Transnat'l Organized Crime, Cybercrime, Narcotics Archives | Page 4 of 8

U.S. Secretary of State Makes Historic Visit to Suriname and Guyana and Promises More Law Enforcement Assistance

September 18, 2020 by Bruce Zagaris Leave a Comment

On September 17-18, 2020, U.S. Secretary of State Michael Pompeo made the first visit to Suriname and Guyana. It coincided with promises that the U.S. would increase its technical assistance with respect to law enforcement and national security issues in both countries.

Suriname

With respect to Suriname Secretary Pompeo traveled there on September 17 and met with President Chandrikapersad “Chan” Santokhi , and key members of his cabinet. Santokhi was elected in July.

As part of his travel, the State Department issued a statement underscoring existing U.S. assistance to combat narcotics trafficking. The statement noted that Suriname participates in various programs funded by the State Department’s Bureau of International Narcotics and Law Enforcement (INL) in an effort to stop the use of Suriname as an intermediary jurisdiction for drugs and other contraband.

The State Department has engaged in training for Suriname’s Port Control Unit, which seized more than 3000 kg. of cocaine in 2019, including a 2,300 kg seizure, one of the largest in Suriname’s history.

In addition, the U.S. government has committed more than $600,000 towards an anti-money laundering risk assessment, which identifies vulnerabilities in Suriname’s anti-money laundering (AML) regime. The Financial Action Task Force requires a national risk assessment by each country because at both country and financial institution levels AML must be conducted on a risk-based assessment (RBA). The RBAs by financial institutions must depend on the national risk assessment. Although Suriname is comparatively small in population and economy, it has a large territory and multiple sources of risks of laundering, such as informal gold mining, narcotics and gold smuggling from Venezuela and other neighboring countries, human trafficking, and the use as casinos in Suriname as a vehicle to launder.

The State Department has congratulated the fact that Suriname voted in free and fair elections and has apparently shown it wants to take a new direction based on transparency, rule of law, and democracy. To support the new direction, the U.S., in addition to increasing trade and investment, is deepening its security relationship and supporting Suriname’s economic growth. The State Department says it is prepared to help Suriname and its engagement with the international Monetary Fund and other international financial institutions. In early February, it was revealed that $100 million in private citizens’ savings had disappeared from the Central Bank of Suriname (CBvS).[1]

The new Surinamese President is a former justice minister and police commissioner. The loser of the election, president Desiré “Desi” Bouterse took power through a coup. He has been convicted of narcotics trafficking in the Netherlands and is convicted in Suriname for ordering the execution of political opponents in 1982.[2]

The U.S. State Department has recognized that Suriname’s leaders and civil society must establish sustainable models to extract natural resources transparently and safely and use the resources to benefit the Surinamese people. According to the State Department’s press release, U.S. investment in Suriname’s gold sector offers a model. The State Department aims to work with Suriname to combat corruption.

In a brief press conference the two leaders fielded questions mainly concerning potential U.S. political and military pressure on Venezuela and the role of China in the region.

Guyana

On September 17, 2020, Secretary Pompeo also visited Guyana. After much controversy over the election of March 2 between incumbent David Granger, and Irfaan Ali, Granger challenged the results for months. Granger eventually relinquished his challenged after the U.S. imposed sanctions on members of Granger’s administration for undermining democracy.[3]

The State Department issued a statement for the Guyana visit. Pursuant to the Caribbean Basic Security Initiative, the U.S. provides technical assistance to Guyana on law enforcement professionalization, strengthening the rule of law, and combating transnational crime. In particular, the assistance has focused on increased training for crime scene investigators, forensic video analysis, trial advocacy, and the development of a curriculum for continuing education programs for magistrates. The program also focuses on training prosecutors and magistrates on implementing maritime security law. The training has resulted in more criminal prosecutions and convictions and faster adjudications.

The State Department has assisted in training Guyana’s Port Control Unit to combat the trafficking of cocaine and other illicit goods through Guyana. The U.S. Coast Guard provides training and mentoring to the Maritime Administration Department (MARAD) in order to improve port security. The U.S. military trains the Guyana Defense Forces personnel annually. The training includes a current student at the U.S. Coast Guard Academy.

After Secretary Pompeo’’s visit, a bilateral Shiprider Agreement will come into force, enabling joint maritime and airspace patrols to interdict narcotics. The U.S. government has recently given $200,000 in equipment and interceptor boat parts to strengthen Guyana’s ability to patrol its territorial waters.

The U.S. has helped the development of Guyana’s energy sector through technical partnership on best practices for energy sector policy, regulation, and revenue management. The U.S. Department of the Treasury’s Office of Technical Assistance supports training and development within the Guyana Revenue Authority’s Large Taxpayer Division. These recommendations will help Guyana.

