Director General/Executive Director
Vladivostok, 3 July 2013
Excellencies, Ladies and Gentlemen
Money laundering and illicit financial flows are global problems of an astounding scale.
According to research by UNODC, these flows amounted to 1.6 trillion US dollars in 2009.
That is 2.7% of the global GDP.
Money laundering makes crime possible and profitable. It is critical to the operation of virtually every form of transnational and organized crime.
Let us take, for example, a recent case in the headlines. Liberty Reserve is an online cash transfer business. It has been accused of laundering 6 billion US dollars over seven years of operation.
The case is ongoing, and I do not wish to comment on the particulars. But it is striking to note the range of illicit activities that the US prosecutors say were supported by this digital financial infrastructure.
Drug trafficking. Child pornography. Cybercrime. Credit card theft. Investment fraud.
Such crimes exploit our globalized economy. Money laundering enables the criminals to bring the proceeds out into the open.
By layering illicit funds through complex mechanisms, criminals can disguise their origins, enabling them to openly enjoy the benefits of their ill-gotten assets.
These funds can then be used to finance terrorist activities and to commit further acts of crime.
Such acts can fuel conflicts and instability, and are a hindrance to development. They impact on a country's good governance, and hurt the reputations of financial systems.
Understanding the scale and nature of these illicit financial flows is therefore critical to shutting down organized crime groups and traffickers.
However, this is no easy task. Money laundering often involves a series of multiple, complex transactions. Criminals use sophisticated means, online and offline, to hide their tracks.
Effective legislation on anti-money laundering and countering the financing of terrorism is needed. That way the integrity of financial institutions can be protected, illicit financial flows can be investigated, and the criminals prosecuted and permanently deprived of the proceeds of their crimes.
Anti-money laundering is a key component of UNODC's mandate under the UN conventions on drugs, organized crime, corruption and the financing of terrorism.
The UN General Assembly, in several resolutions, has specifically tasked UNODC with delivering technical assistance in this area to Member States. This assistance is aimed at strengthening capacity to combat money laundering and the financing of terrorism in accordance with UN instruments and international standards.
This includes support for the development of effective and comprehensive national legal and regulatory frameworks. It also includes support for the institutions and practitioners needed to implement them.
In this regard, UNODC works with law enforcement agencies, Financial Intelligence Units and prosecutors.
Specific training courses and capacity building are offered through UNODC's Vienna headquarters and UNODC field offices around the world. Initiatives focus, for example, on cash couriers and financial analysis for Financial Intelligence Units, as well as financial investigations and prosecution techniques.
Through this comprehensive approach, UNODC is helping to support national systems that can detect, seize and confiscate illicit proceeds.
We also work to promote coordination between these systems regionally and internationally. We must ensure that there are no weak points or gaps that can be exploited by criminals.
The nexus of drugs, crime, corruption and terrorism is complex and insidious. It affects every country and every economy.
There is therefore a clear need to strengthen international cooperation to combat money laundering if we are to address these threats.