RESOURCE MATERIALSERIES No. 65

UNAFEI
Fuchu, Tokyo, Japan

March 2005

Kunihiko Sakai
Director
United Nations
Asia and Far East Institutefor the Prevention of Crime andthe Treatment of Offenders(UNAFEI)
1-26 Harumi-cho, Fuchu, Tokyo 183-0057, Japan
http://www.unafei.or.jp
unafei@moj.go.jp

CONTENTS
INTRODUCTORY NOTEv
PART ONEWORK PRODUCT OF THE 125TH
INTERNATIONAL TRAINING COURSE
Effective Countermeasures against Illicit Drug Trafficking and Money Laundering
Visiting Experts Papers
・ Investigation of Money laundering and Corruption
by Mr Tony KWOK Man-wai (Hong Kong)

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・ Developments in Mutual Legal Assistance and Extradition at the International Level
by Mr Hans G. Nilsson (European Union)
15・ Special Investigation Techniques and Developments in Mutual Legal AssistanceThe Crossroads between Police Cooperation and Judicial Cooperation
by Mr Hans G. Nilsson (European Union)

39・ Challenges Facing U.S. Anti-Money Laundering Efforts in Transnational Crimeby Ms Linda M. Samuel (United States)

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・ Repatriation Obligations Under the United Nations Convention against Corruption
by Ms Linda M. Samuel (United States)

58

・ Situation on Money Laundering in Thailand
by Pol. Maj. Gen. Peeraphan Prempooti (Thailand)

65

Participants Papers
・ The Current Situation Concerning Drug Related Crimes and Money Laundering in
Estoniaby Mr Aro Siinmaa (Estonia)

114

・ Pakistan: Not a Source but a Victim Country
by Mr Syed Nayyar Abbas Kazmi (Pakistan)

130

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・ Legal Approach to Combating Illicit Drug Trafficking and Money Laundering in
Thailandby Mr Krirkkiat Budhasathit (Thailand)

140

Reports of the Course
・ Effective Criminal Investigation
by Group 1

156

・ Countermeasures against Organized Crimeby Group 2

178

・ Effectively Tracing the Proceeds of Crime, Focusing on Countermeasures against
Money Laundering
by Group 3

198

PART TWOTHE SIXTH INTERNATIONAL TRAINING COURSEON CORRUPTION CONTROL IN CRIMINAL JUSTICE
Visiting Experts’ Papers
・ The Role of Ombudsman and its Connection with the Control of Corruption
by Judge Anand Satyanand (New Zealand)

213

・ Corruption Control: More than Just Structures, Systems and Processes Alone
by Mr Chua Cher Yak (Singapore)

229

Report of the General Discussion

238

APPENDIX

243

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INTRODUCTORY NOTE
It is with pride that the United Nations Asia and Far East Institute for the Prevention of
Crime and the Treatment of Offenders (UNAFEI) offers to the international community
Resource Material Series No. 65.
This volume contains the work produced in the 125th International Training Course thatwas conducted from 8 September to 30 October 2003 and the Sixth International Training
Course on Corruption Control in Criminal Justice that was conducted from 4 to 28 November
2003. The main theme of the 125th Course was, Effective Countermeasures against Illicit
Drug Trafficking and Money Laundering .
Drug trafficking is a major global problem that facilitates drug abuse and helps to fundthe growth of organized criminal groups. The proceeds of this crime often find their way into
the legitimate business sphere impairing the integrity of legitimate financial systems. There isalso evidence that terrorists use such proceeds to fund their activities; there is therefore, apressing need to take steps to combat this threat.
One of the most effective measures that can be taken against drug trafficking is to target
the proceeds of this crime and thereby deprive the criminals of the purpose of their operations.
By implementing effective strategies to prevent them cleaning this dirty money we can stopthem gaining the benefits of their activities and in turn stop the growth in drug trafficking andother criminal activities carried out by these criminal groups. The UN Convention against
Illicit Traffic in Narcotic Drugs and Psychotic Substances, UN Convention against
Transnational Organized Crime and the FATF Forty Recommendations are at the forefrontof the fight against drug trafficking. Regional initiatives, such as the Asia/Pacific Group on
Money Laundering, help implement these international standards within a specific region.
This Course gave the participants an opportunity to share information on the current
situation of illicit drug trafficking and money laundering and the challenges faced by eachcountry. Equipped with this information the participants were able to explore more effective
measures and strategies to meet their own countries needs and those of the international
community as a whole.
Corruption is an insidious plague that has a wide range of corrosive effects on societies.
It undermines democracy and the rule of law, leads to violations of human rights, distorts
markets, erodes the quality of life, and allows organized crime, terrorism and other threats tohuman security to flourish. This evil phenomenon is found in all countries, big and small,rich and poor; however, it is in the developing world that its effects are most destructive.
Corruption hurts the poor disproportionately by diverting funds intended for development,
undermining a government s ability to provide basic services, feeding inequality and injustice,and discouraging foreign aid and investment. Corruption is a key element in economic underperformance, and a major obstacle to poverty alleviation and development.

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Since the problems of corruption are so great and perennial, UNAFEI has held a courseon corruption control for the last six years. This year, however, was significant in that theGeneral Assembly of the United Nations adopted the Convention against Corruption which
introduces many measures to aid the fight against corruption. This Course gave theparticipants a timely opportunity to focus their discussions on how to implement theprovisions of this Convention, so that their countries could become parties to this instrument.
In this issue, in regard to the 125th Course, papers contributed by visiting experts,
selected individual presentation papers from among the participants, and the Reports of the
Course are published. I regret that not all the papers submitted by the Course participants
could be published. In regard to the Sixth Corruption Course the papers contributed by thevisiting experts and the Report of the General Discussion are published. I must request theunderstanding of the selected authors for not having sufficient time to refer the manuscripts
back to them before publication.
I would like to pay tribute to the contributions of the Government of Japan, particularly
the Ministry of Justice and the Japan International Cooperation Agency, and the Asia Crime
Prevention Foundation for providing indispensable and unwavering support to UNAFEI sinternational training programmes.
Finally I would like to express my heartfelt gratitude to all who so unselfishly assisted in
the publication of this series; in particular, the editor of Resource Material Series No. 65, Mr
Simon Cornell, who so tirelessly dedicated himself to this Series.
March 2005

Kunihiko Sakai
Director of UNAFEI

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PART ONEWork Product of the 125th International Training Course
EFFECTIVE COUNTERMEASURES AGAINST ILLICIT DRUG
TRAFFICKING AND MONEY LAUNDERING

UNAFEIVISITING EXPERTS PAPERSINVESTIGATION OF MONEY LAUNDERING AND CORRUPTION

Tony KWOK Man-wai *I. SHORT HISTORY OF THE ICAC HONG KONG
Let me explain briefly about the Hong Kong ICAC which has a particularly interesting history andstory to tell. It was established in 1974 at the time when corruption was widespread, and Hong Kong, asa British Colony, was probably one of the most corrupt cities in the world. Corruption was a way of life
and there was at that time a particularly close business association between law enforcement agencies
and organized crime syndicates. Nearly all types of organized crimes, vice, gambling and drugs, were
protected. As a taxi-driver, you could even buy a monthly label to stick on your taxi s windscreen and it
would give you immunity from any traffic prosecution. Such was the scale of open corruption in HongKong. When the ICAC was set up at that time, very few people in Hong Kong believed that it would be
successful. They called it Mission Impossible . Within three years, the ICAC smashed all the corruption
syndicates in the Government and prosecuted 247 government officers, including 143 police officers,amongst whom some were labelled Million Dollar Detective Sergeants !
The United Nations research on corruption described Hong Kong as a success model in fighting
corruption. So, what is our secret of success? To me, there are five factors:
First. There is top political will to eradicate corruption, which enables the ICAC to become a truly
independent agency, directly responsible to the very top, i.e. the Chief Executive of Hong Kong.
This ensures that the ICAC is free from any interference in conducting their investigation, and can
get on with its task without fear or prejudice.
Second. The strong political support was translated into financial support. The ICAC is probably
one of the most expensive anti-corruption agencies in the world. Their annual budget amounted to
US $90M, about US $15 per capita. You may wish to multiply this figure with your own country s
population and work out the anti-corruption budget that needs to be given to the equivalent of the
ICAC! However, looking at the budget from another angle - it represents only 0.3% of Hong Kong
Government budget or 0.05% of Hong Kong s Gross Domestic Product (GDP). I think you willagree that such a small premium is a most worthwhile investment for a clean society.
Third. The ICAC enjoys wide investigative power. Not only are they empowered to investigate
corruption offences, both in the Government and private sectors, they can investigate all crimes
which are connected with corruption.
Fourth. The ICAC strives to be highly professional in their investigation. The ICAC was one of thefirst agencies in the world to videotape interviews of all of its suspects; they have a dedicatedsurveillance team with over 120 specially trained agents who took surveillance as their life-long* Honorary Course Director of the University of Hong Kong and Former Head of Operations, Independent Commission Against
Corruption (ICAC), Hong Kong.

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RESOURCE MATERIAL SERIES No. 65

career. The ICAC has a number of other specialized units such as witness protection, computer
forensics and financial investigation.
Finally. The ICAC adopts a comprehensive three-pronged strategy in fighting corruption, i.e.
through deterrence, prevention and education. All three are important but in my view, deterrence isthe most important. That is the reason why in the ICAC s total establishment of over 1,300 staff
members, over 900 of them work in the Operations Department, responsible for investigating
corruption. Nearly all of the major corruption cases I have dealt with were committed by people
with high authority and wealth. For them, they have certainly been educated about the evil ofcorruption and they may also be subject to a certain degree of corruption prevention control. But
what inspired them to commit corruption? The answer is simply greed, for they would weigh thefortune they could get from corruption with the chance of them being discovered. So how can wedeter them from being corrupt? The only way is to make them realize that there is a high risk ofthem being caught, which is the Mission of the ICAC Operations Department ― to make corruption
a high risk crime. To do that, you need a professional investigative force.

II. CORRUPTION AND MONEY LAUNDERING
Corruption rarely exists alone. It is often a tool to facilitate organized crimes. Over the years, The
ICAC has investigated a wide range of organized crimes facilitated by corruption. Police officers havebeen arrested and convicted for corruptly assisting vice and gambling operators; Customs officers havebeen arrested for colluding with drug traffickers and smugglers of various kinds; Immigration Officers forassisting illegal immigrants; hotel and retail staff for perpetuating credit card fraud. In regard to money
laundering, The ICAC has come across incidences where bank staff, finance market operators,
accountants, lawyers, casino managers corruptly assist the organized crime syndicates to launder proceedsfrom crime. In these cases, the ICAC needs to investigate not only corruption, but also some very
sophisticated organized crime syndicates and professionals
A. What is Money Laundering?
Criminals of every kind - from drug traffickers, smugglers, illicit arms dealers to corrupt officials must launder the money flowing from their crimes to conceal such proceeds from being the target ofinvestigation and seizures. They make their ill-gotten wealth look clean by moving it around, andlegitimizing it in the world s financial systems. Attacking criminals where it hurts - in their pockets - bypreventing them from profiting from their crimes is an effective deterrent. Combating money launderingis therefore of paramount importance in suppressing serious and organized crimes.
B. Money Laundering in Hong Kong
Like other international financial centres, Hong Kong is not immune from the risk of being used bycriminals to launder their illicit proceeds. Our open economy makes detection of transfer of illicit funds
even more difficult. Notwithstanding this, Hong Kong has been vigilant in safeguarding the stability andintegrity of our financial sector against such risks. Proactive actions have also been taken against money
laundering, both domestically and on the international front.
In Hong Kong, a person commits a money laundering offence if he deals with any property, knowing
or having reasonable grounds to believe that it represents any person s proceeds of drug trafficking or anindictable offence.

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C. Stages of Money Laundering
There are three stages of money laundering:
1. Placement - disposing of the funds, e.g. using cash carriers or false identities to open bank accounts
for deposits; use of offshore accounts so that the original owners cannot be traced.
2. Layering - distancing the funds from the source, e.g. further transfers of funds amongst layers ofbogus accounts or use of shell companies to create a bogus business transaction.
3. Integration - merging the funds and placing them into the economy, e.g. integrate with legitimate
business through creative accounting such as false invoices, over or undervalue of goods, or in thepretext of a loan payback.
D. Hong Kong s Anti-Money Laundering framework
Over the years, Hong Kong has built up a robust and comprehensive anti-money laundering
framework as described below. The framework has continuously been strengthened by a number ofmeasures and initiatives on the legislative, enforcement and regulatory fronts.
1. Legislation - The Drug Trafficking (Recovery of Proceeds) Ordinance and the Organized andSerious Crimes Ordinance are the two main pieces of legislation to combat money laundering.
2. Law enforcement - Police, Customs and the ICAC.
3. Financial regulators - Hong Kong Monetary Authority, Insurance Authority, Securities and Futures
Commission.
4. International co-operation - Hong Kong being a member of the Financial Action Task Force on
Money Laundering (FATF).
5. Criminal Justice System - the courts.
E. Hong Kong Anti-money Laundering Legislation
Money laundering in Hong Kong is enforced through two pieces of legislation:
1. Drug Trafficking (Recovery of Proceeds) Ordinance, Chapter 405;
2. Organized and Serious Crimes Ordinance, Chapter 455
Which cover the following offences/measures:
・ Dealing with the proceeds of crime - a person commits an offence if he deals with any property,
knowing or having reasonable grounds to believe that the property directly or indirectly represents
any persons proceeds of drug trafficking or an indictable offence. Maximum penalty - 14 years anda fine of HK $5 million.
・ Reporting suspicious transactions - where a person knows or suspects any property represents or isconnected with proceeds of a drug trafficking offence or an indictable offence, he shall as soon as itis reasonable for him to do so, disclose that knowledge or suspicion to an authorized officer.
Maximum penalty - Three months imprisonment and a fine of HK $50,000.
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・ Control of banks, money changers and remittance agents - requiring them to register their businesswith the police, identify customers for transaction over HK $20,000 and keep transaction records
for six years.
・ Enforcement power :(i) Search warrant(ii) Production Order(iii) Restraint Order- permits the making of a restraint order if a person has been arrested for an
organized crime(iv) Confiscation Order
After the events of 11th September, 2001, the United Nations (Anti-terrorism Measures) Ordinance
was enacted in July 2002 to implement, among others, the more pressing elements of the FATF s EightSpecial Recommendations on Terrorist Financing and the mandatory elements of the United Nations
Security Council Resolution 1373 relating to measures for the prevention of terrorist acts.
F. Law Enforcement
Anti-money laundering and countering terrorist financing legislation are principally enforced by the
Police and Customs. The two agencies jointly operate the Joint Financial Intelligence Unit which collects
suspicious transaction reports, analyses and disseminates intelligence for follow up investigations for the
purpose of prosecution of money laundering and terrorist financing offences. So far, over HK $380
million (US $48.7M) have been confiscated since the enactment of the two anti-money laundering laws.
As at 30 April, 2003, a total of HK $1,172 million of proceeds of crime was under restraint orders. In
addition, HK $101 million has been ordered to be confiscated and was pending recovery from thedefendants. To enhance international co-operation, Hong Kong has shared with foreign jurisdictions, onfour occasions, confiscated assets related to drug trafficking, involving the total amount of HK $57
million.
G. International Cooperation
Hong Kong plays an active role in international cooperation in anti-money laundering in the following
areas:
・ Signatories to multilateral treaties such as the 1988 UN Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances (the Vienna Convention), 2000 UN Convention
against Transnational Organized Crimes (the Palermo Convention), etc.
・ Provides mutual legal assistance to other jurisdictions under the Mutual Legal Assistance in
Criminal Matters Ordinance and to surrender fugitive offenders under the Fugitive Offenders
Ordinance in respect of money laundering and terrorist financing offences. At present, Hong Kong
has signed 14 agreements under the Mutual Legal Assistance in Criminal Matters Ordinance and 13
agreements under the Fugitive Offenders Ordinance.
・ Liaison network with the World Bank, International Monetary Fund (IMF), Asia Pacific Economic
Cooperation (APEC), Interpol and World Customs Organization (WCO).
・ As a member of the Financial Action Task Force on Money Laundering (FATF), an intergovernmental body established in 1989 which sets standards, and develops and promotes policies tocombat money laundering and terrorist financing. It also monitors international implementation ofstandards through self-assessment, mutual evaluations and identification of non-cooperative
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countries. It comprises 31 countries and governments, the European Commission and the Gulf
Cooperation Council. Hong Kong is an active member of FATF and in recognition of Hong Kong s
efforts against money laundering, it was selected as the President of the FATF for the period from 1
July 2001 to 30 June 2002. The Commissioner for Narcotics, as the coordinator of Hong Kong s
anti-money laundering efforts, represents Hong Kong in this role.
H. Major Initiatives Launched during Hong Kong s Presidency of FATF
Under the presidency of Hong Kong, the FATF made considerable progress in the fight against money
laundering and terrorist financing, the latter role was taken up after the events of September 11, 2001.
Some of the major accomplishments included a comprehensive review of the FATF Forty
Recommendations against money laundering, formulation of the Eight Special Recommendations on
Terrorist Financing, and a worldwide global programme of engagement, and enhanced collaboration with
the IMF and the World Bank.
I. Asia Pacific Group on Money Laundering
Hong Kong is also a founding member of the Asia Pacific Group on Money Laundering (APG). The
Group was set up in 1997 with the aim to facilitate adoption, implementation and enforcement ofinternationally accepted anti-money laundering standards by jurisdictions in the region. As an active
member contributing to the Group s work, Hong Kong is a co-chair of the APG Working Group on
Alternative Remittance and Underground Banking Systems.

III. DIFFICULTIES IN INVESTIGATING CORRUPTION AND MONEY
LAUNDERING
Both corruption and money laundering are difficult crimes to investigate, due to the fact that they are
by nature secretive crimes and often involve only satisfied parties. The offenders are often highly
educated, professional and high-powered who know how to cover up any trail of their crime and who areoften in a position to make others keep the code of silence to abort any investigation. These days, theoffenders often take advantage of the high technology in communication, the ease and freedom of thetransfer of funds, the banking practice that supports secrecy, the availability of nominee accounts and in
exploiting the loopholes created by cross jurisdictional problems, making investigation even moredifficult.
A. Prerequisites for an Effective Investigation
There are several prerequisites to an effective investigation:
1. Independence - corruption investigation can be politically sensitive and embarrassing to theGovernment. The investigation can only be effective if it is truly independent and free from undue
interference. This depends very much on whether there is a top political will to fight corruption in
the country.
2. Adequate investigative power - Because corruption is so difficult to investigate, you need adequate
investigative power. The HK ICAC enjoys wide investigative power, such as power to check bankaccounts, requiring suspects to declare their assets, requiring witnesses to answer questions underoath, restraining properties suspected to be derived from corruption and holding the suspects
travel documents to prevent them from fleeing the jurisdiction.

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3. Adequate resources - investigating corruption and money laundering can be very time-consuming
and resource intensive, particularly dealing with cross jurisdictional cases.
4. Confidentiality - it is crucial that all investigation should be conducted covertly and confidentially,
before overt action is ready, so as to reduce the opportunities for compromise or interference. On
the other hand, many targets under investigation may prove to be innocent and it is only fair topreserve their reputation until there is clear evidence of their corrupt deeds. Hence in Hong Kong,
we have a law prohibiting anyone from disclosing any details of an ICAC investigation until arrestsand searches have been made. The media once described this as a press gag law but they now
come to accept it as a right balance between press freedom and effective law enforcement.

5. International mutual assistance - many cases are now cross jurisdictional and it is important thatyou can obtain international assistance in the areas such as locating witnesses and suspects; money
trails, surveillance, exchange of intelligence, arrest, search and extradition.
6. Professional - all the investigators must be properly trained and professional in their investigation.
The HK ICAC strives to be one of the most professional law enforcement agencies in the world.
Over the years, the ICAC has developed a comprehensive training programme to enhance theinvestigators skill in the following professional areas :・ General investigation techniques・ Interview techniques, including under video recording
・ Financial Investigation Techniques
・ Search・ Surveillance
・ Undercover operations
B. Public Reporting System
Any success in law enforcement always starts with a comprehensive public reporting system and aims
at encouraging the public to report and assist in investigating crime. A good reporting system should take
into consideration the following criteria:
・ Publicity to encourage public reporting・ Provide customer service to complainants
・ Measures to deter frivolous or malicious complaints
・ Establish policy on anonymous reports
・ Enforce strict confidentiality on the reports
・ Measures to protect whistle-blowers
・ Provide a quick response to the reports
・ Establish a fair procedure for handling the reports, with checks and balances against abuse
・ Establish a system of accountability to the complainants
C. Methods of Investigation
Investigating corruption can broadly be divided into two categories:
a. Investigating past corruption offencesb. Investigating current corruption offences

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D. Investigating Past Offences
The investigation normally commences with a report of corruption and the normal criminal
investigation technique should apply. Much will depend on the information provided by the informant
and from there, the case should be developed to obtain direct, corroborative and circumstantial evidence.
The success of such an investigation relies on the meticulous approach taken by the investigators toensure that no stone is left unturned . Areas of investigation could include detailed checking of therelated bank accounts and company ledgers and obtaining information from various sources tocorroborate any meetings or corrupt transactions etc. When there is a reasonable suspicion to act, thesuspects home and office should be searched for further evidence and all related parties should beproperly interviewed.
E. Investigation of Current Corruption Offences
Such investigation will enable greater scope for ingenuity. Apart from the conventional methods
mentioned above, a proactive strategy should always be preferred, with a view to catch the offenders redhanded. Surveillance and telephone interception should be mounted on the suspects and suspicious
meetings monitored. A cooperative party can be deployed to set up a meeting with a view to trap thesuspects. Undercover operations can also be considered to infiltrate into a crime syndicate. The
prerequisite to all these proactive investigation methods are professional training, adequate operational
support and a comprehensive supervisory system to ensure that they are effective and in compliance withthe rules of evidence.
F. Asset Tracing
One most important investigation technique in corruption and money laundering investigation is asset
tracing. The key to this is a painstaking accounting approach to examine and follow the money trail in thefollowing areas:・ bank accounts of the alleged offenders and their relatives
・ remittance・ companies and nominee companies
・ stocks, shares and funds
・ properties
・ source of expenditures
As soon as there is reasonable suspicion, a period of surveillance on the alleged offender to identify
his lifestyle, followed by a thorough search of his home, office, safe deposit box, car and personal
belongings should be conducted so as to obtain the necessary clues to identify where his assets have been
hidden.
G. Resident Informant
One unique feature of corruption investigations is that the investigators must not be content withobtaining evidence against one single offender. Corruption is always linked and can be syndicated. Everyeffort should be explored to ascertain if the individual offender is prepared to implicate other accomplices
or the mastermind of the corruption. In Hong Kong, there is a judicial directive to allow a reduction of 2/3of the sentence of those corrupt offenders who are prepared to provide full information to the ICAC andto give evidence against the accomplices in court. The ICAC provides special facilities to enable such
resident informants to be detained in ICAC premises for the purpose of de-briefing and protection. This
resident informant system has proved to be very effective in dealing with syndicated or high-level
corruption.

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H. Investigative Support
Apart from the core investigation units, there should be strong operational support units, and thefollowing are essential for the reasons given:・ Intelligence Section
As a central point to collect, collate, analyze and disseminate all intelligence and investigation data,
and the upkeep of indices for ready cross reference.
・ Surveillance Section
Such a section is a very important source of evidence and intelligence. ICAC has a dedicatedsurveillance unit of over 120 surveillance agents and they have made a significant contribution to
the success of a number of major cases.
・ Technical Services Section
This section provides essential technical support to surveillance and operations.
・ Information Technology Section
It is important that all intelligence and investigation data should be managed and analyzed bycomputer as an aid to investigation. In this modern age, most personal and company data are storedon computers and investigators must possess the ability to break into these computers seized during
searches to examine their stored data. Computer forensics are regarded as vital for all law
enforcement agencies worldwide these days.
I. Financial Investigation Section
The corruption investigations these days often involve a sophisticated money trail of proceeds ofcorruption, which go through a web of offshore companies and accounts, funds etc. It is necessary toemploy professionally qualified investigative accountants to assist in such investigation and in presenting
such evidence in court.
・ Witness Protection Section
The ICAC has experienced cases where crucial witnesses were compromised, with one evenmurdered, before giving evidence. There should be a comprehensive system to protect crucial
witnesses, including 24 hours armed protection, safe housing, a new identity and overseas
relocation. Some of these measures require legislative backing.

IV. CASE STUDIES
A. Senior Public Prosecutor Corruption Case
A very senior pubic prosecutor, at the time holding the position as the Acting Deputy Director of
Public Prosecutor, was found to have excessive assets of HK $16 million believed to have been derived
from corruption: including bank balances of NZ $2.43 million; three lots of land in New Zealand and an
orchard farm. Enquiries revealed how he had laundered his corrupt proceeds through the following
countries:
・ TAIWAN: he bought gold in H.K., then sold it in Taiwan and kept the money in a Taiwanese
Lawyer s account. Transferred the money to N.Z. via a bank account of a HK lawyer.

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VISITING EXPERTS PAPERS・ LONDON: he drew money from Taiwan via a Taiwanese lawyer. He transferred the money to an
account in H.K. before transferring it to other overseas accounts.
・ HONG KONG: transferred money to his mother s account in Singapore and his family in N.Z.
Bought gold using money transferred back from Singapore and Taiwan.
・ VANUATU PACIFIC: kept money in two trust funds, one of which was for his children.
・ NEW ZEALAND: money to his family s bank account; invested in orchard business, buying threelots of land in Taurauga.
・ AUSTRALIA: kept money from H.K. in his sister in-law s account.
He was subsequently convicted of corruption offences and sentenced to eight years imprisonment,with HK $12 million of his assets forfeited.
B. Illegal Passport & Money Laundering Syndicate
The ICAC smashed an international illegal passport and money laundering syndicate in recent years.
The syndicate members included a Customs Senior Inspector, two Immigration Officers, a Principal
Immigration officer, who was the head of Immigration of an African Country, a bank manager and acasino operator. This syndicate arranged illegal passports, including diplomatic passports from various
foreign countries for sale to people who wanted to emigrate to the US. The syndicate could also assist inlaundering illegal money. The ICAC succeeded in infiltrating into the syndicate through an ICAC officer
acting undercover. At the critical stage, the ICAC also enlisted the assistance of a Russian speaking
undercover officer from a US law enforcement agency to pose as a member of a Russian organized crimegroup. All the key figures were apprehended and subsequently convicted. This is a classic example ofinternational cooperation, and the mutual assistance that should be developed in undercover operations.
C. Counterfeit Credit Cards (CCC) - HK Joint Operation with Tokyo/Seoul
Counterfeit credit card (CCC) fraud continues to be a lucrative source of revenue for organized crimegroups. In 1992, Hong Kong was responsible for 32% of the world s credit card fraud. Now Hong Kongis only responsible for 2% of the fraud. This type of fraud is often facilitated by corrupt retail staff who
steal the genuine credit card information from customers and pass them to the syndicate for making
counterfeit cards. In 2000, the ICAC assisted the Tokyo Metropolitan Police Department in eradicating acrime syndicate from Hong Kong which uttered CCCs in Japan. Tokyo Police, in appreciation of the
ICAC efforts, presented us with a Certificate of Appreciation. In March 2001, information was received
that four members of a CCC syndicate were organizing a trip to Seoul, South Korea, where they intended
to utter CCCs manufactured with data they captured in Hong Kong and elsewhere. A team of ICAC
officers travelled to Korea to assist the Seoul Metropolitan Police in the identification of the suspects. The
criminals were arrested in Seoul. In Hong Kong, simultaneous actions were taken, resulting in the seizureof credit card data and computer software used in the manufacture of CCCs. The leader of the syndicate
was charged with CCC offences in Hong Kong and sentenced to a term of imprisonment. These two cases
were typical international syndicates with operations stretching through a number of jurisdictions. In
recognition of the ICAC s success in CCCs investigation, an ICAC Chief Investigator was awarded
Law Enforcement Officer of the Year by the International Association of Financial Crime Investigators
in America. This is another example of successful international cooperation.

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D. Cigarette Smuggling Case
The ICAC carried out a protracted investigation which lasted for three years from 1993 to 1996 into acigarette smuggling syndicate. Its members included ex-customs officers, a senior manager of aninternational tobacco company, a number of established cigarette traders and senior triad members of Wo
On Lok Triad Society. The investigation revealed bribe payments of over US $4.2M (HK $33M) paid by
the syndicate to the senior manager of a tobacco factory to ensure an unlimited supply of cigarettes tofacilitate smuggling into China. During the course of the investigation, a key member of the syndicate,
who had earlier agreed to assist ICAC in the investigation, was found brutally murdered and dumped in
the harbour in Singapore. His murder was suspected to be carried out by five members of the Wo On Lok
Society. In the end, three members of the syndicate were convicted of bribery, murder or perverting thecourse of justice charges. Three persons are still wanted on warrant. This is one of the most seriousorganized crime cases investigated by the ICAC.
E. Hong Kong Jockey Club Race Fixing Case
Horse racing is a very popular game in Hong Kong and the total amount of bets placed by punters at
each race meeting is in the tune of tens of million of dollars, one of the highest in the world. Hong Kong
Jockey Club is keen to maintain the integrity of racing. In a joint investigation with the Jockey Club, theICAC succeeded in unearthing a case of race fixing involving a number of jockeys who were bribed by an
off-course betting syndicate with a triad background. The total amount of bribes paid to riders for notletting their mounts run to the best of their ability exceeded US $180,000 (HK $1.4 million) in a single
race. This amount of money is only a drop in the ocean compared to the revenue the syndicate gets inillegal bookmaking. Seven persons were prosecuted and three jockeys and two civilians were
subsequently found guilty of bribery and gambling offences, and sentenced to substantial terms ofimprisonment. Unfortunately, the ICAC was not able to get to the head of the syndicate simply because
there was a missing link with no one prepared to provide the necessary evidence against the head. This is
the difficulty of investigating organized crime groups.
F. Soccer Match Fixing Case
Betting on soccer match results used to be illegal in Hong Kong, although it is now legalised. The
ICAC investigated a case involving an illegal international soccer bookmaking syndicate. The syndicate
was involved in illegal soccer betting on international matches and also fixed the outcome of local
football matches. This was achieved by bribing key players in the team. A corrupt police sergeant wasbribed to assist the illegal operation in Hong Kong. This was a particularly difficult case to investigate.
To begin with, no aggrieved individuals came forward to complain. Secondly, the syndicate s operation istransnational. Bets accepted in Hong Kong were then placed with a major bookmaker in Malaysia
through a middleman in Singapore, and all financial transactions were conducted through anunderground banking system. To add to the complexity of the case, all bets were recorded on a
sophisticated computer programme which was capable of total erasure through a push of a button on the
keyboard. The ICAC carried out a strike operation on the first day of the World Cup Final in 1998 andmanaged to break into the premises so swiftly that the operator was so shocked that he was unable to push
the crucial button on time. Nonetheless, it still took a long process of computer forensics to retrieve theevidence from the computer and have it admissible as evidence in court. This investigation resulted in thearrest and conviction of eight individuals in Hong Kong. Five footballers were sentenced to terms ofimprisonment ranging between 12 and 22 months, the police sergeant was jailed for four years, and thehead of the syndicate and his lieutenant were each sentenced to two years imprisonment. The need to
upgrade ourselves in information technology is obvious if we want to tackle sophisticated organizedcrime.

