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Levi, Michael (2013)
Publisher: International Drug Policy Consortium
Languages: English
Types: Book
Subjects: HV
Since the 1980s, there has been a major push in rhetoric and institution-building, \ud emphasizing the centrality of attacking the financial lifeblood of drug trafficking networks \ud and organised economic crimes. Much progress has been made in legislation and the \ud creation of financial intelligence units. However, easier guidance is needed on how to get \ud information overseas, and delays in international cooperation lead to under-exploitation \ud of financial investigation opportunities
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    • 4 For recent examples, see: Williams, M., Holcomb, J., Kovandzic, T. & Bullock, S. (2010), Policing for profit: The abuse of civil asset forfeiture (Arlington, Va: Institute for Justice); Thompson, I. (5 August 2013), 'Law to clean up 'nuisances' costs innocent people their homes', ProPublica, http://www.propublica.org/ article/law-to-clean-up-nuisances-costs-innocent-peopletheir-homes
    • 6 Once such guesstimates are published and uncritically accepted, it becomes difficult politically to produce a lower figure, even if that is much more accurate/analytically plausible. Dubourg, R. & Prichard, S. (eds.) (2009), Organised crime: Revenues, economic and social costs, and criminal assets available for seizure (London: Home Office) estimated the amount of UK proceeds of crime available in the UK for confiscation at £2 billion, a tenth of the lower band figure of the UK estimate for organised crime costs. An earlier UK study had estimated proceeds of property crime to be £1.497 billion in 1992 with the much more modest figure of £460 million 'open to confiscation' (Levi, M. & Osofsky, L. (1995), Investigating, freezing and confiscating the proceeds of crime (London: Home Office, p. 6). Readers should note that it is a mistake simply to contrast harm figures with laundering or with confiscatability figures, since harm is usually far greater than proceeds of crime (depending, of course, on what view one takes of the harm of consensual prohibited activities). Proceeds of crime are gross turnover data, and to generate a 'realisable benefit' figure need to be reduced to take account of lifestyle expenditures as well as criminal business costs including corruption, staff, and transport. For more information, see: Levi, M., Innes, M. & Reuter, P. (forthcoming 2013), The economic, financial & social impacts of organised crime in the EU (European Parliament)
    • 7 Available at: www.unodc.org/pdf/convention_1988_en.pdf.
    • 8 Available at: http://conventions.coe.int/treaty/en/Treaties/ Html/141.htm; http://conventions.coe.int/Treaty/EN/ Treaties/Html/198.htm.
    • 9 Gilmore, W. (2012), Dirty money, 3rd ed. (Strasbourg: Council of Europe)
    • 10 See: Halliday, T., Levi, M. & Reuter, P., (2013), Assessments of anti-money laundering and combating the financing of terrorism, (Chicago: American Bar Foundation); Levi, M. & Reuter, P. (2006), 'Money Laundering', in M. Tonry (ed.), Crime and justice: A review of research, 34: 289-375, (Chicago: Chicago University Press)
    • 11 Though criminal record flows across borders are often uneven, and the reluctance to prosecute corporations even in those jurisdictions that have corporate criminal liability means that
    • 12 Financial Action Task Force (2013), Methodology for assessing technical compliance with the FATF Recommendations and the Effectiveness of AML/CFT systems, (Paris: OECD), http:// www.fatf-gafi.org/media/fatf/documents/methodology/ FATF%20Methodology%2022%20Feb%202013.pdf