Early in Ali’s administration racial tensions have arisen. On September 6, badly mutilated bodies of two cousins, Isiah and Joel Henry, both black teenagers, were discovered in a field. Thereafter, in an apparent reprisal killing a 17-year-old Indo-Guyanese boy was found chopped and beaten to death.[4]

Meanwhile, overhanging the visit are mounting tensions between Venezuela, the neighbor of Guyana and Suriname. Guyana and Venezuela have had a 120-year dispute over their boundary and now the matter is in the International Court of Justice (ICJ). Two years ago Venezuela seized Guyanese ships and disputes jurisdiction of the ICJ.[5] The disputed Essequibo area represents about two-thirds of Guyana’s 83,000 square miles.[6]

In the recent past U.S. initiatives towards the Caribbean have been in response to U.S. national security: in the 1980s the civil wars in Central America, the leftist administration of Maurice Bishop in Grenada, narcotics trafficking; more recently, counter-terrorism, money laundering, and human trafficking. The next issue of the IELR will discuss these developments in more detail.

[1] Dr. Scott MacDonald, Suriname and the Need for Good Governance March 10, 2020, CSIS, https://www.csis.org/analysis/suriname-and-need-good-governance.

[2] Jacqueline Charles, Pompeo makes history as first U.S. secretary of state to visit Suriname and Guyana, Miami Herald, Sept. 16, 2020. With Pompeo trip, oil boom raises focus on Guyana, Suriname, France24, Sept. 17, 2020.

[3] With Pompeo trip, oil boom raises focus on Guyana, Suriname, supra.

[4] Charles, supra.

[5] Molly Quell, Border Dispute Between Guyana, Venezuela Hits UN Court, Courthouse News Service, June 30, 2020.

[6] Charles, supra.

U.S. Treasury Implements Sanctions against ICC Chief Prosecutor and Head of Cooperation Unit

September 2, 2020 by Bruce Zagaris Leave a Comment

On September 2, 2020, the United States Department of the Treasury added to the list of Specially Designated Nationals Fatou Bensouda, the Chief Prosecutor of the International Criminal Court (ICC), and Phakiso Mochochoko, the Head of the Jurisdiction, Complementarity and Cooperation Division.

The Treasury notice implements the executive order issued on June 11, 2020, by United States President Donald J. Trump imposing sanctions on “certain persons associated with the International Criminal Court.”

The Executive Order states the U.S. will impose tangible and significant consequences on those responsible for the ICC’s misconduct. They may include the suspension of entry into the U.S. of ICC officials, employees, and agents, as well as their immediate family members.

Even before the issuance of the Executive Order, the U.S. government had already revoked the visa of the ICC’s chief prosecutor, Fatou Bensouda. The Executive Order and sanctions may hinder the ICC’s recruitment of personnel.

The initial implementation selects the chief prosecutor and the individual in charge of enforcement cooperation. A major weakness of the ICC is its lack of its own police force, so that it cannot actually arrest an individual.

It remains to be determined how broadly the executive branch will apply the sanctions. This will be a major focus of persons interested in the court and in accountability for war crimes and crimes against humanity. The imposition of sanctions is a setback to the effort to hold perpetrators of crimes meriting universal jurisdiction accountable. The sanctions constitute an attack on international and national judicial independence. It sets a bad example for the rest of the world at the very time when democracy is in jeopardy and the world community is struggling to bring accountability for war crimes and crimes against humanity in longstanding conflicts, such as those in Afghanistan, Syria, Libya, and Yemen.

The sanctions undermine longstanding U.S. foreign policy to emphasize the rule of law and bring peace and stability by holding alleged perpetrators of crimes of universal jurisdiction accountable as well as prioritize international human rights. Especially when the sanctions are considered in the context of the U.S. still holding persons for twenty years in Guantanamo without trial, the sanctions will also hamper the ability of the U.S. to obtain international enforcement cooperation, especially from its allies.

During its annual meeting last month, the American Bar Association adopted Resolution 114, urging all national governments to “observe, respect, and protect the independence of the International Criminal Court.” It also “condemns threats by governments to the International Criminal Court and its officers and personnel in the performance of their duties.” Prior ABA policies and statements on the ICC and a timeline of the US-ICC relationship show that the ABA has from the start supported the operation of the ICC and U.S. proactive participation in it. The ABA ICC project’s board members, including former U.S. War Crime Ambassadors and a former Nuremberg prosecutor, have also written opinion pieces the Project’s board members wrote about the sanctions.

