National financial commitment

The event was hosted by the participation of specialists in money laundering issues from the sponsoring countries and institutions.

Conclusions

The main conclusions from the event relate to the advances Bolivia has made in the prevention of money laundering through amendment of the Penal Code and enactment of Supreme Decree 2477 1, which stipulates the establishment of a Financial Investigation Unit. The seminar act concludes that "There is need to define, within private financial entities, preventive and control mechanisms to comply with the Code of Behavior and laws in force"

Likewise, the participants agreed to develop an on-going training programme in private and public institutions including the Government Attorney's Office and other legal organs of the State. It is expected that these institutions will communicate and coordinate to prevent money laundering. Both citizen awareness on the issue and the commitment of the national financial sector are indispensable in fighting this crime effectively, says the document.

Millionaire Profits

Illicit drug trafficking has become an industry that generates million of dollars, states the General Secretary of the United Nations, Kofi Annan. According to Annan, the International Monetary Fund (IMF) has estimated that between 2 and 5 per cent of the Gross Internal Revenue in the world is money laundered from illegal sources.

Some estimates indicate that in Bolivia around 200 million US dollars are laundered annually. Countries with free-market economies, including several Latin American and Eastern Europe countries are preferred by criminals for their illegal activities, says Patricia Llerena, a specialist participating in the Seminar. According to Llerena, delinquents take advantage of the release of economic restrictions and tariffs. Money launderers, however, find ways to achieve their purposes using: banks, casinos, currency exchanges, restaurants and even supermarkets. They introduce illegal money into the legal financial system, transferring it from one place to another so it appears to be clean money.

Lately, criminals use other techniques such as electronic funds transfers, as few banks have the resources to identify these, owing to their rapidity, states an official of the Financial Enforcement Network from the United States.

The Process

It is understood that the money laundering process follows three phases: placement, stratification and integration. The placement is the entering of illegal money into the financial system, which in the opinion of the UNDCP specialist is the most vulnerable phase of the whole process since the delinquent committing the crime is at high risk. On the other hand, the stratification or transformation phase that involves a series of financial transactions the delinquent must perform in order to hide the origin of the illegal money is the most difficult for the investigator. The integration phase occurs when the money has been completely assimilated by the financial system. "It is practically impossible, once the money is integrated, to retrace the route the delinquent has taken and identify the illegal origin of the money", says Llerena.

According to her comments, countries in Latin America offer features favorable to the fulfillment of the second phase of the money laundering process given that such countries are in the middle of their economic opening where privatization is taking place along with fast economic growth in some cases.

Every time investigators manage to identify a process of money laundering, delinquents have already developed a more advanced process. "Every time a scheme has been identified, delinquents have changed it in no time, as they take advantage of the technological advances", explains Llerena. Thus, criminals make financial and commercial transactions through Internet. "They work within the system, taking advantage of it to make their profits". Money launderers move fast, hampering the investigator from following their paths. "The percentage of sentences due to money crimes is very low ... investigations progress very slowly and they require great effort and financing", asserted Llerena.

Commitment

But this does not imply that the battle cannot be won. Investigations, she believes, should be carried out under the direction of a highly trained multidisciplinary team that includes policemen, customs officers, systems engineers and others, " in order to untangle the financial operation web they operate in".

Consciousness raising on the issue and international cooperation are essential to combat money laundering. "All countries should consent, in good faith, to the need for cooperation not only to diminish the committing of these crimes, but also to assume the social commitment of preventing therm", concludes Llerena.