Home » CND Thematic Discussions // Session 4 – Low value of confiscated proceeds of crime related to money laundering arising from drug trafficking

CND Thematic Discussions // Session 4 – Low value of confiscated proceeds of crime related to money laundering arising from drug trafficking

Chair: Welcome back to the afternoon session. The challenge that we will be focusing on this afternoon is the value of confiscated proceeds of crime related to money laundering facing from drug trafficking at the global level, remains flow. We have with us our UNODC colleagues of the cybercrime anti-money laundering section.

Cybercrime and Money Laundering Section, UNODC: Thank you for giving me the floor and for this opportunity to kick-start the discussion today on the challenge of recovering proceeds of crime related to drug trafficking. So good afternoon, everybody. I will comment on this topic from the research, and I will try without taking too much time to give a very brief overview of some findings and progress in the measurement of several areas related to this topic, in particular, highlighting illicit financial flows in addition to asset recovery. I think it’s worth starting with important facts about drug markets. The drug market value chain tends to be concentrated on the end of the supply chain. By that, I mean the price of drugs increases rapidly towards the end of the supply chain. For example, if we were to compare the amount of money spent by consumers to the amount of illicit income generated by traffickers, there is a significant difference. The point is that it makes a difference if we’re looking at the return value of the market or the value of the market. For example, if we look at Afghanistan, the value would be significantly lower than the top billion. So it really makes a big difference where we’re looking. Now, not all the money generated by traffickers is actually profit because they have their operating expenses. And we need to take that into account if we’re looking at their profits. This brings me also to the topic of illicit financial flows. Illicit financial flows are a complex topic, which has come to the fore recently. It’s mainly about illegal activities but also touches on illicit activities. This work of conceptualization started around 2017, and by 2022, it was approved by the statistical commission. Currently, this foundation defines financial flows that are illicit, oriented, transparent, or used. It’s important to keep in mind that it talks about any kind of transfer of value, not only financial instruments but also other assets transferred between individuals. Another important concept is the difference between illicit financial flows and illicit financial outflows. In the case of production countries like Afghanistan and Colombia, we have illicit financial inflows which are much higher than the outflows, because they are exporting drugs. In consumption countries, we have high outflows due to importation of drugs. In transit countries, we still expect inflows to be larger than outflows. Following this work, we have engaged with countries on an extensive metric to beef up the ability of countries to come up with their own estimates of illicit financial flows. Estimating these flows is not a simple exercise; it requires data collection and expertise. By the end of 2022, we had conducted this exercise in 22 countries. This data is also feeding the SDG indicators. We also collect data on financial flows and asset recovery through the Annual Report questionnaire. The ongoing data collection for 2022 shows that cash and the banking system are popular methods for laundering illicit income. Cryptocurrencies and real estate are also high on the list. The majority of countries report that a significant proportion of income goes abroad, indicating international nature of illicit financial flows. The reporting on the value of assets frozen or confiscated is still rather low. Based on previous data collection, we estimated an average of 12.8 million US dollars per country in terms of the total value of assets frozen or confiscated during a given year. However, this is only based on reporting countries. For the next cycle, we hope to have a better evidence base. In conclusion, we need more and better data. Recording assets by predicate offense and type of assets, and expanding the information collected in the Annual Report questionnaire could be useful for countering financial flows and money laundering.

Chief of the Cybercrime and Anti-Money Laundering Section, UNODC: Thank you, Chair, for this opportunity to address this forum. Despite international commitments to identify, trace, freeze, seize, and confiscate proceeds of crime, estimates suggest that we confiscate less than 1% of the proceeds of crime globally in relation to drug trafficking. There’s a need to break the business model of organized crime and remove the financial motivation. Financial investigations face challenges, and ignoring these challenges ensures the growth of the organized crime business model. We need a strong and effective anti-money laundering framework within member states. Prioritizing asset confiscation is crucial. Currently, financial investigation resources lag behind those applied to drug investigation units. We need parallel financial investigations conducted alongside drug investigations. Effective management of frozen assets and efficient information exchange are essential. Additionally, international cooperation and interagency networks play a significant role in asset recovery. In conclusion, we need to enhance the skills of financial investigation and prosecution, strengthen interagency networks, address challenges posed by cryptocurrencies, and prioritize targeting assets. Strong anti-money laundering frameworks are crucial building blocks for these investigations.

