Hennie Verbeek-Kusters, outgoing Chair of the Egmont Group, a collective of 164 financial intelligence units (“FIUs”), and her successor Mariano Federici have expressed concerns regarding the efficacy of cross-border investigations that are suffering as a result of uncooperative jurisdictions and an unsatisfactory mutual legal assistance framework.
Ms Verbeek-Kusters told the Cambridge International Symposium on Economic crime held at Jesus College Cambridge, on Monday 2 September: “as long as we don’t succeed in really changing the mutual legal assistance system that is now actually creating safe havens for criminal money, in essence we really won’t make a change.”
The symposium heard that while there has been a global increase in the number of suspicious activity reports (“SARs”) being filed, investigations are being hampered in cases where potentially valuable reports require mutual legal assistance from jurisdictions which prove either uncooperative or inefficient.
The Egmont group facilitates the sharing of information between FIUs through their secure network. However, information shared between FIUs is for intelligence purposes only, not for use in evidence, so in many cases law enforcement agencies need to use mutual legal assistance to progress their investigations.
Investigative processes can be marred by bureaucratic delays and political considerations at the highest levels. The symposium heard of instances in some jurisdictions of deliberate frustration of requests originating overseas.
Mr Federici, highlighted the difficulty in keeping pace with evolving forms of cross-jurisdictional offending: “We need to look at the entire mutual legal assistance framework designed for a different world, and regain the advantage the state should have over crime.”
Other concerns discussed include new payment technologies, cryptocurrencies and the challenges of effective confiscation in cases involving the transfer of money and assets overseas: “Statistics say less than 3 percent of proceeds of crime are being recovered at a global level. This is a dire outcome, and we need to understand what is preventing us from being effective, so as to adopt the necessary reforms that will help us overcome these challenges” said Mr Federici.
Both Ms Verbeek-Kusters and Mr Federici emphasised the importance of cooperative relationships between banks, other regulated business and the financial intelligence units, which in their experience has proved positive. Ms Verbeek-Kusters said it was impossible for law enforcement to tackle this problem alone and it was important to look at widening the scope of cooperation to other institutions, for example tax authorities, that have the potential to disrupt financial structures.