HIDE & SEEK: ILLICIT COMMERCIAL FLOWS – WHAT THEY HIDE AND HOW TO CONTROL THEM

TAPA Americas’ webinar earlier this month saw Dr. Nikos Passas, Professor of Criminology and Criminal Justice at Northeastern University present his expertise on ‘Illicit Commercial Flows: What They Hide and How to Control Them’.

As well as being Co-Director of the University’s Institute for Security and Public Policy, Dr. Passas also serves on the Global Advisory Board of the Transnational Alliance to Combat Illicit Trade (TRACIT), the Advisory Board of the Global Risk Profile in Geneva, the International Panel of Advisors at the Institute for Australia India Engagement, and the Board of Directors of Compliance and Capacity Skills International.

In the webinar, he explored the methods through which trade is used to hide not only illegal shipments but also illicit financial flows and crimes ranging from money laundering, bribery, tax evasion, and proliferation of WMD or sanctions violations.

Moreover, he discussed the ways informal financial channels intersect with trade transactions, and on ways of detecting abusive patterns and transactions. He noted the need to think of compliance not only as a way of staying out of trouble with the law but also to focus on the ultimate goals of the AML/CFT rules for anti-money laundering and counter financing of terrorism, namely the detection of criminal activities and the proper collaboration between private and public sector actors.

According to Dr. Passas, financial controls against serious crime intensified in the aftermath of 9/11 and grew to counter not only money laundering but also the financing of terrorism and sanctions violations. As he explained, countering terrorism finance through financial controls is not only about cutting off funds or displacing sources and funding methods. Instead, the point is to undermine the finance and support networks of targeted groups.

Countering terrorism financing impacts on fundraising and expenditure, as well as on partners, associates, facilitators, support networks, methods of operation, and distribution of labor involved in financial crime and terrorism financing. The aim is to understand and identify key nodes of information, networks, enablers, and supporters to target more effective and sustainable results.

The webinar explored the three types of global flows that need monitoring and analysis for a clear picture of illicit flows: financial, information, and trade. Ideally, these flows must be traceable and analyzed in parallel, so that discrepancies and anomalies can be revealed and studied. Most  attention focuses on finance and information, but even there, the work is imperfect, and sources are not cross-checked. Trade, on the other hand, is, for the most part, non-transparent and neglected.

Then, discussions considered some of the possible solutions to these challenges: Agencies that gather useful information should share it to develop better analytics to inform more evidence-based practices to counter financial crimes and the financing of terrorism. Moreover, the private sector and researchers can assist with additional data, perhaps operating in secure environments to provide analysis and feedback to both government and business.

By adding crime statistics, criminal records, reports of investigations, open-source literature in multiple languages, and qualitative on-the-ground sources such as interviews from different jurisdictions, we can study, pattern analysis, and map criminal networks, Dr. Passas noted. Oil, trade finance, antiquities, food and agriculture, medical, and arms-related data can be tracked and added to databases, especially for action against terrorist groups that control territory, have access to natural resources, or engage in trade that leaves traces.

TAPA Americas members who missed the webinar can access it by logging into the webinar archive on the Association’s regional website.