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V. CONCLUSION AND OBSERVATIONS
It is obvious that corruption and organized crimes are getting more and more difficult to investigate.
The offenders have taken full advantage of high technology and cross jurisdiction loopholes. The
conventional investigation methods and the current legal system may not be adequate to win the battle
against the corrupt. We should adopt a more proactive approach in investigation such as the wider use ofundercover operations and the use of telephone interception.
I would like to give my personal observation on the following areas:
A. A Strong Partnership Approach
15.The ICAC sees great value in a strong partnership approach with other local law enforcement
agencies, including the Police, Customs, and Immigration Department in Hong Kong. In the old days,
when the ICAC arrested a government official, this might not be welcome by his head of department, whoblamed the ICAC for bringing scandal to his department. Don t wash your dirty linen in public is
outdated and can only encourage corruption. If the dark days of corruption teach us anything, it is thatturning a blind eye to corruption simply will not do. The problem will only grow bigger. I am pleased tonote that heads of departments, particularly the law enforcement agencies, today have changed that
attitude and are taking a proactive strategy in order to tackle corruption. Indeed, many of the ICAC s
most successful cases originated from their proactive approach or as a result of joint investigations. To
effectively deal with a sophisticated organized crime group and its money laundering activities, it ishighly recommended that a multi-disciplinary task force approach be adopted, drawing together
investigators from the police, ICAC, Customs, Tax, legal counsel, forensic accountants, asset
management experts and major case management technological support. Such a multi-disciplinary
approach enables adequate power and expertise to be available to deal with the equally professionally
supported organized crime groups.
B. Adequacy of the Criminal Justice System
Corruption is a secret crime and there is a need to break the secrecy if we want to find out the truth.
The present system in Hong Kong which basically follows the old UK one, allows the suspect to exercise
their right of silence when questioned under caution. If they have a lawyer, the first thing the lawyer willadvise them is to maintain his right of silence. When the case comes to court, the offender will haveample time to concoct a story, which does not allow the prosecution sufficient time to verify its
truthfulness. In the end, it defeats the objective of the criminal justice system in enabling full facts to bepresented to the court so as to arrive at a fair verdict. Under the new UK caution system, the suspects are
now warned that any delayed response to questions may prejudice their defence in subsequent legal
proceedings. The new caution reads like this, You do not have to say anything. But it may harm yourdefence if you do not mention when questioned something which you later rely on in court. Anything you
do say may be given in evidence. I believe this new caution strikes a better balance between the humanrights of suspects and the public interest to investigate crime. Alternatively, we should also consider
adopting the Continental system where the suspect can be interviewed by examining magistrate where hecannot exercise any right of silence.
C. Telephone Interception
It is no longer a secret to the criminal world that most law enforcement agencies have access totelephone interception in their investigation. There appears to be two broad ways in dealing with
telephone interception in different countries. In the United States, Canada and Australia, telephoneinterception requires judicial approval and its products can be used as evidence in court. In the UK andHong Kong, telephone interception is approved by the Government but cannot be used as evidence in any
courts. Experience over the world proved that telephone interception is an extremely useful tool in
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investigating high level organized crime and corruption and its production in court often forms the crucial
evidence against the mastermind offenders. To deprive the use of telephone interception evidence in court
is in my view simply to hamper the effective investigation and prosecution of major corrupt offenders.
Consideration should also be given to introducing new legislation to protect whistle-blowers, witness
protection, and allowing a greater degree of entrapment to facilitate successful undercover operations, andthe international mutual assistance in corruption investigation and money laundering.
D. International Mutual Investigative Assistance in Criminal Matters
We all appreciate that organized crimes this day have no boundary and international cooperation isvital. However, at present, we rely heavily on mutual legal assistance which have restrictions on areas ofcooperation and at the same time require strict judicial procedure which is often a time consuming andcomplicated process. We need to act faster than criminals and there should be a more efficient mechanism
amongst law enforcement agencies to call for and obtain assistance at short notice. The United Nation is
now in the process of drafting a U.N. Convention on Fighting Corruption. I hope that it will enable closer
international cooperation amongst anti-corruption agencies. I believe the time has come for aninternational association of anti-corruption agencies to be formed under the U.N. s auspices to enhanceinternational liaison.

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DEVELOPMENTS IN MUTUAL LEGAL ASSISTANCE AND
EXTRADITION AT THE INTERNATIONAL LEVEL

Hans G. Nilsson *I. INTRODUCTION
Over the past 20 years, if not more, crime has evolved exponentially in the Member States of theUnited Nations and at the regional level. The nature of crime has also changed: from being confined only
to one country or region, crime has become international in its planning, perpetration and detection. The
level of seriousness of the crime has also increased and a number of committed offences can today bequalified as truly international in their very nature (drugs trafficking, terrorism, trafficking in humanbeings, illicit arms trafficking, and crime on the Internet etc.).
This development has required that the international legislator 1 take all necessary measures toenable international judicial cooperation to progress and become more efficient. Although many countries
have the possibility, under their Constitutions, to cooperate against crime on the basis of reciprocity,
experience has shown that a sound legal basis in a Convention is conducive to efficient cooperation
against crime. This is particularly true in the field of extradition but also to a large degree in mutual legal
assistance.
This development has lead to a number of initiatives to be taken in the past 15-20 years within the
United Nations or in regional organisations such as the Council of Europe, the OAS or, more recently, in
the European Union.
I propose in this paper to examine some of the developments that have taken place during this period,
both in the field of extradition and in mutual legal assistance. In order to limit the paper, I will restrict it toan examination of the most important developments and trends at the UN level, namely as regards the two
flagships of international cooperation that have been agreed at international level: the 1988 UN
Convention against trafficking in narcotic drugs and psychotropic substances, concluded on 19 December
1988 and the 2000 UN Convention against transnational organised crime. As regards the third flagship,
which has experienced so far the fate of the flying Dutchman, namely the draft UN Convention against
corruption, at the time of writing not yet concluded but where it may reasonably be presumed that it will
be concluded in December of this year, there is in principle no need to examine this draft, as it largely,
into the most minute detail, contains the same provisions as the Palermo Convention.

* Head of Division, Judicial Cooperation, Council of the European Union, Brussels. The opinions expressed are those of theauthor and not necessarily those of the Institution for which he works.
1

By this term, I am not only referring to the work of international or supranational organisations but also to the work carried out
at a bilateral level between two or more States.

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I will further examine some recent developments within the European Union, which may not be sowell known to an international audience as these developments concern only the 15 Member States of theEU, soon to become 25 as from 1 May 2004. But before explaining the set up of the EU in criminal
matters, I should first mention some matters concerning the Council of Europe - the oldest organisationthat has been dealing with cooperation in criminal matters in Europe since 1957 2.

II. COUNCIL OF EUROPE
At regional level in Europe, many important developments have taken place within the Council ofEurope, the Strasbourg based organisation with its now 45 Member States. Since 1957 it has developed
international instruments in the field of international cooperation in criminal matters, including the 1957
European Convention on Extradition, the 1959 European Convention on Mutual Legal Assistance in
Criminal Matters and the 1990 Convention3 on Laundering, Search, Seizure and Confiscation of theProceeds from Crime4.
The Council of Europe had until 1989 21 Member States, i.e. Western Europe. With the fall of the
Berlin Wall, its membership has gradually evolved until its most recent Member State- Croatia.
Since the membership includes both large States (with very different levels of development of Human
Rights and the Rule of Law) such as Germany, France, Russia and Ukraine, and small States (also withdifferent levels of development in certain aspects) such as Luxembourg, Malta, Liechtenstein andAndorra, the criminal law cooperation within this framework tends to become intergovernmental, andsometimes also a la carte with a number of possibilities of grounds for refusal and reservations in theconventions that have been drafted under its auspices.
A further complication, from this point of view, has been the recent tendency to allow States such as
the United States, to assist in the deliberations of the expert Committees drafting new instruments. At
least to my mind, although it must be welcomed in general that international cooperation in particular in
the field of cyber crime has a vocation to fight crime at a universal level, this has sometimes notfacilitated the difficult search for solutions that may be found between like minded-countries having
similar legal traditions or close ties in international cooperation. A particularly striking example has been
the previously mentioned 1990 Laundering Convention where large concessions were made to one nonEuropean country that participated in its drafting but which today, 13 years after its conclusion, has not
yet ratified this Convention. One may wonder whether it would not have been wiser to seek European
solutions to these problems and seek separate solutions instead with some non-European countries.

2

The Organisation was founded in 1949.

3

This Convention is not European since it is in principle also open to States that are not European as from its beginning - theUSA, Canada and Australia participated in its drafting, although only Australia has signed the Convention that has now 38
ratifications.

4

The Council of Europe has in total elaborated more than 20 international conventions in criminal matters and in total nearly
200 Conventions. Its most important achievement is the European Convention on Human Rights, setting up the unique systemof protection of human rights in Europe by the European Court of Human Rights.

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In this context, the recently concluded Convention on cyber crime must be mentioned as a particularlyinteresting example of a development that may have a real impact on international cooperation in the fightagainst crime in the particular area of computer crime and investigations into cyberspace.
From the Council of Europe experience, one must however also conclude that extradition and mutual
legal assistance remain the main tools in international cooperation; transfer of criminal proceedings andthe recognition and enforcement of criminal sanctions5 remain to a large extent theoretical possibilities
without any follow up in practice, even among countries that have close relations in criminal cooperationsuch as the Benelux countries or the Scandinavian countries. However, cooperation for purposes ofallowing the transfer of sentenced persons6 with a view to permitting them to reinsert in their own
societies has been more successful, although it has proven problematic with some countries, in particularoutside Europe that have been permitted to join this Convention.

III. EUROPEAN UNION
The developments within the European Union are much less well known than those within theCouncil of Europe by the international community. There are several reasons for this, but in particular it
should be mentioned that these developments are relatively recent (the Treaty of Maastricht entered into
force on 1 November 1993), they are unique to the world (a system of semi-supranational competencies
have been gradually put in place; the instruments drafted are binding on the Member States) and they
concern only the Member States of the EU which form part of an ever closer and integrated Union that defacto has its own legal personality7.
In view of these developments, it may be justified to describe in more detail to an international
audience these developments within the EU, since they have an impact on the most developed part ofEurope (the candidate States to the European Union have an obligation to implement the entirety of theUnion acquis), thus the 25 States and since they also have a potential to have an impact on other States in
Europe that have aspirations to become Member States of the European Union.
With the entry into force of the Treaty of Maastricht, the Union declared that judicial cooperation incriminal matters was an area of common interest for the Member States. This means already that themachinery of the EU could be used for purposes of developing criminal law within the framework of theInstitutions of the EU. The European Commission participated in the drafting of the new instruments, andhad even a right of initiative when it came to those relating to fraud (it took the initiative to what was tobecome the 1995 Convention of the fight against fraud for purposes of protecting the financial interests ofthe European Communities. The European Parliament was heard by the Council of Ministers that took all
the final decisions. The European Court of Justice had a limited role to interpret the instruments drafted
under the regime of the Treaty of Maastricht. Under this Treaty regime were however drafted a number of5

See the European Convention of 15 May 1972 on the Transfer of Proceedings in Criminal Matters and the European
Convention of 28 May 1970 on the International Validity of Criminal Judgments.

6

See the Convention of 23 March 1983 on the Transfer of Sentenced Persons.

7Viz. the recently signed, and binding on the Member States when concluded, treaties with the United States on extradition andon mutual legal assistance where the contracting parties are the United States of America and the European Union (and not its
Member States).

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Conventions (14) and so-called Joint Actions (instruments in principle binding on the governments but
which could have a somewhat weak legal status depending on the Member State concerned) on a numberof important topics: definition of the offence of participation in a criminal organisation, private
corruption, confiscation of the proceeds from crime, etc. In addition, the Council adopted so-called
Common Positions, instruments that define a position that the Member States are required to defend
during negotiations within international fora, such as the United Nations or the OECD.
Of particular importance were the two Conventions that were concluded on extradition in 1995 and1996 - see below. In the field of mutual legal assistance, an evaluation was undertaken on how mutual
legal assistance works in practice8 in the Member States, the European Judicial Network was set up and a
Joint Action was adopted on good practice in mutual legal assistance.
It turned out however that the legal instruments at the disposal of the EU did not match the objectivesof the political leaders of the Union. During the revision of the Treaty of Maastricht, the so-called third
pillar 9 became one of the areas where change was most radical. The Joint Actions were abolished andreplaced by Framework Decisions and Decisions, which are both binding on the Member States and arealso liable to be interpreted by the European Court of Justice under certain conditions. Framework
Decisions are used to harmonise substantive and procedural criminal law and Decisions for any otherpurpose. The European Commission has been given a full right of initiative in the same vein as theMember States and was also the body that took the formal initiative, after a decision by the Heads of Stateand Government, to the European Arrest Warrant that abolishes extradition among the Member Statessee below.
One of the reasons for these radical changes was that for the first time in matters of judicial and police
cooperation the Union had set itself an objective: the creation of a high level of safety within an Area of
freedom, security and justice. It should be remembered that in principle, among the Member States, there
are no more internal borders so that people may travel freely from one country to another. Law
enforcement and criminal law cooperation had however remained within the realm of sovereignty and theborders remained for this kind of cooperation. It could however now be said that the first steps towards
the creation of a single Area in certain matters have been taken since the entry into force of the revised
Treaty of Amsterdam on 1 May 1999.
Another reason for the radical changes was the widespread dissatisfaction with the unwieldy systemof slow negotiation and uncertain implementation of international conventions - an instrument that is used
for intergovernmental cooperation and not adapted to the closer ties that the Union is seeking to achieve.
Experience of the Union is that conventions take too long before they are implemented (the 1995 and1996 Conventions on extradition mentioned below have not yet been ratified by all Member States; only
by 13 of them) and the role of Union Institutions, in particular that of the Court of Justice, has not beendeveloped enough.

8

The reports are published on the Council s website at http://www.eu.ue.int.

9

Judicial cooperation in criminal and police matters; the second pillar is the Common Foreign and Security Policy of the Unionand the first pillar is the supranational part of the Union (i.e. the European Community) where the European Commission has
the sole right of initiative ( e.g. environment policy, transport, telecommunications, etc).

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As regards Framework Decisions and Decisions therefore, the Council can prescribe a specific periodof implementation and does also do that in practice - usually 18 months is taken as a normal period for
implementation and adaptation in legislation. The Member State that does not implement a Decision or a
Framework Decision within the prescribed period will be in breach of the Treaty (and of the
Framework/Decision which is binding). In practice, it could be said that the Union has abandoned the
instruments of conventions and will now only resort to these types of instruments which are more
powerful11.
After these brief explanations which are necessary to understand the institutional set up and the natureof the cooperation, I will now turn to the main topic of the paper.

IV. EXTRADITION/SURRENDER
A. At the level of the United Nations
When the 1988 UN drugs Convention was concluded, it was considered that this was an achievement
at international level which made extradition progress considerably. And this assessment must be
considered to be true, although one could also be somewhat more critical to some of the provisions of the1988 Convention. In particular, the 1988 Convention, like a number of its predecessors, does not containreal obligations to extradite - it is not a mini extradition convention which could be read as an extradition
treaty like, for instance, the 1957 Council of Europe Convention or the 1996 EU extradition Convention.
Only Article 6:2 creates certain indirect extradition obligations for the Parties in that a number of theoffences included in the Convention are deemed to be included in the extradition treaties applicablebetween the Parties. Perhaps the real difference is that the level of cooperation internationally was so low,
and was only limited to certain crimes (hijacking, kidnapping of internationally protected persons, takingof hostages, protection of nuclear material, torture and suppression of offences against maritime
navigation, etc.) that any progress on a more common crime such as drugs trafficking could be considered
to be real progress.
If one looks then at the Palermo Convention, which was concluded some twelve years after the 1988
Convention, when the international community had further understood the threat of serious crime, whentrafficking in human beings was rife and when illicit arms smuggling had become a phenomenon tocombat at the international level, one may note that surprisingly little progress has been made in the fieldof extradition - progress in this case meaning that the provisions on international cooperation should havebeen strengthened. In certain respects however, there in undeniably some progress, for instance in that theprotections of the individuals have been reinforced. A comparison will be carried out hereinafter.
The main achievement of the 1988 Convention is of course that it exists and that it has been widely
ratified by the international community of States. It was the first worldwide multilateral convention inwhich all existing instruments of international legal cooperation were recognised. Through Article 6 of
the Convention is established the legal basis for extradition in all kinds of serious drugs offences as well
as for money laundering where the predicate offence is drugs trafficking. A worldwide standard has thus
been established in this important field of law enforcement cooperation. As previously noted, drugs
offences are deemed to be included as extraditable offences in already existing treaties and the10

It should be noted that the new draft for a European Constitution, submitted to the European Council meeting in Thessaloniki
on 20 June 2003, suggests that these instruments should be replaced by European laws and European Framework laws. These
instruments will be equivalent to the current Directives and Regulations and will have direct effect.

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Convention may, in certain circumstances, be considered as a free standing legal basis for extraditioneven where there is no treaty relation.
Article 6:2 is particularly relevant to countries which still have a list of offences in their treaties
whereas it has no relevance to those countries operating a threshold approach. This article is retaken in
the Palermo Convention, Article 16:3. It is the same text that one finds there. However, the Palermo
Convention deals also with accessory extradition, which the 1988 Convention does not cover.
Extradition is not covered by the offences mentioned in Article 3:2 of the 1988 Convention, i.e. theConvention does not create extradition relations for the intentional illegal possession, purchase orcultivation of narcotic drugs for personal consumption, but it does cover all drugs trafficking offences andancillary offences such as preparatory or supportive acts, laundering of or dealing in the proceeds of drugs
offences and acts of instigation. The Palermo Convention goes further as to the scope of the offences as itcovers all the offences under the Convention and offences involving an organised criminal group and theperson who is the subject of the extradition request is located in the territory of the requested State,provided that there is double criminality.
Although the 1988 Convention harmonises to a certain extent the concept of drugs trafficking, itshould be noted that extradition is still subject to the concept of double criminality under article 6:5,
which provides that extradition remains subject to the conditions provided for by domestic law andapplicable extradition treaties. No doubt, such law will necessarily provide for the upholding of double
criminality principles which have been a cornerstone of extradition law for decades. The Palermo
Convention repeats in Article 16:7 these requirements and represents to some extent a step back in that it
makes a specific reference not only to the grounds of refusal mentioned in Article 6:5 of the 1988
Convention but also includes a specific reference to the minimum penalty requirement for extradition.
Interestingly, in the not yet concluded Corruption Convention, the Africa Group has insisted on
abolishing double criminality for mutual legal assistance11, thus making the final attempt to end thenegotiations in August of 2003, but without success. New negotiations will have to be carried out at theend of September 2003 but it is expected that the draft Convention will still be able to be finished by theend of this year and signed in Mexico.
Article 6:5 specifies that extradition remains subject to the conditions provided by the law of therequested Party or by applicable extradition treaties, including the grounds on which extradition may berefused. This paragraph should not be understood as allowing Parties to the Convention to invoke grounds
for refusal which may be provided for under domestic law, but which have not been included in theapplicable extradition treaties. In these cases, the Treaty will have to be applied fully, in accordance with
its text, notwithstanding provisions of the domestic law of the country concerned.
Article 6:6 contains a provision which could be considered to be jus cogens in extradition law, under
Article 53 of the Vienna Convention; namely that extradition may be refused where there are substantial
grounds for believing that compliance with the request would facilitate the prosecution or punishment ofany person on account of his race, religion, nationality or political opinions, or would cause prejudice forany of those reasons to any of the persons affected by the request.

11

Proposed Article 53 (9): Without prejudice to the fundamental principles of their domestic law, States Parties shall [to thegreatest extent possible] render mutual legal assistance in respect of offences covered by this convention, notwithstanding theabsence of dual criminality.

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The Palermo Convention has taken a different approach than the 1988 Convention which contains a
specific ground for refusal. Since it has to be recognised that the refusal would in any case have to bemade on the basis of jus cogens, the approach of the Palermo Convention in Article 16:14, which in myopinion is more legally correct, is to state that nothing in the Convention shall be interpreted as imposing
an obligation to extradite if the requested Party has substantial grounds for believing that the request has
been made for the purpose of prosecuting or punishing a person on account of that person s sex, race,
religion, nationality, ethnic origin or political opinions or that compliance with the request would cause
prejudice to that person s position for any one of these reasons.
It is here first of interest to note that there are new references in the Palermo Convention to a person s
sex and ethnic origin, a clear sign that society has developed since the 1980s, sometimes unfortunately
not in the right direction12. Moreover, the Palermo Convention now contains a specific reference also to
the right of a person against whom proceedings are being carried out to be guaranteed fair treatment at allstages of the proceedings (see Article 16:13). It may thus be noted that significant progress has been madein the Palermo Convention as regards the protection of individual liberties - something which was not in
principle so high up on the agenda in the 1980s.
There are also certain efforts made in the 1988 Convention to introduce exceptions to traditional
treaty law obligations exceptions in extradition. For instance, Article 3:10 of the Convention provides that
offences established in accordance with the Convention shall not be considered as fiscal offences,
political offences or regarded as politically motivated, without prejudice to constitutional limitations andfundamental domestic law of the Parties. This article may be particularly relevant to laundering offences
under Article 3 of the Convention.
One may wonder however, whether this could be considered to be a real achievement, as suchexceptions are usually contained in Constitutions or are considered to be part of fundamental domestic
legal principles. In any case, the mere fact of putting the issue on the table in an international convention
is already an achievement at the international level.
One may also note that during the negotiations of the 1988 Convention, attempts were made toaddress the problem of extradition of nationals. As is well known, common law countries extradite theirown nationals whereas civil law countries do not normally (except under certain circumstances, such as
when the enforcement of a possible sentence may be made in the extraditing country). However, theattempt to address the issue of extradition of nationals was not successful. Extradition of nationals is amatter of constitutional law in a number of countries and, as is well known, to change the constitution is atall order in several States. There is however a provision (article 6:10) that deals with the extradition ofnationals for purposes of enforcement of sentences. A similar provision is found in the Palermo
Convention, Article 16:12. The Palermo Convention however goes further in that it provides for a more
stringent legal regime than the 1988 Convention in relation to nationals whose cases have been submitted
to a competent national authority (see Article 16:10). Moreover, the Palermo Convention also contains
new provisions relating to those countries that may surrender persons only on condition that the person
will be returned to the surrendering State (Article 16:11).
One of the more innovative provisions of the 1988 Convention is article 6:7 which provides for acertain standard in relation to speeding up of extradition procedures or simplifying evidentiary
requirements. The paragraph in itself, however, is not very constraining upon the Parties. It merely

12Viz. ethnic cleansing in former Yugoslavia.

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requires to endeavour to speed up and simplify. However, since this is a most unusual clause even inbilateral extradition treaties, it may be seen as a recognition that extradition procedures are too long andunwieldy, and that evidentiary requirements, in particular prima facie and probable cause requirements
are to be simplified. Rather disappointedly, the Palermo Convention subjects the requirement of speed
also to the domestic law of the Party, which of course waters down the provision to nullity (see Article
16:8). It is unfortunate that the States do not consider the importance of reasonable speed in extradition as
an objective worthy to pursue. Negotiators of international instruments should consider that justice
delayed is justice denied . It is for such reasons in particular that the European Union adopted its Arrest
Warrant (see below).
Paragraph 8 concerning provisional arrest is relevant to those States that can extradite only on thebasis of a Treaty, and which may be willing to regard the 1988 Convention as the necessary legal basis forthat purpose. The paragraph gives such a legal basis, but makes a reference to domestic law which no
doubt will have to contain further specific rules as to the length of detention, etc. The Palermo
Convention contains similar language.
Paragraphs 9 and 10 of the 1988 Convention deal with the concept of aut dedere aut iudicare, either
extradite or try the person. Without going into the rather complicated scheme which must also be read in
conjunction with Article 4 on jurisdiction, one may note that these paragraphs, which were the result oflengthy negotiations, are a compromise between those that prioritise that fugitives shall not be able toescape justice by fleeing abroad, and those that place the emphasis rather on the prevention of possible
conflicts of jurisdiction. In principle, the result of the negotiations were that, when extradition is refused
to another Party to the Convention because the offence was committed within its own jurisdiction or by
one of its nationals, the Refusing Party has an obligation to exercise jurisdiction (i.e. to submit the caseto its competent authorities for the purpose of prosecution) over the (Article 3:1) offence.
The Palermo Convention contains new provisions also relating to fiscal matters and on a consultation
mechanism (Article 16:15 and 16).
Finally, Article 6 of the 1988 Convention contains an exhortation that the Parties shall seek toconclude bilateral and multilateral agreements to carry out or to enhance the effectiveness of extraditionand on transfer of sentenced persons. These paragraphs are very weak and it is doubtful in my mind
whether the mere fact of writing such language into a convention will contribute to the further drafting ofsuch agreements. They are however a recognition that the 1988 Convention is not a free standing
convention creating extradition obligations on its own. These articles are in principle retaken in thePalermo Convention.
As a general evaluation, thus, it may be said that international extradition law has not moved muchfurther in the past 12 - 15 years except in the areas of protection of the individual. That must however beseen to be an achievement. There remain still problems concerning double criminality, the politicaloffence exception and extradition of nationals. Moreover, it seems difficult to achieve something on theissue of speed - extradition proceedings are slow, unwieldy and do not meet the needs of a modern
criminal justice system, which has become more and more globalised and where crime is truly
international by nature and where criminals can easily travel and escape justice in any country.
B. At the Level of the European Union
It is no doubt to my mind that the issue of mutual recognition in criminal matters may have anenormous significance for the development of future policy-making of the EU in the field of criminal law
and it may well represent a real change in policies in criminal matters. As the EU has become a very
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important player internationally also in criminal matters, it is possible that these new instruments andevents may have side effects in other parts of the world.
The former United Kingdom Home Secretary and current Minister of Foreign Affairs, Mr. Jack Straw,
launched the idea of mutual recognition among his colleagues at a lunch during the UK Presidency of theEuropean Union in 1998. Many wondered really what the Minister was aiming at. Was it only a questionof ratification of the 1970 Convention of the Council of Europe or the 1991 Convention drafted within
European political cooperation or was it something else? The European Council13 later confirmed, when
they met at Cardiff in June 1998, that further work needed to be carried out on mutual recognition. It
further decided at its subsequent meeting in Tampere14 in 1999 that mutual recognition should become thecornerstone of future judicial cooperation in the European Union.
C. The Concept of Mutual Recognition
In order to understand what is happening in the European Union in the development of new means ofcooperation in criminal matters, it may be of some interest to examine what is meant by mutual
recognition.
In fact, the concept is not new in the Union. It has been in particular used in the context of setting up
the Single Market within the Union and also in the field of civil law. It is often referred to as analternative of harmonisation, but the matter is somewhat more complicated than that. Using the concept incriminal law is however in principle new.
It is true that until today, the concept of mutual recognition has not been well defined. Some consider
it a revolution whereas others consider that it is only another form of judicial cooperation, somethingsimilar to standard mutual legal assistance, perhaps a little bit more efficient. The question is who isright?
If one looks at the Revised Convention for the Navigation on the Rhine of 17 October 1868 one mayread 15:The decisions of the courts for navigation on the Rhine in each State on the board of the Rhine will
be enforced in all the other States by observing the forms provided for in the law of the executing State.
This text is applicable to financial penalties among the members of the Rhine Commission and was
drafted 135 years ago. It bears, however, a striking resemblance with Article 4 of a UK initiative on
mutual recognition as regards financial penalties which is currently being discussed in the Council. Did
we then not reach any further in 135 years?
It has been argued that the difference between classical cooperation and mutual recognition is thatin mutual recognition, State A takes the decision and this decision is recognised and enforced in State B.
Traditional judicial cooperation is about State A requesting assistance from State B and the decision is

13

This is the Heads of State and Government of the EU.

14

A town in Finland.

15

Quoted from : Council of Europe, Aspects de la valeur internationale des jugements repressifs, Strasbourg 1968.

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being taken in State B. Although clarifying from the point of view of bringing some order into thesystem, I do not consider, however, that the situation is as clearly cut as that. An arrest warrant in State A
for purposes of extradition is already under the 1957 Extradition Convention enforceable abroad and an
insertion, under Article 95 of the Schengen Convention, of information relating to an arrest warrant will
have immediate effects/consequences for any person found on the Schengen territory and will lead to his
immediate arrest. Moreover, Article 13 of the 1990 Council of Europe Money Laundering Convention 16,
in the same manner as the 1988 Drugs Convention, provides for a dual system of recognition: either
direct enforcement of the decision or a submission to competent authorities for them to take decisions.
It cannot be said to be only a question of terminology, although the chosen terminology is importantas it has both a psychological and a symbolic value. Terminology may also have an impact on practice as,
if one in building a system of mutual recognition is creating autonomous concepts 17, Member States will
have to examine whether these concepts fit in with their legal system or if they have to create new legal
concepts. But mutual recognition is not only about admitting that we will accept a foreign decision as if itwere our own, it is also about admitting that it might not fit in with our own legal system. This is also
what the European Court of Justice has noted in a landmark case Gozutok (case 187/01), where theprinciple was applied to a case of ne bis in idem.
In two proposals on freezing of assets and on financial penalties that the Council has been examining
during 2002 and 2003, this is shown by the use of the terms issuing State and executing State . I
believe that the use of those terms is important as they clearly demonstrate that we are no longer in ascheme of cooperation between States but in a system of mutual recognition.
In fact, the concepts are different: in traditional judicial cooperation it is State sovereignty that is the
key element. One sovereign Member State cooperates with another sovereign Member State, fully inrespect of its national law. In mutual recognition the starting point is completely different. It is first andforemost a question of accepting a foreign decision as if it were made by a national judicial authority. The
key issue is: do we have trust and confidence in that decision?
The difference between traditional cooperation and mutual recognition should also have legal
consequences. In principle it should no longer be possible to refuse a foreign enforcement order, it must
be executed. There are, in a full blown scheme of mutual recognition, no longer any rights of refusal, atthe very most rights of non-execution.
If one draws out the consequences of a genuine system of mutual recognition, it should not be
possible to refuse to enforce a decision even if statutory limitations under the national law could apply,
even if the highest penalty for an offence does not exist under the national law, etc. This raises very
delicate issues and it will have to be examined in the future whether one can accept all the consequencesof a pure mutual recognition system, not the least in the light of protection of fundamental rights.
Mutual recognition is not about turning a blind eye to a foreign judicial authority but it is aboutplacing full faith and trust in the foreign legal system and in their judges. Therefore, real mutual

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European Treaty Series No 141.

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It should be remembered that in the European Union, the Court of Justice might be called to pronounce itself on these concepts.

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recognition is only possible among States that are very close to each other and have similar legal systems
or have a high level of trust in each other.
One of the problems in exercising a control of the decision in a foreign State, including a control in
the light of the provisions of the European Convention on Human Rights, is that the foreign State is inalmost all cases never apprised of the entire procedure carried out in the issuing State. The case law of theEuropean Court of Human Rights is clear on this point; the Court examines the entire procedure and sees
whether it, taken as a whole, is considered to be fair. Of course serious mistakes may not be made by thejudge but the question is whether it is a judge in another country that should control that question or ajudge in the country where the main question is examined? For my part I believe that in principle there
should not be any possibility for the judge of another country to control such mistakes unless they areclearly brought to his attention and in such cases they will probably in any case be considered null andvoid under general rules, for instance of constitutional emergency, that could always be applied.
Therefore, in principle, full faith and trust needs to be placed in the foreign judicial authority of anotherMember State.
The question of harmonisation and mutual recognition has been debated intensively within theEuropean Union since the Tampere European Council. It seems clear from the debate that harmonisation
actually favours mutual recognition and that the two go hand in hand. Harmonisation is not an alternative
to mutual recognition and, in the same manner, mutual recognition is not an alternative to harmonisation.
However, the very concept of mutual recognition means also that there might be differences between
Member States legislation, but that should not in itself be an obstacle to mutual recognition.
In my opinion, double criminality is against the concept of mutual recognition - it should therefore notapply. This is also born out to a large extent by the Framework Decision on the European Arrest Warrant.
D. The European Arrest Warrant
The concept of a European Arrest Warrant (EAW) is a concept which, along the lines of mutual
recognition described above, will abolish extradition between the Member states of the European Unionand instead institute a system of surrender. The EAW must be recognised by the judicial authorities ofevery Member State of the EU. Intervention of the Ministries of Justice is abolished and the EAW iscirculated directly between judicial authorities, sometimes via a computerized system which has existed
inside the EU since 1990, the so called Schengen Information System. The EAW serves as a request for
location, arrest, detention and surrender of the fugitive.
Viewed from the perspective of cooperation in criminal justice matters there can be no doubt that the
Framework Decision on the European Arrest warrant does not amount to an automatic extradition or
surrender on demand. On the other hand the changes to which it gives effect are, in their nature andpotential effect, unprecedented for a multilateral instrument in this area of concern. It is, in fact, the first
instrument seeking to implement the principle of mutual recognition in international criminal law.
To many the European Arrest Warrant is closely associated with the formulation, by the Extraordinary
European Council of 21 September 2001, of an action plan to combat terrorism. While it is true that itconstitutes a key ingredient of that plan and that the terrorist attacks on the U.S. of 11 September
produced the necessary political momentum for its timely conclusion, it is necessary to recall that theorigins of the initiative predate those tragic events.
The perceived need to improve the efficiency and effectiveness of extradition among the Member
States of the EU dates back over twenty years and for prolonged periods it had a position of prominence
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on the agenda of the Judicial Cooperation Working Group operating in the framework of European
political cooperation. The concept of the creation of a European Judicial Area can even be traced backto the mid 1970 when, the then French President, Valerie Giscard d Estaing coined the expression.
Inter-governmental interest in extradition was, however, revitalised by the entry into force of theTreaty on the European Union on 1 November 1993. Indeed, at its first meeting later the same month, theCouncil of Interior and Justice Ministers stressed the importance of judicial cooperation and adopted astatement requesting that possible improvements in both extradition requirements and procedures be
examined. This set in train a process which was to result in, among other achievements, the conclusion of
the EU Extradition Conventions of March 1995 and September 1996. Both embodied significant
modernising features and thus constitute an appropriate point of reference in any assessment of thechanges brought about by the arrest warrant.
The 1995 Convention institutes a system of simplified extradition between the Member States of the
EU. The consent of the person and the surrendering State is needed and the conditions for obtaining suchconsent are specified in the Convention. So far, thirteen of the fifteen Member States have ratified thisConvention.
The 1996 Convention on extradition between the Member States of the EU seeks to deal with some ofthe problematic issues in international extradition law. It lowers the threshold for extradition to six
months in the requested member State, it attacks the problems of double criminality in relation toconspiracy and association to commit offences, it abolishes the political offences exception between theMember States (however with some exceptions), it deals with fiscal offences and with extradition ofnationals, without however reaching radical solutions and it contains provisions with respect to lapse oftime and amnesty.
It is however true to note that these two Conventions are classical intergovernmental instruments
which do not correspond to the level of ambition which started to take shape within governments of theEuropean Union and which has led to the creation of the concepts of an Area of Freedom, Security andJustice in the Amsterdam Treaty and abolishing the internal borders of the Union. This was one of themain reasons why the concept of an EAW was created.
While there has thus been a long established recognition of the need for the modernisation of the law
and practice of extradition within the EU, the nature and focus of that debate was to be transformed in aradical fashion by the Tampere European Council of October 1999. When the Council reaffirmed theimportance of developing the Union as an area of freedom, security and justice it sought at the same timeto ensure that the subject remained at the very top of the political agenda and to provide policy
orientations and priorities to guide subsequent developments.
Of these the most innovative and demanding, from a criminal justice perspective, relates to mutual
recognition of judicial decisions. In the words of the conclusions (the so-called Tampere Milestones):
33.Enhanced mutual recognition of judicial decisions and judgements and the necessary
approximation of legislation would facilitate cooperation between authorities and the
judicial protection of individual rights. The European Council therefore endorses theprinciple of mutual recognition which, in its view, should become the cornerstone of judicial
cooperation in both civil and criminal matters within the Union. The principle should apply
both to judgements and to other decisions of judicial authorities.

