Corruption in the Pacific: Targeted Strategies Needed
A recent survey by the National Integrity System highlights the importance of understanding traditional integrity systems and their potential to combat corruption in the region. According to experts, cultural practices are often used for corrupt purposes rather than being the cause of corruption.
The fight against corruption is a global effort that requires a comprehensive approach. The G20 member countries, United Nations Office on Drugs and Crime (UNODC), International Monetary Fund (IMF), World Bank, StAR, and FATF, along with regional bodies such as the Asia/Pacific Group (APG), recognize that the fight against corruption is essentially an effort to combat the generation, transfer, concealment, and laundering of the proceeds of corruption.
Anti-Money Laundering Frameworks Crucial
Corruption is driven by factors such as greed, power, and influence, with the underlying motivation being to profit from illegal activities. Anti-money laundering (AML) and criminal asset recovery frameworks are effective tools in combating corruption. A robust AML framework can unite a range of institutions under the shared umbrella of “avoiding FATF blacklisting”.
- Key elements of effective AML and criminal asset recovery laws include compliance with international standards and obligations, such as:
- United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988
- United Nations Convention Against Transnational Organized Crime 2000
- United Nations Convention against Corruption 2003
- Financial Action Task Force (FATF) Recommendations
Money Laundering: A Threat to Economic Growth
Money laundering is the process by which funds obtained illegally are made to appear legitimate. This allows criminals to profit from their illegal activities and fuel further criminal activity. Targeting money laundering can disrupt criminal activity, provide a significant deterrent, and assist countries in establishing a good reputation for financial stability and transparency.
- In the context of corruption, AML strategies support economic growth and investment in communities.
- Money laundering often takes place across national borders, highlighting the importance of international cooperation to tackle this issue.
Essential Features of Effective Anti-Money Laundering Systems
There are four core features essential for an effective anti-money laundering system:
- Money laundering offenses and a criminal asset confiscation/ proceeds of crime regime
- Enforceable obligations on financial institutions:
- Identify and verify customers
- Report suspicious matters
- Keep records
- Undertake AML risk assessments
- Maintain appropriate AML programs
- Authorities with powers to gather and analyze financial data, investigate, and prosecute money laundering
- Effective international crime cooperation mechanisms (including extradition and mutual legal assistance)
Comprehensive Asset Recovery Regimes
A comprehensive proceeds of crime regime is a key law enforcement tool that can deprive criminals of the proceeds and benefits gained from criminal conduct. This prevents the reinvestment of those proceeds into further criminal activity and provides a mechanism for the confiscated funds to be reinvested into the community.
- A comprehensive asset recovery regime includes five main features:
- Investigative powers to enable identification of assets
- Confiscation of assets without compensation
- Powers to freeze and seize assets
- Effective disposal of seized assets
- International cooperation mechanisms to facilitate asset recovery
The fight against corruption requires a comprehensive approach that includes targeted strategies, effective AML frameworks, and international cooperation. By understanding traditional integrity systems and their potential to combat corruption, we can work towards creating a more transparent and stable financial system.