Chair: Thank you. Any questions?

European Union: Thank you for these insights. You had a lot of recommendations and what can be done. On the whole, I’m wondering – because in the past, we’ve spent a lot of time and effort on improving the legislative frameworks, but also I think the review mechanism or the Convention against Corruption, and they’ll be dealing with review mechanisms. So a lot has been done. Would you say that is unbalanced? What is the biggest obstacle – the insufficient legislative and regulatory framework? Or is it rather lack of …well… you said it’s an afterthought? Is that the predominant obstacle? And if so, why? Because it’s a bit counterintuitive. And we’re speaking about big sums of money. It should be obvious to go after these illicit flows but apparently that’s not happening. So which of the two I think is still the biggest the bigger obstacle and why is that?

UNODC: We believe a lot of work has been done to strengthen anti-money laundering frameworks and legislative frameworks in various jurisdictions worldwide. We are in a strong state in that regard. However, the challenge lies in the prioritization of these efforts. Unlike drug seizures, where finding drugs means finding the disease, the situation is far more complex when it comes to assets. Illicit assets are held in different jurisdictions, obfuscated, and disguised in various ways, often within jurisdictions with secrecy provisions. Global efforts are underway to address this issue, but the key is to connect and collaborate with these jurisdictions. The difficulty arises from the intricate nature of this work. There are no easy wins in combating money laundering associated with drug trafficking. Unlike those directly involved in drug trafficking, the individuals with control over the assets are often distant from the frontline actions. They purposefully keep their involvement far removed from the actual activities. Creating a connection between these layers is challenging and often elusive.

United Kingdom: We aim to make the UK the most challenging place for money laundering and eliminate the profitability of the drug market. To achieve this, we need to enhance our understanding of the best methods to restrict organized crime groups’ ability to launder their ill-gotten gains and increase the confiscation of cash and assets. The proceeds from the drug trade constitute a significant portion of criminal funds circulating in the United Kingdom. The National Economic Crime Center’s project is designed to make it more difficult for criminals in the UK to launder their crime proceeds by introducing obstacles and increasing the cost of the laundering process. This initiative involves collaboration across government agencies, law enforcement, and financial institutions. Its objectives include making money laundering tougher for criminals, discouraging the use of criminal proceeds, especially from the illegal drug trade. Additionally, we are enhancing the capabilities and capacities of the National Crime Agency and the police, ensuring they have the necessary data, technology, and investigative tools to target both domestic and international criminals. We have intensified our efforts against the supply of the most harmful drugs, primarily focusing on Class A drugs. This approach involves tackling all stages of the supply chain, including pursuing the money trail to disrupt drug gang operations and seize illicit cash. We are utilizing our investment in 20,000 more police officers to expand regional organized crime units across the country. This expansion enables these units to crack down on those facilitating drug supply, including individuals involved in illicit firearms and money laundering. Moreover, we have significantly increased our efforts to confiscate criminal assets, seizing cash, cryptocurrencies, and other assets from individuals engaged in drug-related crimes, drug trafficking, and distribution.

European Union: Mr. Chair, as we have heard, organized crime is profit-driven. It enables the funding of further criminal activities and the infiltration of the legal economy and public institutions. Serious organized crime in the EU relies on laundering vast amounts of criminal profits, often with the help of professional money launderers who operate through parallel financial systems isolated from any oversight mechanism. Sophisticated criminal networks engage in these activities using cash, informal value transfer systems, and innovative tools such as crypto assets. Therefore, the most effective way to combat organized crime, including drug trafficking, is to target the criminals’ money, especially through asset recovery measures. However, the rate of confiscating criminal assets remains disproportionately small, even in the European Union, accounting for less than 2% of the proceeds of organized crime. Consequently, one of the strategic priorities outlined in the EU drug strategy is to track, trace, freeze, and confiscate the proceeds and instruments used by organized crime groups involved in the illicit drug market. One approach to achieve this is the harmonization of rules across Europe related to money laundering. This includes promoting the investigation and prosecution of money laundering offenses, potentially through the introduction of standalone money laundering offenses, to encourage the exchange of best practices and the systematic application of asset recovery measures. To enhance our effectiveness in addressing this challenge, we are strengthening the asset recovery framework. Firstly, by ensuring the systematic initiation of financial investigations and empowering competent authorities with the necessary powers and information to trace and swiftly freeze criminal assets. Secondly, by ensuring the efficient management of frozen assets to prevent them from losing value during criminal proceedings. Thirdly, by broadening confiscation possibilities, including the confiscation of unexplained wealth linked to criminal activities. Furthermore, following the effective confiscation of assets, careful consideration should be given to the safe and secure reuse of confiscated property, supporting not only supply reduction but also demand reduction efforts. It is important to note that money laundering knows no borders within the EU. To prevent criminals from finding safe havens, it is crucial for all countries to enhance regulation against money laundering and criminal finances. International cooperation with specialized authorities to obtain financial information on the activities and assets of criminal groups is also essential. In conclusion, I would like to emphasize that cooperation through effective multilateralism remains the best way to address the global challenges of today and tomorrow. The EU and its member states will continue to contribute to our collective efforts at national, regional, and international levels to confront the challenges posed by global criminal networks.

