Towards a Clean World
| Published date | 01 April 2002 |
| Pages | 279-286 |
| Date | 01 April 2002 |
| DOI | https://doi.org/10.1108/eb027308 |
| Author | Andrew Edwards |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 5 No. 4
Towards a Clean World
Andrew Edwards
INTRODUCTION
In all its many manifestations, economic crime
remains a threat to civilisation.
As the appalling events of 11th September have
reminded us, it is not the only threat. Nor the most
obvious. But a serious threat it surely is. And a
threat that is here to stay. Combating economic
crime will be a continuing task for public authorities
everywhere.
The experience of the CIS countries, in particular,
is a constant reminder of the misery that results when
national authorities cannot or do not contain the
threat effectively.
In many countries, the authorities have contained
the threat. But none of us is as successful as we
should be. Recoveries of the proceeds of crime are
generally minuscule.
Within the spectrum of economic crimes, tax
evasion has a special importance in terms of scale of
proceeds and number of persons involved. And tax
evasion, money laundering and economic crime of
all kinds are symbiotically linked in a social ecology
which is shamefully prevalent.
It makes good sense, therefore, to look at these
subjects together and to consider in particular:
— what progress the world has
made
so far in tackling
them
— what problems remain, and
— what the world needs to do next.
PROGRESS SO FAR
Without doubt, the world has made much progress
in these areas in recent years. The big ideas have
included:
— international standards in areas such as financial
regulation and combating money laundering
— international cooperation based on such standards
— external assessments of individual countries
— transparency, coupled with respect for human
rights and privacy
— suspicion reporting
— cooperation between national tax authorities
— cooperation with offshore centres.
Taking these in turn, the major countries, and others
too,
now cooperate extensively in the regulation of
financial institutions with the help of the familiar
Basel Committee, IOSCO and IAIS Standards.
Many countries now cooperate in combating money
laundering. The FATF has successfully promulgated
what is in effect a world standard, the Forty Recom-
mendations, with an emphasis on cooperation,
transparency and suspicion reporting.
The major countries now have a framework for
cooperation with offshore centres, based on assessment
against international standards by IMF teams.
And national tax authorities have at least begun to
cooperate, mainly through the OECD, on the collec-
tion and allocation of tax revenues.
In the course of these initiatives, the international
community has made two significant discoveries:
— first, that international standards, suitably
expressed, are a vital instrument for progress;
— secondly, that there are ways to enforce them, or
make them effective, based on the desire of
most countries to appear respectable.
PROBLEMS STILL TO BE SOLVED
In spite of the progress, there are many unsolved
problems. These can be summarised under five
main headings, nearly all involving tax in some way.
Inadequate cooperation between
national authorities
In most countries, cooperation between national
authorities leaves much to be desired. Tax and
customs authorities, police, financial regulators,
company, trust and property registries: all of these
typically continue to do their own things in separate
compartments.
Tax authorities in particular operate as a race apart.
They are not properly wired into the wider business of
combating crime:
— first, they have no
obligation
to volunteer information
to the police or other authorities. Unlike banks,
tax officials are not required to file suspicion
reports. Neither are company or property
Journal of Money Laundering Control
Vol 5, No
4,
2002,
pp.
279-286
© Henry Stewart Publications
ISSN 1368-5201
Page 279
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