ECONOMY

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27 February 2007
Asset Forfeiture Effective Way To Fight International Crime

By Eric Green, USINFO Staff Writer

Washington -- Asset forfeiture and sharing is an effective way to combat money laundering and terrorist financing, say U.S. officials.

The most important goal is “to take the criminal proceeds away from the criminals,” U.S. Department of Justice official Lester Joseph said.

Under asset forfeiture, governments confiscate assets from money laundering and other crimes. The United States is sharing the proceeds from this process with other nations, the Justice Department told USINFO February 20. From 1989 through January 2007, it transferred, with the concurrence of the State Department, more than $228 million to 35 countries that helped the United States in asset forfeiture cases.

"Asset sharing enhances international forfeiture cooperation by creating an incentive for countries to work together, regardless of where the assets are located or which jurisdiction will ultimately enforce the forfeiture order,” Joseph said.

A joint publication by the World Bank and the International Monetary Fund (IMF) defines money laundering as the disguising of money derived from illegal sources or activities, including narcotics trafficking and terrorism. In contrast, terrorist financing involves the provision of financial support to terrorists or pro-terrorist groups, and funding for terrorism may originate from legitimate sources. Money laundering and terrorist financing often display similar features, mostly having to do with concealment and disguise.

“International efforts against money laundering grew stronger and more effective in 2005,” according to the State Department’s 2006 International Narcotics Control Strategy Report. More countries -- 17 in all -– officially announced anti-money laundering and counterterrorist financing laws for the first time in 2005, the time period covered in the report.  The State Department’s 2007 report is due in early March.

Dennis Lormel, the former chief of the anti-terrorism financing unit at the FBI, told USINFO February 22 that international cooperation against money laundering and terrorist financing is extremely important but also challenging because of the differences in legal and financial systems around the world.

One particular problem, he said, is in defining “terrorism.”  Reaching a global consensus on what the term means can be very difficult, said Lormel, who now is senior vice president on anti-money laundering for a Reston, Virginia, firm called Corporate Risk International.

BENEFITS OF REGIONAL COOPERATION

U.S. Treasury Department official Patrick O’Brien said February 12 at a conference in Miami on money laundering that the “collective efforts” of the U.S. government with its international partners to identify and combat illicit finance have seen “impressive results all over the world.”

For example, O’Brien said U.S. and Colombian law enforcement agencies working together dismantled a drug trafficking empire led by two brothers, Gilberto and Miguel Rodríguez Orejuela, who once controlled an estimated 80 percent of Colombian cocaine exports to the United States.

The brothers pleaded guilty in November 2006 to their crimes, were sentenced to 30 years in prison and ordered to forfeit $2.1 billion in assets made from their narcotics trafficking, said O’Brien, who is Treasury’s assistant secretary for terrorist financing.

O’Brien told the conference, sponsored by the Florida International Bankers Association (FIBA), that the successful dismantling of that drug ring was a “clear example of the ... benefits that result from strong regional cooperation.” (See related article.)

To that end, he announced that a U.S.-Latin America Private Sector Dialogue will be held April 18-20 in Cartagena, Colombia.  The event will bring together representatives of the U.S. and Latin American financial sectors to discuss issues related to measures against money laundering and terrorist financing.

In addition, another conference on money laundering is scheduled for March 15-17 in Hollywood, Florida, sponsored by the Miami-based Alert Global Media.

Treasury official William Baity, acting director of the agency’s Financial Crimes Enforcement Network (FinCEN), said financial institutions around the world “want to do their part in protecting their markets and their countries.”  But he added that these institutions need to know that the information they provide about suspicious financial activity “is not going into a black hole.”

The Egmont Group of Financial Intelligence Units, he said, provides a center for information exchange on such suspicious activity. The group encompasses the United States and 100 other countries and jurisdictions.

Lormel, the former FBI official, said the Egmont Group can play an especially vital role if the countries’ various financial intelligence units can reach a consensus on the “really critical” issue of information sharing.  Sharing the “lessons learned” in cases involving suspicious financial activities, he said, will have a “tremendous impact on our ability to deal with” the problems of terrorist financing and money laundering.

The World Bank/IMF Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism is on the World Bank Web site.

For additional information on U.S. policies, see Terrorist Financing and the electronic journals The Fight Against Money Laundering, and The Global War on Terrorist Finance.

More information about FinCEN is available on the Treasury Department Web site.

Additional information about the Egmont Group, the FIBA Conference and the Money Laundering Alert Conference is available on the organizations’ Web sites.

The full text of the International Narcotics Control Strategy Report for 2006 is available on the State Department Web site.

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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