Australia: The rapid and intricate nature of international financial transactions hampers efforts to trace funds associated with drug trafficking and money laundering. Successful mitigation requires in-depth cooperation with both the private sector and global allies. Australia has a robust anti-money laundering and counterterrorism framework that aims to reduce the vulnerability of Australian businesses to illicit financial flows. However, the lack of reporting obligations among professional groups like lawyers and real estate agents offers organized crime various pathways to conceal assets. Australia is progressing major reforms to its anti-money laundering and counterterrorism framework to ensure that the country’s laws meet international standards and keep pace with the evolving threat environment. These reforms are intended to be finalized by 2025 in advance of Australia’s mutual evaluation. Like many countries, our process for confiscation of assets and funds obtained by criminal activity, including drug trafficking, is contained in relevant domestic legislation. Once proceeds of crime or other controlled property have been confiscated, pursuant to the Proceeds of Crime Act, the official trustee disposes of the proceeds or the property to the Commonwealth Confiscated Assets Account. The regime includes both conviction-based and non-conviction-based asset confiscation measures. These funds are then reinvested into programs that aim to prevent crime, promote law enforcement, reduce the illegal use of drugs, and treat drug addiction. A recent example of Australia’s productive use of its Confiscated Assets Account to benefit the community, is the first phase of a project to build capacity for the safe handling and disposal of illicit drugs and precursors in Cambodia, in our region.  Other Australian Federal Police projects have also received funding that contributes to law enforcement efforts under the national drug strategy, including over 3.8 million targeting transnational series and organized crime groups’ involvement in the illicit drug trade. Another program where confiscated assets have been put to good use is the national public campaign managed by an independent civil society organization. This campaign encourages the Australian public to report information to disrupt the manufacturing, dealing, and trafficking of illicit drugs. The reports can be made anonymously and are then provided to relevant police authorities. These public campaigns have shown significant results; in 2020 alone, the mentioned campaign generated over 430,000 tips, leading to 6,600 arrests and 18,600 charges. Regarding COVID impacts in Australia, the pandemic had little impact on how criminal organizations operated and how they concealed their assets. The most significant impact occurred at an administrative level, with some processes and matters being slowed down due to restrictions, which impacted the execution of restraint and forfeiture measures by both the police forces.

Mexico: Mexico acknowledges the challenges associated with tracing and confiscating proceeds of drug trafficking. International cooperation is essential in addressing the intricate nature of international financial transactions. Strengthening anti-money laundering frameworks, promoting information exchange, and enhancing interagency networks are vital steps in combating organized crime and drug trafficking.

