The Global Fight against Money Laundering and Financing of Terrorism: Are we doing enough? Twenty Seventh International Symposium Economic Crime, Cambridge University Tuesday, 1th September 2009 (Workshop 3 – 17:30-18:30) Tuesday, 1th September 2009 (Workshop 3 – 17:30-18:30)

Abstract The aims of my dissertation are: (i) to understand the general principles, causes and effects of the ML phenomenon, (ii) critically discuss the suitability of the global anti-ML legal framework, (iii) explore legal problems that may arise in implementing the international crime of ML at the national level, as well as to suggest how these legal problems can be solved. The aims of my dissertation are: (i) to understand the general principles, causes and effects of the ML phenomenon, (ii) critically discuss the suitability of the global anti-ML legal framework, (iii) explore legal problems that may arise in implementing the international crime of ML at the national level, as well as to suggest how these legal problems can be solved. Taking a multi-disciplinary and comparative perspective the research argues that the definition of the international crime of ML as drafted in the international conventions is inadequate in dealing with ML, because it is not uniformly applied in every country. Based on that conclusion, the dissertation proposes a new and uniform definition of the universal crime of ML. True unification of the international offence, in my opinion, can only be realized by the adoption of a uniform act, elaborated in an international convention, that generates a reconciliation of the different criminal and economic theories of criminal and economic law, at the international and national levels. Taking a multi-disciplinary and comparative perspective the research argues that the definition of the international crime of ML as drafted in the international conventions is inadequate in dealing with ML, because it is not uniformly applied in every country. Based on that conclusion, the dissertation proposes a new and uniform definition of the universal crime of ML. True unification of the international offence, in my opinion, can only be realized by the adoption of a uniform act, elaborated in an international convention, that generates a reconciliation of the different criminal and economic theories of criminal and economic law, at the international and national levels.

Problems / Research Questions. Part I: Extra-legal factors. Part I: Extra-legal factors. - Why do criminals choose ML? - Why are some countries more attractive than others as a destination of “dirty” money? The Argentine example. - Which is the relation between Money Laundering (“ML”) and Financing of Terrorism (“FT”)?. Part II: Critical analysis of the international anti-ML legal regime. Part II: Critical analysis of the international anti-ML legal regime. - Question: Whether the supranational anti-ML regime that have been put in place to curb ML can indeed make an effective contribution to reach this goal. - Potential solution to this problem: Create an harmonized international regime against ML to avoid “shopping around the world”. Part III: A vertical comparative analysis (international level vs domestic level). Part III: A vertical comparative analysis (international level vs domestic level). - Potential solution to the problem: create a uniform definition of the international crime of ML, to avoid “shopping around the world” and difficulties on the requests of information and extradition between each country of the world (principle of “dual criminality”.

Relation between Money Laundering and Financing of Terrorism Conclusion 1: ML is one (1) of the four (4) economic channels that terrorist groups can use to finance their activities. Conclusion 1: ML is one (1) of the four (4) economic channels that terrorist groups can use to finance their activities. Conclusion 2: considering that “ML” and “MD” are concealment processes, terrorist groups probable will not commit an attach in the same jurisdiction where they practise ML or MD activities. Their main purpose is to conceal the movement of their assets. Conclusion 2: considering that “ML” and “MD” are concealment processes, terrorist groups probable will not commit an attach in the same jurisdiction where they practise ML or MD activities. Their main purpose is to conceal the movement of their assets.

Cost/Benefit analysis of ML First Dilemma: submit or not submit the assets for a ML process. Cost-benefit analysis based on significant amount of collected assets and the characteristics of the jurisdiction where the criminal is allocated. First Dilemma: submit or not submit the assets for a ML process. Cost-benefit analysis based on significant amount of collected assets and the characteristics of the jurisdiction where the criminal is allocated. Second Dilemma: self-laundering or not self- laundering. Second Dilemma: self-laundering or not self- laundering.

Causes and Effects of ML – Seven variables (i) Governments in need of investment. (ii) Countries with weak anti-ML enforcement systems: When states are weak, but act as if they were strong passing out laws and regulations purporting to regulate without the will or capacity to enforce the law, they inevitable create spaces between reality and legality that can explored by criminals, terrorists and, therefore, launderers (Bagley, “Globalization and Latin American and Caribbean Crime”, 2005). (iii) High rates of corruption. (iv) Social, economic and political conflicts. (v) Vulnerable and open borders. (vi) Countries with inadequate anti-ML norms. (vii) Countries with high rates of informal economy.

Part II: Harmonization or Unification of anti-ML norms? Jurisdictions could have “adequate” or “inadequate” anti-ML norms Jurisdictions could have “adequate” or “inadequate” anti-ML norms IF A adequate and B adequate = 3 stages of ML are harder in both countries. IF A adequate and B adequate = 3 stages of ML are harder in both countries. If A “adequate” and B “inadequate” = ML is easier in jurisdiction “B”, but also in jurisdiction “A”. Criminals “clean” money in jurisdiction “B” and then they submit money already “cleaned” in country “A”. If A “adequate” and B “inadequate” = ML is easier in jurisdiction “B”, but also in jurisdiction “A”. Criminals “clean” money in jurisdiction “B” and then they submit money already “cleaned” in country “A”. If A “inadequate” and B “inadequate” = the incentive/motivation in commission of “ML” and “predicate offence” are higher in both jurisdictions. If A “inadequate” and B “inadequate” = the incentive/motivation in commission of “ML” and “predicate offence” are higher in both jurisdictions. My potential conclusion: harmonization of preventive/regulatory anti-ML norms, and unification of the definition of the international crime of ML My potential conclusion: harmonization of preventive/regulatory anti-ML norms, and unification of the definition of the international crime of ML

Part III: Toward a uniform definition of the international crime of ML I propose a new international convention that reconcile worldwide and universal social and legal “models of law” in order to succeed in the global fight against ML, that: I propose a new international convention that reconcile worldwide and universal social and legal “models of law” in order to succeed in the global fight against ML, that: Only criminalize intentional ML, admitting a broad definition (defining the term “suspicious” – dolus eventualis). Only criminalize intentional ML, admitting a broad definition (defining the term “suspicious” – dolus eventualis). Refers to “all offences” as predicate offence (including the crime of tax evasion but only punishable if the values involved on the operation of ML are over a specific economic value (e.g.– USD 100,000). We need to reduce the “informal” economy as much as possible in order to identify and arrest criminal groups. Refers to “all offences” as predicate offence (including the crime of tax evasion but only punishable if the values involved on the operation of ML are over a specific economic value (e.g.– USD 100,000). We need to reduce the “informal” economy as much as possible in order to identify and arrest criminal groups. Also penalize “self-laundering” behaviours. Also penalize “self-laundering” behaviours.

Conclusions In my point of view, anti-ML norms must be called upon to invent a flexible process of harmonization that leaves room for believing we can find general consensus on how to protect common values. In my point of view, anti-ML norms must be called upon to invent a flexible process of harmonization that leaves room for believing we can find general consensus on how to protect common values. A uniform definition of the international crime of ML is essential, among other reasons, to enable to achieve easier and more efficient processes of extradition and cooperation between countries. A uniform definition of the international crime of ML is essential, among other reasons, to enable to achieve easier and more efficient processes of extradition and cooperation between countries.