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The Tampere conclusions also called for specific action to be taken in the sphere of extradition:
35.With respect to criminal matters, the European Council urges Member States to speedily
ratify the 1995 and 1996 EU Conventions on extradition. It considers that the formal
extradition procedure should be abolished among the Member States as far as persons areconcerned who are fleeing from justice after having been finally sentenced, and replaced by asimple transfer of such persons, in compliance with Article 6 TEU. Consideration should also
be given to fast track extradition procedures, without prejudice to the principle of fair trial.
The European Council invites the Commission to make proposals on this matter in the light of
the Schengen Implementing Agreement.
Finally the Council called for a Programme of measures to be adopted by the end of 2000 to
implement the principle of mutual recognition. This has since been accomplished. Two initiatives relate to
the extradition sphere (measures 8 and 15); as with Tampere they distinguish between pre and postconviction cases. In the final event, however, the European Arrest Warrant, like classical extradition law,
was formulated so as to embrace both elements.
Interestingly in the original Programme of measures neither was afforded the highest priority (2 and 3
respectively). In another programme of the Union, the so-called Millenium Strategy against organizedcrime, the creation of a system of surrender was considered to be a long term objective (to be realised
within ten years). That the European Arrest Warrant was to become the first mutual recognition measure
upon which provisional agreement was to be reached was the result of the change of emphasis andperception brought about by the events of 11 September.
As has been pointed out in the above mentioned Programme of measures 2000:
Implementation of the principle of mutual recognition of decisions in criminal matterspresupposes that Member States have trust in each others criminal justice systems. That
trust is grounded, in particular, on their shared commitment to the principles of freedom,democracy and respect for Human Rights, Fundamental Freedoms and the Rule of Law .
The recitals to the Framework Decision on the EAW explicitly re-affirm that high level of confidence.
From that base it goes on to articulate a scheme designed to remove the complexity and potential fordelay inherent in the present procedures of extradition . That classical system of inter-state cooperation isabolished: replaced by a system of surrender between judicial authorities .
Indeed, it is the decision to remove the executive from its previously central role in the process of
surrender which constitutes perhaps the most innovative feature of the new regime. As the UK Home
Office has noted:
The warrant can only be executed by a judicial authority in the executing state, and there isvirtually no involvement for the executive in the decision-making process. The Central
Authority ... may have a small role to play in transmitting documents, requests for additional
information and facilitating translations and may be involved in some limited elements of thedecision making process.
The judicialisation of the process of surrender is to be warmly welcomed. Over the years - andparticularly in high profile cases - the propensity for politicians to intervene to prevent extradition, where
it was otherwise legally possible, has often been a source of friction and concern.
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While the new process is to be overwhelmingly judicial in character it is not to be automatic. It may
be based on the notion of mutual trust but it also acknowledges that there remain limits to theconsequences which flow from such trust. Consequently the Framework Decision contains bothmandatory and discretionary grounds for non-execution (see especially Articles 3-5) as well as a range ofother limits and guarantees as regards the nature and scope of the process.
That said there is no doubt that impressive strides have been taken towards the removal of some of the
traditional barriers to cooperation, traditionally found in extradition instruments. By way of illustration let
us take what were perhaps the three most controversial and difficult issues in the lengthy EU engagementwith extradition, namely:
1) non-extradition of nationals;
2) the political offence exception ; and3) the requirement of double criminality.
1. Non-Extradition of Nationals
As has been noted above, many States, particularly those from the civil law tradition, have been
precluded by constitutional or statutory provisions from extraditing their own nationals. For this reason it
has become commonplace for extradition arrangements to include nationality as an optional ground forrefusal. This is, for instance, the stance taken in Article 6 of the 1957 European Convention, drafted under
the auspices of the Council of Europe, though it is associated with a requirement to submit the case fordomestic prosecution when this ground is invoked (As many practitioners know, this possibility is often
hardly worth the paper on which it is written.).
As noted above, the 1996 EU Convention recorded only modest movement in this area. Article 7
established the basic principle that extradition must not be refused on this basis (a principle subsequently
acted upon by Germany that made a change to its Constitution and allowed extradition of nationals with
the EU). However, the same article contained an opt-out or derogation provision which, in effect, permits
Member States to maintain this barrier on an indefinite basis.
By way of contrast the Framework Decision on the European Arrest Warrant does not include
nationality (in its pure form) as either a mandatory or discretionary ground for non-execution (save inrespect of Austria where a special, though limited, transitional provision applies until 31 December 2008
- Art. 26). That said, the EAW stops short of negating nationality as a relevant factor. This is wellillustrated by the inclusion, in Article 5(3), of the option of making execution conditional on a guarantee
that, upon conviction, the individual is returned to his or her state of nationality to serve the sentence
there (This is commonly called the Dutch solution as it has been advocated by the Netherlands ininternational fora for a number of years since the Netherlands found this solution in extradition cases with
the USA where the death penalty could ensue.). This approach is complemented by an option, in respectof convicted persons, to execute the sentence in the state of nationality rather than return the offender tothe state of conviction (Art. 4(6)). A similar philosophy is also evident in the treatment of the transit ofnationals (Art. 20(1)).
From this it may be fairly concluded that the Framework Decision has made significant strides ineliminating a major barrier to extradition while remaining sensitive to some of the underlying issues ofprinciple.

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2. The Political Offence Exception
The EAW performs even more radical surgery on the so-called political offence exception to
extradition. Over many years the Member States of the Council of Europe have played a key role inpromoting the incremental abolition of this controversial barrier to extradition: a process commenced in
the 1957 Convention, and carried forward by Protocol I in 1975 (Crimes against Humanity and War
Crimes), and, more significantly, by the 1977 European Convention on the Suppression of Terrorism. In
so doing the Council of Europe has also pioneered a substitute form of protection for the individuals
concerned; namely, the so-called fair trial or asylum clause (1977: Art. 5). The major defect in thisapproach was the continued ability and willingness of countries (including the Member States of the EU)
to undermine the effectiveness of these developments by having (frequent and extensive) recourse tolimiting reservations and declarations.
The 1996 EU Convention recorded some progress in this sphere by establishing both a new generalprinciple or goal and a new minimum standard. Article 5(1) set as the general principle that no offence
may be regarded as political inter-se. Departures from this may, however, be effected by State declaration.
However, Article 5 also sets a limit to this process in the form of a common minimum standard; that no
EU Member can regard the offences covered by the European Convention on the Suppression ofTerrorism as political. By way of compensation the fair trial or asylum provision would, however,continue to apply.
The EAW has taken this process an important stage further: namely, the abolition of the politicaloffence exception as such. This major achievement is not, however, specifically proclaimed in the text.
Rather it flows from the fact that political offences are not enumerated as mandatory or optional grounds
for non-execution. The sole remaining element of the treatment of this subject is confined to the recitals
and takes the form of a modernised version of the fair trial or asylum provision.
In this sphere also it may properly be concluded that the EAW will give effect to substantial change at least (given the limited number of cases) symbolically.
3. Double Criminality
The feature of the EAW scheme which has attracted perhaps the greatest public attention to date is the
exceptions which it creates to the traditional requirement of double criminality; i.e., the rule which, inessence, provides that there shall be no surrender for acts which are not categorised as criminal by the lawof the State of refuge. As previously noted, this traditional barrier to extradition, it should be noted, wasleft largely intact by the 1996 EU Convention (though relaxed by Article 3 for conspiracy and association
to commit terrorist, organised crime and drugs trafficking offences).
These limited exceptions to the double criminality rule are significantly widened by Article 2(2) of
the framework decision. In respect of a very broad list of thirty two generic types of offences, it abolishes
the possibility of examination of double criminality. If a foreign judge certifies that he is investigating aparticular offence which is punishable by imprisonment in his country of at least three years and if that
offence is on the list of thirty two offences, the judge in the executing state shall not examine the facts ofthe case and control double criminality. It is very important to note that for the purposes of the EAW it is
the act as defined by the law of the issuing State which governs the matter. Therefore, in principle, an
executing judge is not allowed, under the Framework Decision, to examine whether double criminality
exists. If the foreign judge has certified in the EAW that the offences which he is investigating are on thelist, the case is closed.

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Moreover, the list of offences contained in Article 2(2) is not restricted to terrorist offences. Indeed its
very broad coverage has been heavily influenced by the Europol Convention Annex. Crimes such as
racketeering, money laundering, computer-related crime, fraud and swindling are on the list, so there is
ample room for manoeuvre for the judges who want to use the EAW. The list can be added to by theCouncil, acting unanimously, following consultation with the European Parliament. For crimes which are
not on the list or which have a penalty level of less than three years in the issuing State, double
criminality will continue to apply.
While this approach constitutes a radical departure from pre-existing European and international
precedents it is of importance to stress that the requirement of double criminality has not been abolishedcompletely, although it may be assumed that most cases of what was previous extradition among theMember States will now be covered by the list.
Also relevant in this context is the fact that the Framework Decision leaves intact the traditional ruleof extradition law in relation to extraterritorial offences; namely that there is no obligation to surrenderwhen the arrest warrant envisages offences which have been committed outside the territory of theissuing Member State and the law of the executing Member State does not allow prosecution for the sameoffences when committed outside the territory of the executing Member State (Art. 4(7)). As aconsequence the difficulties encountered by Spain on this basis in the Pinochet affair could arise again in
the future. Importantly this permissive restriction applies to all offences including those listed in Article2(2).
Whilst there has again clearly been significant progress in reducing the impact of a traditional
obstacle to extradition, the treatment of double criminality and related matters also serves to underlinethat the system provided for in the Framework Decision falls some way short of extradition on demand.
In my opinion, the Council has reached a fair balance between efficiency and protection of individual
rights.
Among the other notable features contained in the Framework Decision and designed to modernise
and expedite the process of surrender one might mention the following:(i) A significant relaxation of the requirement of speciality - albeit along the lines trailed in the
1995 and 1996 EU Conventions.
(ii) It makes provision for Eurojust to play a limited though constructive role by:- the provisionof advice (upon request) in cases of multiple requests for surrender (Art. 16(2));- requiring
states to inform Eurojust of the reasons for failure to observe the stringent time limits for
surrender (Art. 17(7)).
(iii) In principle the system should consign the frequent and lengthy delays (often counted inyears) associated with extradition to the dustbin of history. Under the Arrest Warrant theprocess should take place very rapidly: in principle not more than 60 days which however in
exceptional cases may be extended to 90 days (Art. 17). Where surrender is made uponconsent, the process will take 10 days.
The EAW is, without doubt, the most important development to emerge from a quarter of a century of
EU engagement with the issue of enhanced cooperation between Member States in the administration of
criminal justice. If one thinks of the law and practice of extradition as involving or reflecting some sort ofbalance between its cooperative and protective purposes there has, through this measure, been a decisive
shift towards cooperation and even towards recognition of each others systems.

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This is not to say, however, that protections for the individual have no role to play in this new system;
far from it. By way of illustration, the provisions on such matters as double jeopardy, right to a lawyer,amnesty, and in absentia convictions all have a protective purpose.
At the root of some concern over the EAW expressed by human rights organisations is the view thatthe mere fact of participation by all Member States in the ECHR, with the associated right of individual
petition, is not a sufficient guarantee for the appropriate treatment of the individual whose surrender has
been sought. Furthermore, it is argued that the relatively few ECHR inspired references in the text of theframework decision do not adequately address this issue. In my opinion, such concerns are not founded.
There is one substantive provision in the operative part of the text which makes a reference to theprotection of human rights - namely Article 1(3). This provision states that the decision shall not have theeffect of amending the obligation to respect fundamental rights and fundamental legal principles as
enshrined in Article 6 TEU (which refers to the ECHR and the constitutional traditions of the Member
States). The question here is whether there was a need to state the obvious - of course the Member Statesof the EU are bound by the European Convention of Human Rights and their constitutions.
The Preamble also contains three further relevant recitals; namely:(i) Paragraph 10 - On suspension of the arrest warrant in the case of a severe breach of theprinciples set out in Article 6(1) TEU (which includes Human Rights and Fundamental
Freedoms);(ii) Paragraph 12 - Which, inter alia, embodies the fair trial or asylum provision to compensate in effect - for the abolition of the political offence exceptions; and(iii) Paragraph 12a. Due process, freedom of the press, etc.
It is argued by some that this is insufficient; that the text must be supplemented by the inclusion ofsubstantive grounds for refusal where the individual faces a violation of Article 6 or Article 5 rights upon
return.
The Home Secretary in the UK has noted:
It is conceivable that there may be a wholly exceptional case in which the UK courts may
judge that there is a risk of treatment, on return ... that is incompatible with the ECHR.
Under those circumstances, the District Judge could refuse to execute a request for aEuropean Arrest Warrant.
The basis for this view is clearly Article 1(3). It should, however, be noted that the Strasbourg caselaw indicates that the circumstances triggering such protection are set at a relatively high level (See, e.g.
Soering Case).
It would, as the work of the International Law Association has demonstrated, have been possible toformulate an explicit general human rights clause to reflect this restricted reality (though with a highthreshold; e.g. a real risk of a serious violation ). However this is seemingly implicit in Article 1(3) that this could actually happen in the context of the development of the EU today is however rather
improbable, to say the least. Those seeking broader protections than this might be best thought of as
looking for measures to compensate for the removal of those principles of extradition which were of
direct benefit to the individual. This says something fairly fundamental about the reality of the existinglevels of mutual trust on which mutual recognition is based.
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E. Mutual Legal Assistance
1. At the Level of the United Nations
Mutual legal assistance has, in the same manner as extradition, for decades been characterized byconcepts of sovereignty and protection of the essential interests and the ordre public of the requested
State. It has in fact become a tool for diplomats and not for law enforcement, scarcely meeting the needsof a modern society which is open to attack from terrorists and organized criminals engaged in trafficking
in all sorts of goods or of human beings.
However, the trend was broken to some extent when the 1988 Convention for the first time in a world
wide instrument incorporated provisions on international cooperation, taking into account in particularexperiences of a number of countries belonging to the common law tradition, in the conclusion ofbilateral treaties on the subject.
In Europe, the mutual legal assistance until 1990 was founded on the 1959 Council of Europe
Convention on mutual legal assistance in criminal matters and, for some countries, on the 1962 Benelux
Convention. Within the Nordic countries, a regional cooperation had been developed which was largely
based on uniform laws and on trust (and common language) between those countries.
But at the worldwide level, it was clear that the ever increasing drugs trafficking phenomenon had tobe met - the drafting of the 1988 Convention provided a golden opportunity. Moreover, the Convention
allowed for provisions on transfer of criminal proceedings, transfer of enforcement of sentences, transfer
of sentenced persons and the transfer of the enforcement of confiscation orders, to be incorporated.
However, in relation to such latter cooperation, the drafters deliberately refrained from elaborating
detailed provisions as it was considered that such cooperation for the time being would be more
appropriate for regional or bilateral conventions.
It would not be possible to examine in detail all the provisions of the 1988 Convention and thesignificant progress that was made at the time. Such an examination would make this paper too long andunwieldy. I will therefore concentrate the following analysis on some of the more significant
improvements between the 1988 Convention and the Palermo Convention.
Before doing so, it should however be noted that the two Conventions (in Article 7(1)-(6) for the 1988
Convention and in Article 18(1)-(6) for the Palermo Convention) are freestanding and not only contingent
upon the existence of a Treaty between the Parties. They therefore give a solid legal basis to afford thewidest measure of mutual legal assistance in investigations, prosecutions and judicial proceedings relating
to offences covered by the Conventions (the 1988 Convention only covers the core offences). In thefollowing paragraphs (8-19 for the 1988 Convention and 9-29 for the Palermo Convention), the two
Conventions are not freestanding but apply to requests if the Parties are not bound by a Treaty or, if they
are bound by a Treaty, that Treaty will apply unless the Parties agree to apply the UN Conventions. The
Palermo Convention however strongly encourages its own application if it facilitates cooperation.
Only from the number of paragraphs in the articles, it may be concluded that the provisions of thePalermo Convention represent significant progress and a higher level of precision than the 1988
Convention. Among the new (or more specified) measures mentioned as examples of mutual legal
assistance under the Palermo Convention are freezing, providing information, evidentiary items andexpert evaluations, as well as the provision of government records. The facilitation of the voluntary
appearance of persons in the requested State has also been added specifically, although Article 7(4) of the1988 Convention contains some weak treaty language that also would cover this situation.
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Provisions of so-called spontaneous information have also been added in the Palermo Convention,
probably on the basis of experiences gained in the context of Article 10 of the Council of Europe
Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, which, to myknowledge, was the first multilateral instrument on cooperation in criminal matters that contained such aprovision. Paragraph (18(4)) of the Palermo Convention is however considerably weakened as it is madecontingent upon not being without prejudice to domestic law, something that may mean that in practice
the paragraph may not be so efficient. It is also interesting to note that the Palermo Convention in thefollowing paragraph to a great degree of detail specifies the conditions under which the spontaneoustransmission will take place and in particular contains language as regards information that is exculpatory
to an accused person. This again illustrates how the modern multilateral treaties have become more
protective of individual rights of persons than the previous generation.
Interestingly, the Palermo Convention goes into some detail, in its paragraph 13, also on the crucialrole of the Central Authorities to ensure that requests are speedy and properly executed or transmitted toan executing authority responsible for the execution of the request (which in such a case is encouraged
to execute speedily - an obvious reference to the independence of the judicial authorities). The Palermo
Convention also contains, in paragraph 24, a specific obligation for the States to execute the request formutual legal assistance as soon as possible and that it shall take as full account as possible of any
deadlines suggested by the requesting State for which reasons are given. The information requirements
have also been specified to a high level of detail in that paragraph. These provisions are probably inspiredby similar provisions in the previously mentioned Joint Action of 1998 of the Council of the EU on bestpractices in MLA and of corresponding provisions in the EU 2000 Convention on mutual legal assistance.
The Convention also deals with the difficult problem of federal States which may have several central
authorities. It also considerably alleviates the formalism concerning written requests transmitted via
diplomatic channels and allows for any means capable of producing a written record under conditions
allowing the establishment of authenticity. This may mean that at least faxes may be used or, with agenerous interpretation, even E-mails. It will also allow a development in the future that would betechnology neutral. No doubt, this could allow States to expedite the execution in particular of freezingorders where often speed is of crucial importance.
The Palermo Convention reflects also technological progress in that it allows ( wherever possible andconsistent with fundamental principles of domestic law ) for the hearing of witnesses by videoconference(see paragraph 18). This possibility was first included in the Convention of 29 May 2000 of the European
Union on mutual legal assistance between the Member States and has in that convention been
considerably regulated in detail. The Palermo Convention has not gone into detail but provides merely forthe legal framework for the decision to be made. It may be assumed that this paragraph may need somefurther specific agreements between the Parties, as in practice several problems have not been addressed,
such as the responsibility for perjury and other delicate questions.
2. At the Level of the European Union
In a paper which I submitted to the Group training course for senior officials at UNAFEI in February
2000, I described in detail the work of the European Union as regards mutual legal assistance. It istherefore not necessary that I again go into detail on that work. It is sufficient here to note that theConvention, which I described in that paper, has now been adopted on 29 May 2000 and is so far ratified
by three Member States.

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In addition, an innovative Protocol to the Convention was adopted in 2001. This Protocol sets up asystem whereby the Member States would be able to provide mutual legal assistance in the search forbank accounts of suspects and, when found, to block money on such accounts. This Protocol represents agreat step in the fight against organised crime and constitutes a breakthrough in enhancing efficient law
enforcement.
As previously mentioned, the Council, in implementing its programme concerning mutual
recognition, has begun to draft a number of instruments embodying this principle. Many of these
instruments have been recently adopted or are in the final stages of negotiation and will be adopted
shortly.
Among these measures are Framework Decisions on:
Freezing of assets. This Framework Decision18 will enable assets to be frozen within 24 hours in the entire
Union.
Financial penalties. This Framework decision will enable financial penalties to be executed in the entire
EU on the basis of a very simplified system with few grounds for non-execution.
Confiscation. This Framework Decision will enable confiscation orders to be executed within the Union
on the basis of a very simplified system. It is still under discussion but can be expected to be adopted
within six to ten months.
In addition, the Council is expecting a new proposal from the European Commission to set up asystem of mutual recognition for obtaining evidence abroad.

V. SOME NOTES ON MONEY LAUNDERING AND FINANCING OF TERRORISM
The offence of money laundering was first, in an international context, mentioned in an old Council ofEurope Recommendation from 1980, but the Council of Europe was ahead of its time. When then theissue was brought up in the context of the negotiations on the 1988 Convention, things had moved ahead
and the international community was prepared to deal with the issue - there was a generally shared feelingamong legislators and policy makers that there was a need to hit criminals where it hurt most - in thewallet .
The definition of money laundering was taken up not only in the 1988 Convention but also in the 40
Recommendations of the FATF and in the 1990 Convention. This contributed to a general consensus thatsomething had to be done, although there was (and still is) doubt in some countries about making money
laundering a criminal offence across the line, and not only for proceeds from drugs trafficking.
The activities of the FATF, MONEYVAL or other international groupings have however had a great
impact and there is a growing international consensus on the topic.

18

OJ L 196/45, 2.8.2003.

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In the European Union, a number of initiatives have been taken in the form of binding legislation.
Among these the following can be mentioned:- The Council Directive of 10 June 1991 on prevention of the use of the financial system for the purposeof money laundering19. This Directive obliges the Member States to prohibit money laundering and lays
down detailed rules on serious transaction reports and on know your customer requirements. This
Directive was supplemented in 200120 when the obligations of the Directive were extended to certain nonfinancial activities and professions, including lawyers and accountants. It also broadened the prohibitionof the predicate offences.
- The Joint Action on money laundering, the identification, tracing, freezing, seizing and confiscation of
instrumentalities and the proceeds from crime21. This Joint Action deals with a number of issues such as
reservations to the previously mentioned Council of Europe Convention, training and other issues.
- A Framework Decision on the same topic22 which approximates criminal law and addresses the issue ofpredicate offences and sanctions (at least four years imprisonment). Value confiscation is introduced
throughout the EU.
- A Decision on cooperation between Financial Intelligence Units23. The FIUs shall cooperate toassemble, analyse and investigate relevant information within the EU. It lays down rules on
exchange of information and on analysis thereof.
The special European Council, held in Tampere on 15 and 16 of October 1999, was devoted to themaintenance and the development of an area of freedom, security and justice in the European Union.
Among the conclusions of the Tampere European Council was a call for improved cooperation againstcross border crime through the use of joint investigation teams to combat, inter alia, terrorism and forspecial action against money laundering.As regards financing of terrorism, the following may be noted.
In the wake of the terrorist attacks in the USA on 11 September 2001, the Justice and Home Affairs
Council met on 20 September and adopted a series of measures to combat terrorism, including in theareas of judicial and police cooperation and the financing of terrorism.
At the extraordinary European Council on 21 September 2001 it was decided that the fight against
terrorism would be a priority objective of the European Union. The Council approved a plan of action
dealing with enhanced police and judicial cooperation, developing international legal instruments against
terrorism, preventing terrorist funding, strengthening air security and greater consistency between all theUnion s policies. An informal meeting of the ECOFIN Council took place on 21 September 2001. It
issued a statement on actions to combat the financing of terrorism.
The statement outlined a number of initiatives in this regard. These were:- Rapid adoption of the second money laundering Directive (see above) and a Framework Decisionon the execution in the EU of orders freezing assets or evidence.24- Paying particular attention to activities linked to terrorism in the draft Directive on insider trading.
- Reinforcing exchange of information between Financial Intelligence Units (FIUs). See above.
- Ensuring extension of the Financial Action Task Force (FATF) mandate to include terrorist
financing and supporting the FATF s Non-Cooperative Countries and Territories (NCCT) exercise
and review of its 40 Recommendations.
- Adopting a proactive and coordinated approach to such matters in international fora.
- Asking EU future members to be in line with EU standards.
- Ratification and implementation of relevant UN Resolutions and Conventions.

19

OJ L 166/77, 28.6.91.

22

OJ L 182/1, 5.7.01.

20

L 344/76, 28.12.01.

23

OJ L 271/4, 24.10.00.

21

OJ L 333/1, 9.12.98.

24

OJ L 196/45, 2.8.2003.

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On 19 October 2001 the European Council declared that it is determined to combat terrorism in every
form throughout the world. It also indicated that it would continue its efforts to strengthen the coalition of
the international community to combat terrorism in every shape and form. It called for particular attention
to be given to approval of the European arrest warrant, the common definition of terrorist offences andthe freezing of assets, increased cooperation between the operational services responsible for combating
terrorism (Europol, Eurojust, the intelligence services, police forces and judicial authorities) and effective
measures to combat the funding of terrorism by formal adoption of the second Money Laundering
Directive and speedy ratification of the UN Convention for the Suppression of Terrorist Financing.
Therefore, since October 2001 a number of actions have been taken by the EU aimed at countering
terrorism as well as preventing the acquisition, retention and use of funds or assets by such organisations.
Taken together with the earlier actions these constitute powerful measures in the Union s arsenal to fightterrorism. Outside of what has already been mentioned above, some of the further legislative actions will
be mentioned here.
- Council Decision of 6 December 2001 extending Europol s mandate to deal with serious forms ofinternational crime listed in the Annex to the Europol Convention25 The effect of this Council Decision
was to enable Europol to deal with the serious forms of international crime listed in the Annex to theEuropol Convention, such as murder, grievous bodily injury, kidnapping, hostage-taking, organisedrobbery and illicit arms trafficking. Europol s mandate now includes support for law enforcement against
serious international organised crime, including terrorism.
- Council Common Position26 of 27 December 2001 on combating terrorism27. The Common Position setsout a number of actions to be taken to combat terrorism. The principal measures contained in the
Common Position are: criminalising the financing of terrorism within the EU, freezing of financial assets
or economic resources of persons or entities involved in terrorism, prohibiting the giving of financial orother assistance to such persons or entities, requiring measures to be taken to suppress any form of
support for those involved in terrorist acts, taking steps to prevent terrorist acts and denying safe haven to
those involved in such acts. It also calls for Member States to afford one another (and third countries)
assistance in connection with criminal investigations or criminal proceedings relating to the financing or
support of terrorist acts, better border controls to prevent the movement of terrorists, informationexchange and cooperation to prevent and suppress terrorist acts. Furthermore the Common Position
contains a list of international conventions and protocols against terrorism to which member states should
become parties.
- Council Common Position of 27 December 2001 on the application of specific measures to combat
terrorism28. The Common Position establishes the primary list of persons, groups and entities involved in
terrorist acts. It sets out the criteria to be used to decide who should be considered as terrorists forinclusion on the list and the actions which constitute terrorist acts. The names on the list are to bereviewed at least once every six months. Under the Common Position the European Community is

25

OJ C 362/01, 18.12.01.

26This is a binding instrument under the Common Foreign and Security Policy.

27

OJ L 344/90 of 28 December 2001.

28

OJ L 344/93 of 28.12.0.1.

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empowered to order the freezing of the funds and other financial assets or economic resources of, and theprohibition on the provision of financial services to, the listed persons, groups and entities. Member
States are required to afford each other assistance in preventing and combating terrorist acts. In
accordance with Article 6, the Common Position is to be kept under constant review. The annex to the
Common Position has been up-dated several times.
- Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directedagainst certain persons and entities with a view to combating terrorism29. The Regulation provides for thefreezing of the funds, financial assets and economic resources of certain persons, groups and entities
involved in terrorism, for a prohibition on the making available of funds, financial and economic
resources to such persons, groups and entities and a prohibition on the provision of financial services tothem. It authorises the Council to establish and maintain a list of persons, groups and entities involved in
terrorism. Provision is also made for the granting of authority for the use of funds frozen in accordancewith the Regulation to meet essential human needs and for certain other payments (e.g. taxes, utility billsetc.).
- Council Decision of 27 December 2001 establishing the list provided for in Article 2(3) of Council
Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons andentities with a view to combating terrorism30. This decision contains a list or persons, groups and entities
against whom specific restrictive measures are to be applied in accordance with Council Regulation No
2580/2001. An updated list of persons, groups and entities to which the measures in the Regulation apply
has been published several times.
- Council Decision of 28 February 2002 setting up Eurojust with a view to reinforcing the fight against
serious crime31. This Decision establishes Eurojust, to be composed of seconded prosecutors, judges orpolice officers from each Member State. The objectives of Eurojust are to stimulate and improve thecoordination, between the competent authorities of the Member States, of investigations and prosecutions,to improve cooperation between the competent authorities of the Member States and to support thecompetent authorities of the Member States in order to render their investigations and prosecutions more
effective. The Decision also provides that Eurojust shall establish and maintain close cooperation with
Europol and OLAF (an EU body protecting the financial interests of the Community). It also permits
Eurojust to conclude cooperation agreements with third States and international organisations and bodies.
It may also establish contacts and exchange experiences of a non-operational nature with other bodies, inparticular international organisations and conclude cooperation agreements with third States. Eurojust has
its seat in The Hague and has already dealt with more than 500 cases of serious international crime.
- Council Framework Decision of 13 June 2002 on joint investigation teams32. The Framework Decision
is intended to make the combating of international crime as effective as possible. It considered it
appropriate that a specific legally binding instrument on joint investigation teams should be adopted toapply to joint investigations into drugs/human trafficking and terrorism and that they should be set up, asa matter of priority, to combat offences committed by terrorists. The Framework Decision provides thattwo or more Member States may establish joint investigation teams for a specific purpose and for alimited period to carry out criminal investigations in one or more of the States establishing the team.

29

OJ L 344/70 of 28.12.01.

31

OJ L 063/1 of 6.3.2002.

30

OJ L 344/1 of 28.12.01.

32

OJ L 162/1 of 20.6.02.

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RESOURCE MATERIAL SERIES No. 65- Council Framework Decision of 13 June 2002 on combating terrorism33. The Framework Decision
requires Member States to adopt a common definition of terrorist offence as set out in Article 1. It also
obliges Member States to criminalise certain actions related to terrorist groups or terrorism, such as
directing or participating in the activities of a terrorist group as well as inciting, aiding or abetting andattempting to commit a terrorist offence.

VI. CONCLUSION
As may be seen, the legislative activity of the Council of the EU is impressive. A number oflegislative proposals are under way and many acts have been adopted. The political objective of creating
an Area of Freedom, Security and Justice should be realised gradually. At the same time, the Union needs
to dialogue with its partners because crime does not stop at its frontiers. One interesting example of this
dialogue is the recently signed Treaties on extradition and on mutual legal assistance between the EU andthe United States of America, where the EU for the first time in this context acts as an entity with a legal
personality.34 The Union is also currently negotiating treaties in this area with Norway and Iceland andwill, no doubt, in the future negotiate treaties with its partners.

33

OJ L 164/3 of 22 June 2002.

34

OJ L 181/27, 19.7.2003.

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SPECIAL INVESTIGATION TECHNIQUES AND DEVELOPMENTS IN
MUTUAL LEGAL ASSISTANCE - THE CROSSROADS BETWEEN POLICECOOPERATION AND JUDICIAL COOPERATION

Hans G. Nilsson *I. INTRODUCTION
The international community has during many decades looked at police cooperation and judicial
cooperation in criminal matters as two separates disciplines. Traditionally, police cooperation has been
carried out within the framework of Interpol on a purely bilateral basis. The police have been used tocooperate informally and exchange information, sometimes with a dubious legal basis for doing so. On
the other side, judicial cooperation has been an extremely formalised exercise, more looking likeinternational diplomacy than efficient law enforcement.
However, the globalisation, the internationalisation of crime and its development into very serious
forms including its spread over the world in many different forms has forced judicial cooperation to meet
more and more with police cooperation. It has been realised over the past two decades that police
cooperation in itself is not an end and that it must come closer to the finality of the investigation andprosecution of an offender and the stopping of serious criminality such as trafficking in human beings,
drugs trafficking and terrorism. On the other hand judicial cooperation has, very slowly, become slightly
less formal and more direct, in particular within Europe. It has been understood that modern day
investigations cannot be carried out like they were when there was no Internet, no SWIFT transfers or no
e-mails.
Therefore, the police cooperation, as it traditionally has been seen, has joined mutual legal assistanceand, on the other hand, mutual legal assistance has come much closer to traditional police cooperation. In
fact, the border between the two has become blurred and it is no longer possible to distinguish specificallybetween these forms of cooperation. This development can also be seen in the international legal
instruments that have been adopted within the past two decades. It should also be realised that what may
be considered to be police cooperation in one country could be predominantly a judicial cooperation
measure in another country. Police services may have powers in some countries which are only devolved
to judicial authorities in other countries and vice versa. The difference between common law and civil
law traditions in this respect is great and has certainly contributed to the relatively disparate picture that
one gets when examining international cooperation.
There has also been a shift, in particular in Europe, from traditional judicial cooperation throughcentral authorities or through diplomatic channels, to more direct cooperation between judicial authorities
or by transmission through the International Criminal Police Organisation. The recognition or use ofInterpol is already laid down in the 1959 Council of Europe Convention on mutual legal assistance incriminal matters and has also been recognised in Article 7, paragraph 8 of the 1988 Convention of theUN.

