Rethinking the Regulatory Approaches Taken Towards Organized Crime in the Global South Region - 1

The link between transnational organised crime and crime based illicit financial flows

Tabitha Agaba

This presentation seeks to highlight the link between transnational organised crime and crime based illicit financial flows and its impact. Transnational organised crime is oftentimes a source of illicit financial flows and sometimes illicit financial flows facilitate transnational organised crimes. Organised crime networks, by the virtue of their illicit activities, amass considerable profits, which are subsequently channelled into conflict zones. The interconnectivity of crime based illicit financial flows and transnational organised crime is conversation that should attract more attention because of its implications such as sustaining or exacerbating conflict or insecurity, creating financial loss to legitimate governments among others.

Dealing with corruption as a transnational organised crime

Dr. Simeon Igbinedion

My presentation will discuss the character of corruption as a transnational organised crime. My focus is on grand corruption – the genre of corruption whereby high-level public officials of a state plunder a huge chunk of its common wealth for personal benefits to the detriment of the state. When the United Nations Convention Against Transnational Organised Crime (UNCATOC) was adopted in 2000, corruption was less invidious than it is in contemporary times. Thus, the UNCATOC criminalizes (the transactional aspect of) corruption without incorporating the criminal organizational attributes of the conduct. Although the United Nations Convention Against Corruption (UNCAC) 2003 expands the dragnet of corruption prohibition it still fails to integrate the criminal organizational features of corruption into the prohibited conducts. Interestingly, the Financial Action Task Force on Money Laundering (FATF) filled in the vacuum created by the two instruments through its introduction of the concept of “politically exposed persons (PEPs).” The corrupt PEP constitutes a transnational organised group, which comprises himself, family members, acquaintances and business associates. The members of the group manifest the character of a typical criminal organisation and have different roles to play in the enterprise of plundering state resources and subsequently laundering the proceeds therefrom into their personal bank accounts and estates located in foreign jurisdictions. Unfortunately, many domestic legal systems fail to reflect the transnational criminality of the PEPs in their prohibition of corruption. One of the effects of such failure is that when corruption is committed and money disappears, the usual suspect is simply the corrupt public official while members of his criminal group are treated marginally as mere accessories. Therefore, the discussion is expected to generate perspectives on dealing with corruption as a transnational organised crime.

Policy Measures and Legislative Frameworks Designed to Dismantle Organized Crime Syndicates

Brian Omondi

Organized crime syndicates pose a significant threat to global security and economic stability, necessitating robust policy measures and legislative frameworks to combat their influence effectively. My presentation will explore the multifaceted approaches employed by various nations and international bodies to dismantle these illicit networks. Central to this discussion will be the analysis of comprehensive legal frameworks, such as the United Nations Convention against Transnational Organized Crime (UNTOC).

The presentation will delve into national legislative instruments, highlighting case studies from countries like the United States with its Racketeer Influenced and Corrupt Organizations Act (RICO), which has been instrumental in prosecuting crime syndicates by targeting their economic foundations. Similarly, Italy’s anti-mafia laws, including the use of witness protection programs and asset seizure, have proven effective in weakening the mafia’s stronghold. Moreover, the role of international cooperation will be examined, emphasizing the importance of cross-border initiatives and intelligence sharing facilitated by organizations such as INTERPOL and Europol. The presentation will also address contemporary challenges, including cybercrime and the use of cryptocurrencies by organized crime groups. By evaluating the successes and limitations of existing measures, the presentation aims to provide insights into evolving strategies that policymakers and law enforcement agencies can adopt to enhance their effectiveness in combating organized crime.

New Governance and Anti-money Laundering Regulatory Approaches

Kartini Makmur

Discussions on the types of incentives that exist in both formal and informal financial sectors and between regulators, as well as their interconnectedness, have given rise to new topics of the “New Governance” concept, which encompasses the observable proliferation of networks, the government’s growing dependence on non-state entities in implementing its policies, and the development of strategies for efficiently regulating these networks within the framework of public sector reforms. Hence, this presentation will discuss the new governance theory and its implementation in anti-money laundering regulation in the Indonesian financial industry, both formal and informal sector. For a deeper and more comprehensive discussion, this study covers the ‘work’ of networked governance, including the rise of markets and networks, the importance of network integration, as well as the links, tensions, and relationships between formal regulations and informal finance; metagovernance, decentring regulation, and heterarchy.

The Misuse Of Non-Profit Organisations (NPOs) In Illicit Financial Flows

Maureen Emefa Bansah

The voluntary sector, a powerhouse in sustainable development, is grappling with a significant issue. While NPOs play a pivotal role in addressing various socio-economic issues in society, their activities are increasingly being exploited for illicit financial activities such as money laundering, tax evasion, and terrorist or conflict financing. This exploitation, estimated to cost some countries hundreds of millions of dollars, is a growing concern that demands our immediate attention.

NPOs are susceptible to illicit financial flows due to their peculiar nature of receiving huge sums of funds and logistical support from donors. They receive special privileges such as tax exemptions and enjoy favourable public goodwill, resulting in minimal suspicion of illicit financial activities. Moreover, with limited crime detection capabilities in the global south, it is easy for the NPOs to be misused for illicit gains. This phenomenon undermines regulatory enforcement and poses far-reaching consequences for the non-profit sector and the public as a whole.

The presentation will examine NPO abuses through case studies, offer solutions for improving regulatory oversight, and strongly advocate for rigorous financial monitoring and auditing practices to ensure accountability. It will also stress the crucial role of collaboration with regulatory bodies and financial institutions in safeguarding against illicit financial flows, thereby ensuring a more secure and trustworthy voluntary sector.

FATF Grey Listing Mechanism: The Plight of Sub-Saharan Africa

Dr Lovina Otudor

Money Laundering is a global crime. It can derail economies and foster an avenue for terrorist financing. To stop these international crimes, the Financial Action Task Force was established with a mandate to regulate money laundering based on the needs of the regulatory environment of its founding fathers, majorly developed economies of the West. It was later discovered that the world is a global village with borderless financial centers and as such the FATF extended its reach to all nook and cranny of the globe.

However, this was without recourse to the regulatory dynamics of all regions especially the Global South Countries with smaller financial centers which were unique in their formation and development. These created problems of regulatory compliance and enforcement. Rather than create modalities for self-discovery and development to meet its standards, the FATF mode of operation appears punitive and controlling, lacking in transparency. Thirty five years on, the FATF operations appear to be that of a global club consisting of Western alliances to the detriment of Global South countries especially those in sub-Saharan Africa. Its box-ticking approach has propelled the laundering of criminal [proceeds in global financial centres that tick the box of compliance but fail to stop the laundering of criminal proceeds. Countries unable to tick the box with little or no money laundering emanating from their jurisdictions are grey-listed. The goal of this presentation is to highlight this narrative in line with the plight of sub-Saharan Africa and to present a blueprint for future research.