The implementation of the Executive Order against the ICC will further alienate U.S. relations with its closest allies, who are making contingency plans for the potential that Donald J. Trump may be re-elected. On July 17, 2020, European Union High Representative/Vice-President Josep Borrell made a statement on United States sanctions. He referred specifically to the U.S. unilateral sanctions against the ICC. Borrell said sanctions against those involved in the work of the ICC, its staff, and their families, as well as persons associated with the ICC, are unacceptable and unprecedented in scope and content.

INTERPOL, I-CAN Global Anti-Mafia Organization Take Down Fugitives

August 10, 2020 by Julia V. Brock Leave a Comment

By Julia Brock, Scripps College Class of 2022

INTERPOL’s Cooperation Against ‘Ndrangheta (I-CAN) has rounded up six fugitives in Albania, Argentina, and Costa Rica, following intelligence tips gathered in an operation targeting the ‘Ndrangheta in November 2019. The news was reported on INTERPOL’s website on July 23, 2020.

Last year’s “Operation Magma 2007” targeted individuals wanted for association with the ‘Ndrangheta, as well as drug trafficking and illegal weapons possession. It resulted in the arrest of 45 suspects across Italy. It was conducted by Italy’s Guardia di Finanza and Direzione Centrale Servizi Antidroga, and coordinated by the Direzione Distrettuale Antimafia in Reggio Calabria.

Three of the fugitives were arrested in Buenos Aires on 21 July, 2020, while a simultaneous operation in Tirana, Albania led to the capture of a fourth ‘Ndrangheta-linked fugitive. The next day, a fifth fugitive was arrested in Costa Rica. A sixth fugitive who had avoided capture in Operation Magma 2007 was arrested in Albania last May.

Combined, the operations netted 400 kg of cocaine, 30 kg of hashish, 15 kg of marijuana, an automatic assault rifle, three semiautomatic pistols, a silencer and ammunition of various calibers.

The operation also led to the dismantle and arrest of all top family members of the Bellocco family clan, one of many in the ‘Ndranghata. The Bellocco clan was involved in importing South American cocaine by boat into Italy, particularly from Argentina and Costa Rica. For this, the group depended on emissaries who travelled frequently between the Bellocco clan’s Calabrian base and supplier countries.

The ‘Ndrangheta

The ‘Ndrangheta is the most extensive, wealthiest, and powerful criminal organization in the world. “Ndrangheta” itself means loyalty or courage and is of Greek origin. The organization specializes in kidnapping and political corruption, but have also been linked to drug trafficking, bombings, murder, counterfeiting, gambling, frauds, theft, labor racketeering, loansharking, and alien smuggling. The organization has acquired direct or indirect control of companies operating across all areas of society, including construction, transportation, import and export, and more. They also utilize the deepweb and Darknet to conduct illicit commerce transactions.

The ‘Ndrangheta was formed in the 1980s when a group of Sicilians, banished from the island, settled in Calabria and formed small criminal organizations based on family ties, primarily blood relationships and marriages. It has since expanded into an international organization and is present in 32 countries worldwide. Its tight-knit, clan-like structure makes it difficult to penetrate.

INTERPOL and Organized Crime Prevention

INTERPOL’s Organized Crime unit’s goal is to stop organized crime organizations like the ‘Ndrangheta from operating. The unit works hand in hand with all of INTERPOL’s police services to identify major figures involved in transnational crime, the associated criminal networks and their activities.

The unit also conducts criminal analysis based on intelligence provided by our member countries and partners, such as biometrics, images and known associations. These methods allow INTERPOL to have a detailed understanding of the crime organizations they are focusing and proves crucial to finding connections between organizers, financiers, distributors, and corrupt officials.

I-CAN

I-CAN, an Italian and INTERPOL initiative targeting the ‘Ndrangheta, was launched in January 2020. The ultimate goal of the I-CAN project is to enhance the ability of law enforcement worldwide to more effectively identify and combat mafia-type organizations.It is funded by the Italian Department of Public Service and focuses on the ‘Ndrangheta.

I-CAN is developed across three pillars:

Content – Building on Italy’s direct experience and knowledge of the threat posed by Ndrangheta, its structure and how it operates.
Access – Making this vital policing information available to the targeted countries, in order to identify patterns, trends and potential targets for law enforcement.
Action – Coordination of joint investigations with national law enforcement to identify and arrest individuals wanted in connection with Ndrangheta-linked activities.

EUROPOL Starts European Financial and Economic Crime Center

June 9, 2020 by Bruce Zagaris Leave a Comment

On June 5, 2020, Europol started the new European Financial and Economic Crime Center (EFECC). The European Union Anti-money Laundering Action Report mentioned the start of the EFECC, partly in response to the various anti-money laundering scandals in the European Union (e.g., Danske Bank and Swedbank).