* Head of Division Judicial Cooperation, Council of the European Union. The opinions expressed are those of the author andnot necessarily those of the Institution for which he works.

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It is significant that the UN 1988 Convention deals very little with new forms of cooperation such as
special investigative teams. However, Article 9, concerning other forms of cooperation and training thanthe classical mutual and legal assistance, deals with the enhancement of the effectiveness of law
enforcement action to suppress the commission of offences established in accordance with theConvention. It may be considered to be a precursor to what would follow in other Conventions. This
Article suggests that on the basis of bilateral or multilateral agreements or arrangements the parties shallcooperate with one and another in conducting inquiries with respect to drugs offences having aninternational character, concerning the identity, whereabouts and activities of persons suspected of being
involved in drug offences, the movement of proceeds of property involved in the commission of theseoffences and the movement of narcotic drugs. The Convention suggests in Article 9.1.c., in appropriate
cases and if not contrary to domestic law, that Joint Teams should be established taking into account theneed to protect the security of persons and of operations. Therefore, for the first time the possibility of
the creation of so called Joint Investigation Teams has been established in this Convention. However it
may be that not many Joint Teams have been established under the provisions of the Convention as it isprobably too basic to be able to be implemented properly unless there is complete mutual faith and trust
between the Parties.
The developments under international law continued, however, after the 1998 Convention and anumber of instruments in Europe began to contemplate the taking of specific measures which may beconsidered to be special investigative measures. Before examining some of these measures, it may
however be useful to consider some terminological and methodological issues.

II. WHAT ARE SPECIAL INVESTIGATION TECHNIQUES?
There is to my knowledge no internationally agreed definition of what constitutes special
investigation techniques. It would be possible to make two kinds of definition, one functional definition
simply enumerating some techniques which are known in police or judicial cooperation, or to make ageneric definition. In literature, one has distinguished between the use of subterfuge and the overt or
secret nature of police or judicial action. In addition, it has also been considered the interaction between
investigating and prosecuting authorities and the witnesses, suspects and the third parties.
The use of subterfuge involves a certain degree of deception: there is a procedure which seems to leadan individual to perform certain acts or reveal certain information by generating a divergence between
what is supposed to be the case and what is expressed in a conventional manner or otherwise. Infiltrationand pseudo-purchases are examples.
The overt or secret nature is present where an attempt is made to conceal what is being done. The
tailing of a person, telephone tapping and filming of persons are by nature secret. The aim of the secrecy
is not to alter the behaviour of the presumed offender but to deprive him of his information.
Secrecy is distinguished from deception: the latter involves falsifying information; the former isintended to deprive the suspect of information. The degree of secrecy may vary: the accused may be
informed post facto of the results of telephone tapping, tailing and filming while the identity of an
infiltrated officer will usually be kept secret up to and including the trial stage.
As for the interaction with the individuals concerned, this is brought into play by the interrogation of asuspect, the questioning of a witness or confrontations.

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Through a combination of these three variables, one can classify criminal investigation procedures
under eight headings:
1. Overt investigations with interaction and without deception(Example: examination by a judge, interrogation, confrontation)
2. Overt investigations without interaction and without deception(Example: visit to a home, scientific police investigations, expert reports)
3. Secret investigations with interaction and without deception(Example: use of informants)
4. Secret investigations without interaction and without deception(Example: tailing information tapping or monitoring of telecommunications)
5. Overt investigations with interaction and deception(Example: false promises and dissimulation and falsehood in the course of interrogation)
6. Overt investigations without interaction or deception(Example: subjecting a vehicle to a compulsory road security check in order to search itsurreptitiously)
7. Secret investigations with interaction and deception(Example: undercover operations)
8. Secret investigations without interaction and deception(Example: use of enticements and traps to enable the commission of an offence)
If one chooses a more generic definition of special investigation techniques they may consideredbeing techniques for gathering information systematically in such a way as not to allow the target person
to know of them, applied by law enforcement officials for the purpose of detecting and investigating
crimes and suspects .
When the Council of the European Union worked on identifying special investigative techniques it
identified a number of categories. The following are some examples:
1. Interception, recording and transcription of telecommunications
2. Interception and recording of other forms of communications
3. Interception, recording and tracing of communications in the area of computer crime
4. Tracing of telecommunications
5. Observation
6. Observation and surveillance by video camera
7. Infiltration
8. Infiltration by an undercover agent of the requested state
9. Infiltration by an undercover agent of the requesting state in the territory of the requested state
10. Infiltration by an informer of the requested state
11. Handling of informers
12. Cross-border observation
13. Cross-border hot pursuit
14. Cross-border tracking
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15. Controlled delivery
16. Pseudo purchases
A number of other techniques could also be mentioned such as in general undercover operations
including covert investigations, front store operations (for instance undercover companies), controlled
deliveries, electronic surveillance of all forms, searches (including on premises or objects), agent
provocateurs , etc... Also the increasing use of so-called Joint Investigative Techniques may bementioned in this context as a special investigative technique.
There is of course a fine line to be drawn between so-called special investigation methods and police
investigation techniques. Police investigation techniques may be applied to back up special investigation
methods. They are applied within the same legal framework and according to the same principles,particularly proportionality and necessity. Special police investigation techniques may be used where
special investigation methods have been authorised. For instance observation may necessitate the use ofparticular technologies (such as bugging) but the use of such technologies alone is not per se special
investigation methods.
One could also distinguish between whether the special investigation methods used are utilised inproactive or reactive investigations. The question here is whether the special investigation methods could
be used in the preparatory phase of criminal investigations, perhaps even before a specific crime has been
identified.
The use of a special investigation method in proactive criminal investigations is of course sensitivefrom the point of view of protecting individual liberties but it appears that in many Member States of theEuropean Union this is a possibility under certain conditions, such as that there should be a legal
framework for the method and that there is adequate control, in particular judicial control. In addition,
there must be a reasonable suspicion that an offence will be committed and that the investigation method
is used exceptionally. In particular the safeguarding of public order needs to be taken into account. Thereis ample case law from the European Court of Human Rights in relation to when a reasonable suspicion
arises. There must be an existence of facts or information which will satisfy an objective observer thatthe person concerned may have committed the offence. What may be regarded as reasonable will
however depend on all the circumstances, as noted in a judgement on 30 August 1990.
During the early 1990 s, a number of international developments in Europe could be recorded which
had a bearing on special investigative techniques. Such developments were linked with the gradualabolition of the border controls of the Member States (the so-called internal borders of the Union) and thesubsequent necessity for the adoption of so-called flanking measures, i e measures that were necessary tomaintain law and order in a Union which no longer had borders. It may be questioned whether these socalled flanking measures actually were motivated by the abolition of the frontiers or instead whether
crime in itself must not be fought?
Be it as it may, in the so-called Schengen Convention of June 1990, implementing the Schengen
Agreement of 14 June 1985, on the gradual abolition of checks at common borders, a number of special
investigation techniques were included. These measures were applicable only to five Member States inthe beginning but were increased to include, in principle, all Member States of the EU, Norway and
Iceland.
In article 39 of the Convention, the contracting Parties undertook to ensure that their police authorities
shall, in compliance with national legislation, and within the scope of their powers, assist each other for42

125TH INTERNATIONAL TRAINING COURSE
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the purpose of preventing and detecting criminal offences, so far its national law does not stipulate thatthe request has to be made by the judicial authorities and provided that the request of the implementation
thereof does not involve the application of coercive methods by the requested Contracting Party.
In accordance with Article 40, police officers in one of the Contracting Parties who, within theframework of a criminal investigation, are keeping under observation in their country, a person who ispresumed to have taken part in a criminal offence to which extradition may apply, shall under certain
conditions be authorised to continue this observation in the territory of another Contracting Party. Even
without prior authorisation the police officers may also be authorised to continue beyond the border undercertain specified conditions in Article 40 paragraph 2.
There are a number of general conditions that have to be satisfied in order to allow this cross-bordersurveillance. For instance, the officers carrying out the surveillance must comply with the law of theContracting Party in whose territory they are operating and obey the instructions of competent local
authorities. They must also carry documents certifying that authorisation has been granted and that they
are acting in an official capacity. They are allowed to carry service weapons during the surveillance but
would not be able to use these weapons except in cases of legitimate self-defence.
Article 41 of the Schengen Convention deals with hot pursuit. This hot pursuit is authorised tocontinue in the territory of another Contracting Party without prior authorisation where, given theparticular urgency of the situation, it is not possible to notify the competent authorities of the Contracting
Party prior to the entry into its territory. The hot pursuit could be continued in a specified number ofkilometres inside the territory of the other Party.
It should be noted that since these far going international provisions, in effect transfer in certain
respects some parts of their sovereignty to the other Contracting Parties, it was felt necessary to solve theissue of responsibility for acts committed by a police officer when operating inside another Contracting
Party s country and also to solve the issue of responsibility for damages caused by police officers during
the course of their mission. All these measures were also combined with other measures such as the setting
up of Joint Police Stations close to the borders and having common training and exchange of officers.
It should also be noted that under Article 53 of the Schengen Convention requests for mutual legal
assistance may be made directly between judicial authorities and returned by the same channels. Thispossibility of direct communication should however not prejudice the possibility of requests being sent
and returned between Ministries of Justice or through national central offices of Interpol. The Schengen
Convention abolished therefore the old requirement of communication by central authorities contained in
the 1959 Convention.
Gradually one may observe in the European Union that Article 53 has now been, to a large extent,
implemented and that most judicial cooperation between the Member States of the European Union is
now taking place bilaterally.
At the same time as the negotiations on the Schengen Convention and the 1988 Convention of theUN, negotiations were carried out within the framework of the Council of Europe. These negotiations
started 1986 with the setting up of a special committee that would elaborate a convention on Laundering,search, seizure and confiscation of the proceeds from crime. The Convention, which was to be included
as European Treaty series number 141, was signed on 8 November 1990 and entered into force in 1993.
It has now nearly 40 ratifications and may be considered to be at least an equivalent success as that of the1957 and 1959 Conventions of the Council of the Europe 2.
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The Council of Europe Laundering Convention contains some language that may be fitted into thesection on special investigation techniques. It contains a general obligation for a Party in Article 3 toadopt such legislative and other measures as may be necessary to enable it to identify and trace property
which is liable to confiscation and to prevent any dealing in, transfer or disposal of such property. In its
Article 4 special recognition is given to the so-called special investigative powers and techniques . A
Party is under this Article obliged to adopt such legislative and other measures as may be necessary toempower its courts or other competent authorities to order that bank, financial or commercial records bemade available or be seized in order to carry out confiscation and investigative and provisional measures.
A weaker provision is found in Article 4, paragraph 2, which provides that each party shall consider
adopting such legislative and other measures as may be necessary to enable it to use special investigativetechniques facilitating the identification and tracing of proceeds and the gathering of evidence related
thereto. Such techniques may include monitoring orders, observations, interception of
telecommunications, access to computer assistance and orders to produce specific documents.
Under the Convention the Parties are obliged to assist each other in the identification and tracing of
instrumentalities, proceeds and property liable to confiscation. As already has been mentioned, there is apossibility for Parties to forward information spontaneously; this was the first time to my knowledge thatprovisions concerning spontaneous information were contained in an international instrument. The
background to this provision was that the drafters of the Convention looked at some conventions on
exchange of information in tax matters and drew the parallel to conventions on judicial cooperation incriminal matters.
The development of mutual legal assistance in the European Union did not stop with the setting up of
the European Judicial Network, the adoption of the Joint Action concerning best practices in mutual legal
assistance and the development of Eurojust, i.e. the new European Union prosecuting agency having its
seat in The Hague. On 29th May 2000, the Council adopted a new convention on mutual assistance incriminal matters between the Member States of the European Union and decided to include a number of
special investigative measures into the Convention. Among these measures is the spontaneous exchange
of information, hearing by video conference, hearing of witnesses and experts by telephone conference,
controlled delivery, joint investigation teams, and covert investigations.
The most important, and most difficult, measure of special investigative techniques that was includedin the Convention was the interception of telecommunications. It took the Council nearly two years tonegotiate the five articles concerning this highly sensitive topic. Moreover it turned out that thetechnologies changed all the time so that, for instance, certain types of telecommunications were madeavailable during the negotiations and certain companies involved in satellite communications went into
bankruptcy, etc. The complexity of the issue is clear when reading the headings of article 19 and 20:
interception of telecommunications on national territory and interception of telecommunications without
the technical assistance of another Member State. The first type of interception is in connection with theuse of service providers. It will not be possible in the context of this paper to go more deeply into thevarious measures. It is sufficient to note that although the European Union is by definition an area of
freedom, security and justice where the Member States have a high level of trust in each other, still theprovisions concerning special investigative techniques show that some mistrust or at least caution has
been required in the drawing up of these provisions. No doubt this has to do with the fact that this special

2

A full description of the work of the Convention is found in Criminal Law Forum 1991, Volume 2 number 3, by the author ofthis paper, with the title the Council of Europe laundering convention - a recent example of the developing international law .

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investigative technique is so intrusive and necessitates judicial control in conformity with the Member
State s constitutions and the European Convention on human rights.
The negotiations in the European Union had a direct impact also on the negotiations of the Palermo
Convention. This is clear from article 19 which concerns Joint investigations and article 20 which
concerns special investigative techniques. One may however note that the UN context has considerablywatered down the provisions in that for the Joint Investigations the States Parties shall consider
concluding bilateral or multilateral arrangements or arrangements and they shall ensure that sovereignty
in the other State Party whose territory such investigation is to take place is fully respected. Therefore asimple legal framework, really an exhortation without any substantive operationality, has been included.
The same may be said for the special investigative techniques included in article 20. There aresafeguards relating to the fact that the techniques must be permitted by the basic principles of thedomestic legal systems, safeguards relating to the fact that they must be within the possibilities of a State
Party and under the conditions prescribed by its domestic law. Controlled delivery is one of the measuresand, where it is appropriate, also the use of other special investigative techniques are contemplated. States
Parties are encouraged to conclude when necessary appropriate bilateral or multilateral agreements forusing the special investigative techniques.

III. CONCLUSION
Crime evolves and the international conventions with them. However with the present pace andreticence among the international community, it is not sure that we will manage to fight 21st Century
criminals with the tools that are adapted to the society of today. Ratification of conventions is slow,
political will is lacking in some quarters of the planet and resources are unfortunately scarce in many
States. At the same time the criminals use more and more sophisticated techniques, modern means oftelecommunications, e-mails and the Internet, and have vast resources due to their criminal acts.
The truth of the matter is that law enforcement will always be behind modern day criminals.
However, law enforcement has at its disposal special investigative techniques, which may be very
efficient. These techniques need however, to be used with caution: a balance has to be found between therespect for individual rights and the need to safeguard the collective interests. Investigative means
require a legal basis and its effects must be foreseeable. Investigations must be necessary and the results
impossible to achieve by other means interfering less with individual rights and freedoms.
There must also be a certain margin of appreciation in deciding what measures to take, both in generaland in particular cases those that should be left to the national authorities. In doing so there must be fairbalance between the individuals fundamental rights and the democratic societies legitimate rights toprotect it against criminal activities. This balance is not always easy to find.

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CHALLENGES FACING U.S. ANTI-MONEY LAUNDERING EFFORTS IN
TRANSNATIONAL CRIME

Linda M. Samuel *I. INTRODUCTION
Astute drug traffickers and other criminals are increasingly committing their crimes in one country
and hiding and sheltering their vast wealth elsewhere. The various ways criminals move funds acrossinternational boundaries is limited only by their imagination. They do it the old fashioned way by handcarrying it in suitcases, across the Mexican border on horseback, in body cavities, and of course throughfinancial institutions, including wire transfers and commercial transactions involving undervalued or
overvalued commodities or falsified loan arrangements. Why do criminals do this? They know that there
are still many countries on this earth that have weak enforcement and will provide their wealth a safe
haven so that they can enjoy the fruits of their crime and use the money to further and continue theirillegal activities. The result is that money laundering has become a global problem involving
international financial transactions, the smuggling of currency cross borders, and the laundering in one
country of the proceeds of crimes committed in another country. Indeed, that virtually every significant
money laundering case in the United States is now transnational in nature is the rule, rather than the
exception. This crime of money laundering has devastating social consequences and is a threat to thesecurity of all our nations. We are all in agreement that to disrupt and dismantle organized criminalgroups, we must attack the economic underpinnings of their crimes by following the money flow andusing forfeiture to take away their financial networks. When the money flows are transnational,
international cooperation is vital. Where the mechanisms for rendering assistance from one country toanother are too slow and frustrate rather than facilitate cooperation then we must change our ways andstreamline our legal assistance procedures. If we are not willing to do this, the criminal will always stay
one step ahead of the law. Outlined below are three critical areas which are essential components for any
country s anti money laundering regime.

II. STRONG DOMESTIC MONEY LAUNDERING LAWS, WHICH HAVEFORFEITURE AS ITS CENTREPIECE
Having an effective legislative framework must be a priority for every country. Each nation must
criminalize money laundering and needs an effective system to identify, trace, freeze or seize andultimately confiscate property involved in serious profit generating offences. It is critically important tohave an ability to take away the economic incentive that criminals enjoy from their crimes - which
provided the motivation for them to commit the crimes in the first place. As an important starting point,countries should take stock in their own national laws to see where domestic cases have broken down and* Linda M. Samuel serves as the Deputy Chief of the Asset Forfeiture and Money Laundering Section of the United States
Department of Justice in Washington, D.C. overseeing international forfeiture and money laundering programmes. The views
expressed in this paper, however, are the personal views of the author and do not necessarily represent the official views orpolicies of the Department of Justice.

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where their system has failed them. It is a pretty good indicator that if a country is unable to do forthemselves, they will be unable to do for others. Whether there is a political will to make needed
legislative changes is an entirely different matter. In the United States, we have experienced enacting
relevant legislation both with and without political will in two recent laws - the Civil Asset Forfeiture
Reform Act of 2000 ( CAFRA ) and the USA Patriot Act of 2001 ( the Patriot Act ). Prior to thepassage of CAFRA, the Department of Justice had been trying unsuccessfully to amend the forfeiturelaws for the better part of nine years. Year after year some other issue became the national priority for ourCongress, and civil forfeiture reform was put on the back burner. On the other hand, following theterrorist attacks of September 11th, there was nothing more important to Congress than giving U.S. law
enforcement the tools they required.
For its part, the United States made significant changes to its money laundering law as a result of theenactment of The Anti-Terrorism Act of 2001 (USA Patriot Act), Public Law 107-56, which became
effective on October 26, 2001. The Patriot Act was enacted in record speed - some six weeks following
the terrorist attacks. Most importantly, in many instances, these new powers are not limited to terrorism
cases. Well before September 11, those in law enforcement - both police and prosecutors - knew for sometime that our money laundering and forfeiture laws were inadequate. Even the criminals knew of the
weaknesses of U.S. law and could capitalize on them. When our laws were enacted in 1986, they wereintended to address primarily a domestic problem. The laws were not designed with international
considerations in mind such as when the illicit proceeds were beyond our borders, and conversely what
protection we could give to other countries when the illegal money was in the U.S. but the crime thatgenerated those funds was committed abroad and did not violate U.S. penal laws. Indeed, until recently,
United States federal law for the most part did not permit the forfeiture of the proceeds of foreign crimes.
As another example, our laws require notice on third parties but did not adequately address how we coulddeliver notice on third parties who lived outside the United States, and the time limits we place on
domestic notice are not always reasonable considering the time it may take to locate a foreign interested
party, make a legal assistance request, and have that request executed. Furthermore, our laws did not
facilitate the introduction of foreign bank records and other foreign evidence in U.S. court proceedings,
especially in civil forfeiture cases.
But, as we all know, money laundering has become a global problem with the use of technology to
conduct business and transfer funds from one country to another. For instance, in the area of corruption,
we have all read in the newspapers such names as Abacha, Bhutto, Fujimori, Lazarenko, Marcos, andSuharto, to name a few heads of state and high ranking government officials and about their family
members, cronies, and collaborators who have laundered their illicit enrichments by transferring them tojurisdictions abroad.
By amending the money laundering laws as part of the Patriot Act, the United States has strengthened
its ability to assist foreign government by improving our capacity to recognize foreign restraining orders
and forfeiture judgments. Importantly, we have further expanded the list of foreign crimes that are
predicate offences under the money laundering laws to include: an offence against a foreign nation
involving bribery of a public official, or the misappropriation theft, or embezzlement of public funds byor for the benefit of a public official; all crimes of violence; smuggling munitions or technology withmilitary applications; and any offence with respect to which the United States would be obligated by any
multilateral treaty to extradite or prosecute the offender.
In the Patriot Act, Congress broadened our law enforcement authority in many respects to improve
U.S. anti money laundering efforts to combat terrorist financing. Among other things, the law provides
broad civil forfeiture authority against domestic and foreign based property involved in terrorism and47

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terrorist financing offences 1 and making terrorist financing a predicate offence for money laundering.
These powers combined with a pre-existing law allowing for direct forfeiture authority for the proceeds
predicate offences, including the foreign offences, as well as instrumentalities used in those crimes are
extremely potent weapons in a prosecutor s arsenal to combat terrorism.
In addition, pursuant to 18 U.S.C. § 1960, any money remitter, licensed or unlicensed, who operates
a business knowing that the funds being transmitted are derived from a criminal offence, or are intended
to be used for an unlawful purpose can be prosecuted. The scope of the statute as amended is greater than
the scope of existing money laundering laws because there is no $10,000 requirement and because there
is no specific intent requirement if the money constitutes criminal proceeds, and no proceeds requirement
if the money is intended to used to commit an unlawful act.
Also, Congress enacted a new provision, 31 U.S.C. § 5332, which makes bulk cash smuggling acriminal offence. Because it was already a crime to fail to file a CMIR report (failure to report crossborder currency movements involving $10,000), the practical effects of section 5332 are to enhance theability of the Government to forfeit the unreported currency, and to make it possible to prove that anoffence was committed before the defendant actually reached the border crossing where a CMIR report
has to be filed.

III. MUTUAL LEGAL ASSISTANCE LAWSCountries need to be able to cooperate internationally where the crime occurs outside their borders but
the proceeds generated are located within their borders. They must have laws and procedures to restrain
assets at the request of another jurisdiction and to enforce foreign forfeiture judgments rendered by courts
in other jurisdictions so that they do not become safe havens to criminals and their illicit wealth. The
following are six areas where experience has shown us that the legal systems of sovereign states
frequently do not mesh, thereby impeding effective cooperation. Even where there are good domestic
laws in place, the protections that law enforcement can provide does not always extend to the situations
where the crime occurs outside a country s borders but the proceeds generated are within its borders andto the situations where the requested state must initiate its own domestic forfeiture or laundering
proceedings in order to render legal assistance. The obstacles include:
A. Inadequate Scope of Covered Offences
A significant gap that can be exploited by criminal groups results from their knowing in which
jurisdictions it is not a crime to launder the proceeds of foreign offences. To determine whether this issue
manifests itself, one must first look to determine what legislative scheme is in place in the affectedjurisdiction. The specific issue of whether a country can assist given the offence involved, typically turns1

See 18 U.S.C. § 981(a)(1)(G)(iii) which makes subject to forfeiture all assets, foreign or domestic, derived from, involved in,
or intended to be used to commit any act of domestic or international terrorism. Under this provision, the burden of proof is on
the property owner to prove that the property is not subject to forfeiture. Hearsay evidence is admissible in somecircumstances to protect national security. Additionally, terrorist assets are broadly defined to be All assets, foreign anddomestic - (1) Of any individual, entity, or organization engaged in planning or perpetuating any act of domestic orinternational terrorism against the U.S., U.S. citizens or residents, or their property, and all assets, foreign or domestic,
affording any person a source of influence over any such entity or organization; (2) Acquired or maintained by any personwith the intent and for the purpose of supporting, planning, conducting, or concealing an act of domestic or international
terrorism; (3) Derived from, involved in or used or intended to be used to commit any act of domestic or international terrorism
against the U.S., U.S. citizens or residents, or their property.

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on whether the particular country in question has adopted a list approach or an all-crimes approach in its
anti-money laundering law. The United States went down the path of having a list approach of predicate
offences in its money laundering law. Currently, we have more than 200 specified unlawful activities thatare predicate crimes for money laundering. To those of you here today from countries that are developing
their laws for the first time or seeking to modernize their laws, I would submit that our approach is not theone to follow. In the past, often times persons who committed crimes outside the jurisdiction of theUnited States could deposit their illicit proceeds in the United States with impunity because many foreign
offences were not contained on our list of predicate offences. However, it should not matter where thepredicate offence took place so long as the conduct would have been criminal if it had occurred where theproperty is found. The rationale for criminalizing money laundering should be the same regardless of theunderlying offence involved -whether it be drug trafficking, extortion, alien smuggling, or internet fraud and regardless whether the offence was a violation of United States law or that of another nation.
Currently, the foreign specified unlawful activities or money laundering predicates in the UnitedStates include an offence against a foreign nation involving:
1. the manufacture, importation, sale, or distribution of a controlled substance (as such term isdefined for the purposes of the Controlled Substances Act);
2. murder, kidnapping, robbery, extortion, destruction of property by means of explosives or fire ora crime of violence (as defined in section 16);
3. fraud, or any scheme or attempt to defraud, by or against a foreign bank (as defined in paragraph
7 of section 1(b) of the International Banking Act of 1978);4. bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by orfor the benefit of a public official;
5. smuggling or export control violations involving(i) an item controlled on the United States Munitions List established under section 38 of theArms Export Control Act (22 U.S.C. 2778); or(ii) an item controlled under regulations under the Export Administration Act of 1977 (15C.F.R. Parts 730-774);
6. an offence with respect to which the United States would be obligated by a multilateral treaty,
either to extradite the alleged offender or to submit the case for prosecution, if the offender were
found within the territory of the United States.
We still do not have complete parity in our domestic and foreign lists, but we expect that the numberof cases where we will be able to render international assistance will certainly increase because now it is acrime in the United States to launder proceeds of more foreign offences. Additionally, both the proceeds
and the instrumentalities from all these foreign offences are now subject to forfeiture.
B. Inability to Assist in Civil Forfeiture Cases
As many of you know, the United States has both criminal and civil (or in rem) forfeiture. In thelatter instance, the United States is able to forfeit the property without convicting a person of a crime.
The non-conviction based forfeiture proceedings are quasi criminal in nature, and the government must49

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prove that the property at issue was either derived from the commission of a criminal offence or was used
to commit an offence. Nevertheless, the United States has been denied assistance from jurisdictions thathave only criminal based forfeiture systems. The result is that tainted property is not restrained andremains available to the criminal because the jurisdiction where the property is located has no one toprosecute. All too frequently the suspect is a fugitive, unidentified, or living comfortably in a jurisdictionthat does not extradite its nationals. In some cases, the target is dead. Yet often times, there is strong even incontrovertible - evidence that the subject property was involved in crime. Under a civil forfeiture
statute, an action can be brought to forfeit property irrespective of the status of the owner. Indeed, U.S.
law even permits prosecutors to file a civil forfeiture action against foreign-based property. In manycases, an in rem action is undertaken in conjunction with a criminal investigation. In all cases, theprosecutor must demonstrate that a crime has been committed and that the property at issue was derived
from or used in a criminal offence. Perhaps if some requested states had a better understanding of thecivil forfeiture process, they might be more willing to render assistance in the freezing of assets,furnishing bank records, serving notice, and enforcing orders in civil forfeiture cases.
Consider the cases of notorious Colombian drug traffickers who distributed cocaine to the UnitedStates and laundered their drug proceeds in banks throughout the world. Suppose these drug traffickers
are killed during raids with the police, which is not beyond the realm of possibility given the fate of Pablo
Escobar, Julio Rodriguez-Gacha, and Jose Santa Cruz Londono. Since these kingpins are no longer
available for prosecution in Colombia or for extradition to the United States where they were indicted,
civil forfeiture actions are the only mechanism in the United States to confiscate their massive criminal
wealth.
In accordance with United States law, 28 U.S.C. § 1355(b)(2), United States district courts are
vested with extraterritorial jurisdiction and venue over assets located beyond U.S. borders that are subject
to civil forfeiture under United States law. Section 1355(b)(2) is particularly useful in cases where theforeign country in question cannot forfeit the property under its own laws, but may be able to take othersteps that advance the United States forfeiture effort (e.g., seize the property, enforce a United States
forfeiture judgment, or repatriate the assets). In such cases, once the assets have been civilly forfeited in
the United States, we can transmit the final civil forfeiture judgment to the foreign country for
enforcement or repatriation of the assets.
However, in some jurisdictions, where they have no one to prosecute and cannot assist the UnitedStates in civil forfeiture matters, the unjust result is that drug proceeds will revert to the heirs of thedeceased drug trafficker. We are heartened to learn of the increasing number of countries that recognize
this gaping hole in the international arena and have extended their legal assistance laws to cover civil
forfeiture proceedings as being related to foreign criminal investigations or have themselves adopted civil
forfeiture laws.
C. Inability to Restrain Assets
Taking provisional measures is perhaps the most important act a requestedcountry can take on behalfof a requesting country. Countries need to be able to respond swiftly to foreign requests to seize or freeze
criminal assets located in their borders and to preserve those assets until they are forfeited. This is a
critically important step to prevent their dissipation.
Previously, the United States capacity to render this kind of assistance was seriously deficient. Now,
where the statutory requirements of the Patriot Act are met, U.S. prosecutors can freeze assets at therequest of another country. Foreign nations seeking a restraining order in the United States of America
must (1) be a party to the United Nations Convention Against Illicit Traffic in Narcotic Drugs andPsychotropic Substances or maintain a treaty or other formal international agreement that provides for50

125TH INTERNATIONAL TRAINING COURSE
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mutual forfeiture assistance with the United States of America, and (2) allege that the foreign offence
committed for which forfeiture is sought constitutes a violation for which property could be forfeitedunder federal law if the offence were committed in the United States. Where a U.S. prosecutor files amotion for a restraining order with the court based on foreign evidence, the court may rely on information
set forth in an affidavit describing the nature of the proceeding or investigation underway in the foreigncountry, and setting forth a reasonable basis to believe that the property to be restrained will be named ina judgment of forfeiture at the conclusion of such proceeding. Alternatively, to preserve the availabilityof property subject to a foreign forfeiture or confiscation judgment, a U.S. prosecutor can seek to registerand enforce another country s restraining order. In this case, the Attorney General must certify that it is in
the interest of justice to give effect to such foreign orders. The duration of the restraining order can vary.
Where notice would likely jeopardize the availability of the property for forfeiture, the U.S. court isauthorized to enter a temporary restraining order for a period not exceeding ten days (unless extended forgood cause shown or unless the party against whom it is entered consents to an extension for a longer
period) without prior notice or opportunity for a hearing. Upon entry of the ex parte temporary
restraining order, the United States will then provide notice of the restraint to persons and entities affectedby the order and so that they may seek a hearing in regard to this matter. After a hearing upon notice tointerested parties, the United States can seek a restraining order, subject to renewal in 90 day intervals.
To help deal with the situation where a foreign country is unable to restrain assets for us, the UnitedStates has enacted a unilateral measure in the Patriot Act to permit Federal prosecutors to seek court
orders directing defendants to repatriate their foreign based criminal wealth to the United States where it
can be preserved pending forfeiture. This provision is particularly helpful where the jurisdiction where
the property is located is unable to freeze the assets at the request of the United States. Although we
expect that few, if any, countries will be able to honour these orders through registration and enforcement,
there is nonetheless a benefit under our system in that the law permits the court to hold the defendant incontempt for his or her failure to comply with such order to return assets to the United States that he or
she has laundered elsewhere. Additionally, there are enhanced sentencing provisions for the recalcitrant
defendant.
This is not the only area in the Patriot Act that confers unilateral powers to immobilize assets. Wherecountries still invoke bank secrecy to thwart the efforts of law enforcement or otherwise declines tocooperate, we have found it necessary to find ways to circumvent those jurisdictions by providing selfhelp type measures to direct action against U.S. banks serving to conduct business in the United States
for foreign banks.
The Patriot Act has created a new civil forfeiture statute, 18 U.S.C. § 981(k), to permit the forfeitureof funds held in U.S. correspondent accounts on behalf of foreign banks. By authorizing prosecutors to
substitute funds in correspondent accounts in U.S. financial institutions for the funds in the targeted
foreign bank account, they will now be able to seize and forfeit criminal assets that previously may havebeen beyond our reach. In other words, where the government can show that forfeitable property wasdeposited into an account at a foreign bank, U.S. prosecutors can now file a civil forfeiture action against
the equivalent amount of money that is found in that foreign bank s correspondent account located in the
United States. Previously, U.S. dollars derived from crime were deposited in offshore accounts where
they were promptly transferred back to the United States in a correspondent account held in the name of
the foreign bank. The criminal was able to avoid the forfeiture of his funds because they are held in thename of the foreign bank and not the offender. The government was required to trace the deposited funds
into the correspondent account, and the foreign bank was considered to be the owner of the funds.
Because the foreign bank was, in most cases, an innocent owner, the government could not successfully
maintain a civil forfeiture action. The law redefines who is an owner of the funds for purposes of51

RESOURCE MATERIAL SERIES No. 65

contesting a forfeiture proceeding and applying the innocent owner defence. The owner of the funds isdefined as the account holder at the foreign bank - not the foreign bank itself - which means that theforeign bank whose account will be the subject of the forfeiture proceeding will lack standing to object tothe U.S. forfeiture action.2 Moreover, it is no longer necessary to trace the money in the correspondentaccount to the foreign deposit. Under the Patriot Act, if the bank where the criminal proceeds are locatedhas a correspondent bank account in the United States with available funds, civil forfeiture of an amountequivalent to the tainted funds is now authorized from the correspondent account at a bank in the UnitedStates. The Department of Justice does not intend to use this new forfeiture authority in every case as an
avenue of first resort, especially where established effective procedures for international cooperation
already exist.3 Indeed, the U.S. Department of Justice recognizes the controversial nature of these
extraordinary powers and the possible adverse consequences to our international law enforcement
relations with our foreign counterparts and the international banking community. Nevertheless, in theaftermath of the terrorist attacks, the United States believed that drastic and aggressive measures wereneeded so long as jurisdictions are willing to provide safe havens for criminal proceeds and to impose
insurmountable barriers to international cooperation in the investigation and prosecution of money
laundering and asset forfeiture cases.
Similarly, prosecutions in the United States have been impeded on numerous occasions because ofprosecutors and agents have been unable to obtain foreign bank records, even when those foreign banks
maintain a presence in the United States or maintain funds in a correspondent bank account there.
Notwithstanding any mutual legal assistance treaty relationship we may have with any particular country,
foreign banks that maintain correspondent accounts in the United States must now designate a
representative within the United States to receive government subpoenas. Under this provision, Section
319(b) of the PATRIOT Act, which is codified at 31 U.S.C. 5318(k), the Attorney General and theSecretary of the Treasury may issue subpoenas to foreign banks that maintain accounts withcorrespondent banks in the United States in order to obtain records related to the U.S. correspondentaccounts, including records maintained outside of the United States relating to the deposit of funds into
the foreign bank, irrespective of foreign secrecy laws and the formal international legal assistanceprocess. If the bank fails to comply with the subpoena, the domestic financial institution must terminate
its correspondent relationship with that foreign bank not later than ten business days after receipt of
written notice from the Secretary or the Attorney General that the foreign bank has failed either to comply
with the subpoena or to initiate proceedings to contest it.4 The result is that those non cooperating foreignbanks that accept criminal proceeds will not be able to enjoy access to the United States financial system.
D. Inability to Enforce Foreign Forfeiture Judgments
Where a crime has been committed in one jurisdiction and the illicit proceeds arein another, it is notalways practical or possible to conduct prosecutions in each country.

