Who is Going to Do the Dirty Work against the Laundering of Proceeds of Corruption?
| DOI | https://doi.org/10.1108/eb026028 |
| Pages | 297-299 |
| Date | 01 April 2002 |
| Published date | 01 April 2002 |
| Author | Michael C.SC Blanchflower |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 9 No. 4
ANALYSIS
Who is Going to Do the Dirty Work against the
Laundering of Proceeds of Corruption?
Michael C. Blanchflower, SC
If the central topic of this symposium had been
corruption, then speakers would give estimates of
worldwide corruption — both public and private.
The figures would be in the hundreds of millions of
dollars. They would talk about past corruption and
plundering by Abacha, Marcos and Suharto and
present corruption carried on by leaders of some
countries.
The question which never seems to be asked is:
where did or do the proceeds of corruption go?
And, what can or has been done to recover it?
The problem has not gone unnoticed. In the UK
the Society for Advanced Legal Studies studied the
problem, as it applied to the UK, and produced the
comprehensive report 'Banking on Corruption.
The Legal Responsibilities of Those Who Handle
the Proceeds of Corruption', reported in the
Autumn 2000 issue of the Journal of Money Laundering
Control. The foreword, by the Secretary of State for
International Development, states, 'I welcome the
initiative taken by the Society for Advanced Legal
Studies to study this further. I hope this will lead to
a wide discussion about the contribution the financial
and legal professions can make to reducing the
scope for corruption.' Not a whisper about intended
government action.
The problem has been noticed by the United
Nations. Resolution No. 54/205, adopted by the
General Assembly on 27th January, 2000, and entitled
'Prevention of corrupt practices and illegal transfer of
funds':
(1) Condemns corruption, bribery, money laundering
and the illegal transfer of funds;
(2) Calls for further international and national
measures to combat corrupt practices and
bribery in international transactions and for
international cooperation in support of these
measures;
(3) Also calls for, while recognising the importance
of national measures, increased international
cooperation, inter alia, through the United
Nations system, in devising ways and means of
preventing and addressing illegal transfers, as
well as in repatriating illegally transferred funds
to their countries of origin, and calls upon all
countries and entities concerned to cooperate in
this regard;
(4) Requests the international community to support
the efforts of all countries aimed at strengthening
institutional capacity for preventing corruption,
bribery, money laundering and the illegal
transfer of funds;
(5) Decides to keep this matter under review, and in
this regard requests the Secretary-General, in
consultation with member states and relevant
bodies of the United Nations system, to include
in the report called for in its Resolution 53/176,
to be submitted at its 55th session, information
on progress in the implementation of the present
resolution and recommendations, inter alia, with
regard to repatriating illegally transferred funds
to their countries of origin.
Corruption is no different from other crimes that
generate financial gain. Evidence and anecdotal infor-
mation confirm that proceeds of corruption are
laundered in the country where the corruption
takes place ('country A'), and more often transferred
to an overseas country ('country B'). Where corrup-
tion is practised by government leaders and officials
there is a greater motivation to launder the proceeds
overseas in order to hide their corrupt activities.
Persons benefiting from the corruption are reluc-
tant to leave their proceeds in country A because of
the risk that if there is a change in government
their proceeds are at risk of forfeiture. It is safer to
have the proceeds in countries with efficient and
sound banking systems, and where there are legal
and accounting services which can carry out instruc-
tions and assist in preventing the proceeds being
discovered or recovered. Consequently, proceeds of
Journal of Financial Crime
Vol. 9.
No.
4,
2002,
pp.
297-299
© Henry Stewart Publications
ISSN 1359-0790
Page 297
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