Russia: Trafficking, a criminal enterprise mirroring legitimate businesses, involves commodities, transportation, logistics, and financial infrastructures. Globally, drug trafficking yields a staggering $500 million, funneling this money into the banking system, making it a significant beneficiary. The legislation around this issue has become a global concern, impacting economic security and reshaping the landscape of international drug trade through E-commerce development. In the modern world, records related to drug trafficking reveal a grim social reality, with civil rights members of criminal communities operating anonymously through encrypted communication. Approximately 1% of total revenue, a significant portion generated by transnational organized crime, infiltrates the global financial system. Addressing this challenge necessitates collective responsibility and international cooperation. Criminals continually innovate to conceal illegal activities, particularly in financial aspects. With advancements in technology, alternative methods like cryptocurrencies, utilizing blockchain for anonymity, have gained popularity. Although cryptocurrencies aren’t legal in Russia, criminals convert them into fiat money through exchanges. Monitoring tools and analytical interfaces have been developed, aiding financial and criminal investigations. One example illustrates how criminal funds flow through cryptocurrency exchanges and online platforms. Criminals utilize third parties unaware of the illegal transactions, exchanging cryptocurrencies for fiat money. Payment methods have evolved, with financial rewards hidden in remote locations. The profits from illegal drug trafficking, now predominantly in cryptocurrencies, are converted and transferred through various electronic payment services, making their way to online store owners. Our micro analysis service enables in-depth scrutiny of cryptocurrency market participants, facilitating macro analysis for mutual settlements. This functionality verifies participants, preventing transactions with criminal sites. In financial investigations, trends indicate a rise in cryptocurrency use by criminal organizations, often involving cryptocurrency exchanges for money laundering. Noteworthy successes include uncovering bribery involving over 1000 bitcoins, the first case leading to cryptocurrency confiscation in Russia. The Supreme Court’s judgment classifying cryptocurrency exchange as money laundering marks a pivotal moment. In conclusion, the global nature of the drug trade underscores the need for robust cooperation. Together, we can combat crime and money laundering effectively. Thank you for your attention.

Kenya: In our country, we have implemented the Proceeds of Crime and Anti-Money Laundering Act, which mandates the recovery of proceeds from criminal activities. This law empowers us to seize assets, including those used in trafficking, through both civil and criminal forfeiture procedures. Under criminal forfeiture, individuals are required to disclose their assets, aiding us in disrupting and dismantling criminal networks. We prioritize information sharing, crucial in tackling these challenges. One major hurdle we face is the depreciation of assets over time, affecting their value during recovery. Additionally, the transnational nature of these crimes complicates recovery efforts, requiring international collaboration. We have observed the use of virtual assets and cryptocurrencies, especially in the dark web, posing challenges to tracking and protecting our financial intelligence efforts. Cash transactions further complicate matters, bypassing the formal financial system. Despite these challenges, collaborative efforts have proven valuable. We are part of regional networks, such as the one in Eastern Africa, which have significantly aided us in recovering proceeds from narcotic drug activities.

Thailand: (…)

Peru: As you know, the main objective of illicit drug trafficking organizations, as any illegal economy is a generation of profits distributed, distributed at the highest level of the structure of the criminal transnational organizations where the vulnerable population is increasingly more well. The main criminal actors get richer, for example, produce approximately 870 tons of cocaine in 2022, an equivalent in the domestic market to more than 1000 million dollars entering into the world economy. Let me briefly describe the situation of an area in Peru with the highest growth of poker cultivation, for illicit purposes in the period 2018-2022. With an impressive rate of 470 60-70% of royalty rate, going from 2565 hectares to 14,531 hectares of cultivation in a period of five years. With this region also has the greater presence of unauthorized airstrips with more than 120 airstrips, mostly located in natural protected areas. Land invasion and deforestation due to the expansion of illicit crop cultivation are the main drivers of deforestation in this area. Both activities are closely linked to organized crime dedicated to illicit drug trafficking, which plays an important role of financing and coordinating all stages of the criminal chain. A recent study of the UN ODC identified in the confluence of illicit drug trafficking with other crimes, mainly illegal logging, illegal mining diversion of chemical precursors used for cocaine, drug product production, money laundering, as well as human trafficking. In coca cultivation plots identified exceed eight hectares higher than the national average rate of 1.1. An investment that local farmers could hardly afford. We’re facing a new modality of organized crime and money laundering for drug trafficking. The Financial Intelligence Unit of Peru during the period of 2020 to 2023, reported suspicious transactions of numerous money transfers to Europe and Asia. Transactions that are not normal for a local economy such as in this context, the financial analysis and investigation of money laundering for from illicit drug trafficking. Consider a draft national perspective represents a critical issue demanding a coordinated and collaborative response among accounting, economic and financial entities of the Financial Intelligence Unit, prosecutors and anti-drug policies of member states to give an assertive fight against organized crime, environmental crimes, and money laundering contributing to or more effectively combat of money laundering proceeding from illicit drug trafficking, and its diversification to finance related activity, particularly the ones that directly have impact on the environment. Finally, researcher, the figure of loss of ownership for money laundering has proven to be an effective mechanism in drug money laundering investigations, considering it’s important to reallocate resources to improve the operational capabilities of state security lawyer and law enforcement enforcement forces. Thank you very much, Mr. Chair.