EFECC’s Goals and Operation

The EFECC will work within the current organization structure of Europol, which are already quite active and playing important roles in the EU response to financial and economic crime. It will be staffed with 65 international experts and analysts.

The Europol press release explains that money laundering and criminal finances serve as the engines of organized crime. Without them criminals cannot utilize the illicit profits they generate with the various serious and organized crime activities they conduct in the EU. Europol has reported that 98.9% of estimated criminal profits remain with criminals.

The COVID-19 pandemic in Europe has illustrated that criminals are quick to adapt their criminal schemes to changing conditions to take advantage of fears and vulnerabilities. Criminals are targeting economic stimuli proposed in the wake of the COVID-19 pandemic to defraud public funding. Law enforcement authorities must be able to follow the money trail as a regular part of their criminal investigations and seize criminal profits in order to effectively disrupt and deter criminals involved in serious organized crime.

According to Tim Adams, President and CEO of the Institute of International Finance, the industry has called for an intelligence-led approach to financial crime, and meaningful initiatives like EFECC are essential to improving outcomes.

Europol Strategic Report

On June 5, 2020, Europol published a strategic report . It gives an overview of the most menacing phenomena in the area of economic and financial crime, including various types of fraud, the production and distribution of counterfeit goods, money laundering, and others.

Missing trader intra-community (MTIC) fraud is the most commonly encountered type of value added tax (VAT) fraud in the EU. MTIC fraudsters often target countries with high VAT rates. Based on studies and cases supported at the EU level, Europol estimates between €40 to € 60 billion are lost each year to MTIC fraud schemes in the EU.

An increased risk of financial crime is that 58% of customers banking in the EU now regularly employ digital online solutions such as websites or applications to conduct transactions. Mobile banking alone had increased by 50% by the end of 2019. These banking methods, albeit convenient, present risks. Customers often lack technical knowledge and experience. As a result, they are vulnerable to attacks by cybercriminals using phishing techniques and malware solutions in order to access online accounts.

Increasing digitalization and less direct interaction with customers can also weaken Know Your Customer procedures. Weakened KYC procedures make financial services more vulnerable to use for various criminal activities, including online banking fraud.

Analysis

The start of the EFECC will increase financial intelligence for the EU and enable it to trace and seize money more often as well as uncover and investigate money laundering and financial crime schemes.

One thing to watch will be the interaction of EFECC with national law enforcement authorities, especially prosecutors.

The current issue of the IELR will have a more comprehensive story on the start of the EFECC and the strategic report behind its start.

EU Publishes AML/CFT Action Plan

May 8, 2020 by Bruce Zagaris Leave a Comment

On May 7, 2020, the European Commission issued an Action Plan to provide concrete measures over the next 12 months. It will strengthen its enforcement, supervision and coordination of the EU’s rules to combat money laundering and terrorist financing.

The Commission issued what it characterized as a more transparent, refined methodology to identify high-risk third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes. The methodology is meant to enhance its engagement with third countries and bring more cooperation with the Financial Action Task Force (FATF).

The Commission also issued a new list of third countries with strategic deficiencies in their AML/CFT frameworks.

The Action Plan has six pillars. Each is designed to improve the EU’s overall effort to combat ML and TF, and to strengthen the EU’s global role in this area. The six pillars are intended to better harmonize and make the EU regime more effective.

Six Pillars of the Action Plan

The six pillars are as follows:

Effective application of EU rules: The Commission will continue to monitor closely the implementation of EU rules by EU Members to ensure that national rules are consistent with the highest possible standards. The plan encourages the European Banking Authority (EBA) to use its new powers to combat money laundering and terrorist financing. The timeline is ongoing.
A single EU rulebook: The integration of the EU’s internal market and financial system should be matched by a single set of AML/CFT rules. Diverging interpretations of the rules cause loopholes in its systems. Criminals can exploit the loopholes. The Commission will propose rules in Q1 of 2021.
EU-level supervision: In the first quarter of 2021, the Commission will propose to establish an EU-level supervisor. At present, each EU Member individually supervises EU AML/CFT rules. The Commission will propose rules in Q1 of 2021.
A coordination and support mechanism for EU Member Financial Intelligence Units (FIUs): FIUs in EU Members play a critical role in identifying transactions and activities that could be linked to criminal activities. The Commission will propose rules in Q1 of 2021.
Enforcing EU-level criminal law provisions and information exchange: Rapid and trustworthy information-exchange is crucial. EU rules facilitate cooperation and exchanges of information between law enforcement authorities. The future Financial Crime Center of Europol will promote combating money laundering and terrorist financing. The Commission will issue guidance on the role of public-private partnerships to clarify and enhance data sharing. The Commission will issue guidance in Q1 of 2021.
The EU’s global role: The EU is determined to increase its efforts to that it is a single global actor in the AML/CFT area. The EU will adjust its approach to third countries with deficiencies in their regime concerning AML/CFT. Pending the application of its new methodology issued with its Action Plan, the updated EU list ensures better alignment with the latest FATF list.