    • 13 Levi, M. (1991), 'Regulating money laundering: The death of bank secrecy in the UK', British Journal of Criminology, 31(2): 109-125; World Economic Forum, Organized Crime Enablers (Geneva: WEF), http://www.weforum.org/reports/organizedcrime-enablers
    • 15 We presume, but cannot verify, that other banks behaved differently
    • 16 Financial Services Authority (2011), Banks' management of high money-laundering risk situations, www.fsa.gov.uk/ pubs/other/aml_final_report.pdf; Findley, M., Nielson, D., & Sharman, J. (2013), Global Shell games (Cambridge: Cambridge UP); Findley, M., Nielson, D. & Sharman, J. Global shell games: Testing Money launderers' and terrorist financiers' access to Shell companies, http://www.griffith.edu. au/business-government/centre-governance-public-policy/ research-publications/?a=454625
    • 17 Financial Action Task Force (2012), Operational issues - Financial investigations guidance (Paris: OECD), p. 6, http://www.fatf-gafi.org/media/fatf/documents/reports/ Operational%20Issues_Financial%20investigations%20 Guidance.pdf
    • 18 See, for example, US Department of State (2013), 2013 International Narcotics Control Strategy Report (Washington DC: State Department), http://www.state.gov/j/inl/rls/ nrcrpt/2013/; International Narcotics Control Board (2011), Report of the International Narcotics Control Board for 2010, Chapter 1, http://www.incb.org/incb/en/publications/annualreports/annual-report-2010.html
    • 19 Levi, M. (2012), 'How well do anti-money laundering controls work in developing countries?' In: Reuter, P. (ed.), Draining development? Controlling Illicit flows from developing countries (Washington DC: World Bank Press), pp. 373-414. For an interesting example of a local FIU publicly calling on Indonesian authorities to do more with its reports that identify large accounts held by law enforcement officers and politicians, see: Triyono, A. (11 January 2012), 'Indonesia antimoney laundering agency reports 1,800 officials to corruption authorities', Jakarta Globe, http://www.thejakartaglobe.com/ archive/indonesia-anti-money-laundering-agency-reports1800-officials-to-corruption-authorities/490471/
    • 21 Naylor, R.T. (1999), 'Wash-out: A critique of the follow-themoney methods in crime control policy', Crime, Law and Social Change, 1: 1-57, http://link.springer.com/article/10.1023%2 FA%3A1008386203362#page-1
    • 22 Blumenson, E. & Nilsen, E. (1998), 'Policing for profit: The drug war's hidden economic agenda', University of Chicago Law Review, 65: 35-114, http://papers.ssrn.com/sol3/ papers.cfm?abstract-id=959869##
    • 23 Baicker, K. & Jacobson, M. (2007), 'Finders keepers: Forfeiture laws, policing incentives, and local budgets', Journal of Public Economics, 91: 2113-2136, http://users. nber.org/~jacobson/BaickerJacobson2007.pdf
    • 24 Worrall, J. and Kovandzic, T. (2008), 'Is policing for profit? Answers from asset forfeiture', Criminology & Public Policy, 7(2): 219-244
    • 25 Skolnick, J. (2008) 'Policing should not be for profit', Criminology & Public Policy, 7(2): 257-262, http:// onlinelibrary.wiley.com/doi/10.1111/j.1745- 9133.2008.00506.x/abstract
    • 26 Miller, M. & Selva, L. (1994), 'Drug enforcement's double edged sword: An assessment of asset forfeiture programs', Justice Quarterly, 11(2): 313-335, at p. 331
    • 27 Levi, M. & Osofsky, L. (1995), Investigating, seizing, and confiscating the proceeds of crime, Crime Detection and Prevention Series Paper 61, (London: Home Office), http:// webarchive.nationalarchives.gov.uk/20110218135832/http:/ rds.homeoffice.gov.uk/rds/prgpdfs/fcdps61.pdf
    • 28 Available at: http://www.cps.gov.uk/legal/d_to_g/financial_ reporting_order/
    • 29 Wilkinson, R. & Pickett, K. (2010), The spirit level: Why equality is better for everyone (London: Penguin)