2

The foreign bank will be permitted to contest the forfeiture when it is alleged to have been the wrongdoer or when the foreigndepositor had already withdrawn the money from the foreign bank before the money in the correspondent account was
restrained or seized.

3

Section 319(a) addresses this possible issue by allowing the Attorney General, in consultation with the Secretary of theTreasury, to suspend or terminate a forfeiture if the Attorney General determines that a conflict of law exists between the lawsof the jurisdiction in which the foreign bank is located and the laws of the United States with respect to liabilities arising fromthe restraint, seizure, or arrest of such funds . . . . and that such suspension or termination would be in the interests of justice
and would not harm the national interests of the United States .

4

Failure to terminate the correspondent relationship in accordance with these provisions shall render the U.S. financial
institution liable for a civil penalty of up to $10,000 per day until the relationship is terminated.

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Therefore, the capability of countries to register and enforce foreign forfeiture judgments is anecessary component of any international forfeiture regime. Without this capacity, courts in the country
where the criminal assets are located must then waste precious judicial and prosecutive resources toinstitute duplicative proceedings against property that has already been forfeited in another jurisdiction.
Although the United States lagged behind many jurisdictions in obtaining thisauthority, we can now
finally register and enforce the final civil and criminal forfeiture judgments entered by courts in othercountries. Pursuant to 28 U.S.C.§ 2467, the United States can give effect to foreign forfeiture judgments
rendered in connection with any violation of foreign law that would constitute a violation of an offence
for which property could be forfeited under federal law if the offence were committed in the UnitedStates. The requesting state seeking enforcement of its forfeiture judgment enforced must be a party to
the Vienna Convention or have entered into a treaty or other international agreement with the UnitedStates that provides for forfeiture assistance, and the request for enforcement must be certified by the
Attorney General or his designee. We will file such final judgment with federal courts and domesticate
them, thereby treating the judgment as if it had been rendered by a court in the United States. The courtin the United States will be bound by the findings of fact in the foreign court order, and may decline
enforcement in only very limited circumstances involving fundamental due process deprivations such aslack of notice, lack of jurisdiction, or fraud in the foreign proceedings. In addition to the judicial
economy considerations by avoiding duplication of efforts, the benefit of such a provision is that thedefendant or person affected by the order cannot have two bites at the apple. In other words, he or she
will not be permitted two opportunities in two different forums to litigate and contest the forfeitability ofthe property.
E. Payment of Attorneys Fees from Criminal Proceeds
In the United States, a criminal defendant has a constitutional right to counsel pursuant to the Sixth
Amendment of the Constitution. However, he or she does not have a right to high-priced counsel or evena right to counsel of his or her own choice. Additionally, this constitutional right to counsel applies only
in criminal proceedings and does not extend to civil forfeiture cases. Moreover, a defendant does nothave the right to use criminal wealth and property subject to forfeiture to pay for attorneys fees. The rulein the U.S. is that a defendant cannot use forfeitable property to pay for defence counsel.5 The notion isthat money stolen in a fraud case or earned in a drug deal belongs to the Government and the victims, notto the defendant; so he cannot use it to pay his attorney. Even where the defendant claims he needs thefunds to hire defence counsel, the rule in the U.S. is that the funds remain under restraint if theGovernment satisfies the court that it has probable cause to believe that the funds will be forfeited in
the event of a conviction.6
Other countries, however, permit a defendant to draw down against restrained criminal funds forliving expenses and lawyers fees.
If a criminal robbed a bank and was captured holding the bags of cash taken from the vault, I think wewould all agree that the money would be returned to the bank, and the robber should not be entitled to use
the proceeds of his crime to pay for his lawyers to mount his defence. It should be no different for other5

See Caplin & Drysdale, Chartered v. United States, 491 U.S. 617, 109 S. Ct. 2646 (1989); United States v. Monsanto, 491 U.S.
600 (1989).

6

See United States v. Jones, 160 F.3d 641 (10th Cir. 1998) (defendant has initial burden of showing that he has no funds otherthan the restrained assets to hire private counsel or to pay for living expenses, but if he makes this showing he is entitled to ahearing); United States v. Farmer, 274 F.3d 800 (4th Cir. 2001) (defendant entitled to pre-trial hearing if property is seized for
civil forfeiture if he demonstrates that he has no other assets available; following Jones); United States v. Jamieson, 189 F.
Supp.2d 703 (N.D. Ohio 2002) (same, following Jones; to satisfy 6th Amendment requirement, defendant must show he has
no access to funds from friends or family; Government has right to rebut showing of lack of funds if hearing is granted).

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types of crimes. Yet, if that defendant concocts an elaborate scheme to bilk money from investors or
foreign governments, and sets up sham corporations with bank accounts into which he deposits his
criminal proceeds, in many jurisdictions he can obtain court approval to access those funds, which by thistime have been restrained, to pay for a lawyer and for living expenses for his family. This is an unfair
result, especially in fraud cases, where the jurisdiction seeking to forfeit those funds is aiming to makerestitution to identifiable victims.
From a prosecutor s point of view, it is frustrating to see assets that should otherwise be available forforfeiture and restitution evaporate because another country - the country where the criminal was savvy
enough to launder them - has released the funds to pay lawyers and to enable the criminal s family
continue to enjoy a lifestyle to which they have no right to be accustomed. Importantly, prosecutors
know that so long as lawyers have a deep pocket to tap for fees, these cases will drag on, as there is no
incentive for the lawyers to bring their clients to the table to cooperate. In some instances, as a result ofpoor court oversight, money has been released for reasonable living expenses, which have enabled thedefendants family to remain in high priced housing that was purchased with criminal proceeds andenabled their children to attend expensive private schools.
Countries need to re-examine the circumstances in which they will release restrained funds, and ifthey cannot limit this practice entirely, they must impose tighter controls. At a minimum, courts should
insist on a detailed and verifiable bill of costs before releasing any money to ensure that those funds will
go towards reasonable and necessary expenditures.
F. Lack of Asset Sharing Arrangements
The United States believes that the inadequacy of asset sharing arrangements is another serious
impediment to the success of asset forfeiture on a global level. The sharing of forfeited assets among
nations enhances international cooperation by creating an incentive for countries to work together tocombat international crime. Criminals certainly do not respect national boundaries when committing
crimes and laundering their profits. Ideally, law enforcement authorities throughout the world should
strive to dismantle criminal organizations no matter where their assets are located. Too often law
enforcement s efforts stop at the border, and police do not take that extra step of either tracing the money
in another country or alerting their counterparts to the possible existence of criminal funds. In part, thismay be due to notions of sovereignty and international law, and a lack of awareness among law
enforcement authorities as to the availability of asset forfeiture in certain countries. However, in somecases, there is a lack of certainty with respect to asset sharing and, the attitude is that once criminal
property leaves your borders, it is someone else s problem. After all, why should you do all the work if
another government is going to keep the money? While keeping the money out of the hands of thecriminals should always be our primary law enforcement objective, the reality is that there is a revenue
generating side effect from conducting financial investigations and forfeiture cases, and which
jurisdiction ultimately retains the money is a legitimate question.
In most countries, law enforcement agents, prosecutors and investigating magistrates are overworked
and have limited resources. In times of shrinking resources and budget concerns, supervisors are notparticularly keen to allocate the expenditure of resources on investigations where there is no hope ofrecovery for their government to recoup investigations and prosecution expenses. These concerns can beaddressed through asset sharing, which we view is a matter of fairness. When law enforcement fromseveral jurisdictions have worked together dedicating human resources, time, money an energy, and theresult is a successful prosecution and forfeiture, those governments that contribute to the successful effort
should share in the fruits of their labour. To take a finders-keepers attitude will not promote internationallaw enforcement cooperation. Indeed, for a country that forfeits property with international cooperation
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to retain all the proceeds for itself will reward only those countries that have served as money laundering
havens.
Despite having enacted forfeiture laws, most countries have not satisfactorily dealt with the issue of
asset sharing. Both the Vienna Convention on narcotics trafficking and the Palermo Convention ontransnational organized crime urge signatories to give special consideration to asset sharing, yet the lawsof many countries provide that all forfeited proceeds shall be deposited into their national treasuries
without the possibility of sharing those assets with other countries that may have devoted substantial
investigative and/or prosecution resources to the successful forfeiture result.
The United States has been a proponent of international asset sharing for many years. To date, theUnited States Department of Justice has transferred more that $175 million to 27 different nations. We
currently have three laws (21 U.S.C. § 881(e)(1)(E), 18 U.S.C.§ 981(i) and 31 U.S.C. § 9703(h) thatprovide for international asset sharing. We believe that if asset sharing were adopted as a policy and apractice, there would be an incentive for law enforcement in one country to pursue assets in another, andcountries would more willingly participate in international investigations.

IV. GOOD RELATIONSHIP WITH THE FINANCIAL SECTOR
An effective anti-money laundering regime depends upon a strong partnership between law
enforcement agencies and financial institutions. Through the filing of CTRs (currency transaction
reports), information sharing under the PATRIOT Act, and the filing of SARs or STRs (Suspicious
Activity Reports), U.S. financial institutions play a key role in the investigation of financial crimes,
including terrorist financing. But, we rely on banks to do more than merely report suspicious transactions
and monitor currency deposits.
In conducting a financial investigation, law enforcement authorities must have access to evidence todetermine the identity of who opened a bank account, who the true parties to a transaction are, and who
the true beneficial owner of the funds in a targeted account is. Our ability to follow the money is key tonot only prosecuting criminals, but also to preventing terrorism and disrupting other transnational crime.
Thus, it is critically important that banks and other financial institutions to know with whom they are
doing business and be able to share that information with law enforcement when necessary.
Many of the obstacles in the financial sector that impeded American law enforcement were addressedwith the enactment of the Patriot Act, which importantly was enacted with the support of the banking
community. Numerous provisions in the Patriot Act attempt to make financial institutions in the UnitedStates be more accountable. These measures include: prohibition on correspondent banks in the UnitedStates from doing business with foreign shell banks; requirement for enhanced due diligence forcorrespondent accounts with offshore banks or banks in non-cooperating jurisdictions; requirement thatcovered financial institutions to assure that correspondent accounts of foreign banks are not used toindirectly provide banking services to foreign shell banks; requirement that covered financial institutions
to keep records of foreign ownership of foreign banks; and the requirement that U.S. financial institutions
close the correspondent accounts of foreign banks that fail to produce records formally requested by theJustice or Treasury Departments. The Patriot Act also requires that financial institutions maintainrecords of the information used to verify a persons identity, including name, address and other identifying
information. The law further requires the Secretary of the Treasury, in consultation with the Attorney
General and Secretary of State, to take all reasonable steps to encourage foreign governments to require
the inclusion of the name of the originator in wire transfer instructions for funds sent to the United States.
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In the past year, the government has made clear that banks will be held liable, both under criminal andcivil laws, for failure to comply with anti-money laundering requirements. In 2002, a civil penalty in theamount of $100,000 was assessed against Great Eastern Bank of Miami for failing to file Suspicious
Activity Reports. In addition, two U.S. banks, Broadway National Bank and Banco Popular of Puerto
Rico were prosecuted criminally.
In January 2003, Broadway National Bank of New York, an institution used by a number of money
launderers, became the first financial institution to be convicted of criminal violations of the Bank
Secrecy Act for the failure to file Suspicious Activity Reports. Broadway Bank pleaded guilty to threecharges: failure to maintain an anti-money laundering programme as part of illegal activity involving
more than $100,000 in a 12-month period; failure to report suspicious transactions; and structuring, inother words, accepting deposits just below $10,000 that were calculated to evade the CTR reporting
requirements. The bank agreed to pay a $4 million fine. Evidence came out indicating that Broadway
knew its obligations under the law but it chose not to comply with it. For almost ten years the bank scompliance manual sat in its vault and was never opened. Between 1996 and 1998, Broadway failed toreport $123,000,000 in suspicious cash deposits, which were then transferred to over 100 accounts,
including international wire transfers to accounts in Colombia and Panama. More than one-third of the
cash deposits came from one customer -a major money launderer for Colombian drug traffickers.
Also in January 2003, the United States filed a Criminal Information in the U.S. District Court for theDistrict of Puerto Rico charging Banco Popular with one count of failing to file Suspicious Activity
Reports. The bank and the government entered into a deferred prosecution agreement under which Banco
Popular waived indictment, agreed to the filing of the Information charging it with a crime, andacknowledged responsibility for failing to file accurate and timely Suspicious Activity Reports whenconfronted with the knowledge that its accounts were being used for activity consistent with money
laundering. For instance, the bank did not undertake the most minimal due diligence in an effort toknow its customer. One customer alone deposited a monthly average of $1,400,000 from a businesslocated near the bank which bank employees noticed had few, if any, customers. When Banco Popular
filed CTRs, they were often inaccurate. The few SARs that it did file were late and contained false or
inaccurate information. Banco Popular consented to a civil penalty of $20,000,000, and it acknowledgedthat the United States could institute a civil forfeiture action against accounts containing over
$21,000,000 in funds believed to be the proceeds of criminal activity. Based upon Banco Populars
actions including its acknowledgment of responsibility, its willingness to settle civil claims against the$21,000,000 held in its accounts and its consent to a $20,000,000 civil penalty, the government agreed todefer prosecution for one year. If Banco Popular is in full compliance with all of its obligations under theagreement, the government agreed then to seek dismissal of the Information.

IV. CONCLUSION
To pursue financial crimes, countries must aggressively enforce their money laundering laws andmust have cooperative relationships with their financial institutions. Because of the ease with which
criminals can move assets between countries, international cooperation is vital. While it is obviously
important to arrest, prosecute, and convict offenders of financial crimes, it is equally important to trace,
locate, seize, and forfeit the criminal wealth. Effective asset forfeiture is a critical tool of modern law
enforcement. Through asset forfeiture, governments can take both the profit out of crime and disrupt
criminal activity by forfeiting the property that makes the crimes possible and where necessary makerestitution to victims. With the strong support of other governments, the United States has been able touse its criminal and civil forfeiture procedures to restrain and forfeit criminal property even where
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criminals have hidden their illicit assets outside of the United States.
Unfortunately, there are still jurisdictions in this world which fail to cooperate internationally and lackthe political will to institute recognized worldwide standards pronounced by the Financial Action Task
Force in its 40 Recommendations and eight Special Recommendations related to terrorist financing.
Notwithstanding the existence of mutual legal assistance treaties, multilateral agreements, and otherformal arrangements to facilitate cooperation, the mechanisms in place in some jurisdictions are patently
inadequate. Any weak link in the chain affects the entire financial system. Delays in cooperation aretantamount to non-cooperation. Where countries are not willing to cooperate, the United States hasenacted and will use certain unilateral measures in the Patriot Act to deal with these obstacles.
For its part, U.S. law enforcement authorities are now better equipped to institute civil forfeiture
actions, provide investigatory assistance, and to restrain assets and enforce certain foreign forfeiture
judgments, to assist foreign governments seeking to forfeit assets in the United States that are traceable toforeign crimes. In addition, the Department of Justice firmly supports international asset sharing as ameans to further international cooperation in asset forfeiture. Each country must do its part to ensure that
there are no safe places for criminals or their criminal wealth.

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REPATRIATION OBLIGATIONS UNDER THE UNITED NATIONSCONVENTION AGAINST CORRUPTION

Linda M. Samuel *I. OVERVIEW OF OBLIGATIONS UNDER THE CONVENTION
Once it is finalized, the United Nations Convention against Corruption will impose important new
obligations on nations to adopt measures to prevent, criminalize, and combat corruption. The draft
convention has six substantive chapters, including chapters that wouldstrengthen domestic infrastructuresto prevent corruption, establish standards for criminalizing offences of corruption, provide forinternational cooperation, facilitate the recovery of the proceeds of foreign corruption, encourage
exchange of technical assistance, and establish a mechanism for monitoring implementation. Chapter V
is one of the most important chapters in the treaty dealing with the recovery and disposition of assets that
corrupt officials placed outside their home countries. Chapter V, article, 61 will establish a framework forthe disposition of assets that have been acquired through corruption and forfeited by one state as a resultof a mutual legal assistance request from another state and will obligate states to return such assets to therequesting state in at least some circumstances. 1* Deputy Chief
Asset Forfeiture and Money Laundering Section,
U.S. Department of Justice.
1

The current text of Article 61,

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Article 61 reflects a compromise of the competing interests of the victim states, typically developing
countries, which wanted recognition of their right to the repatriation of the proceeds of corruption
offences committed by their officials without facing excessive delays and overly technical mutual legal
assistance requirements, and the interests of the requested states, typically financial centre countries,
which frequently require evidence in conformity with their mutual legal assistance laws to support therecovery and return of the claimed proceeds of corruption.

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The Convention itself recognizes that not all corruption offences result in a looting of the nationaltreasury. Under paragraph 3(a) of Article 61, there is a mandatory return obligation with regard toembezzled public funds. The obligation to repatriate the assets to the victim country is imposed when acountry chooses to enforce another country s forfeiture order for embezzled public funds. On the other
hand, paragraph 3(b) contains a more qualified repatriation obligation in cases involving other convention
offences where either the victim state can reasonably establish its legitimate ownership to the forfeiting
state or when the forfeiting state recognizes damage to the victim state as a basis for repatriation. Despite
its mandatory tone, paragraph 3(b) is not entirely mandatory in its application. As written, because theforfeiting state must be satisfied that the victim state has reasonably established its ownership of theassets, a requested state would be able to decline repatriation if the victim state were not able to establish
to the satisfaction of the requested state that it is the owner. In addition, the convention establishes abasic principle for the disposition of forfeited assets in accordance with the convention and domestic law,requires states to be able to transfer forfeited assets to other countries, permits states providing assistanceto deduct reasonable expenses, and includes permissive language allowing for States to conclude
agreements on how to dispose of forfeited property.
Importantly, the mandatory return of forfeited assets category would only apply in a narrow set ofcases and would be subject to important safeguards. First, the repatriation requirements of paragraph 3
are all to be made in accordance with the mutual legal assistance provisions of Article 53, whichauthorizes governments to deny legal assistance where it would conflict with its essential interests.2
Consequently, a requested state would not be obliged to repatriate assets if it would mean transferring theassets to a government hostile to the requested state or even possibly one that the requested state believed
was corrupt or otherwise engaged in conduct contrary to their important national or foreign policy
objectives. Second, the repatriation requirement in the proposed text is triggered only in those cases
where the requested state chooses to forfeit the funds by enforcing a foreign forfeiture judgment. This, ofcourse, will be dependent upon the victim state having obtained a forfeiture judgment in the first instance.
Not only are foreign forfeiture judgments rare in such cases due to death, fugitiveness, immunity, or
evidentiary obstacles for the victim state, but, even were a judgment rendered, consistent with the mutual
legal assistance exceptions, a requested state could choose not to enforce what it perceived to be aquestionable foreign forfeiture order. Further, through paragraph 1, the whole article is made subject tothe conditions of the convention and domestic law. This reinforces the ability of the requested state todeny repatriation on essential interest grounds or if it would conflict with its domestic law. Additionalsafeguards include the protection of bona fide third parties in paragraph 2 and the implicit ability to insist
upon reaching agreement on how the funds will be disposed of through an agreement authorized inaccordance with paragraph 5.

II. REPATRIATION UNDER UNITED STATES LAWThe United States does not anticipate that it will be required to make changes to its law to comply
with Article 61 because the obligations are in line with mechanisms already in place in the United States.
Moreover, the repatriation of forfeited assets in state embezzlement cases or where the victim state canestablish specific pecuniary loss as a result of the offence giving rise to the forfeiture would be consistent
with U.S. law and the Department s preference for restoring forfeited assets to owner victims. The means

2

We are working with the State Department to determine whether there is a legal consequence between the chapter language inaccordance with and our preferred language of subject to prior to the reference to Article 53 on mutual legal assistance.

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through which the United States will effect repatriation will be pursuant to the Attorney General s
statutory discretion to restore assets to victims and the authority to share forfeited assets with foreign
governments. In recent years, the United States has taken significant steps to facilitate the detection andrecovery of the proceeds of foreign corruption and to assist in bringing foreign corrupt officials to justice.
Legislative changes in the Civil Asset Reform Act of 2000 and the USA Patriot Act increased our ability
to restrain and forfeit the proceeds of foreign offences. Other Patriot Act provisions established foreign
official corruption as a predicate for money laundering and forfeiture including bribery of public officials
and misappropriation of public funds. The law further requires financial institutions to provide enhanced
scrutiny of private banking accounts of senior foreign public officials.3 Similarly, where a victim canestablish its pecuniary loss through the presentation of documentary evidence and that loss was the direct
result of the offence that gave rise to the forfeiture or a related offence, our regulations require us to makerestitution of the funds.
The United States has flexible authority to return assets that it confiscates based upon a request forassistance concerning a corruption offence against another country. Under 18 U.S.C. § 981(i) and 18
U.S.C. § 982(b)(1) (through reference to 21 U.S.C. § 853(i) referencing 21 U.S.C. § 881(e)(1)(E)), theAttorney General has discretionary authority to share forfeited assets to other countries as long as theother country assisted in the proceedings leading to the forfeiture. In order to establish the foreign
corruption offence, we will almost invariably have to receive assistance from the victim state. In
addition, under 18 U.S.C. § 981(e)(6), the Attorney General has authority to restore property to victims,
including foreign governments. Both of these international sharing and restoration authorities should also
extend to those cases in which the United States enforces a foreign forfeiture order, pursuant to 28 U.S.C.
§ 2467, on behalf of a foreign nation as if it had been entered by a court in the United States. 4 In
practice, the Department has sought to make victims whole to the extent possible. International asset
sharing is a discretionary authority, and remission and restoration decisions are subject to morecompulsory regulations promulgated under 18 U.S.C. § 981.5
In application, the repatriation obligations under article 61 are most likely to cause us difficulty incases in which we have concerns about the integrity of the government seeking repatriation of the funds,
where we disagree with the other country on how to use the funds, or where transferring assets would beinconsistent with our efforts to resolve other core obstacles to law enforcement cooperation with thatcountry. In a current foreign official corruption forfeiture case and more frequently in some major
narcotics asset sharing cases, we have confronted precisely these issues. In such cases, our generalpractice has been not to deny repatriation or asset sharing, but to defer the transfer until resolution of thecomplications. In the context of this convention, the provision allowing for the transfer of assets pursuant
to an agreement may provide sufficient flexibility to enable us to defer the repatriation in official
corruption cases if similar concerns arise.

3

Recent examples of Department efforts to combat foreign corruption include the arrest and indictment of former UkranianPrime Minister Pavel Lazarenko currently being prosecuted in San Francisco, the successful forfeiture of approximately $20
million associated with former Peruvian intelligence chief Vladimiro Montesinos and his associates, direct case assistance toNicaragua s investigation and prosecution of former President Aleman and his associates, the restraint of more than $43 million
in connection with Mexico s prosecution of a corruption scandal involving its state-owned oil company.

4

While there is no express disposition language in 28 U.S.C.§ 2467, enforcement of an order as if entered by a United States
court also implies disposition in accordance with United States law, including asset sharing or restoration, remission
procedures.

5

Asset sharing authority has been delegated to the Deputy Attorney General. Remission decisions have been delegated to theChief of the Asset Forfeiture and Money Laundering Section.

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III. CASE STUDY - VICTOR ALBERTO VENERO GARRIDO
A. Case Background
On September 14, 2000, a video tape aired in Peru showing presidential adviser Vladimiro
Montesinos Torres, head of Peru s powerful and secretive National Intelligence Service, purportedlyoffering a bribe to an opposition Congressman. This publicity about Montesinos, widely regarded as thepower broker behind then-President of Peru Alberto Fujimori, led Fujimori to appoint a special
prosecutor and prompted numerous other Peruvian investigations into the illicit activities of Montesinos
and other associates of the Fujimori government, including Victor Alberto Venero Garrido (Venero).6 A
Swiss investigation initiated in October of 2000 led Swiss authorities to freeze approximately $48 million
connected to Montesinos on November 3, 2000, and an additional $22 million on November 29, 2000.
These events eventually led to Fujimori s flight to Japan in November of 2000, and the fall of his
government. Montesinos, a fugitive since September of 2000, was eventually captured in June of 2001 in
Venezuela with the assistance of the FBI and extradited to Peru to face corruption, drug trafficking, illicit
enrichment and other charges.
On January 26, 2001, prior to the capture of Montesinos, the United States arrested Venero in Miami
on a provisional arrest warrant and request for extradition from Peru. Venero, a Peruvian citizen andclose associate of Montesinos, later waived further proceedings and was extradited to Peru to face chargesof crimes against the administration of justice, bribery (corruption of a public official), and criminal
concealment, among other charges. Montesinos and his associates, including Venero, generated thecriminal proceeds forfeited in this case through the abuse of Montensino s official position as advisor toformer President Fujimori. Some of the principal fraudulent schemes involved the purchase of militaryequipment and service contracts as well as the criminal investment of government pension funds. At thetime of his arrest, FBI Miami discovered several cashiers checks and accounts related to Venero. The
United States Attorney s Office for the Southern District of Florida, with assistance from the UnitedStates Attorney s Office for the Central District of California and the Asset Forfeiture and Money
Laundering Section of the Criminal Division (AFMLS), restrained approximately $17.3 million
connected to Venero, ultimately forfeiting $15.9 million plus interest accrued. During the course of theinvestigation, U.S. law enforcement agents identified and forfeited approximately $4.3 million, plus
interest accrued, in additional assets. The combined net forfeited amount from these two judgments was$20,277,618.32.7
B. Role of Venero
Venero was involved in a huge kickback scheme that bilked both Peru s treasury and Peru s Militaryand Police Pension Fund. In 1994, Venero and others used pension fund money and their own money tobuy a majority interest in a Peruvian banking institution, Financiera del Sur (FinSur), which in June 1999
was bought by Peru s Banco de Comercio.Venero was in charge of seeking investments on behalf of
FinSur and identified construction and real estate projects for the bank and pension fund to finance. He

6

Venero was the de facto head of the Peruvian military and police pension fund and took a cut of interest payments as kickbacks
on the bank deposits he made resulting in the theft of approximately $100 million in pension funds. Montesinos, once the top
adviser to Fujimori, and Venero also allegedly set up their own companies to buy apartment complexes, hotels and otherbuildings to be sold to the pension fund at inflated prices. Venero also sold substandard arms and supplies to the Peruvian
armed forces at highly excessive prices. Purchases included defective Soviet-made MiGs as well as arms from Belarus,
Ukraine, and Bulgaria. In addition to his money laundering activities, Venero also directed death squads, engaged in influencepeddling, and bribed opposition politicians.

7

As noted previously, the investigation also forfeited an additional $358,753.76. In addition, the FBI and SDFla s involvementin the investigation also contributed to the arrest of Montesinos and the direct return of additional assets to Peru, including atleast $14.1 million repatriated by Venero.

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also controlled the construction companies which built those projects. Venero established a pattern of
inflating the actual cost of the pension fund investment projects by 25 percent and billed FinSur
accordingly. Projects recommended by Venero were automatically approved by the board members at thepolice pension fund, as several of them received kickbacks. In just one project of this type, Venero
constructed a mall as a FinSur investment. The $25 million project was fraudulently inflated by $8
million. Similarly, Venero covertly formed and controlled several front companies used to broker loans
from FinSur in exchange for kickbacks from borrowers. When some loans defaulted, Venero wouldpurchase the busted projects at extremely low prices for resale at a profit.
In addition, Venero and members of FinSur s board of directors were authorized by the Peruvian
government to arrange the purchase of military aircraft for the nation. In just two aircraft deals in 1995
and 1998, the Peruvian government paid an extra $150 million, because of a fraudulent 30 percent markup tacked on to the sale price. This illicit money allegedly was funnelled through FinSur and Banco deComercio. From there, it flowed into numerous accounts under a variety of names in banks in the UnitedStates and elsewhere to conceal the origin of the illicit funds.
Venero consistently used a group of banks located in Peru, the Cayman Islands, Panama, the UnitedStates, and elsewhere to launder his and others share of criminal proceeds.South American, Caribbean,
and U.S. banks identified as funnels for their criminal proceeds include the following: Banco Banex,
Banco Nenevo Mundo, Banco Industrial de Finanzas, Pacific Industrial Bank, Banco Exterior in Panama,
Weise Bank, Bank of America International and Tribank in the Cayman Islands, Citibank, Bank ofAmerica, Prudential Securities, American Express Financial Services, Northern Trust Bank, Sanwa Bank
and California s Hacienda Bank.
Cheryle Mangino Diaz, a California banker who is married to Venero s cousin, formerly was amember of the board of directors of Hacienda Bank. Since 1996, she helped Venero conceal more than
$20 million in the United States. For example, Mangino Diaz made several false statements to Hacienda
Bank officials regarding the origin of the funds that appeared in her account at the time Fujimori andMontesinos fled Peru in September 2000. Venero also used the name of his son-in-law, Sandro Tafur
Arevalo, to stash funds at the Bank of America and to conceal his ownership of a penthouse apartment at
8855 Collins Ave. in Surfside.
Venero and his activities were brought to the attention of the FBI by the filing of a Suspicious Activity
Report by Citibank s compliance officer in Long Island City, New York. Venero opened a bank account at
Citibank in Miami in 1998, and moved about $15 million through it until he was arrested in January,
2001. Initially, the account opening did not raise any suspicion because Latin Americans often opened
dollar-denominated bank accounts in the U.S. to protect their assets from inflation in their homecountries. However, Citibank and other financial institutions holding bank and brokerage accounts
owned or controlled by Venero, Cheryle Mangino Diaz, and others gradually noticed unusual activity inthe accounts and filed SARs with the U.S. Government. According to bank officials, Venero s financialtransactions had no apparent business justifications and the origin of the funds was suspicious.
C. International Sharing
The United States Department of Justice has approved transferring $20,277,618.32 in forfeited funds
to the Government of Peru (GOP) in recognition of its assistance in the Venero case. The forfeited funds
represent the proceeds of a broad range of fraud, corruption and money laundering offences committed in
Peru and the United States that were connected to former Peruvian intelligence Chief Vladimiro
Montesinos, his associate Victor Alberto Venero-Garrido, and other associates of Montesinos and former
Peruvian President Alberto Fujimori. The statutory basis for the transfer under U.S. law is Title 18,
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United States Code, section 981(i)(1) authorizes the Attorney General to transfer money laundering
proceeds and instrumentalities forfeited under 18 U.S.C. §§ 981 and/or 982 to a foreign country thatparticipated directly or indirectly in acts leading to the seizure and forfeiture of the property.8 Currently,
discussions are underway between the United States and Peru regarding how best to effect this transfer.

