RISK ELEMENTS
CRIMINAL TRENDS
Current & Emerging Criminal Trends
As money laundering is the result of criminal proceeds, it is important to identify and understand crime and criminal trends that are prevalent in any specific country particularly those crimes that may result in significant cross border financial transactions. Trends in current and emerging financial crime prevalent within the jurisdiction/region may cause a sudden increase in certain types of financial transactions in a country or enquiries of potential business.
Until recently, there was little public information available covering criminal markets and criminal actors on a country-by-country basis that could be used when assessing or rating countries, however, with the release of Global Initiative's organized Crime index, that information is now available, and covers drug trafficking, organized crime areas and human trafficking.
High Intensity Drug Trafficking Areas
Since 1996, the US Department of State has been reporting on the worldwide situation regarding narcotics. Each year the International Narcotics Control Strategy Report is published. This provides information on a country by country basis on various matters relating to drug production, trafficking and control.
The US also publishes a Presidential Determination on major drug transit or major illicit drug producing countries each year. In 2020, there were 22 countries named in the Determination, with Bolivia and Venezuela having been cited as having failed demonstrably during the previous 12 months to adhere to their obligations under international counter-narcotics agreements.
High Intensity Organised Crime Areas
There is no central database containing worldwide extensive information on organised crime or gangs, however information may be sourced by exploring on-line data sources relevant to specific organised gangs, for instance, Central and South American drugs cartels, Russian Mafia, Chinese Triads or North American motorcycle gangs. Interpol, the US State Department and country specific serious crime websites (e.g. the National Crime Agency in the UK) also provide further information on organised gangs, that may include structures and names of known members. Furthermore, the Global Initiative Organised Crime index provides a relevant data overview on a country-by-country basis.
High Levels of Trafficking in Persons
It is estimated that around 25 (2.5) million people are subject to trafficking or smuggling every year in a business that has a current annual turnover of around US$150 (30) billion. That is equivalent to the entire population of Australia.
The US State Department publishes the Trafficking in Persons (TIP) Report on an annual basis. It is also the world’s most comprehensive resource of governmental anti-trafficking efforts representing an updated, global look at the nature and scope of trafficking in persons and the broad range of government actions to confront and eliminate it.
Trafficking Reports are available on a country by country basis and each country is placed into one of four tiers, depending upon the extent of the governments’ efforts to meet the US Trafficking Victims Protection Act’s minimum standards for the elimination of human trafficking, which are generally consistent with the Palermo Protocol.
The Palermo protocols are three protocols that were adopted by the United Nations to supplement the 2000 Convention against Transnational Organized Crime (the Palermo Convention). They are:
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the Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially women and children;
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the Protocol against the Smuggling of Migrants by Land, Sea and Air; and
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the Protocol against the Illicit Manufacturing and Trafficking in firearms, their parts and components and ammunition
Tax Evasion
Tax evasion is the illegal act of non-payment or non-reporting of tax liabilities. This crime is widespread, it is estimated that in Europe, around EUR800 billion is lost to tax evaison each year, in the US that some is around US$150 billion.