Proceeds of crime – a bridge too far?

Citation

Rider, B. (2016), "Proceeds of crime – a bridge too far?", Journal of Money Laundering Control, Vol. 19 No. 1. https://doi.org/10.1108/JMLC-11-2015-0048

Proceeds of crime – a bridge too far?

Article Type: Editorial From: Journal of Money Laundering Control, Volume 19, Issue 1

The 33rd Cambridge International Symposium on Economic Crime took place, as usual, at Jesus College, Cambridge, during the second week of September. As in previous years, the symposium addressed a great variety of issues relevant to promoting and protecting integrity. However, the focus of this year’s programme was on the role and efficacy of compliance in supporting the law. Some 600 speakers and over 1,200 participants from 90 or so countries explored many aspects of compliance and in particular its relevance in fighting money laundering and the identification of illicit funds. Of course, the symposium over the last 33 years has played a not insignificant role in fostering the development of law and compliance in the interdiction of the proceeds of crime and wider criminal property. Indeed, perhaps this has been the annual symposium’s most significant achievement.

Consequently, it came as a surprise to at least some of those attending that so many experts doubted the efficacy of this strategy and raised concerns regarding the cost benefit. Of course, it has long been recognised that the various legal mechanisms that have been developed to seize and confiscate criminal property, other than in relatively simple circumstances, have not been as effective as many had hoped. In most jurisdictions, the amounts of money taken away from criminals, let alone terrorists, through the operation of proceedings of crime laws, have been derisory. Having said this, there are those who would rather seek to justify the significance that this strategy has attained on the basis not of final court orders, but the disruption to criminal financial pipelines that the law and in particular compliance has facilitated. The regime that supports anti-money laundering laws is designed, it is argued, primarily to provide intelligence and not evidence that can be used in judicial proceedings. The overarching approach today in dealing with organised crime and, indeed, many forms of crime that are economically motivated or dependant on financial support, and it is not the traditional one of detection, investigation and prosecution, but intervention leading to disruption of the enterprise. The problem with this approach, which has much to commend it and is perhaps an inevitability, is that the efficiency of disruption and the accountability of those engaged in such activity is not easily measured. This is all the more an issue when the seemingly disproportionate penalties that have been, with some regularity, imposed on our leading financial institutions for failures of compliance are brought into the balance.

It was not those in the frontline, namely those responsible for compliance that doubted the efficiency and effect of strategies based on the identification and interdiction of criminal property. Indeed, the main concern was voiced by those in law enforcement and by those concerned with policy in governments. Thinking beyond the provable nexus between criminal activity and its property, there was an increasing interest in the use of legal mechanisms that focused on unaccounted wealth and the ability to raise tax and related liabilities in relation to unexplained wealth. There was also great interest in the development of devices that can better identify and attribute beneficial ownership and control over assets. The implications in terms of traditional property-related rights, while recognised, were seen as secondary to enhancing the efficacy of laws designed to deprive criminals and corrupt officials of their ill-gotten gains and better disrupt the pipeline of questionable funds.

Another issue that came to the fore was the desirability of fixing institutions with liability in a more convincing manner than the regulatory contrivances that have been employed in regard to the financial institutions. The strict criminal liability of corporations under Section 7 of the Bribery Act 2010 in regard to bribery of foreign officials anywhere in the world for the benefit of companies operating in the UK was thought to be a sound model, albeit the authorities have found it in practice difficult to utilise. Many called for the issue of vicarious liability to be revisited. Generally speaking, criminal law, unlike the civil law, does not accept vicarious criminal liability. The rules relating to attribution of knowledge and intention are also inarticulate and uncertain. There is also seemingly – a reluctance on the part of prosecutors in the UK to build upon cases where the courts have accepted the merger of the individual, who acts in the course of a business, with his employer. Alongside the desirability of fixing proper criminal responsibility on companies, there was also concern to properly identify and impose personal liability on those who in management oversee and encourage criminal activity. However, the issue here is the extent to which the law is prepared to impose an obligation to supervise and take affirmative action to prevent criminal activity by others.

Of course, during the week in some 20 plenary sessions and 50 workshops, there were a host of other issues discussed and explored. As in previous years, the regret of the organisers was that relatively very few participated from the British academy. The interest in such issues, despite their practical and intellectual significance, within the UK appears to be less today than it has been in the past. Given what happened to the reputation and standing of the City, this, at least to the mind of the present commentator, is inexplicable.

Barry Rider - Centre for Development Studies, University of Cambridge, Cambridge, UK