8

Section 981(a)(1), which contains three subsections, provides for the civil forfeiture of (A) assets traceable to, or involved in,money laundering violations; (B) proceeds and instrumentalities of foreign drug felonies and other specified unlawful
activities; and (C) property constituting, or derived from, proceeds traceable to certain bank fraud violations or any otherspecified unlawful activity. Section 982 provides for the criminal forfeiture of property involved in or proceeds derived frommoney laundering offences.

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VISITING EXPERTS PAPERSSITUATION ON MONEY LAUNDERING IN THAILAND

Pol. Maj. Gen. Peeraphan Prempooti *I. THE ANTI-MONEY LAUNDERING ACT B.E. 2542 (1999)
The Anti-Money Laundering Act in Thailand originated as a result of the United Nations Convention
against Illicit Drug Traffic in Narcotic Drugs and Psychotropic Substances, 1988, known as the Vienna
Convention 1988.
This Convention was drafted as a consequence of the belief that effective law enforcement of drugtrafficking would take place if they could prosecute financiers or cut off their funds. There were several
meetings among more than 100 UN member countries and the Convention was resolved on 19 December
1988. At that time, there were 71 countries to ratify the Convention. As for Thailand, we did not ratify atthat time because we have to have approval from the Cabinet before endorsing any agreements. However,
we presented our will by signing the Final Act.
The Office of the Narcotics Control Board (ONCB) which is the Thai coordinating body on drug
matters has realized the importance of being a party to the Convention. Therefore, the ONCB set up the
Ad Hoc Committee comprising of representatives from concerned government agencies to consider theConvention.
On 16 May 1990, the Ad Hoc Committee passed a resolution that Thailand could be a party to theConvention when there are sufficient domestic laws to comply with the obligations addressed in theConvention. Two years later, there was a working group, chaired by a representative from the Office of
the Attorney-General, established to consider whether Thailand had sufficient domestic legal andadministrative measures to comply with the Convention. At that time, there was a resolution that Thailand
was not ready to be a party of the Convention because there was no domestic law concerning moneylaundering control. Consequently, the ONCB and concerned government agencies drafted the AntiMoney Laundering Act. The Bill was sent to the Cabinet and Parliament for consideration. On 19 March
1999, the Parliament, which consists of members from the House of Representatives and the House of
Senators, considered approving the Bill. Then, Anti-Money Laundering Act B.E.2542 (1999) was
published in the Government Gazette on 21 April 1999 and came into force in the Kingdom on 19 August
1999.
In Anti-Money Laundering Act B.E.2542 (1999), there are 66 sections covering definition terms;
general provisions; reporting and identification; the Money Laundering Control Board; the BusinessTransaction Committee; the Anti-Money Laundering Office; the procedure concerning property; andpenalties. The law can be categorized by Chapter as follows:
Chapter 1: General Provisions, comprising sections 5-12
Chapter 2: Reporting and Identification, comprising sections 13-23
Chapter 3: Money Laundering Control Board, comprising sections 24-31* Secretary-General, Anti-Money Laundering Office, Thailand.

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Chapter 4: Business Transaction Committee, comprising sections 32-39
Chapter 5: Anti-Money Laundering Office (AMLO), comprising sections 40-47
Chapter 6: The Procedure Concerning Properties, comprising sections 48-59
Chapter 7: Penalties, comprising sections 60-66(The Anti-Money Laundering Act B.E.2542 (1999) is in Appendix A)
A. Section 3
Definition terms used in this Act are prescribed in section 3. Currently, there are eight predicate
offences, including a new one - terrorism - that was enacted on 11 August 2003. The eight predicate
offences are as below:(1) Narcotics;(2) Trafficking in or sex exploitation of children and women in order to gratify the sexual desire ofanother person;(3) Cheating and fraud to the public;(4) Misappropriation or cheating and fraud under other commercial banks and financial legislation;(5) Malfeasance in office or judicial office;(6) Extortion and blackmail committed by organized criminal association or unlawful secret society;(7) Customs evasion;(8) Terrorism
The financial institutions having the legal obligation to report financial transactions to the AMLO
consist of commercial banks; finance companies; securities companies; credit financers; insurance andassurance companies; savings cooperatives; etc (such as money changers, securitization companies andinvestment consultants. Section 3 also gives the definition of Transaction and Suspicious Transaction .
The meanings of these two words are described as the following:Transaction means any activity relating to a juristic act, contract, or any operation with otherpersons dealing with finance, business or involving properties.
Suspicious Transaction means a transaction that is more complicated than the norm by which thattransaction is usually conducted, a transaction that lacks economic rationale; a transaction where there is
probable cause to believe that it was conducted for the purpose of avoiding the compliance of this Act; ora transaction related to or possibly related to a commission of any predicate offence, whether thecommission of such transaction is conducted once or more than once.
B. Sections 5-9
These sections address the criminal offence on money laundering. In recent decades, crimes havebecome more complicated and sophisticated. Local crimes have stepped up to the level of transnationalorganized crime with a lot of assets involved. The significant characteristics of a transnational organizedcrime are as below:(1) The division of labour: There are specialists, such as lawyers and accountants, involved in theirillegal activities so that these persons use their expertise to technically conceal or distort money
derived from illegitimate sources;(2) The commission of many crimes: transnational organized crime tends to violate many offencesat the same time. There is a cooperation and coordination network to support their group
activities as well;(3) Maximizing the profit: The objective or final goal of any transnational organized crime is tomaximize the profit or benefit to their organization. Most of the money or benefit from theseillegal activities will be transformed for the purpose of concealing the illegitimate source of
these funds.
The funds will be laundered so it is clean and then will be used to support their illegal activities again
and again as a revolving fund. Therefore, there are special measures prescribed in these sections in order66

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to achieve more effective law enforcement in tackling transnational crimes. For example, (1) Transferringor transforming or disguising of properties related to an offence shall be deemed as having committed themoney laundering offence. (2) Whoever commits a money laundering offence, even if the crime wascommitted outside the Kingdom, shall receive the penalty within the Kingdom, if: (a) either the offenderor co-offender is a Thai national or resides in the Kingdom; (b) the offender is an alien and has taken
action to commit an offence in the Kingdom or is intended to have the consequence resulting there fromin the Kingdom, or the Royal Thai Government is an injured party; or (c) the offender is an alien whose
action is considered an offence in the State where the offence is committed under its jurisdiction, and ifthat individual appears in the Kingdom and is not extradited under the Extradition Act, Section 10 of thePenal Code shall apply mutatis mutandis.
C. Sections 13-23
These sections address the reporting of transactions and knowing your customer. Presently, there arethree types of transactions that financial institutions and persons that have legal transaction reporting
obligations have to report to the AMLO.
(1) Any cash transaction worth Bt 2 million or more.
(2) Any property transaction, including S.W.I.F.T. and Bahtnet transfers, worth Bt5 million or more
(Bahtnet transfers are a kind of domestic money transfer between financial institutions).
(3) Any suspicious transaction, there is no threshold. (For example, any cash transactions worth
almost 2 million baht, it may be 1.8 million baht or 1.9 million baht. It seems that thesetransactions have been made under two million baht in order to avoid reporting to the AMLOthat have been made more than one time a day in the same bank account number, or in adifferent bank account number but have the same bank account holder. In addition, thesetransactions have taken place over a short period of time.)
However, there is the exemption for the reporting of transactions if another party is in these six
categories:(1) Members of the Royal family.
(2) The public sector comprising the government, central government agencies, provincial and local
government administrations; state enterprises and public organizations.
(3) The Foundations belonging to members of the Royal family comprising (a) the Chaipattana
Foundation, (b) H. M. the Queen s Foundation for the Promotion of Supplementary Occupations
and Related Techniques, and (c) Sai Jai Thai Foundation.
(4) Transactions connected with property under the movable category being made with financial
institutions except for: (a) domestic money transfer transactions using the Bahtnet service underthe Bank of Thailand rules governing the Bahtnet service or inter-bank cross-country moneytransfers using the service of the Society for Worldwide Interbank Financial
Telecommunication, Limited Liability Co-operative Society (S.W.I.F.T. s.c.); (b) Transactions
connected with ships having tonnage from six tons or more, steam ships or motor boats having
tonnage from five tons or more, including rafts; (c) The transactions connected with vehicles,
instruments or any other mechanical equipment.
(5) The execution of loss insurance contracts except for compensation under loss insurance
contracts expecting to make payments of ten million baht or more.
(6) The registration of rights and juristic acts under the category of transfer to be public benefit landor the obtainment by possession or by prescription under Section 1382 or Section 1401 of the
Civil and Commercial Code.

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RESOURCE MATERIAL SERIES No. 65

As for reporting forms (See Appendix C), there are seven transaction reporting forms as described as
below:(1) AMLO 1-01:
The form for any cash transaction reported by financial institutions.
(2) AMLO 1-02:
The form for any property transaction reported by financial institutions.
(3) AMLO 1-03:
The form for any suspicious transaction reported by financial institutions.
(4) AMLO 1-04-1: The form for any cash transaction reported by insurance or assurancecompanies.
(5) AMLO 1-04-2: The form for any property transaction reported by insurance or assurancecompanies.
(6) AMLO 1-04-3: The form for any suspicious transaction reported by insurance or assurancecompanies.
(7) AMLO 1-05:
The form for any suspicious transaction reported by investment consultants.
As for time periods for submitting the report to the AMLO, any cash or property transactions
occurring during the first 15 days and the latter of a month must be reported to AMLO during periods of
16th day-22nd day of that month and of 1st day-7th day of the next month, respectively. Meanwhile, any
suspicious transaction must be reported within seven days from the date having the reasonable suspicion.
Additionally, whoever handles any transaction with a financial institution has to present the citizen
identification card or other identification cards issued by any government agencies, according to ameasure on know your customer (KYC). All the above records must to be maintained for a period of five
years from the date that the account was closed or the termination of relations with the customer, or fromthe date that such transaction occurred, whichever is longer, unless the competent official notifies that
financial institution in writing to do otherwise.
D. Sections 24
This section addresses the composition of the Anti-Money Laundering Board who acts as the policy
maker on money laundering issues. The Board comprises members not more than 27 persons as below:(1) The Prime Minister; (Chairman)(2) Minister of Finance; (Vice-Chairman)(3) The Permanent Secretary of the Ministry of Justice;(4) The Attorney-General;(5) The Commissioner-General of the Royal Thai Police;(6) The Secretary-General of Office of the Narcotics Control Board;(7) The Director-General of the Fiscal Policy Office;(8) The Director-General of the Department of Insurance;(9) The Director-General of the Department of Lands;(10) The Director-General of the Customs Department;(11) The Director-General of the Revenue Department;(12) The Director-General of Department of the Treaties and Legal Affairs;(13) The Governor of the Bank of Thailand;(14) The President of the Thai Banking Association;(15) The Secretary-General of the Securities Exchange Commission;(16)-(24) Nine qualified experts appointed by the Cabinet from those who have expertise ineconomics, monetary affairs, finance, law or any other related fields beneficial to the
execution of this Act with the consent of the House of Representative and the Senate
respectively as a member of the Board;(25) The Secretary-general of AMLO as the Secretary of the Board(26)-(27) Two AMLO officials as the Assistant Secretaries of the Board.
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E. Section 40
At the beginning of the office s establishment, the AMLO was supervised by the Office of the Prime
Minister. Nonetheless, after the government restructuring on 2 October 2002, AMLO becomes an
independent agency, under the supervision of the Minister of Justice. Functions and responsibilities of the
AMLO are as follows:(1) Acting in accordance with the resolutions of the Board and the Transaction Committee, and tocarry out other administrative functions.
(2) Receiving transaction reports delivered in accordance with the requirements in chapter two, andto issue an acknowledgement of such report.
(3) Collecting, tracing, monitoring, studying, and analyzing reports or any other information related
to financial transactions.
(4) Collecting evidence in order to prosecute any violator under the provisions of this Act.
(5) Launching an education programme in order to disseminate information, educate and provide
training pertaining to the undertaking of this Act, or assist or support both public and private
sectors to launch such programmes.
(6) Carrying out other functions in accordance with the provisions of this Act or other laws.
There are a Bureau and four Divisions in AMLO. The organization chart can be illustrated as below:

Secretary-General

DeputySecretary-General(Compliance)

DeputySecretary-General(Administration)

Examination andAnalysis Bureau

Law Enforcement
Policy Division

Information andAnalysis Center (FIU)

Asset Management
Division

Gneral Affairs
Division69

RESOURCE MATERIAL SERIES No. 65

The head of the AMLO is the Secretary-General. There are two Deputy Secretary-Generals to assist
the Secretary-General in supervising and administrating AMLO tasks. The Examination and Analysis
Bureau is responsible for investigation and civil legal proceedings. The Information and Analysis Centre
acts as the AMLO s FIU. It is responsible for transaction reports collection and analysis. The Law
Enforcement Policy Division is responsible for anti-money laundering policy, training, public relations
and foreign affairs. The Asset Management Division is responsible for storing, maintaining and disposalof seized asset. The last one is the General Affairs Division; it is responsible for personnel and budget
managements.
F. Sections 48-59
These sections address the process of report examination and procedures concerning assets. The flow
chart starting from obtaining transaction reports through money laundering prosecution is shown as
below:

Transaction Reports

Reported by Financial
Institutions (see.13, 14)

Reported by Land
Offices (see.15)

Reported by Investment
Consultant (see.16)

Reported by Other
Channels (see.48, p.3)

AMLO (see.40)

Transaction Committee or
Secretary-General (see.34)
Transaction Restrain

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Temporary Asset Seizure

125TH INTERNATIONAL TRAINING COURSE
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Probable Cause
3 days (sec.35)

Probable Evidence
10 days (sec.36)

Believable Cause
90 days (sec.48)

Secretary-General(sec.49)

Reporting to
AMLO Board(sec.37)

Reporting to
AMLO Board(sec.48, p.5)

Evidencing ofBelievable
Evidence
AMLO Board has to makethe decision within 30 days
otherwise, it shall follow
Public Prosecutor’s opinion.
(sec.49)

Inadequate
Evidence

Public Prosecutor(sec.49-55, 58-59)

Asset movement/transfer
Prevention

Requesting
court to order theprovisional
asset Forfeiture(sec.55)

Civil Court(sec.49-55, 59)
The ownership/transferee/ beneficiary
files a petition(sec.50)

Turning over the Asset Ownership to
the Government (sec.51, p.1)

Notice Announcement(sec.49, p.5)

Right Protection(sec.50-52, sec.57, p.4)

Proving a true owner/honest beneficiarywithin 1 year (sec.53)
Believable Proof
Returning of Asset(sec.53, sec.57, p.4)

Unbelievable Proof
Refusing to Return
the Asset (sec.51)

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RESOURCE MATERIAL SERIES No. 65

After the AMLO have received the transaction reports, from financial institutions, land offices,
investment consultants, other government agencies or even complaint letters, the AMLO will examine
and analyze received transaction reports. The investigation will then be performed as well.
If there are grounds to believe that such transaction is related to predicate offences or a money
laundering offence, an officer in charge will propose it to the Transaction Committee or the AMLO
Secretary-General (in case of emergency) for consideration. In case the Transaction Committee considers
that such transaction may be engaged with predicate offences or money laundering, the Transaction
Committee has the power to restrain all transactions of involved suspected persons for three working daysin case of having probable cause or for ten working days in case of having probable evidence.
Furthermore, if there is a believable reason that the asset related to an offence may be transferred,
distributed, moved or be transformed, the Transaction Committee has the power to seize such asset for
not exceeding 90 days. All transaction restrains and temporary asset seizures shall be reported to the
AMLO Board.
If the asset seized by the Transaction Committee Order or the Secretary-General Order is unsuitable tokeep in custody or will be more burdensome to the Government rather than the utilization thereof forother purposes, the Secretary-General may:
- Order those who have a vested right in the asset to maintain and utilize the asset with bail orsecurity;- Issue an order for a sale by auction and then keep the cash in a bank account;- Issue an order to utilize such asset for official purposes.
This is in order to prevent the devaluation of the asset occurring as a result of depreciation and of
inappropriate asset maintenance. In the meantime, if at last the court issues an order to return the asset tothe owner or holder or the vested interest recipient of the asset because the court believes that such person
has owned the asset honestly and/or with compensation, this process would reduce damage occurring tosuch good faith person as well.
In case there is evidence to believe that such asset is related to an offence, the Secretary-General will
forward the case to the public prosecutor to consider filing a petition to the court for the Government totake ownership of the asset. If the public prosecutor considers there is insufficient evidence to file apetition to the court, the case will be sent back to the Secretary-General for re-consideration and then to
re-submit to the public prosecutor again. In case the public prosecutor still considers there is not enoughevidence, the public prosecutor will urgently inform the AMLO Board via the Secretary-General formaking a decision. The AMLO Board has to finish the consideration within 30 days from the date ofreceipt. Otherwise, the case will follow the public prosecutor s opinion.
During processing the case to the court, if there is probable cause to believe that there may be atransfer, distribution or movement of any asset related to an offence, the Secretary-General could pass the
subject to the public prosecutor to file the petition to the court for the provisional asset forfeiture.
After receiving the petition to turn over the ownership of the asset to the Government from the publicprosecutor, the court will make an order to post a notice at the court and to publish the notice in a local
well-known newspaper for two consecutive days so that individuals who may claim ownership or have avested interest in the asset can file an objection to the petition to the court prior to the issuance of thecourt order. In case the court believes that the asset named in the petition is related to an offence and thepetition of the claimant has no merit, the court will give the confiscation order to turn the ownership of
the asset over to the Government. However, if the court believes that the petition of the claimant has
merit, the court may issue an order to protect the rights of the recipient claimant with or without
conditions.
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125TH INTERNATIONAL TRAINING COURSE
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The petition for asset return must be sent to the court within 1 year from the date of the final court
confiscation order. Unless the claimant has to prove that he did not file the petition within one year
because he did not know of the notification or written notice of the Secretary-General. In case an owneror holder or a vested interest recipient of the asset can establish the validity of the claim to the satisfactionof the court, the court may order the return of the asset or may set any condition for claimant rights
protection.
Although the Anti-Money Laundering Act B.E.2542 (1999) has been in effect since 19 August 1999,
operations of the AMLO did not start until a year later on 27 October 2000. This was because thenecessary Ministerial Regulations needed to be completed.
During 27 October 2000 - 31 August 2003, the AMLO handled 190 cases. There are ten cases that the
court has already passed judgment. Meanwhile, most of them are in the stage of investigation andevidence gathering. Details are in the following Figure.
The Progression of Cases Proceeded under Anti-Money Laundering
Act B.E.2542 (1999) during 27 October 2000 - 31 August 2003,
Classified by Stage of Proceedings
At the Stage of Investigation and
Evidence Gathering, (29)At the Stage ofProsecutor
Proceedings, (10)Judgment

Judgment, (28)At the Stage of
Court Proceedings
At the Stage ofProsecutor Proceedings
At the Stage ofInvestigation and
Evidence Gathering
At the Stage of Court proceedings, (123)

The Majority of the 190 cases are drug offences which covers 178 cases, accounting for 93.68% of
total cases. The second are customs evasion offences which covers five cases, accounting for 2.63% of
total cases. Meanwhile, there have been no cases concerning blackmail and terrorism as yet. Details areillustrated the following Figure.
The Composition of Cases Handled by AMLO during
27 0ctober 2000 - 31 August 2003, Classified by Predicate Offence

No.of
cases
200
180

178

160
140
120
100
80
60
40
20
0

Narcotics

2

2

1

2

0

5

0

Sex
Trafficking

Cheating

Fraud

Malfeasancein OfficeBlackmailCustoms
EvasionTerrorism73

RESOURCE MATERIAL SERIES No. 65

During the period of 27 October 2000 to 31 August 2003, the AMLO seized assets pertaining topredicate offences and money laundering totalling approximately Bt 2,000 million. According to thefollowing Figure, most of them are in form of the attached bank accounts item that took a 49.15% stake,followed by the cash item that took a 19.33% stake.
The Proportion of Seized Assets during
27 0ctober 2000 - 31August 2003, Classified by Type of Asset
Vehicles
4.86%

Precious Stones
and Others 7.96%

Cash
19.33%

Premises
18.70%

Bank Accounts
49.15%

G. Sections 60-66
These sections address penalties in cases of violating or non-complying with the Act. Significant
points can be concluded as below:(1) An individual, who is found guilty of money laundering activities, will receive a jail term of one toten years and/or fined from Bt 20,000 to Bt 200,000. Meanwhile, a juristic person will be finedfrom Bt 200,000 to Bt 1 million;(2) If a person having a legal transaction reporting obligation fails to report, such person will receive ajail term not exceeding two years and/or fined from Bt50,000 to Bt500,000;(3) Whoever discloses any official secret concerning the proceedings according to the Act withoutauthorized legal power will receive a jail term not exceeding five years and/or fined not more than
Bt100,000.
Penalties will be doubled for a public official, member of the House of Representatives, member ofthe House of Senators, member of a Local Administration Council, Local Administrator, Government
Official, Employee of a local administration organization, or employee of an organization or a publicagency, member of a board, manager, or executive official, or employee of a state enterprise, or memberof a board, manager, or any individual who is responsible in the management of a financial institution, or
member of any organizations under the Constitution.
Penalties will be tripled for any member of the AMLO Board, or member of a Sub-Committee Board,or member of the Transaction Committee, or Secretary-General, or Deputy Secretary-General, orcompetent official, or public official empowered to act in accordance with this Act, who commits any
malfeasance in office, or malfeasance in judicial office.

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125TH INTERNATIONAL TRAINING COURSE
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II. FINANCIAL INTELLIGENCE UNIT (FIU)
For Thailand, the Financial Intelligence Unit or FIU is a part of the AMLO. It can be said that theInformation and Analysis Centre acts as the Thai FIU. Its main responsibilities can be described as thefollowing:(1) To receive and to keep electronic transaction reports derived from financial institutions and othersources;(2) To preliminary examine and to analyze transaction reports, particularly suspicious transaction
reports, and information concerned;(3) To act as the central authority of Thailand in exchanging of financial information, including signing
the Memorandum of Understanding (MOU) on financial information exchange, with other foreign
FIUs;(4) To set up and to maintain an AMLO database, computer and communication systems.
The Averaged Proportions of Received Transaction Reports Derived
from 27 October 2000 - 1 August 2003, Classified by Type of Report
5.72%
42.73%

51.55%Cash Transaction Report

Property Transaction Report

Suspicious Transaction Report

According to the above Figure, at present, almost all transaction reports have been sent to the AMLO
in the form of an electronic file. All the reports derived from 27 October 2000 - 31 August 2003
accumulated to 1,438,521 reports with a value of about Bt371 trillion. At the end of 31 August 2003, allthese reports roughly comprised 51.55 percent of property reported; followed by a 42.73 percent cash
reports and a 5.72 percent of suspicious transaction reports. These proportions are pretty constant fromtime to time as shown in the following figure.
The Proportions of Transaction Reports during
October 2002 - August 2003, Classified by Type of Report
60

52.95

52.67

52.47

52.44

52.23

52.12

52.06

51.85

51.66

51.55

51.55

41.33

41.63

41.80

41.83

42.63

42.12

42.17

42.40

42.57

42.70

42.73

50
40

% of Accumulated Cash Transaction Report% of Accumulated Property Transaction Report% of Accumulated Suspicious Transaction Report

30
20
10

5.72

5.70

5.73

5.73

5.74

5.75

5.75

5.72

5.76

5.75

5.72

g03
Au

3
l-0
Ju

03
nJu

M

ay

-0
3

3
r-0
Ap

ar03
M

03
bFe

03
nJa

2
c-0
De

02
No
v-

Oc

t-0

2

0

75

RESOURCE MATERIAL SERIES No. 65

Presently, the Information and Analysis Centre or FIU has 15 manpower persons. These persons are
divided into two groups: The first one is responsible for financial transaction analysis and informationexchange. The other is responsible for the establishment and maintenance of the database and computer
systems.
As for international cooperation, the AMLO is a member of the APG and the Egmont Groups. We
have constantly supported the groups activities and have cooperated and coordinated with member
countries with our full efforts. We also realize that information exchange is one of the significant factors
leading to law enforcement success. Hence, the AMLO, in association with the Ministry of Foreign
Affairs, had drafted the Memorandum of Understanding Concerning Cooperation in the Exchange ofFinancial Intelligence Related to Money Laundering based on the Egmont Group Model. This MOU
Draft was proposed to the Cabinet for consideration. On 12 February 2002, the Cabinet approved the
MOU Draft and also authorized the AMLO Secretary-General to sign the MOU with other foreign FIUs
on behalf of the AMLO. At the present time the AMLO has signed the mentioned MOU with six
countries as below:
1. Belgium
2. Brazil
3. Lebanon
4. Indonesia
5. Romania
6. United Kingdom

MOU effective 24 April 2002.
MOU effective 29 January 2003.
MOU effective 25 February 2003.
MOU effective 24 March 2003.
MOU effective 24 March 2003.
MOU effective 11 June 2003.

Additionally, there are many countries in the process of MOU negotiations such as Australia,
Malaysia, Russia and Korea.
As for non-MOU countries, we consider exchanging information with them on a case-by-case (basedon reciprocity) basis.

III. THE WAR AGAINST DRUGS IN THAILAND
Since the drug situation in Thailand has been deteriorating, there has been a drug epidemic in many
areas at both the village and community levels. The increasing of drug problems in the country tends togive more negative impacts to the economy, society and political affairs. This is partly as a result of
criminal adaptation operating as a network making law enforcement officers have more difficulty indetecting criminal activities.
The Government, therefore, issued many measures focusing on drug prevention and also put the drug
policy in the main policy on state stability. On 14 January 2003, the Prime Minister announced a War
against Drugs in Thailand. Consequently, government agencies concerning drug prevention andsuppression have been assigned to determine proactive measures on drug prevention and suppression,emphasizing asset forfeiture according to the Anti - Money Laundering Act B.E.2542 (1999). This
operation was first set for the period of 1 February - 30 April 2003 and then was extended to 10 August
2003.
In compliance with the said Government announcement, the AMLO as the central authority on money
laundering matters has converted the policy on the war against drugs into the operation plan in order to76

125TH INTERNATIONAL TRAINING COURSE
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support operations and tasks of both itself and other agencies concerned with drug elimination. The
objectives of the AMLO operation plan can be described as the following:
1. To prevent narcotic law violators, particularly, drug trafficking groups and to stop their illegal
activities;
2. To contribute to other government agencies operations by joining operations, and by exchanging
information leading to the seizure of assets and the arrest of offenders;
3. To convince people collaborate on drug prevention and suppression via public relations. For
example, educating people on money laundering law; allowing people to give information to theGovernment via a post box, telephone, letter or e-mail.
There are two expected outcomes of the AMLO operation plan as below:
1. People will collaborate with the Government in drug prevention and suppression;
2. The Government can seize more assets pertaining to drug activities. This action would put
pressure on handling drug activities and would also crack drug networks.
There are three stages for implementing measures according to the AMLO operation plan comprisingshort-term; medium-term and long-term sub-plans. Details are as follows:
A. Short-term Sub-plan
1. To conduct public relations in order to let people know the policy on drug prevention andsuppression. The AMLO will facilitate people in giving information via the said channels and keep
the names of informants in confidence. This measure took place from 15 January to 15 April 2003;
2. To follow financial movements along the Thai borders and urge the implementation of the measure
on reporting of taking-in and out of the country of foreign currency exceeding US$10,000 orequivalent;
3. To urge the start of the enactment of the Office of the Prime Minister s Regulation on Award
Payment concerning Asset Proceedings in Accordance with the Anti-Money Laundering Act
B.E.2542 (1999);
4. To urge the addition of terrorism into the Anti-Money Laundering Act B.E.2542 (1999) as theeighth predicate offence and criminalizing terrorist activities in the Penal Code;
5. To arrange 24-hour-standby officers for joint operations with other government agencies such as the
Bank of Thailand, the Royal Thai Police, Office of the Narcotics Control Board and Defence
Ministry. This measure took place from 20 January to 30 April 2003;
6. To urge the disposal of seized assets, particularly perishable assets, high maintenance cost assets andassets that become rapidly worthless.
B. Medium-term Sub-plan
1. To provide instant training courses on money laundering control to government officials andfinancial institutions officers;
2. To urge the signing of the MOU concerning information exchange with other FIUs;
3. To request more manpower for AMLO task expansion;
4. To study and propose the issuance of Orders or the amendment of laws/regulations concerningmoney laundering so that operations would be more rapid and flexible.
C. Long-term Sub-plan
1. To consider proposing additional predicate offences on money laundering;
2. To consider establishing AMLO Regional Offices and the construction of a warehouse for keeping
seized assets.

