and administrative law, might prove effective in pursuing the proceeds of certain types of crime and in particular corruption. Of course, this is not a new idea, indeed, the very first issue of this journal emphasised the potential for such claims. The UN Convention on Corruption gives considerable support to such claims, albeit in a not entirely joined up manner. There have been some well documented successes where, particularly with bi-lateral and international assistance, claims from developing countries against those who have engaged in looting and worse, have achieved a degree of success. Of course, removing what in most cases is but a proportion of the ill gotten gains from a former despot and his family may not satisfy everyone’s sense of justice. However, better a little justice than none! Such claims have encountered two major obstacles – the ability to freeze overseas funds efficiently and the cost of proceeding. Several speakers at the symposium noted the considerable improvement in not only the law but the willingness of governments to use it in freezing assets. The point was made that what would have taken many months when the first symposium took place – was achieved more or less worldwide in the case of several of the targets in the Arab Spring in 30 minutes. Indeed, British Government succeed in freezing relevant accounts within minutes of the request being received from Egypt. The funding of civil recovery procedures is still a problem as those currently involved in pursing funds from Libya, Egypt and Tunisia emphasised. None the less, there are cases particularly out of Africa where assistance from the World Bank and governments, including the UK Department for International Development, have made a real difference. What is perhaps more significant in the longer term is the increasing interest in facilitating and promoting the “bounty hunting” and causes of action similar to those under the US False Claims Act – again something which was discussed and supported by Commonwealth Law Ministers meeting in Barbados in 1979!

September 2012

Barry Rider