    • 30 Geis, G. (2008), 'Asset forfeiture and policing', Criminology & Public Policy, 7(2): 215-218
    • 31 Scottish Government (2009), Joint Thematic Report on the Proceeds of Crime Act 2002, HMICS and Inspectorate of Prosecution in Scotland, p.14, http://www.scotland.gov.uk/ Publications/2009/10/26113051/0
    • 32 Buscaglia, E. & van Dijk, J. (2003), 'Controlling organized crime and corruption in the public sector', Forum on Crime and Society, 3(1 and 2): 1, pp. 3-34, http://www.unodc.org/pdf/ crime/forum/forum3_Art1.pdf
    • 33 Van Duyne P. & Stucco, E. (2012), Corruption in Serbia, from black box to transparent policy making (Oisterwijk: Wolf Legal Publishers)
    • 35 U.S. Department of Justice Office of the Inspector General Audit Division (January 2013), Assets forfeiture fund and seized asset deposit fund annual financial statements fiscal year 2012, U.S. Department of Justice Office of the Inspector General Audit Division Audit Report 13-07, p.4, http://www. justice.gov/oig/reports/2013/a1307.pdf
    • 36 U.S. Department of Justice Asset Forfeiture Program (January 2008), National Asset Forfeiture Strategic Plan 2008-2012 (Washington DC: US Department of Justice), http://www. justice.gov/criminal/afmls/pubs/pdf/strategicplan.pdf
    • 37 U.S. Department of State, Department of Justice & Department of Homeland Security (May 2012), U.S. asset recovery tools & procedures: A practical guide for international cooperation (Washington DC: US State Department), http:// www.state.gov/documents/organization/190690.pdf. A more universal guide may be found in: United Nations Office on Drugs and Crime (2012), Manual on international cooperation for the purposes of confiscation of proceeds of crime, (Vienna: UNODC), http://www.unodc.org/documents/organizedcrime/Publications/Confiscation_Manual_Ebook_E.pdf. See also: Kennedy, A. (2007), 'Winning the information wars: Collecting, sharing and analysing information in asset recovery investigations', Journal of Financial Crime, 14(4): 372-404
    • 38 Levi, M. & Osofsky, L. (1995), Investigating, seizing, and confiscating the proceeds of crime, Crime Detection and Prevention Series Paper 61, n.27 (London: Home Office), http://webarchive.nationalarchives.gov.uk/20110218135832/ http:/rds.homeoffice.gov.uk/rds/prgpdfs/fcdps61.pdf; Performance and Innovation Unit (2000), Recovering the proceeds of crime (London: Cabinet Office), http:// webarchive.nationalarchives.gov.uk/+/http:/www. cabinetoffice.gov.uk/media/cabinetoffice/strategy/assets/ crime.pdf. See also: Gold, M. & Levi, M. (1994), Moneylaundering in the UK: An appraisal of suspicion-based reporting (London: Police Foundation); KPMG (2003), Review of the regime for handling suspicious activity reports (London: Home Office); Fleming, M. (2005), UK law enforcement agency use and management of suspicious activity reports: Towards determining the value of the regime, http://www.ucl. ac.uk/scs/downloads/research-reports/fleming-LEA-SARS
    • 39 Home Office (2009), Recovery of the proceeds of crime: Police performance expressed as a ratio of assets recovered per 1000 head of population, April 2006 to March 2009 (London: Home Office); see also: Bullock, K. (2010), 'The Confiscation Investigation', Policing: An International Journal of Policy and Practice, 4(1): 7-14
    • 40 This example shows the problems of looking at costs without assessing benefits: almost all policing - and every other public service including education - is policing for loss in this narrow sense
    • 41 Available at: http://www.legislation.gov.uk/ukpga/2002/29/ contents
    • 42 Available at: http://www.scotland.gov.uk/Topics/Justice/ crimes/organised-crime/organised-crime
    • 43 Available at: http://www.unodc.org/unodc/en/treaties/CAC/.