77

RESOURCE MATERIAL SERIES No. 65

By the end of the drug war policy period, Thailand was successful in dealing with drug barons andfinanciers. The Government seized billions bath of assets and put pressure on some drug dealers to giveup the drug cycle.
As for AMLO performance, we searched 100 suspected places and investigated 721 cases during theperiod of 1 February - 10 August 2003. Consequently, we seized assets worth almost Bt530 million andsome more after that. Two hundred and seventy cases were investigated in the Central Region, followed
by 191 cases in Bangkok, 107 cases in the Southern Region, 103 cases in the Northern Region and of 47
cases in the North Eastern Region. As for asset seizures derived from this operation, about Bt347 million
came from the Central Region cases, accounting for 65.53% of total seized assets of about Bt529 million.
It was followed by a Bt80.25 million in seized assets from the Northern Region cases, accounting for15.16% of total seized assets. (As shown in the following table and Figure.)
The Proportions of Asset Seizure Derived from the War against Drugs
Implementation, in Part of AMLO, Classified by Region
2.91%

6.06%

10.34%

15.16%

65.53%

BangkokCentralNorthern

North EasternSouthern

IV. THAILAND S IMPLEMENTATION OF CFT- SIGNING, RATIFICATION,
AND IMPLEMENTATION OF ANTI-TERRORISTS INSTRUMENTS
Thailand has intensified efforts to implement the United Nations resolutions related to counterterrorism. Thailand has been a party to three Conventions and one Protocol: The Convention on Offences
and Certain Other Acts Committed on Board Aircraft (1963), The Convention for the Suppression of
Unlawful Seizure of Aircraft (1970), and The Convention for the Suppression of Unlawful Acts against
the Safety of Civil Aviation, (1971), and The Protocol for the Suppression of Unlawful Acts of Violenceat Airports serving the International Civil Aviation Organization (ICAO) 1988.
The Minister of Foreign Affairs of Thailand signed the International Convention for the Suppressionof the Financing of Terrorism on 18 December 2001. Thailand expects to become a party to thisConvention by the end of 2002. The Thai Cabinet also resolved on 11 December 2001 to endorse, for
Thailand, to be a party to all the remaining conventions relating to counter-terrorism, pending thenecessary amendments to the domestic laws.
On 25 February 2002, the Cabinet resolved to set up the National Committee on Consideration of
Becoming a Party to International Conventions related to Counter-Terrorism to consider the remaining
eight related international conventions in order to speed up the process of becoming a party to these78

125TH INTERNATIONAL TRAINING COURSE
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conventions. These conventions include the following:1) Convention on the Marking of Plastic Explosives for the Purpose of Detection 1991
2) Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation 1988
3) Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms located on theContinental Shelf 1988
4) International Convention against the Taking of Hostages 1979
5) Convention on the Physical Protection of Nuclear Material 1980
6) Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons,
including Diplomatic Agents 1973
7) International Convention for the Suppression of Terrorist Bombings 1998
8) International Convention for the Suppression of Financing of Terrorism 1999
Suppression of Terrorist Financing
Pursuant to the UN Security Council Resolutions 1267 (1999), 1269 (1999), 1333 (2001), and 1373
(2001) to counter-terrorism, Thailand issued circular letters to all related agencies to suppress thefinancing of terrorism and comply strictly with the UN resolutions and assigned the Council of State toconsider relevant domestic laws.
A. Prevention of Terrorist Financing
In 1999, Thailand established the Anti-Money Laundering Office (AMLO) to take effective
countermeasures against money laundering and other illegitimate financing. On 5 August 2003, the Thai
Cabinet approved the two draft amendments becoming effective 11 August 2003 onwards of the Penal
Code and the Anti-Money Laundering Act to prescribe financing of terrorism as a serious offence under
the Thai criminal law and to empower the AMLO to freeze terrorist funds as mandated by the UNSC
Resolution 1373.
On 27 October 2000, all financial institutions are required to report any transfer of funds in cash equal
to or greater than 2 million Baht, or transfer of assets equal to or greater than 5 million Baht, and any
suspicious financial transactions by their clients to the AMLO under the revised law. Also, the Exchange
Control Act B.E. 2485 requires all persons or entities to report any remittance in the amount equal to or
over US$ 10,000 to the Bank of Thailand and will soon have to report to the AMLO which maintains
these financial records in its electronic database.
Suppression of Terrorist Financing
The Anti-Money Laundering Office (AMLO) is now acting as the Thai national financial intelligenceunit (FIU) and has become a member of the EGMONT Group of Financial Intelligence Unit since 2001.
The AMLO is ready to sign an MOU with all 69 members of the EGMONT Group to help facilitate theexchange of information on terrorist financing and tracking of blacklisted groups.
B. Financial Action Task Force on Money Laundering (FATF) Special Recommendations andAction Plan on the Suppression of Terrorist Financing
Thailand currently completed the self-assessment against the FATF s eight special recommendations
on the suppression of terrorist financing.
C. Strengthening Aviation Security
According to the National Security Programme, Thailand is in the progress of revising its security
programme, measures, and procedures to provide tighter civil aviation security systems in airports and thescreening of passengers luggage by the end of the year 2002. Thailand has been active in conducting
training for emergency responses during aircraft hijacking situations among national authorities.
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D. Strengthening Maritime Security
Thailand is implementing recommendations by the International Maritime Organization (IMO) tostrengthen maritime security, including the installation of Automatic Identification System (AIS) on
newly built ships. Thailand welcomes technical and financial assistance from international sources to help
build the capacity of government agencies in improving maritime security. Thailand also continues topromote the strengthening of domestic coordination and international cooperation to suppress piracy andarmed robbery.
E. National Counter-Terrorism Measures
The Royal Thai Government set up the Committee of Counter-International Terrorism (COCIT)
chaired by the Prime Minister, to be a focal point for policy formulation. The Counter International
Terrorist Operations Centre (CITOC), directed by COCIT, is responsible for the coordination between thepolicy level and the operational units. Both agencies are mandated by the Policy on Counter International
Terrorism 1993, a broad framework proposed by the National Security Council and endorsed by the Thai
Cabinet of 1983.
In October 2000, the Directive Committee on the Prevention and Solution of Transnational Crime wasalso created as part of the Office of the National Security Council by the Prime Minister to provide
guidelines for coordination among agencies on transnational crime to suppress the movement of terroristgroups.
F. Progress on Energy Security
Thailand has undertaken a study on a National Oil Stockpiling Strategy to determine the feasibility
and viability of establishing an official oil stockpile. Thailand has given cooperation in improving theASEAN Petroleum Security Agreement (APSA) aiming to achieve an efficient regional energy security
mechanism. Also, Thailand is willing to participate in real time information sharing measures andactively exchange energy dialogue at both the intra-regional and inter-regional levels with a view tostrengthening energy security in the region as a whole.
G. Security of Information and Communication Infrastructures
The National Intelligence Agency of Thailand is entrusted with the coordinating intelligence on
counter-terrorism and maintains close communications with foreign governments to suppress terrorism.
Since 11th September 2001, the Agency has stepped up its effort to closely monitor international
developments related to counter-terrorism and checking background information of suspicious groups
travelling in and out of the country.
In April 2001, National Electronics and Computer Technology Center (NECTEC) established
ThaiCERT as an electronic discussion forum among experts, governmental agencies, and the private
sector on cyber security. ThaiCert, a five-year plan, provides online services of the computer emergency
response team with up-to-date bulletin/announcements on outbreaks of viruses, new security threats, acybersecurity laboratory, and training courses. ThaiCERT is now a well recognized body in Thailand.
On 20 July 2001, the National Information Technology Committee (NITC) chaired by the Prime
Minister, announced 3 sets of policy aimed at enhancing information security. These policies involve: 1)
The Communication Authority of Thailand to establish a formal agreement with its licensee ISPs to (a)synchronize their system clocks, (b) maintain customer access log (with caller ID data) for at least 3
months, (c) cooperate fully with the police in case of incidents, and (d) add a clause in their service
contract identifying customers responsibility regarding inappropriate use; 2) The Telephone
Organization of Thailand to maintain caller ID records for Internet investigation purposes; 3) The Royal
Thai Police to set up an Internet hotline for incident report and to investigate whether it is necessary and80125TH INTERNATIONAL TRAINING COURSE
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appropriate to regulate Internet cafes.
The Thai government plans to establish the National Information Security Centre to take action incyber security violations and to serve as the point of contact for other agencies.
H. Protecting Cross-Border Security and Enhancing Business Mobility
The Thai authorities responsible for protecting national security have created a watch list databaseof suspicious terrorists groups. The Ministry of Interior formulated policies for cross-border security andalerted rural provinces to prevent, arrest, and suppress terrorists from using Thailand as a safe haven.
The Ministry of Foreign Affairs and other relevant authorities are doing their utmost to ensure that theprocedure of issuing visas for entry and exit meets international standards and has taken steps to prevent
passport counterfeit. The Thai Cabinet approved the reduction in the number of countries entitled toexemption of visa requirements for a stay of up to 30 days from 57 countries to 37 countries and thenumber of countries entitled to a visa-on-arrival for a stay of up to 15 days from 96 countries to 15
countries.
I. Countering Biological Terrorism
Thailand has organized seminars and roundtable discussions on how to prevent the use of Weapons ofMass Destruction through biological and chemical forms and is in the process of developing an expert
group to stimulate the exchange of information among all relevant agencies.
The Office of the National Security Council of Thailand, with the US embassy, arranged the Weaponsof Mass Destruction (WMD) First Responder Training Programme in June 2001 and also jointly held the
Postal Chemical/Biological Incident Management Training Programme for relevant governmental
agencies during April 2002.
J. Strengthening International Cooperation
Thailand has made measurable progress in strengthening the regional and bilateral cooperation efforts
against counter-terrorism. At the regional level for instance, Thailand has been an active participant
within the ASEAN Regional Forum (ARF) to promote discussions to prevent terrorism and contribute tosecurity within the Asia-Pacific Region.
Thailand is in the process of acceding to the Agreement on Information Exchange and Establishmentof Communication Procedures to which the Philippines, Malaysia, Indonesia, and Cambodia are Parties.
The scope of cooperation under this Agreement includes better coordination through the exchange of
information and use of standard communication procedures, with a view to combating and preventing
international terrorism and transnational organized crime.

V. COMPLIANCE WITH FATF S (FINANCIAL ACTION TASK FORCE) EIGHTSPECIAL RECOMMENDATIONSIn addition to the International Convention for the suppression of the Financing of Terrorism 1999,
the United Nations Security Council passed Resolution 1373, which requires all UN member States toprevent and suppress the financing of terrorist acts and to freeze all assets linked to terrorists. Moreover,on October 2001, an emergency meeting was convened by the Financial Action Task Force [FATF] inWashington, D.C. FATF is an independent international body comprised of 29 country members and 18

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regional bodies and observer organizations, which has set the international standards for anti-money
laundering efforts through its issuance of the 40 Recommendations. Thailand participates in FATF
through its membership in the Asia Pacific Group [APG]. At this extraordinary meeting, FATF considered
what the worldwide response should be to combat terrorist financing. On October 31, 2001, FATF
announced a Special Set of eight Recommendations on Terrorist Financing to supplement the existing 40
Recommendations.
The new framework announced by the FATF to assist in detecting, preventing, and suppressing thefinancing of terrorism and terrorists acts in which Thailand has completed the self-assessment against the
FATF s eight Special Recommendations above is as follows:

VI. SUMMARY
Pursuant to the U.N. Security Council Resolutions 1267 (1999), 1269 (1999), 1333 (2001), and 1373
(2001), the Thai government issued instructions to all authorities concerned to comply with these U.N.
resolutions, including the freezing of funds or financial resources belonging to the Taliban and the AlQaeda network. The relevant authorities and the Council of State have considered relevant domestic laws
and regulations in order to make necessary amendments thereto in order to implement the Resolution infull.
On 5 August 2003, the Thai Cabinet approved the two draft amendments becoming effective 11
August 2003 onwards of the Penal Code and the Anti-Money Laundering Act to prescribe financing ofterrorism as a serious offence under the Thai criminal law and to empower the AMLO to freeze terrorist
funds as mandated by UNSC Resolution 1373.
In effect, all financial institutions in accordance with the Anti-Money Laundering Act are required topromptly report their suspicions of any transactions that may be linked, or related to, or are to be used forterrorism, terrorist acts or by terrorist organizations.
Intelligence and security agencies in Thailand have been on high alert since the 11 September
incident. Thai intelligence agencies, both civilian and military/law enforcement, have placed a highpriority on information sharing and networking with their foreign counterparts, especially the U.S.
agencies. The Anti-Money Laundering Office of Thailand has become a member of the EGMONTGroup since 2000. The membership has enabled the Office to have access to and exchange information
with other members.
Thailand also has the Mutual Assistance in Criminal Matters Act (1992), which forms a broad basis
for cooperation with other countries with regard to criminal matters i.e. taking testimony and statementsof persons; providing documents, records and evidence for prosecution and search and forfeiture ofproperties. The law is supplemented by Treaties of Mutual Assistance in Criminal Matters that Thailand
has with 5 countries: namely, the United States, Canada, the United Kingdom, France and Norway.
In conclusion, Thailand has adopted a firm policy in condemning terrorism in all forms andmanifestations. In practices, all authorities have done their utmost to ensure that Thailand will not be
used as a base for the commission of any terrorist acts against any other country and that terrorists will
never find a safe haven in Thailand.

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VII. THAILAND ASSESSMENT: EIGHT SPECIAL RECOMMENDATIONS
The framework announced by FATF to assist in detecting, preventing, and suppressing the financing
of terrorism and terrorists acts in which Thailand has completed the self-assessment against the FATF s
Eight Special Recommendations above is as follows:
A. Ratification and Implementation of UN Instruments
In complying with the related U.N. resolutions concerning actions taken on the Taliban Group inparticular resolutions 1267/1999, 1269/1999, the Thai Cabinet issued an instruction on 21 December
1999 to all authorities concerned to comply with these U.N. resolutions, including the freezing of transfer
funds or financial resources belonging to the Taliban.
On 5 August 2003, the Thai Cabinet approved the two draft amendments becoming effective 11
August 2003 onwards of the Penal Code and the Anti-Money Laundering Act to prescribe the financing
of terrorism as a serious offence under the Thai criminal law and to empower the AMLO to freeze
terrorist funds as mandated by the UNSC Resolution 1373.
In effect, all financial institutions in accordance with the Anti-Money Laundering Act are required topromptly report their suspicions if any transactions that may be linked, or related to, or are to be used forterrorism, terrorist acts or by terrorist organizations.
Thailand has been party to four conventions and protocols relating to terrorism concluded in theframework of the International Civil Aviation Organization (ICAO); namely, the Convention on Offences
and Certain Other Acts Committed on Board Aircraft (1963), the Convention for the Suppression of
Unlawful Seizure of Aircraft (1970), the Convention for the Suppression of Unlawful Acts against the
Safety of Civil Aviation (1971) and the Protocol for the Suppression of Unlawful Acts of Violence at
Airports Serving International Civil Aviation, Supplementary to the Convention for the Suppression of
Unlawful Acts against the Safety of Civil Aviation (1988).
The Minister of Foreign Affairs of Thailand signed the International Convention for the Suppressionof the Financing of Terrorism on 18 December 2001. As for the other seven conventions, the Cabinet
resolved on 11 December 2001 to endorse, in principle, for Thailand to be a party to all the remaining
conventions relating to terrorism pending the necessary amendments of domestic laws to enable fullcompliance with each convention.
On 25 February 2002, the Cabinet resolved to set up the National Committee on Consideration of
Becoming a Party to International Conventions relating to Terrorism as proposed by the Ministry ofForeign Affairs. This National Committee is empowered: to consider details of the remaining eight
related international conventions and to enact or amend relevant domestic laws in order to implement all
obligations under those conventions.
B. Criminalizing the Financing of Terrorism and Associated Money Laundering
In 1999, Thailand established the Anti-Money Laundering Office to take effective countermeasuresagainst money laundering and other illegitimate financing. According to the resolution of the Cabinet on
2 October 2001, the Council of State proposed the two draft amendments of the Penal Code and the
Money Laundering Act. The draft amendment of the Penal Code defines the scope of terrorism andprescribes the act of terrorism as a serious offence with severe punishments under Thai criminal law.
On 5 August 2003, the Thai Cabinet approved the two draft amendments becoming effective 11
August 2003 onwards.
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C. Freezing and Confiscating Terrorist Assets
At present, the existing domestic laws provide a legal basis for the Anti-Money Laundering Office, tofreeze the transfer of funds or financial resources of persons or entities suspected of committing or
facilitating the commission of terrorist acts. The amendments to the Penal Code and to the Money
Laundering Act are to make terrorist acts under the Penal Code an offence under the Money Laundering
Act. Accordingly, the laws empower the Anti-Money Laundering Office to freeze the transfer of funds or
financial resources of alleged terrorists and their accomplices.
D. Reporting Suspicious Transactions Related to Terrorism
All financial institutions in accordance with the Anti-Money Laundering Act are required to promptly
report their suspicions of any transactions that may be linked, or related to, or are to be used for terrorism,
terrorist acts or by terrorist organizations.
E. International Cooperation
Intelligence and security agencies in Thailand have been on high alert since the 11 September
incident. Thai intelligence agencies, both civilian and military/law enforcement, have placed a highpriority on information sharing and networking with their foreign counterparts, especially the U.S.
agencies. The Anti-Money Laundering Office of Thailand has been a member of the EGMONT Groupsince 2000. The membership has enabled the Office to have access to and exchange information withother members on the basis of the memorandum of understanding (MOU).
Thailand also has the Mutual Assistance in Criminal Matters Act (1992), which forms a broad basis
for cooperation with other countries with regard to criminal matters i.e. taking testimony and statementsof persons; providing documents, records and evidence for prosecution and search and forfeiture ofproperty. The law is supplemented by Treaties of Mutual Assistance in Criminal Matters that Thailand
has with five countries: namely, the United States, Canada, the United Kingdom, France and Norway.
At the regional level, Thailand has strengthened its counter-terrorism cooperation within theframework of ASEAN in accordance with the ASEAN leaders Declaration on Joint Action to Counter
Terrorism of November 2001. The Terrorism component of the Work Programme to Implement theASEAN Plan of Action to Combat Transnational Crime was adopted at the Special ASEAN Ministerial
Meeting on Terrorism, held in Kuala Lumpur on 20-21 May 2002. In addition, Thailand has expressed its
willingness to accede to the Trilateral Agreement on Information exchange and Establishment ofCommunication Procedures between Indonesia, Malaysia and the Philippines, which was sighed on 7
May 2002.
F. Alternative Remittance
Under the Exchange Control Act, all persons or legal entities that provide services for thetransmission of money or value must be approved by the Minister of Finance under the recommendationof the Bank of Thailand. Any persons or legal entities that carry out this service illegally are subjected tocivil or criminal sanctions under this law. Commercial banks are required to report all transfers made withforeign countries within three days of the transaction date. Any suspicious activity will be reported to theAnti-Money Laundering Office. A number of laws and regulations have been enacted to curb informal
activities. Education as well as measures such as a reduction of registered capital for money changers
have been provided to encourage informal agents to enter the system.
In addition, another measure against alternative means of cash remittances is to enact the ministerial
attachment to the Exchange Control Act on the declaration of the cash transition of foreign currency
equivalent to or over USD 10,000.

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G. Wire Transfers
Under the current Anti Money Laundering Act B.E. 2542, any person or legal entities that have theapproval to provide the services for the transmission of money must require their customers to provide
accurate and meaningful originator information. Furthermore, the Anti-Money Laundering Office
imposes legal obligations for such persons or entities to report certain kinds of transactions namely: (1) atransaction involving cash in an amount equal to or exceeding two million baht (2) a transaction involving
an asset equal to or exceeding five million baht; or (3) any suspicious transaction. If the moneytransmission service-providers fail to follow these instructions, they are subjected to substantial penalty
fines (Bt 300,000).

H. Non-Profit Organizations
The amendments to the Penal Code and the Anti-Money Laundering Act prevent the possible misuseof non-profit organizations by terrorists, and empower the relevant Thai authorities to effectively impede
terrorist activities and financing.
The legal regime of entities, particularly non-profit organization under the supervision of the Office of
National Cultural Commission, Ministry of Culture would be reviewed to prevent any misuse for terrorist
financing purposes.

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APPENDIX A
ANTI-MONEY LAUNDERING ACT OF B.E. 2542 ＊ (TRANSLATION)
Bhumibol Adulyadej, Rex.,
Given on the 10th Day of April B.E. 2542
Being the 54th Year of the Present Reign.
His Majesty King Bhumibol Adulyadej is graciously pleased to proclaim that:
Whereas it is expedient to enact a law on the anti-money laundering;This Act contains some provisions restricting the rights and liberties of an individual set forth in ofsection 29 together with section 35, section 37, section 48 and section 50 of the Constitution of theKingdom of Thailand, which was endorsed in the enactment of this law.
Be it, therefore, enacted by His Majesty the King, by and with the advice and consent of the National
Legislative Assembly as follows:
Section 1: This Act shall be cited the Anti-Money Laundering Act of B.E. 2542.
Section 2: This Act shall come into force on and after one hundred and twenty days of its publicationin the Government Gazette.◆
Section 3: In this Act,
Predicate offence means:(1) Offences relating to narcotics under the Narcotics Control Act or the Act on Measures for the
Suppression of Offenders in an Offence relating to Narcotics.
(2) Offences relating to sexuality under the Penal Code, in particular to sexual offences pertaining toprocuring, seducing, or taking or enticing for indecent acts on women or children in order togratify the sexual desire of another person, and offences relating to the trafficking in children or
minors, or offences under the Measures to Prevent and Suppress Trading of Women andChildren Act, or offences under the Prevention and Suppression of Prostitution Act, in particular
related to offences of procuring, seducing, enticing or kidnapping a person for the purpose of theprostitution trade, or offences relating to being an owner of a prostitution business, or an
operator, or a manager of a place of prostitution business, or supervising persons who commit
prostitution for trade in a prostitution business.
(3) Offences relating to cheating and fraud on the public under the Penal Code or offences pursuant
to the Fraudulent Loans and Swindles Act.
(4) Offences relating to embezzlement or cheating and fraud involving assets, or acts of dishonesty
or deception as described in the law governing commercial banks, or Act on the Undertaking of
Finance Business, Securities Business and Credit Financier Business, or Act governing
Securities and Stock Exchange, which is committed by a director, a manager or any person who* Translated by Pol. Maj. Gen. Peeraphan Prempooti, B.A. (Pol.Sc.), LL.B., LL.M., M.PA., Secretary-General,
Anti-Money Laundering Office. Translation is for the convenience of those who are not familiar with the Thai language. For
official purposes, only the Thai text will be relevant.
◆Published in the Government Gazette Vol.116, Part 29 Gor. On the 21st Day of April of B.E. 2542 (B.E.=Buddhist Era,
B.E.2542 is equivalent to A.D.1999).

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is in charge of or having any vested interest relating to the management of a financial institution.
(5) Offences relating to malfeasance in office, or malfeasance in judicial office under the Penal
Code, offences pertaining to the law governing public officials of a state enterprise or
government office, or offences pertaining to malfeasance or dishonesty in carrying out official
duties under other related laws.
(6) Offences relating to the commission of extortion or blackmail by a member of an unlawful secretsociety or organized criminal association as defined in the Penal Code.
(7) Offences relating to customs evasion under the Customs Act.
(8) Offences relating to terrorism under the Penal Code 1.
Transaction means any activity related to a juristic act, contract, or any commitment with otherpersons dealing with finance, business or involving assets;
Suspicious transaction means a transaction that is more complicated than the norm by which thattransaction is usually conducted, a transaction that lacks economic rationale; a transaction where there is
probable cause to believe that it was conducted for the purpose of avoiding the compliance of this Act; ora transaction related to or possibly related to a commission of any predicate offence, whether thecommission of such transaction is conducted once or more than once;
Asset involved in an offence means:(1) money or property derived from the commission of a predicate offence, or from aiding or abettingin the commission of a predicate offence;(2) money or property derived from the sale, distribution, or transfer in any manner of the money orasset in (1); or(3) fruits of the money and property in (1) or (2).
Notwithstanding how many times the asset in (1), (2), or (3) has been sold, distributed, transferred, ortransformed, or found in whosoever possession, or being transferred to whomever, or bearing inregistration or record under whosoever ownership.
Financial institutions means:(1) The Bank of Thailand under the Bank of Thailand Act, a commercial bank under the Commercial
Bank Act, or a bank established under the provisions of a specific law;(2) Finance business and credit finance companies under the Act on the Undertaking of FinanceBusiness, Securities Business and Credit Finance Business, and securities companies under the
Securities and Exchange Act;
(3) The Industrial Funds Corporation of Thailand under the Industrial Funds Corporation of Thailand
Act, and the small and medium enterprise funds corporation under the Small and Medium
Enterprise Funds Corporation Act;
(4) Life insurance companies under the Life Insurance Act, and casualty insurance companies under
the Casualties Insurance Act;
(5) Saving cooperative companies under the Savings Cooperatives Development Act; or(6) Any juristic person undertaking non-bank business related to finance as provided by the Ministerial
Regulations.
Board means the Anti-Money Laundering Board.

1

Executive Decrees published in the Government Gazette on August 11, B.E. 2546 (2003) to amend the Penal Code Section 135
and the Anti-Money Laundering Act of B.E. 2542 (1999) Section 3.

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Board Member means a member of the Anti-Money Laundering Board and includes its chairman.
Competent official means the person appointed by the Minister to act in accordance with this Act.
Secretary-general means the secretary-general of the Anti-Money Laundering Board.
Deputy Secretary-general means the Deputy Secretary-general of the Anti-Money Laundering
Board.
Office means the Anti-Money Laundering Office.
Minister means the Minister who is in charge of the enforcement of this Act.
Section 4: The Prime Minister shall be in charge of the enforcement of this Act and has the power toappoint competent officials, and to issue Ministerial Regulations, Rules, and Notifications in accordancewith this Act.
Such Ministerial Regulations, Rules, and Notifications shall come into force upon their publication in
the Government Gazette.

Chapter 1
General Provisions

Section 5: Whoever:(1) transfers, receives the transfer, or changes the form of an asset involved in the commission of an
offence, for the purpose of concealing or disguising the origin or source of that asset, or for the
purpose of assisting another person either before, during, or after the commission of an offence
to enable the offender to avoid the penalty or receive a lesser penalty for the predicate offence;or(2) acts by any manner which is designed to conceal or disguise the true nature, location, sale,transfer, or rights of ownership, of an asset involved in the commission of an offence shall bedeemed to have committed a money laundering offence.
Section 6: Whoever commits a money laundering offence, even if the offence is committed outside
the Kingdom, shall receive the penalty in the Kingdom, as provided in this Act, if:(1) either the offender or co-offender is a Thai national or resides in the Kingdom;(2) the offender is an alien and has taken action to commit an offence in the Kingdom or is intended
to have the consequence resulting therefrom in the Kingdom, or the Royal Thai Government is
an injured party; or(3) the offender is an alien whose action is considered an offence in the State where the offence iscommitted under its jurisdiction, and if that individual appears in the Kingdom and is notextradited under the Extradition Act, Section 10 of the Penal Code shall apply mutatis mutandis.
Section 7: Pursuant to the offence of money laundering, whoever undertakesone of the following acts
shall receive the same penalty as a principal offender of such offence:(1) aiding in the commission of an offence or abetting the offender, either before or during the88

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commission of the offence; or(2) procuring or supporting with money or assets, means of transportation, shelter, or any otherobject, or undertaking any other acts in order to assist the offender to escape or to avoid thepunishment from such offence, or to gain a benefit from the commission of an offence.
The Court may not impose a lesser punishment than that provided by the law for such offence where
the person who procures or provides money or assets, shelter, or hiding place in order to assist his or her
father, mother, son or daughter, wife or husband to avoid apprehension.
Section 8: Whoever attempts to commit an offence of money laundering shall receive the same
penalty as provided by the law for a successfully committed offence.
Section 9: Two or more persons who conspire to commit the offence of money laundering shall each
receive half of the punishment provided by the law for such offence.
If a money laundering offence is committed as a result of a conspiracy under the first paragraph, theconspirator shall receive the punishment provided by the law for such offence.
If a conspirator in the commission of an offence withdraws from the conspiracy or intervenes toprevent the commission of the offence and such committed offence does not achieve its end, theconspirator who withdrew from the conspiracy or intervened to prevent it shall receive the punishment
provided in the first paragraph.
If an offender, described in the first paragraph, admits to the conspiracy to a competent official prior
to the commission of the offence that he or she conspired to commit, the Court may or may not impose apenalty less severe than that provided by the law for such offence.
Section 10: Whoever, in their capacity as a public official, member of the House of Representatives,
member of the House of Senators, member of a Local Administration Council, Local Administrator,
Government Official, Employee of a local administration organization, or employee of an organization ora public agency, member of a board, manager, or executive official, or employee of a state enterprise, or
member of a board, manager, or any individual who is responsible in the management of financial
institution, or member of any organizations under the Constitution commits an offence under this chapter
shall receive two times the punishment provided by law for such offence.
Any Member of the Board, or Member of Sub-Committee, or Member of the Transaction Committee,
or Secretary-general, or Deputy Secretary-general, or competent official empowered to act in accordancewith this Act, who commits an offence under this chapter shall receive three times the punishment
provided by law for such offence.
Section 11: Any Member of the Board, or Member of Sub-Committee Board, or Member of theTransaction Committee, or Secretary-general, or Deputy Secretary-general, or competent official, or
public official empowered to act in accordance with this Act, who commits any malfeasance in office, ormalfeasance in judicial office as provided in the Penal Code in connection with the commission of an
offence provided in this chapter shall receive three times the penalty provided by law for such offence.
Section 12: For purposes of this Act, Member of the Board, Member of a Sub-Committee,
Transaction Committee, Secretary-general, Deputy Secretary-general and competent official are also
competent officials under the Penal Code.

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Chapter 2
Reporting and Identification

Section 13: Whenever a transaction takes place at a financial institution, the financial institution has
a responsibility to file a report of that transaction with the Office, if any transaction appears to be one of
the following:(1) A transaction involving cash in an amount equal to or exceeding the significant amount set forthin the Ministerial Regulations;(2) A transaction involving an asset equal to or exceeding the significant value set forth in the
Ministerial Regulation; or(3) Any suspicious transaction, whether or not it is in accordance with (1) or (2). A financial
institution has a continuing obligation following the filing of a report to provide to the Officewithout delay any additional facts or significant information about which it becomes aware thatis relevant to the reported transaction or to confirm or deny the original information about thereported transaction.
Section 14: Where a financial institution subsequently obtains probable cause to believe that any
transaction previously carried out which was not reported in accordance with section 13 appears to havebeen a transaction that financial institution must report in accordance with section 13, then the financial
institution shall report that transaction to the Office without delay.
Section 15: The Land Office of Bangkok Metropolitan, the Provincial Land Office, the Branch ofLand Office, and the District Land Office, have a duty to report to the Office whenever a request forregistration of rights and juristic act involving an immovable asset when a financial institution is not
involved as any party to such request, and the transaction appears to involve any of the following:(1) When payment is made in cash exceeding the significant amount as set forth in the Ministerial
Regulations;(2) When an immovable asset has an estimated value on the registration of rights and juristic act inan amount exceeding the significant amount set forth in the Ministerial Regulations, except in
the case of transfer by succession to a statutory heir; or(3) When it is a suspicious transaction.
Section 16: A person who is engaged in a business of operating, or advising to engage in investment
transactions, or the movement of capital has a duty to report to the Office when there is probable cause tobelieve that such transaction may relate to asset involved in a commission of offence or is a suspicioustransaction.
A person identified in the first paragraph who is subject to the reporting rules under this section has acontinuing obligation following the filing of a report to provide to the Office without delay any additional
facts or significant information about which it becomes aware that is relevant to the reported transaction
or to confirm or deny the original information about the reported transaction.
Section 17: The reporting under the provisions of section 13, 14, 15 and 16 shall be made inaccordance with the format, interval, guidelines and methods prescribed in the Ministerial Regulations.
Section 18: Any transaction that the Minister deems fit to exempt from the reporting requirement
under the provision of section 13, 15 and 16 shall be in conformity with the Ministerial Regulations.

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Section 19: A report submitted in accordance with section 13, 14, 15 and 16 in good faith by any
individual capacity if it appears to cause damage to any person, that individual shall not be liable for any
damage.
Section 20: A financial institution shall require all customers to show identification prior to
conducting any transaction on behalf of a customer, as provided by Ministerial Regulations, unless that
customer has previously identified. The customer identification under the first paragraph shall be inaccordance with the procedures as the Minister may prescribe.
Section 21: A financial institution that conducts a transaction described in section 13 shall requestthat the customer provide all facts in connection with such transaction. If a customer refuses to fill out aform to provide all facts in accordance with the first paragraph, the financial institution shall record such
refusal and report to the Office immediately. The fact and information requirement under the first andsecond paragraphs shall be the form, content, guidelines, and methods prescribed in the Ministerial
Regulations.
Section 22: Financial institution shall maintain all customer identification records under section 20,
and a record of facts and information under section 21 for a period of five years from the date that theaccount was closed or the termination of relations with the customer, or from the date that suchtransaction occurred, whichever is longer, unless the competent official notifies that financial institution
in writing to do otherwise.
Section 23: The provisions in this chapter shall not apply to the Bank of Thailand governed by the
Bank of Thailand Act.

Chapter 3
Anti-Money Laundering Board

Section 24: There shall be an Anti-Money Laundering Board consisting of the Prime Minister as
Chairman, Minister of Finance as Vice-Chairman, the Permanent Secretary of the Ministry of Justice, theAttorney-General, the Commissioner-General of the Royal Thai Police, the Secretary-general of the
Office of Narcotics Control Board, the Director-General of the Fiscal Policy Office, the Director-Generalof the Department of Insurance, the Director-General of the Department of Lands, the Director-General of
the Customs Department, the Director-General of the Revenue Department, the Director-General of
Department of the Treaties and Legal Affairs, the Governor of the Bank of Thailand, the President of theThai Banking Association; the Secretary-general of the Securities Exchange Commission and nine
qualified experts appointed by the Cabinet from those who have expertise in economics, monetary affairs,
finance, law or any other related fields beneficial to the execution of this Act with the consent of theHouse of Representative and the Senate respectively as a member of the Board and the Secretary-generalof the Office as Secretary of the Board.
The Board shall appoint no more than two government officials in the Office as the Assistant
Secretary of the Board.
In case where the Chairman or Member of the Board in paragraph one can not attend the board
meeting, one shall delegate a deputy who is knowledgeable relating to duties of the Board to attend thatparticular meeting.

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Section 25: The Board shall have the duty to:(1) propose to the Cabinet measures to combat money laundering;(2) recommend to the Minister Ministerial Regulations, Rules and Notifications to enforce this Act;(3) set rules pertaining to the custody, maintenance, sale by public auction, optimum usage, anddamage evaluation, and depreciation of the assets in accordance with section 57;(4) promote cooperation from the public in providing information to combat money laundering;(5) monitor and evaluate the effectiveness of the enforcement of this Act; and(6) perform other duties as provided in this Act or in other laws.
Section 26: The qualified experts appointed by the Cabinet shall serve a term of four years from thedate of appointment, and shall be eligible to serve only one term.
Section 27: Apart from the term limit set forth in section 26. The appointment of a qualified expert
by the Cabinet shall terminate from office upon:(1) death;(2) resignation;(3) being removed by the Cabinet by the consent of the House of Representative and the Senate
respectively;(4) being a bankrupt;(5) being an incompetent or quasi-incompetent person;(6) being imprisoned by a final judgement to a term of imprisonment.
If a qualified expert is appointed during the term, whether as an addition or a replacement, that
qualified expert shall serve the remainder of that term.
Section 28: If a qualified expert has fully served the term and no new qualified expert been
appointed, such qualified expert shall remain in office until such time as a new qualified expert has been
appointed.
Section 29: The meeting of the Board shall require of no less than one half of member of the Boardin the presence to constitute a quorum.
The Chairman of the Board shall chair the meeting. If the Chairman is unable to attend the meeting or
cannot execute the duty, then the Vice-Chairman shall chair the meeting. If the Vice-Chairman is unable
to attend the meeting or cannot execute the duty, the members of the Board who are present shall electone of the members of the Board to chair the meeting.
A resolution of the meeting shall pass by a majority of the votes cast. Each member of the Board
shall have one vote. In the event of a tie, the Chairman shall cast an additional vote to be the deciding
vote.
Except, however, a decision by the Arbitrary Sub-Committee under resolution to pass underparagraph three of section 49 shall require a majority of two third of the votes cast of participating
members of the Sub-Committee.
Section 30: The Board may appoint a Sub-Committee to study and submit recommendations on any
particular subject, or to undertake any action on behalf of the Board. Section 29 shall apply mutatis
mutandis to any meeting of the Sub-Committee.
Section 31: Members of the Board and Members of the Sub-Committee may receive remuneration as
determined by the Cabinet.

