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Money laundering is closely related to crimes such as drug trafficking, corruption and organized crime. At FIIAPP we work to fight this problem through a wide range of projects
The concept of “money laundering” arose during the 1920s in the United States. American mafias, dedicated to the smuggling of alcoholic beverages, created a network of laundries to hide the illicit origin of the money derived from this business.
As explained by the United Nations Office on Drugs and Crime (UNODC), money laundering is “the method used by infractors to hide the illegal origins of their wealth and protect their income, with the goal of flying under the radar of institutions in charge of investigation and law enforcement”.
The United Nations has the Financial Action Task Force, which sets standards to organize the legislative architecture of the fight against money laundering by organized crime .
UNODC also emphasizes that individuals and terrorist organizations employ techniques similar to those practised by people who are involved in money laundering to hide their resources. All these techniques carry with them crimes such as corruption or organized crime.
In this regard, the Deputy Managing Director of the International Monetary Fund , Min Zhu, notes that “money laundering and terrorist financing are financial crimes that have economic consequences . They can threaten the stability of a country’s financial sector or its external stability in general. Effective regimes to combat money laundering and terrorist financing are essential to safeguarding the integrity of markets and the global financial framework, as they help mitigate the factors that lead to financial abuse.”
Along these lines, we must emphasize that money generated by criminal activities is difficult to hide. Over the years, States have reinforced the mechanisms necessary to identify, seize and confiscate that money wherever it is. “Measures to prevent and combat money laundering and terrorist financing, therefore, are not just a moral imperative, but an economic need,” according to Zhu.
2030 Agenda and Sustainable Development Goal 16
Spain, together with the 193 countries of the United Nations, pledged to comply with the 2030 Agenda, approved by the United Nations General Assembly in September 2015. In this context, the non-governmental organization Transparency International (IT) has published a report, which takes April to June 2018 as its reference, in order to examine the progress of Spain in relation to Sustainable Development Goal 16, based on promoting a just, peaceful and inclusive society, which contains goals related to transparency and fighting against corruption . This document focuses on the situation of illicit financial flows, bribery and corruption in all its forms, transparent and accountable institutions, public freedoms, and the right to access information.
In addition, the report highlights that, although Spain has made great strides at the legislative level on this matter, “it is necessary that the institutions constituting the first line of prevention and fighting against corruption, such as the Anti-Corruption Prosecutor, remain totally independent from political power.” Likewise, “Spain has the challenge of achieving a homogeneous and effective legal framework in all matters related to public integrity and accountability, and at all territorial levels.”
FIIAPP works on the fight against money laundering
FIIAPP is working on the fight against money laundering through a variety of projects.
EL PAcCTO is a European Union programme implemented by FIIAPP and Expertise France with the support of IILa and Camões. The main goal of this project is the fight against transnational organized crime and the strengthening of the institutions responsible for guaranteeing citizen security in 18 countries in Latin America.
“EL PAcCTO aims to address various challenges and, thanks to the exchanges in working groups and the presentation of practical cases, also identify the difficulties and weaknesses specific to Latin America and identify possible coordination difficulties between the agents in the fight against money laundering”, highlights Jean Dos Santos, an EL PacCTO project expert.
Additionally, a project called European Support for Bolivian Institutions in the Fight against Drug Trafficking and Related Crimes places special emphasis on money laundering. The project has sought to improve capability through training courses. It has focused on strengthening inter-institutional coordination and international cooperation and has given aid support to overcome the fourth round of the Mutual Evaluation of the Financial Action Task Force Group of Latin America.
“Whether or not the Bolivian State can remain off the famous black or grey lists comprised of States that have neither established prevention measures against money laundering nor committed themselves to doing so depends in large part on passing this Mutual Evaluation”, emphasized Javier Navarro, National Police Inspector and expert on this project.
Following this same line of work, the EU Law Enforcement Support Project in the fight against drugs and organized crime in Peru seeks to improve the effectiveness of training schools, inter-institutional cooperation and Peruvian intelligence systems in order to fight drugs, organized crime and money laundering.
Likewise, EU-ACT projects on Action against Drugs and Organized Crime and SEACOP are also active in the fight against money laundering, a problem closely related to drug trafficking and organized crime.
“Drug trafficking organizations are present in different countries. The materials may be supplied by one country, others may be transit countries, others destination countries, etc. Money laundering may take place in yet other countries. Therefore, if this is not addressed from a transnational standpoint, it is impossible to deal with,” explains José Antonio Maté, EU-ACT Project Coordinator for the Central Asia area.
With the ARAP-Ghana project , ‘Accountability, Rule of Law and Anti-Corruption of Ghana’, the goal is to reduce corruption and improve accountability in the African country, taking into account the money laundering that corruption brings. Ghana has created the National Anti-Corruption Plan (NACAP), of which this project is part.
Finally, in the El PacCTO:Supporting AMERIPOL project it is expected that money laundering will be incorporated into the technological platform for the exchange of police information that this project is promoting in Latin America.
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Javier Navarro, a Spanish National Police inspector and expert in the European project to support Bolivian institutions in the fight against drug trafficking and related crimes, explains how this project deals with the problem of money laundering
Money laundering is generally one of the most significant problems for states at the social, economic and political levels. Drug trafficking, the funding of terrorism and corruption are its most prominent predicate offences.
Through international treaties and trade agreements, efforts are being made to homogenise countries’ internal legislation to create a new framework that positively favours economic and social aspects; however, at the same time, criminal organisations are emerging that use loopholes to increase money laundering.
In this sense, the Plurinational State of Bolivia, through the Financial Investigations Unit, is developing and favouring numerous cooperation and collaboration actions among the country’s various financial institutions, strengthening the mechanisms aimed at preventing money laundering, such as preparing financial intelligence reports, reporting suspicious transactions and referring them to the judicial authorities if they find indications that a crime has been committed.
The institutional effort that they are putting in must be translated, in the next few years, into improving results in relation to obtaining a greater number of convictions and increasing the financial assets and resources confiscated due to money laundering, which can then be reused to continue strengthening structures to prevent this type of crime.
The European project to support Bolivian institutions in the fight against drug trafficking and related crimes, which is funded by the European Union and managed by FIIAPP, places special emphasis on the issue of money laundering. In the two years we have been working on the project, the focus has been on strengthening three main aspects.
On the one hand, we have sought to train the Bolivian Police, the Financial Investigation Unit, the Public Ministry and the Ministry of Justice through training courses in money laundering, seizure of assets, analysis of financial intelligence and financial cybercrime; we have also proposed future specialisation modules in money laundering for the Bolivian School of Judges and Prosecutors.
In addition, we have focused on strengthening inter-institutional coordination and international cooperation by establishing collaboration, support and advice channels and creating spaces of understanding between institutions that develop functions aimed at the prevention and investigation of money laundering.
Finally, we have given support and assistance to help pass the fourth round of the Financial Action Task Force of Latin America (Gafilat) Mutual Evaluation, which will take place in Bolivia in the second half of 2020.
We must also remember that the FATF Recommendations include the objectives of setting standards and promoting the effective implementation of legal, regulatory and operational measures to combat money laundering, the financing of terrorism and other threats related to the integrity of the international financial system.
Whether or not this Mutual Evaluation is passed will depend to a large extent on whether the Bolivian State can continue to stay off the famous black or grey lists composed of states that do not comply and do not commit themselves to establishing measures to prevent money laundering.
In 2019, the project will remain active and committed to all actions that strengthen public policies carried out in Bolivia to combat money laundering.