France: I work as an analyst at the French office, whenever it challenges in the fight against drug trafficking, there’s a seizure of assets. Financial institutions differ depending on the type of cash perpetually luxury goods or cryptocurrencies, the circulation of cash remains predominant in the practice. In 2022, the amount of assets seized by French authorities, worth 111 million euros. The seizure of cryptocurrencies represented 2.82% of criminal assets since France set up a dedicated office, the agency for the management and recovery of series. Complicated as this office was placed under the supervision of the Ministry of Justice and the ministry of public action icons. Their mission is to manage enhance and enforce the seizures and confiscation carried out by investigators and test responders. Reviews of a court has provided us an effective system for seizing and confiscated criminal assets, recorded scheduled assets have been reused for social purposes. For instance, buildings and houses belonging to traffickers have been seized and given to assertions to provide houses for individual means or to create a house for women, victims of violence. A recent act and trying this principle. This actions require the approval of Minister of Justice or the Ministry of Public items, and certain conditions must be met. In addition, if a buildings are occupied, it takes time to get the people who live there to leave. The one year periods between reception of a property and approval by the office both maybe exceeded. In April 2023, an exceptional auction brought together assets seized in cases relating exclusively to drug trafficking crimes. I have become a member of the steering group of the Camden Asset Recovery interagency Network, an informal worldwide network of product points set up in 2004 to increase the effectiveness of the confiscation of ASIC projects.

Speaker (TBA): […] I am referring of course to non-computer based communication as a key tool for asset recovery. And then our second button American country where I work with prosecution authorities have implemented laws and obtained important sessions in cases of data recovery related to drug trafficking, corruption, and other social plagues that certainly undermine states in the part of the world. Despite this, the tool is not widely used, and in most countries, it is applied only to a small number of crimes in a context of misinformation, and discourages political incentives to adopt this type of view. As a result, asset recovery represents only 1% of the estimated 350 billion in illicit flows per year in Latin America. Organized crime expires manifestation therefore remains profitable, profitable, despite the harshness of personal credit. Drug cartels are the most pernicious forms of crimes multiplied seriously affecting the stability of life in American society. Not conviction-based for discussion because of his versatility it has the potential to be a game changer. The experience of the last decade since the conception and implementation of these vital tools showing effect that it can be a powerful weapon against organized crime, while at the same time, it is possible to design and compete to base confiscation of those that respect fundamental rights and guarantees. It is a matter of promoting draconian laws or an exemption, but adopting laws that better capture and therefore offer more efficient solutions to economic reality or environment that can picture based participation low appropriately reduce the demands related to the standards of proof, which not only facilitate the work of law enforcement authorities, but perhaps the most important feature that not only conveys fervor to procedures and joy is the autonomy and dependent independence for criminal proceedings. That is the law for the recovery of facts in assets originating from serious crimes, even if the perpetrators are not criminally prosecuted. The vast circuit has given rise to a plethora of cases that have generated important jurisprudence international, which can be summarized for that conviction-based education has become a universal standard. And its well-conceived dynamics are perfectly compatible with international human rights. Therefore, the fact that it is not a globally recognized tool, and that there are no clear and binding standards in the national debate is two other factors that are not only to make the best decision we hope to see more countries adopting and effectively using such laws fairly with a human rights approach.

