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The laundering of money derived from illicit drug trafficking and other serious crimes has expanded throughout the world affecting all countries. Funds from the illicit drug trade, which are "laundered" through banks and other financial institutions threaten the integrity and stability of financial systems, even weakening Governments at times. Therefore the international community as a whole holds the responsibility to combat money laundering in order to deny safe haven to drug criminals and their ill-gotten gains. The seizure of drugs, even in large quantities, often have only a limited impact on drug trafficking. The drug trade may be more vulnerable in the area of finance since money is both the lifeblood and the sole end of illicit trafficking. Cash in small denominations, as usually received from illicit drug transactions at the street level is bulky, difficult to hide and cumbersome to move. To address this problem and others, such as disguising and accounting for vast assets which have no legitimate origins, drug organisations and criminals have become experts in the art of money laundering, introducing drug cash into the legitimate financial system and moving it around until it appears "clean". DRUG TRAFFICKERS ARE BEST HIT THROUGH THEIR POCKETS Efforts to prevent money laundering are of critical importance in the fight against drug trafficking. If drug profits can be seized at their entry point into the financial systems, traffickers can be significantly hurt "in their wallets". Money, after all, is the primary objective of drug trafficking. Converting cash into other forms of money or assets is the most important step, since at this point the money may be most directly connected with the illegal source and therefore is most likely to be seized. After that, numerous transactions create a complex paper trail, making identification of the illicit source difficult. THE PROCESS The process of money laundering can be understood as having three stages: placement, layering and integration. Placement, the initial entry of funds into the financial system, serves the purposes of relieving the holder of the physical cash and positioning the funds for the next stage. Placement is the process' most vulnerable stage, as the chance of discovering the illicit origin of the money is greatest at the beginning. Layering, the following stage describes a series of transactions designed to conceal the money's origin. At this level, money is often sent from one country to another and then split into a variety of investments, which are moved frequently to evade detection. In the integration stage, the funds have been fully assimilated into the legal economy, where they can be used for any purposes. A number of countries have instituted a set of control measures including the duty for financial institutions to disclose suspicious operations, in order to detect and trace financial operations on dirty money. However, other countries, including many offshore banking "havens" are still subject to few regulations. Hence, the need for a global agreement and cooperation is essential to prevent launderers moving their business to unregulated countries and thus evading prosecution. INTERNATIONAL EFFORT To harmonise the efforts of the international community against money laundering, the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (ratified by 140 states by July 31, 1997) defined for the first time money laundering as a criminal offence. The 1988 Convention requires State parties to declare money laundering a punishable offence and to adopt measures to identify and freeze or confiscate proceeds from the sale of illicit drugs as well as to promote international cooperation against money laundering. THE SPECIAL SESSION ON THE WORLD DRUG PROBLEM The United Nations General Assembly Special Session on the World Drug Problem, to be held in New York from 8 to 10 June 1998, will consider further measures to improve international cooperation and action against money laundering. Specifically, the General Assembly will adopt a draft document on money laundering, through which will strongly condemn the laundering of money derived from illicit drug trafficking, related crimes and the use of countries' financial systems for that purpose. The Assembly would also urge all States to implement the anti-money laundering provisions of the 1988 UN Convention by applying the following measures:
GLOBAL PROGRAMME The United Nations Office for Drug Control and Crime Prevention in Vienna (ODCCP) is currently implementing the Global Programme Against Money Laundering (GPAML). A three-year programme, aiming to increase the effectiveness of international action against money laundering through comprehensive technical cooperation services offered to Governments. The Programme encompasses three main areas of activities: technical cooperation through increasing awareness; institution strengthening and training; as well as research and analysis. The GPAML will offer States key information to better understand the phenomenon of money laundering and enable the international community to elaborate more efficient countermeasure strategies. In addion, assistance and training to the financial investigation units, including the international aspects of the crime of money laundering will be provided. The implementation of the Global Programme Against Money Laundering is carried out in the spirit of cooperation with other international, regional and national organisations and institutions. A number of activities are conducted in concert with other organisations and initiatives, including banking associations, existing Financial Intelligence Units, the Financial Action Task Force and its counterparts in Asia and the Caribbean, the Commonwealth Secretariat, the Organization of American States /CICAD, Interpol, World Customs Organisation, Council of Europe, World Bank and the United Nations Development Programme. � | ||
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