The Commission initiated a public consultation when it issued its Action Plan. Authorities, stakeholders and citizens have until July 29 to provide their feedback.

Updated List

The EU Anti-Money Laundering Directive requires the Commission to identify high-risk third countries with strategic deficiencies in their regime regarding AML/CFT. The Commission issued a new list, The list is supposed to be better aligned with the lists published by the FATF.

Countries which have been listed are: The Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe.

Countries which have been delisted are: Bosnia-Herzegovina, Ethiopia, Guyana, Lao People’s Democratic Republic, Sri Lanka and Tunisia.

Background

The Commission’s Anti-Money Laundering Package of July 2019 underscored various weaknesses in the EU AML/CFT framework. The Package motivated the Action Plan.

Analysis

The EU announcement underscores a major problem with blacklists. On subjects such as AML/CFT there are multiple sources of listing. They include informal groups, such as FATF, and even individual countries. In addition, significant overlap exists in the subject matter of the OECD’s Global Forum on Tax Transparency and Exchange of Tax Information. The OECD, FATF, the EU, the World Bank Group, and governments make small jurisdictions spend a disproportionate amount of time meeting their engagement and evaluation schemes.

Given the scandals and/other problems that have occurred recently with Danske Bank, Swedbank, Banca Privata d’Andorra, FBME in in Cyprus, conducting supervision at an EU-level makes sense.

The next (May) issue of the IELR will have a more comprehensive discussion of the Action Plan.

ABA Issues Opinion Confirming Obligations of Lawyers to Avoid Counseling or Assisting in a Crime or Fraud in Non-litigation Matters

May 2, 2020 by Bruce Zagaris 1 Comment

On April 29, 2020, the American Bar Association’s Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 491 on “Obligations Under Rule 1.2(d) to Avoid Counseling or Assisting in a Crime or Fraud in Non-Litigation Settings.”

Model 1.2(d) prohibits a lawyer from advising or assisting a client in conduct the lawyer “knows” is criminal or fraudulent. A lawyer or bar trying to discipline a lawyer will infer from the circumstances such knowledge, including a lawyer’s willful blindness to or conscious avoidance of facts. Hence, if facts known to the lawyer show a high probability that a client seeks to use the lawyer’s services for criminal or fraudulent activity, the lawyer has an obligation to make addition inquiring in order to avoid advising or assisting such activity.

Even if information obtained in the course of a preliminary interview or during a representation is not adequate to establish “knowledge” under Rule 1.2(d), other rules may require the lawyer to make more inquiries to help the client avoid crime or fraud, to avoid professional misconduct, and to advance the client’s legitimate interests. These include the duties of competence, diligence, communication, and honesty under Rules 1.1, 1.3, 1.4, 1.13, 1.16, and 8.4.

If the client or prospective client refuses to provide information necessary to determine the legality of the proposed transaction, the lawyer must ordinarily decline the representation or withdraw under Rule 1.16.

The issuance of the opinion comes in the content of media reports adverse to the reputation of lawyers, disciplinary proceedings for assisting clients in criminal activities, such as money laundering, criminal proceedings, and increased reports about the involvement of lawyers in efforts by foreign corrupt officials to launder money into the United States.

The opinion highlights the need of lawyers to meet their obligation to inquire when they have a client who may be seeking to use the lawyer’s services in a transaction to commit a crime or fraud. The opinion concedes that determining whether a client seeks to use the lawyer’s services for prohibited activities can be sensitive. Lawyers generally must believe their clients and investigating the client’s intention can be both expensive and time-consuming. The opinion discusses a lawyer’s obligation to inquire when faced with circumstances giving rise to suspicions about a prospective or existing clients activities is required by authority interpreting Rule 1.2(d) and in the rules on competence, diligence, communication, honesty, and withdrawal.

The opinion explains failure of a lawyer to make a reasonable inquiry is willful blindness punishable under the actual knowledge standard of the Rule. Whether the lawyer must inquire further depends on the circumstances. Rule 1.2(d) states that a lawyer “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.” Even where Rule 1.2(d) does not require further inquiry, other Rules may.

