Editorial

Editorial

Article Type: Editorial From: Journal of Money Laundering Control, Volume 18, Issue 4

The entrepreneurship of Internet technology has given birth to a lush domain that attracts, cultivates and enhances multiple forms, shapes and sizes of deviant behavior and illicit activities. Funding of the deviants comes from the sale of drugs; the sale of arms; the trafficking of human beings, body parts and animals; and the training of terrorists.

The delicatessen in Paris, the upscale mall in Nairobi, the train station in China, the twin towers in New York City, the underground in London – the terrorists and their utilization of intimidation recognize no borders, no statutes and no international agreements. There is no accepted golden rule.

There are no name tags and no official playbook and the lack of and no publicized schedule. The lack of an accurately described perpetrator and a schedule of coming events has endowed the terrorist with phantom-like characteristics that make both the offense and the defense against the terrorist and his/her activities exceedingly difficult. The terrorist is able to make a profound and incredible mark and destabilization both on and in the global economy and the world of psychology.

To carry out their terrorist activities, the organizers need funds, extensive funds. There is no significant effort to contain and limit the potential funds. The funds are ultimately connected with financial institutions, with banks, hawala and other underground exchanges. There is extensive money laundering.

The recent Paris Massacre demonstrates the perpetrators' movement of money within the global financial system. The massacre aroused international anger and at least temporary unified combat efforts.

The transactions are often transnational; conflicts of jurisdiction occur; international cooperation and aggressive offensive efforts are necessary. The keyboard becomes the devious.

The answer may be found not with fines which are the equivalent of a parking ticket, but in laws similar to the USA Patriot Act, Title II and Title III.

On June 2, 2015, the US President signed into law, legislation intended to reaffirm limited expectations of privacy lost under Title II of the USA Patriot Act. Whether limited privacy expectation will be a reality, only time, terrorism and the federal courts will tell.

Consider, for example, USA v. Union Bank (Jordan), 487 F.3d 8 (1st Cir. 2007), (hereinafter: Union Bank). The USA 1st Circuit Court ruled that the government could seize assets from any foreign bank that has a correspondent account (interbank account) with a bank in the USA, provided that the funds are deemed to be profits of criminal activity. The government of the USA seized in rem over $12 million from an interbank account held by the Jordanian Union Bank, as the funds corresponded to, but were not the actual proceeds of, a Canadian telemarketing fraud whose victims included US citizens. Although the bank claimed that it owned the forfeited funds and would also need to reimburse its customers for their loss, the Court ruled that the depositors, not the bank, were in fact owners. Further, as the bank had not yet fulfilled all its obligations to the depositors, the illicit money was deemed to be held by the bank. In consequence, the bank was required to forfeit $2.8 million to the USA from its own assets.

The Court ruled that Title III, Section 319(a) extended the jurisdiction of the USA to reach extraterritorial effects. 319(a) established an effective anti-money laundering program if a foreign bank conducts business with the USA.

The USA, France, the UK, Canada, China and many other countries are diligently involved in the fight against illicit money and economic destabilization. A stumbling block in the fight is the lack of “political will”. The lack of political will results from the lack of funds to support efficient law enforcement agencies and intelligence. In some instances, the political will competes with corruption and bribery. There is a barrier created by the conflict of jurisdiction and the ability of the launderers to disguise organized crime and terrorism organizations.

The creation of fear and terror of the unknown, the unexpected, unnerves the communities and initiates distrust. The social media provides a means by which the perpetrators can readily defy the common values of the international society. Searches are initiated to discover individuals and groups who can be blamed.

There are major vulnerabilities in many governmental, financial and judicial systems. Organized crime and terrorist organizations exploit these fragilities in their favor. The technology facilitates fragmentation and disorganization. The deviants are able to diminish the effectiveness and harmony of societies.

A strong determined international offense and response is vital.

Fletcher Baldwin - University of Florida, Gainesville, Florida, USA

Further reading

Anne Pogue, C. (2005), “If it weren’t for the flip-side – can the USA patriot act help the US pursue drug dealers and terrorists overseas without overstepping constitutional boundaries at home?”, Cornell Journal of Law & Public Policy, Vol. 14 No. 3, pp. 493-495.

Baldwin, F. and DiPerna, T. (2007), “The rule of law: an essential component of the financial war against organized crime and terrorism in the Americas”, Journal of Financial Crime, Vol. 14 No. 4, pp. 405-437.

Stop Funding Terrorism Act (2014: 113 Congress HR 5433).