    • 44 Muzila, L., Morales, M., Mathias, M., & Berger, T. (2012), On the take: Criminalizing illicit enrichment to fight corruption (Washington, DC: World Bank), https://openknowledge. worldbank.org/handle/10986/13090
    • 45 For some parallel Dutch experiences, see: http://www.politie. nl/binaries/content/assets/politie/documenten-algemeen/ nationaal-dreigingsbeeld-2012/cba-witwassen-2012.pdf
    • 46 Gannon, R. & Doig, A. (2010), 'Ducking the answer? Fraud strategies and police resources', Policing & Society, 20(1): 39-60
    • 47 Sproat, P.A. (2009), 'To what extent is the UK's anti-money laundering and asset recovery regime used against organised crime?', Journal of Money Laundering Control, 12(2): 134-150
    • 48 Available at: http://english.wodc.nl/onderzoek/cijfers-enprognoses/Georganiseerde-criminaliteit/
    • 49 Kruisbergen, E., van de Bunt, H., & Kleemans, E. (2012), Georganiseerde criminaliteit in Nederland; vierde rapportage op basis van de Monitor Georganiseerde Criminaliteit (Den Haag: Boom Lemma), http://www.boomlemma. nl/criminologie-veiligheid/catalogus/georganiseerdecriminaliteit-in-nederland-1-2013#
    • 50 Murray, K. (2013), 'A square go: tackling organised crime where it doesn't want to be tackled', Journal of Money Laundering Control, 16(2): 99-108; see also: Murray, K. (2010), 'Dismantling organised crime groups through enforcement of the POCA money laundering offences', Journal of Money Laundering Control, 13(1): 7-14; Murray, K. (2011), 'The uses of irresistible inference: Protecting the system from criminal penetration through more effective prosecution of money laundering offences', Journal of Money Laundering Control, 14(1): 7-15
    • 51 Sproat, P. A. (2007), 'The new policing of assets and the new assets of policing: A tentative financial cost-benefit analysis of the UK's anti-money laundering and asset recovery regime', Journal of Money Laundering Control, 10(3): 277-299, at p. 291
    • 52 Brown, R., Evans, E., Webb, S., Holdaway, S., Berry, G., Chenery, S., Gresty, B. & Jones, M. (2012), Impact of financial investigation on organised crime (London: Home Office), p. 1; see also: Brown, R. (2013), 'Reaching the parts other investigations cannot reach: Securing convictions for organised crime through financial investigation', Journal of Financial Crime, 20(3): 259-266
    • 53 In US Federal law, even spending for immediate consumption can constitute money laundering if the party has the requisite knowledge that the funds and proceeds of crime
    • 54 For an early thoughtful discussion of process issues in an international context, grounded in acute observation, see: Kennedy, A. (2006), 'Designing a civil forfeiture system: An issues list for policymakers and legislators', Journal of Financial Crime, 13(2): 132-163
    • 55 See: Levi, M. (2012), 'How well do anti-money laundering controls work in developing countries?' In: Reuter, P. (ed.), Draining development? Controlling Illicit flows from developing countries (Washington DC: World Bank Press), pp. 373-414, n. 19; Ribadu, N. (2010), Show me the money: Leveraging anti-money laundering tools to fight corruption in Nigeria (Washington DC: Center for Global Development), http://siteresources.worldbank. org/EXTPUBLICSECTORANDGOVERNANCE/Resources/ Showmethemoney.pdf?resourceurlname=Showmethemoney. pdf. This IDPC report does not deal with Grand Corruption that is not specifically connected with illicit drugs, though many systemically corrupt countries may serve as attractors for the drug trade. The Independent Joint Anti-corruption Monitoring and Evaluation Committee conducted a major investigation into the collapse of the Kabul Bank, but this revealed that it was more the result of elite embezzlement/insider loans of US$900 million - little of it recovered - than about specific drug money laundering. Two senior bankers received five year prison sentences in 2013, but it was widely felt that the prosecutions were too narrowly drawn
    • 56 U.S. Department of State (2013), 2013 International Narcotics Control Strategy Report, Volume II: Money laundering and financial crimes, http://www.state.gov/j/inl/rls/nrcrpt/2013/ vol2/index.htm
    • 57 See: Halliday, T., Levi, M. & Reuter, P., (2013), Assessments of anti-money laundering and combating the financing of terrorism (Chicago: American Bar Foundation)
    • 58 Sproat, P.A. (2009), 'Payback time? To what extent has the new policing of assets provided new assets for policing', Journal of Money Laundering Control, 12(4): 392-405, at p. 401
    • 59 Baumer, E. (2008), 'Evaluating the balance sheet of asset forfeiture laws: Toward evidence-based policy assessments', Criminology & Public Policy, 7(2): 245-256, at p. 252
    • 60 See Halliday, T., Levi, M. & Reuter, P. (2013), Assessments of anti-money laundering and combating the financing of terrorism (Chicago: American Bar Foundation), n. 53
    • 61 Dave Bewley-Taylor is the editor of the Modernising Drug Law Enforcement project publication series
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