These Rues include the duty of competence under Rule 1.1., the duty of diligence under Rule 1.3, the duty of communication under Rule 1.4, the duty to protection the best interests of an organizational client under Rule 1.13, the duties of honesty and integrity under Rules 8.4(b) and (c), and the duty to withdraw under Rule 1.16(a). Making further inquiry ensures that the lawyer will be able to give the informed advice and assistance to which the client is entitled, that the representation will not result in professional misconduct, and that the representation will not involve counseling or assisting a crime or fraud.

National Strategy for Combating Terrorist and Other Financing Highlights Gatekeeper Problems

In February 2020, the U.S. Government issued its National Strategy for Combating Terrorist and Other Illicit Financing (“2020 National Strategy”). It identifies and analyzes the threats and vulnerabilities to the U.S. anti-money laundering and counter-financial terrorism (AML/CFT) system. The 2020 Strategy discusses as a major illicit financing risk attorneys, who need not understand the nature or source of income of their clients or potential clients. Attorneys advise on structuring transactions to avoid tax or other implications. In this regard in 2016, the Department of Justice alleged in a civil forfeiture case that lawyer trust accounts held by two large law firms helped launder almost $600 million stolen from the Malaysian government into the U.S. financial system.

OECD Mandatory Disclosure Rules for Addressing CRS Arrangements and Offshore Structures

An area of potential risk to lawyers is inbound investment by investors from countries that participate in OECD automatic exchange of information, known as the Common Reporting Standard (CRS). The OECD has developed mandatory disclosure rules for addressing CRS Avoidance arrangements and offshore structures. Each participating member should have penal or dissuasive sanctions to sanction violations. The 2017 UK Criminal Finances Act illustrates a law implementing the mandatory disclosure rules and imposes criminal sanctions extraterritorially for intermediaries who help taxpayers plan or implement structures violating the Act.

Formal Opinion 491, in addition to heralding the likelihood of new disciplinary proceedings for lawyers failing to make sufficient inquiries for clients who engage in criminal activities, is likely to open the door to prosecutions against U.S. lawyers both by prosecutors in the U.S. and abroad.

Global Fragility Act Aims to Stabilize Conflict Zones and Prevent Wars

February 21, 2020 by Bruce Zagaris Leave a Comment

On December 19, 2019, the United States Congress adopted the historic bipartisan Global Fragility Act (GFA), establishing the first-ever U.S. government strategy to tackle alarming levels of global violence around the world. The violence is causing unimaginable suffering and instability with almost 70 million people around the world trying to flee the violence.

The Act requires the administration to develop a strategy to prevent violence in fragile states. By creating a process to identify the causes of conflict and reallocating resources to respond to them, the GFA will help prevent violence more effectively and reduce its enormous cost on families and communities.

The GFA directs the State Department to start the Interagency Global Fragility Initiative to stabilize conflict-affected areas and prevent violence globally. It creates funds to support these efforts.

The State Department must prepare a plan for the initiative, including its organizational structure and goals. The State Department must lead in development, humanitarian, and non-security policies. Other departments and agencies, including the Department of Defense, will provide support as required.

The State Department must select priority countries and regions that are especially at risk, and report to Congress 10-year plans for each. The plan must include information, including descriptions of goals, plans for achieving such goals, and benchmarks for measuring progress.

The State Department must report to Congress every two years concerning the initiative’s progress. The Government Accountability Office must consult Congress every two years about opportunities to assess the initiative and recommend improvements.

The Act establishes the Stabilization and Prevention Fund (SPF) to support efforts to stabilize conflict-affected areas, including areas at risk from the Islamic State of Iraq and Syria or other terrorist organizations. The Act authorizes $200 million annually over five years for the SPF.

The Act creates the Complex Crises Fund (CCF) to support programs to address emerging, unforeseen, or complex challenges abroad. The Act authorizes $30 million annually over five years for a CCF.

The current issue of the IELR will have a more comprehensive discussion of the GFA.

The American Society of International Law is holding a panel on the Act on Tuesday, February 25, 2020 from 6:00 -8:00 at the ASIL Headquarters, Tillar House (2223 Massachusetts Ave, N.W.). Registration if free and open to the public. For more information and registration, go to www.asil.org/events.

DISTINGUISHED PROFESSOR OF INTERNATIONAL CRIMINAL LAW PASSES AWAY

December 18, 2019 by Bruce Zagaris 1 Comment

On December 9, 2019, Distinguished University and Law Professor Emeritus at the Washington College of Law, American University Nicholas Kittrie passed away. Below is a memorandum from Mary L. Clark, Deputy Provost and Dean of Faculty.