VNGOC / Global Initiative Against Transnational Organized Crime – John Collins: For over a century the international community has sought to shrink, degrade and weaken global illicit drug markets through coordinated international regulations and cooperation on policing, enforcement and counternarcotics and crime efforts. Alongside the 1961 Single Convention and the 1971 Convention, the 1988 Convention Against Illicit Traffic sought to redouble state efforts to tackle the underlying crime and proceeds of illicit drug markets. Indeed the 1988 Convention recognizes that that “illicit traffic generates large financial profits and wealth enabling transnational criminal organizations to penetrate, contaminate and corrupt the structures of government, legitimate commercial and financial business, and society at all its levels”.  However, alongside the many acknowledged failings of the “war on drugs” approach, including its disproportionate impact on vulnerable and marginalized communities, the limitations of efforts to collect and confiscate the proceeds of drug trafficking remains clear and in need of further focus. Continuing to prosecute relatively low-level offenders and people who use drugs, while allowing high levels of impunity for those profiting from the trade is a key issue which must be addressed. As the 2023 Global Organized Crime Index highlights: “We cannot let organized crime continue to grow between the cracks of our seemingly fractured world by taking advantage of gaps in governance, economic inequalities and political frictions.”  A recent FATF report highlighted that organized crime groups use a variety of methods to move illicit proceeds across borders, including bulk cash smuggling; trade-based money laundering; un-authorized money or value transfer services or the banking system; money brokers; and anonymity-enhanced virtual assets, which can be readily converted into fiat currency. Traffickers use shell and front companies to launder proceeds, as well as to procure drugs, precursor chemicals and production equipment.  For example, UNCTAD estimates that drug cartels have generated billions in inward IFFs in the Latin American region. GI-TOC’s extensive work in the Western Balkans found that the confluence of widespread economic informality, a proliferation of special economic zones, weak border controls and significant levels of corruption created a system in which IFFs are rampant. Profits from the drug economy are comingled with the profits of political clientelism, corruption and corporate tax evasion, and then secreted through a weakly enforced system of financial regulation. Research in one Balkan state found that up to 80% of IFFs could be attributed to revenues from the drug trade being moved through the misinvoicing of goods and services.  Similar findings of the three-fold confluence of financial, trade and informal flows were evident across the GI-TOC literature, from countries in Africa, Asia and the Americas. Across West Africa, GI-TOC research highlights that Individuals made rich through proceeds of the illicit drug trade, for example, used this wealth to later enter politics. Trade mis-invoicing is also recorded in the context of the illicit narcotics trade, particularly in connection with payments for synthetic precursors that are under-invoiced or illegally smuggled to drug-producing developing countries in the Mekong region.  Success in confiscating these proceeds remains limited. It is time for the international community, with the systematic involvement of civil society, to redouble its efforts to tackle the scourge of illicit drug trafficking proceeds and thereby limit their ability to corrupt and undermine the societies in which they are generated and the financial systems through which they navigate.  

VNGOC / Peace and Hope for Youth Development (PHY) – Augustine John Nyakatoma

UNODC:  I had almost three years of law enforcement experience prior to joining UNODC in December 2018. I have been working as an advisor against money laundering for almost four years now as part of the LEAD program in Peru. LEAD stands for the Law Enforcement Assistance Program to Reduce Tropical Deforestation. During this four-year period, I have been mentoring trustworthy Peruvian national police counterparts and have had a good deal of success. We’ve been successful in taking down criminal organizations that have been destroying portions of the Amazon rainforest. We train these Peruvian police counterparts and stress the importance of targeting, investigating, and completely dismantling these criminal organizations. This includes identifying, seizing, and then confiscating or forfeiting assets that were used by the organization to commit crimes, or assets that were purchased by the organization using illicit proceeds or illegal profits from their activities. Our focus in Peru has been on illegal logging and deforestation, but the principles we’ve learned apply to any type of illegal activity carried out by criminal organizations. Whether it’s illegal logging, illegal mining, drug trafficking, human trafficking, etc., all these activities generate illegal proceeds. One of the significant challenges we’ve faced in Peru, particularly in the Amazon region, is conducting parallel investigations in a timely manner. Initially, investigating criminal organizations that were destroying the Amazon was not a priority. Very few investigations were taking place, targeting these criminal organizations. Criminal investigations were opened by the prosecutor’s office, at the request of the other units we mentored and supported. However, financial investigations were not initiated until after the major operations or takedowns took place or at the end of the investigation. This delay was due to a lack of trust and willingness to share sensitive case-related information between criminal investigators and financial investigators. The investigators were concerned that premature sharing of information might compromise the criminal investigation. This lack of coordination is common in the Amazon region due to integrity challenges faced by police and prosecutors. To improve the timeliness of parallel investigations, we recommended to the heads of these units that they needed to focus on the financial aspects of these cases. After a year or so, the Peruvian police units we mentored established small financial investigating groups within their units. This was a significant investment. However, to make a real difference, we needed to involve the asset seizing office, known as ‘Extincion de Dominio,’ as early as possible once a criminal investigation was opened. This way, financial investigations and the identification of illegal assets could happen much earlier in the process. A more thorough effort to identify, seize, and confiscate all illegal assets and proceeds could take place. If these assets are left unidentified, other organizational members and relatives can take over the illicit activities, and the organization would not be completely dismantled. Therefore, asset seizure and confiscation are absolutely vital. We are making significant progress in this regard in Peru. Thank you very much.

