is Money Laundering?
widespread is the Problem?
Money Laundering Process
of the Process
Can We Prevent It?
on Financial Institutions
Areas Prone To Money Laundering
INTERNATIONAL INITIATIVES - Part 2
On the legal front, various significant pieces of work have been done. These include:
UN CONVENTION AGAINST ILLICIT TRAFFICKING IN NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES (THE VIENNA CONVENTION). (19 December 1988)
This is one of the most important international treaties in the past 50 years. It not merely requires its signatory states to criminalise the laundering of drug money, and to confiscate it where found, but lays down so far as possible a common wording for the criminal statutes, and a common mode of enforcement. It also requires full and prompt co-operation between the signatory states for the enforcement of these laws anywhere in the world. This agreement in December 1988 commits all countries that ratify it to introduce a comprehensive criminal law against laundering the proceeds of drug trafficking and to introduce measures to identify, trace, and freeze or seize the proceeds of drug trafficking. The UK was one of the first countries to ratify this Convention which has been ratified by over 50 countries.
This UN Treaty is of foundational importance in relation to international co-operation in the area of drug trafficking. In the European context alone, it exerted a major influence on the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the EC Directive on prevention of the use of the financial system for the purpose of money laundering. On a wider stage it has formed an essential framework for the work of the FATF and, indeed, implementation and ratification of the treaty was the first of the recommendations made by the Financial Action Task Force. Several United Kingdom legislative provisions are taken almost directly from the treaty.
The recitals narrate that the Parties to the Convention recognise that links between illicit drug traffic and other related organised criminal activities which undermine the legitimate economies and threaten the stability, security and sovereignty of States; and that illicit drug trafficking is an international criminal activity that generates large profits and wealth, enabling transnational, criminal organisations to penetrate, contaminate and corrupt the structures of government, legitimate commercial and financial business and society at all its levels and they are therefore determined to deprive persons engaged in illicit traffic of the proceeds of their criminal activities and thereby eliminating their main incentive for so doing.
COUNCIL OF EUROPE CONVENTION ON LAUNDERING, SEARCH, SEIZURE AND CONFISCATION OF THE PROCEEDS OF CRIME (1990).
This Convention was ratified by the UK - the first country to do so - in September 1992. The Convention was intended to extend the provisions of international co-operation against the activities of international organised criminality in general. The drafters of this instrument agreed to extend its obligations beyond the area of drug trafficking. As pointed out elsewhere:
‘One of the purposes of the Convention is to facilitate international co-operation as regards investigative assistance, search, seizure and confiscation of the proceeds of all types of criminality, especially serious crimes and in particular drug offences, arms dealing, terrorist offences, trafficking in children and young woman….. and other offences which generate large profits’.
EC DIRECTIVE ON PREVENTION OF THE USE OF THE FINANCIAL SYSTEM FOR THE PURPOSE OF MONEY LAUNDERING (1991).
This directive mirrors the G.7. recommendations of 1989, and aims to make identification of customers and the retention of their records mandatory. The Directive is a legal regulation of mandatory force requiring member states to incorporate the rules contained therein in their own legal systems by a certain date. The relevant provisions of which have been implemented into UK law in the Criminal Justice Act, 1993.