For those of us who had the privilege of knowing Professor Kittrie, he was a great scholar, a fantastic teacher, a very kind human being, and had a love of the field of international criminal and comparative criminal law. The community of international and comparative criminal law will miss him dearly.

“TO: American University Faculty and Staff

FROM: Mary L. Clark, Deputy Provost and Dean of Faculty

SUBJECT: WCL Distinguished University and Law Emeritus Nicholas Kittrie

I write with the sad news of the passing of Distinguished University and Law Professor Emeritus Nicholas Kittrie. Professor Kittrie earned an LL.B. and M.A. from the University of Kansas and an LL.M. and S.J.D. from Georgetown University School of Law. Professor Kittrie joined AU’s Washington College of Law in 1964 and served on the faculty for over 50 years before his retirement in 2017. While at WCL, Professor Kittrie rose through the academic ranks quickly and ultimately served as WCL’s Dean. He also played a major role in the planning and development of the then Criminal Justice Department in the School of Public Affairs. In recognition of his service, WCL’s Faculty Lounge – “The Nicholas N. Kittrie Faculty Lounge” – was dedicated in his honor in 2016.

Professor Kittrie was a leading expert in American and international public and criminal law. He authored or edited more than fifteen books, numerous articles, and gave scores of presentations at universities throughout North America, Europe, Asia, and Africa. Professor Kittrie frequently appeared in the media to discuss topics as varied as war crimes, terrorist activities, political offenders, extradition, and criminal sentencing. Professor Kittrie chaired the United Nations Alliance of NGOS on Crime Prevention and Criminal Justice, served as president of the American Society on Criminology, and served as a legal consultant to the United States Vice President’s Commission on Terrorism. Most recently, Professor Kittrie was honored with the Albert Nelson Marquis Lifetime Achievement Award in recognition of his work as a legal scholar, educator, and legal practitioner in the U.S. and abroad.

Information regarding a service in honor of Professor Kittrie will follow. Condolences or acknowledgments on his behalf may be made to the American Friends of Yemin Orde Youth Village in Bethesda, M.D.”

U.S. Appropriations Bill Carries More Sanctions and Asset Recovery on the Maduro Regime

December 17, 2019 by Bruce Zagaris Leave a Comment

By Bruce Zagaris and Dale Eppler

The House-Senate Appropriations bill, which is expected to pass this week, has several provisions on Venezuela (at around page 1270 in the 1783 page text), including a new requirements on asset recovery and coordination of economic sanctions with other countries. In April, Senator Robert Menendez (D-N.J.) introduced the “Venezuela Emergency Relief, Democracy Assistance, and Development (VERDAD) Act of 2019 with broad bipartisan support. It directs a new strategy for Venezuela in coordination with Congress, and earmarks substantial funds to support it. We understand there also were very high level meetings in the Executive branch during the past week on Venezuela but, thus far, no word from the White House on any change in the direction of U.S. policy.

The language in the bill is as follows:

Subtitle E—Supporting the 8 Reconstruction of Venezuela

SEC. 151. RECOVERING ASSETS STOLEN FROM THE VENEZUELAN PEOPLE.

(a) RECOVERING ASSETS. —The President, acting through the Secretary of State and in consultation with the Secretary of the Treasury, shall advance a coordinated international effort—

(1) to work with foreign governments—

(A) to share financial investigations intelligence, as appropriate;

(B) to block the assets identified pursuant to paragraph (2); and

(C) to provide technical assistance to help governments establish the necessary legal framework to carry out asset forfeitures; and

(2) to carry out special financial investigations to identify and track assets taken from the people and institutions of Venezuela through theft, corruption, money laundering, or other illicit means.

(b) STRATEGY REQUIREMENT.—

(1) IN GENERAL.—Not later than 180 days after the date of the enactment of this Act, the President, acting through the Secretary of State and in consultation with the Secretary of the Treasury, shall submit a strategy for carrying out the activities described in subsection (a) to Congress.

(2) ADDITIONAL ELEMENTS.—The strategy required under paragraph (1) shall—

(A) assess whether the United States or another member of the international community should establish a managed fund to hold the assets identified pursuant to subsection (a)(2) that could be returned to a future democratic government in Venezuela; and

(B) include such recommendations as the President and the Secretary of State consider appropriate for legislative or administrative action in the United States that would be needed to establish and manage the fund described in subparagraph (A).

Subtitle F—Restoring the Rule of Law in Venezuela

SEC. 161. DEVELOPING AND IMPLEMENTING A COORDINATED SANCTIONS STRATEGY WITH PARTNERS IN THE WESTERN HEMISPHERE AND THE EUROPEAN UNION.