UNODC Regional Office Western Central Africa: I am based in our regional office for Western Central Africa. I want to quickly share our experience in West and Central Africa regarding the recovery of proceeds. Drug trafficking, which can also be applied to any kind of predicate offense, generates proceeds of crime. Unfortunately, criminal justice authorities are not well informed about the methods used by criminals to hide money from organized crime, particularly drug trafficking. This is due to a lack of capacity and expertise in specialized investigation techniques and asset division. Additionally, investigators often lack the culture of targeting money laundering and tend to focus on separate investigations related to drug trafficking. This issue has been highlighted in the country’s evaluation reports under the NPT recommendations. Regarding the legal professional framework, countries have laws and institutions in place. However, there is a need for improvement in some aspects of the legal framework. It’s not just about the existence of laws; it’s about how these laws evolve in drug trafficking investigation and prosecution coordination domestically. All the countries have been rated very low, not only for financial investigation or how the FIU is coordinating support investigations but also in terms of supervision. The countries build their systems with heavy reliance on the highly informal economy. Most of the transactional reports received by the FIU are from non-compliant financial institutions. There is a continuing need to strengthen the capacity of the DWP. We are dealing with an informal economy where a significant portion of the foundation is vulnerable. We provide support and technical assistance to countries based on the recommendations from the evaluation reports. Issues related to financial investigation, domestic motivation, and confiscation of crime proceeds are common challenges. Our technical assistance focuses on supporting investigations and prosecutions, emphasizing parallel investigations. Additionally, we provide support to the regional asset recovery interagency network, recognizing the transnational dimension of drug trafficking and the need for financial investigation support in the region. Our aim is to facilitate regional cooperation, as individual countries here do not operate as effectively as expected in financial investigation matters. Establishing these networks is vital for our work in Africa. In many countries, specialized financial investigation units or entities have been established. These units have specific powers to conduct financial investigations. This specialization has shown positive results. We advocate for more countries in the region to move towards specialized units where the capacity for financial investigation can be enhanced. We continue to work closely with our donors to support the capacity of these countries in West and Central Africa. I would like to take this opportunity to thank all our donors who have provided assistance in this region. Thank you very much.

UNODC: To wrap up, when examining the issue from three perspectives—problems, challenges, and solutions—several key points emerge: In terms of the problem, numerous jurisdictions acknowledged the urgent need to intensify efforts in tracing money and seizing assets from drug traffickers. Shockingly, statistics revealed that merely one to 2% of assets from drug traffickers were being seized, a realization that underscored the inadequacy of the current situation. Addressing the challenges, it was emphasized that assets were often held offshore or concealed through complex, opaque techniques and structures. Additionally, the rise of cryptocurrencies, the use of the dark web, and other technologies that enable anonymity further complicated the matter. Beneficial ownership deficiencies were also acknowledged, with some jurisdictions recognizing the ongoing process to update the IMO regimes in line with current international norms. As for the solutions, a consensus was reached on the effectiveness of the Password Recovery Interagency Network as a model for international cooperation. Several jurisdictions praised this system as a way forward, highlighting its potential for application across all regions. Furthermore, there was significant support for the innovative use of seized assets. Jurisdictions shared examples where these assets were repurposed to fund initiatives such as drug treatment, capacity building, and emergency housing. This creative approach was seen as a promising component of the overall solution to the global drug problem. Several jurisdictions stressed the importance of allocating resources and prioritizing asset recovery activities parallel to drug investigations. Additionally, there was a call to leverage non-conviction-based strategies to disrupt the ability of drug trafficking networks to launder their proceeds, especially concerning activities harming the environment. Lastly, enhancing capacity building for dedicated financial investigation units and prosecution units was emphasized as a vital step toward improving our stance in addressing this issue

Chair: There are no more requests for an intervention on the floor. There were indeed many issues discussed. Important points raised the issue of confiscating proceeds related to money laundering, drug trafficking is not an easy one to tackle. But it is heartening to see the ongoing efforts. I thank you for being with us today and sharing your insights. Have a nice evening, the meeting is adjourned.

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