(a) STRENGTHENING SANCTIONS CAPACITY IN LATIN AMERICA AND THE CARIBBEAN.—The Secretary of State, in consultation with the Secretary of the Treasury, shall offer to provide technical assistance to partner governments in Latin America and the Caribbean to assist such governments in establishing the legislative and regulatory frameworks needed to impose targeted sanctions on officials of the Maduro regime who—

(1) are responsible for human rights abuses;

(2) have engaged in public corruption; or

(3) are undermining democratic institutions and 18 processes in Venezuela.

(b) COORDINATING INTERNATIONAL SANCTIONS.

— The Secretary of State, in consultation with the Secretary of the Treasury, shall engage in diplomatic efforts with partner governments, including the Government of Canada, governments in the European Union, and governments in Latin America and the Caribbean, to impose targeted sanctions on the Maduro regime officials described in subsection (a).

(c) STRATEGY REQUIREMENT.—Not later than 90 days after the date of the enactment of this Act, the Secretary of State, in consultation with the Secretary of the Treasury, shall submit a strategy for carrying out the activities described in subsection (a) to: (1) the Committee on Foreign Relations of the Senate; (2) the Committee on Appropriations of the Senate; (3) the Committee on Banking, Housing, and Urban Affairs of the Senate; (4) the Committee on Foreign Affairs of the House of Representatives; (5) the Committee on Appropriations of the House of Representatives; and (6) the Committee on Financial Services of the House of Representatives.

It is not clear yet how the executive branch, working with Congress, will implement the proposed sanctions and asset recovery program. We expect Treasury and State will lead the coordination with other governments. Presumably, the U.S. and its partners will furnish technical assistance to smaller jurisdictions in the region that are willing to help them find, freeze, and even forfeit assets that are the proceeds of crime. Until now, one potential challenge is that some small jurisdictions, especially those that have maintained friendly relations with Chavez and Maduro, and that benefited from PetroCaribe, do not want to take steps inimical to the Maduro regime. Another problem is that governments are much better at freezing accounts than they are at identifying and tracking the proceeds of corruption.

The next issue of the IELR will have a more comprehensive discussion of the provisions.

Professor of Latin American Narcotics and Money Laundering Indicted for Money Laundering

November 19, 2019 by Bruce Zagaris Leave a Comment

On November 18, 2019, the U.S. Attorney for the Southern District of New York announced the arrest of Professor Bruce Bagley of the University of Miami on charges of conspiracy to commit money laundering and money laundering. The indictment alleges that Bagley participated in a conspiracy to launder the proceeds of graft and corruption in connection with public works projects in Venezuela.

In particular, the indictment alleges that in November 2016, Bagley on behalf of Bagley Consultants, Inc, a company Bagley and his wife incorporated in 2005, opened a bank account. Between November 2016 and November 2017, the account had minimal activity. In November 2017, the account started receiving monthly deposits of hundreds of thousands of dollars from bank accounts located in Switzerland and the United Arab Emirates. Each month, Bagley would receive a deposit of approximately $200,000 from one of the overseas accounts into his corporate account. Thereafter, he would withdraw approximately 90 percent of the funds in the form of a cashier’s check, payable to an account held by another individual, an unnamed Colombian individual who helped him to move the money.

Between November 2017 and October 2018, his corporate account received approximately $2.5 million from the two overseas accounts. The Colombian individual to whom the overseas accounts belonged discussed the fact that they were moving another individual’s funds and that the funds represented the proceeds of foreign bribery and embezzlement stolen from the Venezuelan people. In addition to continuing to receive the money, Bagley entered into sham contracts purporting to justify the transfer of the funds belonging to an apparent Venezuelan person into the Colombian’s account.

In October 2018, a bank closed the account of Bagley Consultants, Inc. for suspicious activity. On December 2018, Bagley provided the Colombian individual with information for a new bank account in order to transfer additional money belong to the Venezuelan person. On two occasions, Bagley received funds into the new account after the Colombian individual allegedly told Bagley that the funds represented the proceeds of bribery and public corruption. Bagley transferred most of the funds to the Colombian individual and retained approximately 10 percent as a commission for his services.

Bagley, 73, is a professor of international studies with publication credits, including the book Drug Trafficking, Organized Crime, and Violence in the Americas Today.

The case shows the utility of the unnamed bank, making a suspicious activity report, which apparently led to the investigation and indictment. The case also illustrates the desperate efforts of people in Venezuela to move money, especially alleged proceeds of corruption.

The current issue of the IELR will have a more comprehensive article on this matter.