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Chapter 4
Transaction Committee

Section 32: There shall be a Transaction Committee consisting of the Secretary-general as the
Chairman of the Committee and four other qualified experts whom the Board appointed as members.
Qualification or disqualification of the Transaction Committee shall be as provided by the Minister s
Announcement.A member of the Transaction Committee appointed by the Board shall serve a two year
term. A member of the Transaction Committee whose term is ended may be reappointed and theprovisions of section 27 and 28 shall apply mutatis mutandis, except that termination from office inaccordance with section 27 (3) shall not apply.
Section 33: The meetings of the Transaction Committee shall be in accordance with section 29
mutatis mutandis.
Section 34: The Transaction Committee has the following duties:(1) to audit transactions or assets involved in the commission of an Offence;(2) to restrain a transaction under section 35 or 36;(3) to restrain or seize in accordance with section 48;(4) to report to the Board on its work performed under this Act; and(5) to undertake other functions designated by the Board.
Section 35: In case where there is probable cause that any transaction is involved or may be involvedin the commission of a money laundering offence, the Transaction Committee shall have the power toissue a written order to restrain such transaction, within the time prescribed but not exceeding threebusiness days.
In the case where it is necessary or in an emergency, the Secretary-general shall have the power toissue an order to restrain a transaction in accordance with the provisions under the first paragraph, andthen report to the Transaction Committee.
Section 36: In the case where there is evidence to believe that any transaction is involved or may be
involved in the commission of a money laundering offence, the Transaction Committee shall have thepower to issue a written order to restrain that transaction temporarily within the time prescribed but notexceeding ten business days.
Section 37: When the Transaction Committee or the Secretary-general, whichever it may be, issues a
restraining order in accordance with section 35 or 36, then the Transaction Committee shall file a reportto the Board.
Section 38: In order to undertake a duty in accordance with this Act, the Transaction Committee, theSecretary-general and competent official designated by the Secretary-general in writing shall have thepower to do the following:(1) inquire in writing or compel a financial institution, government agency, organization, or public
office or state enterprise, whichever is the case, to send a relevant official to testify, to submit awritten explanation, or to submit an account, document or any other evidence for examination orconsideration;(2) issue a written inquiry or summons anyone to appear to testify, to submit an explanation note, or
account, document or any evidence for examination or consideration;(3) have access into a residence, place, or any transporting conveyance in which there is probable93

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cause to suspect that any asset involved in the commission of an offence, or evidence involvedin a money laundering offence is hidden or kept, in order to search or for the purpose of tracing,monitoring, seizing or attaching any asset or any evidence. Such access is authorized when it is
too late to obtain a search warrant and the asset or evidence may be moved, concealed,
destroyed, or transformed from its origin nature of appearance.
In the performance of duty under (3), the competent official designated under paragraph (1) shallproduce his or her identification card and assignment document to the individual concerned.
The identification card according to paragraph (2) shall be in the form prescribed by the Minister,which is published in the Government Gazette.
The Secretary-general shall be responsible for the custody and use of all information derived fromtestimony, written explanation, account, document, or any other evidence which has the characteristic of
being specific information of an individual, financial institution, government agency, governmentorganization or state enterprise.
Section 39: Members of the Transaction Committee may receive remuneration as prescribed by the
Cabinet.

Chapter 5
The Office of Anti-Money Laundering

Section 40: There shall be an Office of Anti-Money Laundering in the Office of the Prime Minister
which shall have the power to:(1) act in accordance with the resolutions of the Board and the Transaction Committee, and to carryout other administrative functions;(2) receive transaction reports which are delivered in accordance with the requirements in chapter
two, and to issue an acknowledgement of such report;(3) collect, trace, monitor, study, and to analyze reports or any other information related to financialtransactions;(4) collect evidence in order to prosecute any violator under the provisions of this Act;(5) launch an education programme in order to disseminate information, educate and provide
training pertaining to the undertaking of this Act, or assist or support both public and private
sectors to launch such programmes; and(6) carry out other functions in accordance with the provisions of this Act or other laws.
Section 41: There shall be a Secretary-general who has the duty and responsibility to report directly
to the Prime Minister, to oversee the performance of the Office in general, and to supervise the public
official of the Office. There shall be a Deputy secretary-general to assist the overseeing and supervisingof the performance of the Office.
Section 42: The Secretary-general shall be a civil servant who is appointed by His Majesty the Kingby and with the advice and consent of the Cabinet and the House of Representatives and the Senate
respectively.
Section 43: The Secretary-general shall have the qualifications as follows:(1) knowledge and expertise in the field of economics, finance, fiscal policy or law;(2) be a Deputy secretary-general or a civil servant at a position classification level not less than orequivalent to a Director-General;
94125TH INTERNATIONAL TRAINING COURSE
VISITING EXPERTS PAPERS(3) not be a member of any Board of any state enterprise or any other government agency; and(4) not be a member of the board, or manager, or consultant, or hold any similar position or haveany vested interest in any limited partnership, company, financial institution, or work in any
profession, vocation, or any other establishment which is in contradiction to this Act.
Section 44: The Secretary-general shall hold office for a term of four years from the date of the orderof His Majesty the King.
The Secretary-general shall not be reappointed upon completion of the term served.
Section 45: Notwithstanding serving out the term as provided in section 44, the Secretary-generalshall be terminated from the position in the case of:(1) death;(2) resignation;(3) disqualification in accordance with section 43; or(4) by the order of His Majesty the King, by and with the advice of the cabinet and the House ofRepresentative and the Senate respectively.
Section 46: Where there is probable cause to believe that a customer s account at a financial
institution, equipment or communication device, or any computer has been used or may be used for the
purpose of the commission of a money laundering offence, the competent official, designated in writingby the Secretary-general, shall submit a petition to the Civil Court to issue a warrant to have access to
obtain information from the account, communication data, or computer files.
In accordance with paragraph one, the Court may authorize the competent official who submits such
petition to use any appropriate instrument or access device. The warrant in each endorsement shall not
exceed ninety days.
Once the Court has issued a warrant in accordance with paragraph one or two, the individual
concerned with the account, the communication data or the computer file shall cooperate to comply withthe provisions of this section.
Section 47: The Office of Anti-Money Laundering shall submit an annual performance report to the
Cabinet. The annual performance report shall contain essential details including, but not limited to:(1) a report on the management of assets and all proceedings in accordance with this Act;(2) problems or obstacles encountered in carrying out the responsibilities of the Office; and(3) a report on fact or observations made in carrying out the responsibilities of the Office, including
opinions and recommendations.
The Cabinet shall submit the annual performance report described in paragraph one together with the
Cabinet s observations to the House of Representative and the Senate.

Chapter 6
The Asset Management

Section 48: In examining reports and data on financial transactions, if there is probable cause tobelieve that there may be a transfer, distribution, placement, layering, or concealment of any asset related
to the commission of an offence, the Transaction Committee shall have the power to restrain or seize that
asset temporarily for a period not exceeding ninety days.
In case where it is necessary or in an emergency the Secretary-general may issue an order to restrain
or seize such asset in accordance with paragraph one and then report to the Transaction Committee.
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The examination of reports and transaction data in accordance with paragraph one shall be asprescribed in the ministerial regulations.
Any individual who conducts any transaction or an individual who has a vested interest in the asset
being seized or restrained shall produce evidence to prove that the money and asset in the transaction are
not related to the commission of an offence, so that the restraint or seizure order can be withdrawn. The
proceeding and guidelines shall be administered in accordance with the Ministerial Regulations.
When the Transaction Committee or the Secretary-general, whoever it may be, orders the restraint or
seizure of an asset, or withdraws such an order, then the Transaction Committee shall report to the Board.
Section 49: Under the provisions of paragraph one of section 48, in the case where there is evidence
to believe that an asset is related to the commission of an offence, the Secretary-general shall forward thecase to the prosecutor for consideration to file a petition to the Court to order the forfeiture of such asset
for the benefit of the State without delay.
In a case where the prosecutor deems that the evidence is inadequate to file a petition to the Court for
the forfeiture of the asset, in whole or in part, the prosecutor shall inform the Secretary-general of suchinadequate evidence so that he may proceed to obtain additional information.
The Secretary-general shall proceed without delay in response to paragraph two and submit additional
evidence for the prosecutor to reconsider. Should the prosecutor deem that the evidence is still inadequate
to file a petition to the Court for the forfeiture of an asset in whole or in part, the prosecutor shall informthe Secretary-general in order to forward the matter to Arbitrary Committee for consideration. The
Arbitration Committee shall deliver the decision within thirty days as from the date of receipt from theSecretary-general.
The prosecutor and the Secretary-general shall follow the decision of the Arbitrary Committee. When
the Arbitrary Committee fails to issue a decision within the prescribed time limit, then the prosecutor s
determination will be final.Where the prosecutor s determination pertaining to paragraph three has been
fulfilled then it shall be final. There shall be no more motion against that individual in connection withthe same asset unless new crucial evidence has arisen to convince the Court to order the forfeiture of that
individual asset to the State.
When the prosecutor has filed a petition to the Court, the Court shall order that a notice be posted at
the Court and have it published for two consecutive days in a local, well known, newspaper so that
individuals who may claim ownership or have a vested interest in the asset can file an objection to thepetition to the Court prior to the issuance of an order. In addition, the Court shall send a copy of such
notice to the Secretary-general to post at the Office and at the police station where the asset is located. If
there is evidence of an individual who may claim ownership or has a vested interest in the asset then the
Secretary-general shall send a notice to that individual and inform him/her of their rights. The notice shallbe delivered via certified registered mail to the individual s last known address.
Notwithstanding paragraph one, under a probable cause to act in order to protect the right of acomplainant in the predicate offence, the Secretary-general may forward the matter to the competent
official who is investigating the commission of that offence on the undertaking of such law to protect theright of the victim.
Section 50: An individual, who claims ownership of the asset which the prosecutor has filed apetition to forfeit to the State in accordance with section 49, may file a petition before the Court issues anorder under section 51 showing to the Court that:(1) he or she is the true owner and the asset is not related to any offence or(2) he or she has received the transfer of ownership honestly and with compensation, or he has
acquired the asset honestly and morally, or by charity.
An individual who claims to have a vested interest in an asset on which the prosecutor has filed apetition to forfeit to the State under section 49 may file a petition for a protection of his rights before the96125TH INTERNATIONAL TRAINING COURSE
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Court issues an order. The petitioner must satisfy the Court that he or she is an honest recipient and abona fide purchaser or that he or she has acquired the interest honestly and morally, or by charity.
Section 51: If, after investigating the petition of the prosecutor in accordance with section 49, theCourt believes that the asset named in the petition is related to, an offence and the petition of the claimant
filed pursuant to, section 50, paragraph one, has no merit, the Court shall order the forfeiture of the asset
to the State.
According to this section, if the claimant in section 50, paragraph one is related to or used to berelated to any person who committed the predicate offence or the offence of money laundering, thepresumption shall be that the money or asset is related to an offence or has been transferred dishonestly,
whichever the case may be.
Section 52: Where the Court has ordered the forfeiture of the asset to the State according to section
51, and it subsequently has inquired and believes that the petition of the claimant in section 50 paragraph
two has merit, the Court may issue an order to protect the rights of the recipient claimant with or without
conditions.
According to this section, if the claimant of being a recipient in section 50 paragraph two is related toor used to be related to any person who committed the predicate offence or the offence of money
laundering, the presumption shall be that the claimant has acquired his vested interest in possession
dishonestly.
Section 53: If, after the Court has ordered the forfeiture of the asset to the State in accordance withsection 51, the claimant, either an owner or holder or a vested interest recipient of that asset, can establish
the validity of his claim under section 50 to the satisfaction of the Court, the Court may order the returnof the asset or may set any condition in order to protect the rights of the claimant. If the asset can not be
returned or protected any right, then the claimant shall be entitled to compensation or damage, whichever
the case may be.
The petition under paragraph one shall be filed within one year from the date of the final Court orderof forfeiture. The claimant has to prove that he could have filed the petition under section 50 because heor she did not know of the notification or written notice of the Secretary-general or if with any otherreasons.
The Court shall inform the Secretary-general regarding the petition before issuing any order underparagraph one. The public prosecutor may object to the claimants.
Section 54: In the case that the Court has ordered the forfeiture of an asset to the State according tosection 51, if there are additional assets related to the offence, the public prosecutor may file a motion
requesting the Court to order the forfeiture of those assets to the State.
The provisions of this chapter shall apply mutatis mutandis.
Section 55: After the public prosecutor has filed a petition with the Courtunder section 49, if there is
probable cause to believe that there may be a transfer, distribution, placement of any asset related to an
offence, the Secretary-general may submit the facts to the public prosecutor to file a petition to the Court
to order a provisional seizure or restraint of the asset prior to issuing the order under section 51. The
Court shall consider such petition immediately. If the petition is supported by probable cause, the Court
shall issue the order without delay.
Section 56: Once the Transaction Committee or the Secretary-general, as the case may be, issues anorder to seize or restrain any asset under section 48, the designated competent official shall execute theseizure or restraining order. There will be a report of the execution along with the assessment of the value
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and condition of such asset.
The seizure or restraint of the asset, and the assessment of the value of the asset seized shall be inaccordance with the rules, procedure and conditions prescribed in the Ministerial Regulations; provided
that, the Civil Procedure Code shall apply mutatis mutandis.
Section 57: The custody and maintenance of the asset seized or restrained by the order of theTransaction Committee or the Secretary-general, as the case may be, shall be in accordance with theRules prescribed by the Board.
In the case that the asset under paragraph one is unsuitable to keep in custody, or there will be moreburden to the Government rather than the utilization thereof for other purposes, the Secretary-general may
order those who have a vested interest in the asset to maintain and utilize the asset and may require any
collateral or security assurance. There will be a report to the Board if such asset is ordered to be sold byauction or used for official purposes.
The custody, maintenance, utilization of forfeited assets by those who have a vested interest, or a saleby auction, or the utilization of the asset for official purposes under paragraph two shall be in accordancewith the Rules prescribed by the Board.
If it appears thereafter that the asset sold by auction, or utilized for official purposes under paragraphtwo, was not the asset involved in the commission of an offence, the Board shall return the asset to therightful owner or legal custodian together with compensation and the depreciation value. If the seized
asset can not be returned, then the restitution shall apply in an amount equivalent to the price of the seized
asset as assessed on the day of seizure or restraint on that asset or the value realized at the auction,
whichever the case may be. The rightful owner or custodian person shall receive an interest based on theamount of the restitution or compensation at the highest rate of the fixed deposit savings account of theGovernment Savings Bank, as the case may be.
The assessment of the compensation and the depreciation value under paragraph four shall be inaccordance with the Rules prescribed by the Board.
Section 58: Where the asset involved in the commission of an offence is subject to another legal
process which has not yet commenced or is pending or if it would be more effective to proceed under thisAct, then the Government shall proceed as provided in this Act.
Section 59: The Court proceeding under this chapter shall be filed with the civil court and the Civil
and Commercial Code shall apply mutatis mutandis.
The prosecutor is exempted from all court fees in the undertaking of all proceedings.

Chapter 7
Penal Provisions

Section 60: Any individual who is found guilty of the crime of money laundering shall receive aterm of imprisonment of one to ten years, or a fine of twenty thousand to two hundred thousand Baht, or
both.
Section 61: Any juristic person which is found guilty of an offence under sections 5, 7, 8, or 9 shallreceive a fine in the amount of two hundred thousand to a million Baht.
A Director, Manager, or any person responsible for the operation of the juristic person under the firstparagraph which is found guilty of an offence shall receive a term of imprisonment of one to ten years, ora fine of twenty thousand to two hundred thousand Baht, or both, unless he can prove that he had no part98

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in the commission of such offence of the juristic person.
Section 62:Any individual who is found guilty of an offence under sections 13, 14, 16, 20, 21, 22,
35, or 36 shall receive a fine not exceeding three hundred thousand Baht.
Section 63: Whoever reports or makes a statement according to section 13,14, 16, or 21 paragraph
two with the assertion of a falsehood or the concealment of the facts which should be revealed to theofficials shall receive a term of imprisonment not exceeding two years, or a fine of fifty thousand to five
hundred thousand Baht, or both.
Section 64: Any individual who fails to appear or refuses to testify, or to submit an explanation inwriting, or to submit the account document, or evidence required under section 38 (1) or (2), or who
obstructs, or fails to cooperate under section 38 (3) shall receive a term of imprisonment not exceeding
one year, or a fine not exceeding twenty thousand Baht, or both.
Any individual who acts by any means to leak restricted information to others under section 38
paragraph four, except in the course of doing his/her job or according to the law, shall receive the penalty
set forth in paragraph one.
Section 65: Any person who diverts, damages, destroys, conceals, takes away, loses or renders
useless the document, memoranda, information, or asset which has been ordered seized or restrained by
official action, or which one knows or should have known will be forfeited to the State according to thisAct, shall receive a term of imprisonment not exceeding three years, or a fine not exceeding threehundred thousand Baht, or both.
Section 66: If any person who knows or should have known confidential government information inproceeding according to this Act, acts in any means to let others know or may have the knowledge of that
confidential information, except in the course of conducting his/her work or according to the law, he or
she shall receive a term of imprisonment not exceeding five years, or a fine not exceeding one hundred
thousand Baht, or both.

Countersigned by
Chuan Leekpai
Prime Minister

Principle and Rationale Accompanying
The Anti-Money Laundering Act of B.E. 2542

Principle
To enact a law to prohibit money laundering
Rationale
Presently offenders who violate certain laws have benefited from money or assets obtained from theoffences via money laundering.
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criminal activity and to commit other offences.
This situation has caused problems for law enforcement officers.
Existing laws are not adequate to suppress either money laundering or illegal use of crime-relatedmoney and assets.
Thus, in order to cut off this vicious circle of crimes, measures to effectively combat money
laundering must be established.
Therefore, this law must be enacted.

APPENDIX B
AMENDMENTS OF THE PENAL CODE AND ANTI-MONEY LAUNDERING
ACT
To comply with UN Resolution 1373, On August 5, 2003, Thailand has passed two major Executive
Decrees to amend the Penal Code and the Anti-Money Laundering Act becoming effective from August
11, 2003 onwards.
1 The Amendments to the Penal Code Section 135
Section 135/1
Any person, committing any of the criminal offences stated below:
1. using force to cause death, damage, or serious injury to the life and freedom of an individual;
2. causing serious damage to a public transportation system, a telecommunication system, or an
infrastructure facility of public use; or
3. causing damage to property, places, facilities or systems belonging to a State or government, a person
or an environment system, resulting or likely to result in major economic loss;
who causes serious damages, evokes public fear, or raises civil unrest with the intention to intimidate apopulation, to threaten or compel the Royal Thai Government, or any government or an internationalorganization to do or abstain from doing any act; that person shall be deemed to have committed an act ofterrorism and shall receive a sentence of either a death penalty, life imprisonment, or an imprisonment
from three to twenty years. The person shall also pay a fine of 60,000 to 1,000,000 baht.
Any demonstration, gathering, protest, or movement that calls for the government s assistance or for fairtreatment, which under the Thai Constitution are legal exercises, shall not be regarded as a terrorist
offence.
Section 135/2
Any person who:
1. threatens to commit a terrorist act and shows behaviour convincing enough to believe that the person
will do as said;
2. collects manpower or stockpiles weapons, provides or compiles any property, or organizes any
preparation or conspires for the purpose of committing a terrorist act; or commits any offence whichis part of a terrorist plan; or abets persons to participate in the commission of terrorism; or is aware of
the act of terrorism and conceals such act; that person shall receive a sentence of imprisonment from100

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two to ten years and shall pay a fine of 40,000 to 200,000 baht.
Section 135/3
Any person who is involved or collaborates with the offender as stated in 135/1 or 135/2 shall receive
identical punishment.
Section 135/4
Any person who is a member of a group of people classified as a terrorist organization by either theUnited Nations Security Council resolution or declaration, which Thailand has endorsed; that person shallbe deemed to have committed an act of terrorism. The person shall receive a sentence of imprisonment
not exceeding seven years and shall pay a fine not exceeding 140,000 baht.
2 The Amendments to the Anti-Money Laundering Act (2542/1999) Section 3
Section 3/8
Offences relating to terrorism under the Penal CodeOnce the offences involving terrorist acts have been enacted, suspicious activity reporting [SAR] willautomatically extend to this new offence.

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APPENDIX C

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THE CURRENT SITUATION CONCERNING DRUG RELATED CRIMESAND MONEY LAUNDERING IN ESTONIAAro Siinmaa *I. INTRODUCTION
Estonia, a former republic of the Soviet Union, only regained its independence in 1991. The rapidtransition from one political system to another brought about a situation where it became essential tochange the entire legislative basis. Naturally, it was impossible to carry out such an enormous task at once
and it could be said that even the so-called transitional period or the period of continual amending of thelegislation is not over yet. This in turn has inhibited the formation of a stable practice in all fields of law,
especially in criminal and procedural law.
Although Estonia has established working relationships with many international organizations,
acceded to international conventions and followed the directives of the European Union, there is stillmuch to do in the building up of our legal system. Currently there are debates going on over thecompetence of law enforcement authorities, their position in relation to each other and the scope ofcooperation.
Today the Estonian justice system has reached a most crucial stage as on September 1, 2002 the newPenal Code entered into force replacing the Criminal Code, which dated back to the Soviet period and had
been amended on several occasions. The alteration of the system of provisions of criminal law in the
middle of the calendar year is the reason why the statistics dealt with in this report are inaccurate and thereview itself incomplete.
The reform of the criminal procedural law is also under way. The Riigikogu (the parliament) passed
the Code of Criminal Procedure on February 12, 2003, which will enter into force on July 1, 2004
replacing the old Code dating back to the Soviet regime. The new Code of Criminal Procedure will finallyestablish the adversarial procedure and will change considerably the competence of the law enforcement
authorities. So far pre-trial investigation was carried out by the police or in the case of certain crimes
provided by law by other authorities (for example the customs, border guard and tax board). The police
also brought charges and referred the matter to the court through the Prosecutor s Office. The Prosecutor s
Office exercised supervisory control over the pre-trial investigation and represented public prosecutions.
According to the new Code the Prosecutor s Office will lead the pre-trial investigation. In that way the
responsibility of the Prosecutor s Office for the quality and efficiency of the pre-trail investigation will
increase considerably and thus cooperation between the Prosecutor s Office and the police in the fields ofinvestigation and surveillance must become more efficient. It is too early to say how it will work out inpractice.
Because of the above mentioned reasons it is obvious that at the level of international cooperation,
including in matters under review at this time, we have little experience to share with our colleagues fromcountries whose legal systems have developed undisturbed for decades or even centuries. Our role is* Prosecutor, Estonia.

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therefore to be attentive and grateful learners.
The lack of practice in matters under review is also the result of the small size of Estonia. The area isonly 45,000 square kilometres and the population is approximately 1.5 million, which is many times
smaller than that of many cities of other countries, including Tokyo. It must be emphasised that during thelast 12 years of independence the criminal groups have also made principal changes in their structure andmethods used and found new targets to attack. They have managed to do all that as fast as, or probably
faster than, the legislation has developed.

II. CURRENT SITUATION OF ORGANIZED CRIME IN ESTONIA
In the beginning of the 1990s a new organized underworld, which was more orientated towards
maximising profit, emerged alongside the old subculture of theft based on the Soviet prison hierarchy.
Criminal groups, with notable levels of organization, operating in Estonia were (and still are) of Russianor former Soviet Republics origin and often operated on behalf of criminal groups there. Estonian
criminals had little to say in the criminal world. For example, according to the surveillance agencies,
during the first years of independence there was only one competitive criminal group established by
Estonians and comprising mainly of Estonians. As is typical with the early days of capitalism organizedcrime in Estonia was openly violent for a long time focusing on extortion, robbery, arbitrary behaviour,
trafficking of timber, organized theft, pimping, trafficking of guns and, to a certain extent, drugtrafficking. In time criminals learned to profit from the geographical position of Estonia between Europe
and the former Soviet republics.
The so-called white collar trend in organized crime has only become more obvious during the last
few years. Therefore it must be recognised that investment of money received from, for example, drugtrafficking into legal businesses to conceal its origin has not yet been officially detected. It means that not
only is there no judicial practice in the form of binding judicial decisions but there are no criminal cases
where these connections have been the subject matter of the investigation. Some connections have clearly
been detected but as long as no criminal proceedings are commenced the relevant information is available
only to surveillance agencies and is not within the competence of the Prosecutor s Office. Therefore, I, asa prosecutor, have no right either to rely on that information or to comment on it.
As from 1996 there was, and is, in the new Penal Code, with certain exceptions, a section in the
Criminal Code that states that membership in, or the forming of, criminal organizations or recruiting
members thereto or leading such organizations or parts thereof is punishable. During its period of validity
there has been only one case where the organiser of a criminal organization and its border guard members
were convicted, by virtue of this provision, for smuggling stolen cars into Estonia. Several other criminal
proceedings have also commenced and referred to the court but they were all either terminated during thepreliminary investigation because they were impossible to prove or the court passed a judgement ofacquittal. Therefore it must be admitted that although persons or groups of persons have been convicted
for smuggling or handling narcotic substances it has not been proven by a binding decision that suchactivities were carried out by a criminal organization or, in other words, connections between organizedcrime and drug trafficking or money laundering have not yet been detected.
We can discuss money laundering as an independently punishable crime only theoretically as, so far,no one has been convicted for this crime. According to the surveillance information criminalorganizations are associated with money laundering but in these cases prior crimes are economic or tax
related.
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III. DRUG RELATED CRIMESThe Estonian Police have the following drug units:
1) The Narcotic Crime Department of the Central Criminal Police (a national unit), which comprises a
Procedural Division (10 officials) and an Analysis Division (5 officials).
2) Narcotic Divisions of local police prefectures and individual officials dealing with narcotic crimes.
Larger divisions are located in Tallinn (29 officials), Johvi (9 officials), Tartu (7 officials) andNarva (4 officials); there are also a total of 19 officials in the smaller prefectures. The total number
of officials dealing only with narcotic crimes is 84.
Apart from the police there are five officials in the Border Guard and at the end of 2002 a narcotics
division was established within the Investigation Department of the Customs Board. Cooperationagreements have been concluded between the different divisions (police-customs, police-border guard,
customs-border guard) which enables an exchange of information, organizes training, and helps eachother with transportation, etc. There is also a legal basis for cross-usage of the databases but this fieldneeds to be developed. The main aim of cooperation is to prevent illicit trafficking.
The following data was supplied mainly by the Central Criminal Police (CCP) and the Forensic
Service Centre (FSC) but, due to the above mentioned transitional difficulties, there might be somediscrepancies.
According to the Central Criminal Police, criminal organizations are currently looking for new
possibilities to invest their illegally acquired money into legal businesses. Drug trafficking is becoming
more intensive every day and, for that purpose, established channels are used and new ones are sought
out. Transit of the following narcotic substances and precursors is going on throughout Estonia:
・ heroin and lately fentanyl from Russia, mainly to the Nordic Countries (Scandinavia);・ hashish mostly from Spain to the Nordic Countries (Scandinavia);・ ecstasy (MDMA) from the Netherlands and Belgium, mainly to the Nordic Countries;
・ cocaine from Venezuela, mainly to the Nordic Countries and Russia.
Heroin, fentanyl and precursors are imported from Russia into Estonia, amphetamine and heroin areexported from Estonia into the Nordic Countries (Scandinavia) and precursors are exported from Estonia
mainly to Western Europe. Transit constitutes approximately 70 percent of the drug trafficking while local
consumption constitutes 30 percent. In addition to transit and imported narcotic substances drugs are
manufactured locally as well. In 2001 no illicit narcotic laboratories were destroyed but in 2002 four
laboratories for manufacturing synthetic drugs (amphetamines, ecstacy, GHB and GHB andamphetamines) were found. In 2001, thirteen plantations of cannabis (with a total area of 400 square
metres) were destroyed in Estonia, the production of which was meant for the local market. In 2002 sevenmajor plantations of cannabis were found.
According to the Forensic Service Centre altogether 22 expert analyses were conducted which
identified the plants as cannabis but these also included cases where only single plants were involved. In
2002 amphetamine constituted 36 percent of the expert analyses, products of cannabis 35 percent, ecstasy
13 percent and heroin 9 percent. The percentage is calculated taking into account only the number ofexpert analyses carried out, not the quantity of narcotic substances. According to the Central Criminal
Police the know-how for manufacturing narcotic substances is spreading rapidly and the manufacturing ofamphetamines and ecstasy has become more common. New narcotic substances like GHB and fentanyl
have also come onto the market. A very strong drug, fentanyl (a synthetic heroin or the so-called China
White ) and one of its counterparts, methylfentanyl, which is even stronger than fentanyl, and which are
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now used instead of heroin, came onto the market at the end of 2001. In 2001 fentanyl was not found but
in 2002 it was confiscated in 71 cases. The reason why fentanyl has spread so quickly is probably that it
has become more complicated to get heroin and also because of the low quality of the heroin.
It is a significant trend we are up against as in 2001 heroin constituted 90 per cent of the gross
turnover of the narcotic business amounting to approximately 900 million kroons. Due to the difficulties
in getting heroin, the usage of narcotic substances home-produced from the opium poppy increased
considerably. In 2001 39.4 kg of opium poppy bolls, dust and residues of manufacture were confiscatedwhile in 2002 the amount was 102 kg.
Cannabis products are continually popular. In 2000, 72 kg of cannabis plants, parts of plants andmarihuana (hashish and cannabis seeds are not included here) were confiscated, in 2001 the amount was
260 kg but in 2002 it dropped to 81 kg.
Since the year 2000 the amount of confiscated cocaine has doubled while the amount of confiscated
GHB has also increased massively. One of the acute problems is the production of amphetamines
stimulated by the enormous demand of the Nordic market. In 2002 amphetamine and methamphetamine
was confiscated in 344 cases amounting to 35.1 kg. One of the facts indicating the wide circulation of
narcotic substances is the stabilisation of prices. In 2000, narcotic crimes constituted 2.7 per cent, in 2001
3.9 per cent and in 2002 2.3 per cent of all crimes committed.
The 2002 percentage, however, is debatable as in that year the reform of the criminal law was carriedout which brought with it a temporary decrease in statistical numbers. Therefore, there was no actual
decrease in narcotic crimes and this is supported by the fact that during the first quarter of 2003 theincrease in narcotic offences was 61 per cent when compared to the same period of 2002. These kinds ofstatistics are actually the least informative as all kinds of narcotic related crimes are taken into account on
an equal basis.
Lately the police have paid more attention to serious drug related crimes and the new Penal Codedenounced some of the offences classified as crimes during the first half of 2002. Namely, a person who
has used narcotic and psychotropic substances repeatedly without a prescription will not be punished as acriminal offender as, according to the Narcotic Drugs and Psychotropic Substances Act, this kind ofaction is deemed to be a misdemeanour.
The priority of the police is to damage criminal organizations and not to apprehend minor dealers.
This is also supported by the statistics, which show that although the total number of criminal cases
dealing with the trafficking of narcotics has decreased, the amounts of confiscated substances haveincreased significantly. For example, the amount of confiscated heroin increased over three times in 2002
compared to the year before, although the number of cases decreased more than three times.
In the field of cooperation, apart from the above mentioned agreements concluded between the police,customs and the border guard, there is a rather active exchange of information between the police and theState Agency of Medicine and between the police and businesses selling chemicals. When talking about
combating narcotic crimes at the international level, it is important to mention that Estonia is a member of
EUROPOL and participates in regional cooperation projects such as FINESTO (Estonian-Finnish joint
working group) and FER (Finnish- Estonian-Russian) which was launched at the end of 2002. Estonia
also participates in the project Gulf of Finland and the European joint project N-Hero, led by Russia.
The aim of the latter is to profile heroin which means that confiscated heroin is analysed and, as a result, a
unique characterisation of the batch or fingerprint of the batch is compiled. On the basis of the data, the117

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batch can be compared with other confiscated batches of heroin, similarities can be detected and thus theorigin of the batch can be established along with other important factors like place and time of
production, persons involved, etc.
In addition to the police representatives of the Finnish and Estonian, border guard and customs havealso joined the FINESTO working group. The aim of this working group is to detect and hinder drugtrafficking between Estonia and Finland. Since the end of 2000, when the work was commenced, tens ofkilos of amphetamine and hashish have been confiscated and tens of criminals apprehended. The Finnish
Central Criminal Police has also engaged a Swedish liaison officer in the work of FINESTO. There is acontact person in the Swedish Central Criminal Police who co-ordinates the cooperation. Cooperation
between the Estonian and Swedish police is also active and all official communication channels are being
used - INTERPOL, EUROPOL and the liaison officer at the Swedish Embassy in Estonia, appointed by
the Swedish police.
There is a special unit in the Stockholm Police for combating crime originating from the Baltic Stateswith whom the Estonian Central Criminal Police has good contacts. As Estonia is going to accede to theEuropean Union the narcotic units of the Estonian Police are ready for this - there is an operable national
electronic data exchange and in cooperation with our German colleagues we have drawn up a national
narcotics strategy based on relevant EU documents.
It is appropriate to start the survey on the legislative basis for combating narcotic crimes with the factthat on June 5, 1996 the Riigikogu voted to ratify the UN 1961 Single Convention on Narcotic Drugs andthe UN 1971 Convention on Psychotropic Substances. In 1997 the Narcotic Drugs and Psychotropic
Substances Act entered into force and the Minister of Internal Affairs established the procedures for
documentation of the delivery and storage of narcotic drugs and psychotropic substances and for storing
seized narcotic substances which serve as physical evidence. The same year the Minister of Social Affairs
issued a regulation on the Implementation of the Narcotic Drugs and Psychotropic Substances Act which
comprised schedules of specific substances the handling of which, without a prescription, is prohibited.
The Government of the Republic has passed the following regulations: The definitions of small andlarge quantities of narcotic drugs and psychotropic substances , The procedure for handling opium
poppy and cannabis for the purpose of agricultural production and The procedure for handlingprecursors . On May 31, 2000 the Riigikogu voted to ratify the UN 1998 Convention against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances. During the reform of penal power in the middleof 2002 the system of provisions regulating the punishment for narcotic crimes was changed to a certain
extent. The use of narcotic substances was decriminalised and is now punishable as a misdemeanour
pursuant to the Narcotic Drugs and Psychotropic Substances Act. In the systematic classification of legal
provisions narcotic crimes are deemed as crimes against public health and not as crimes against publicorder, as they used to be. An entirely new definition introduced by the new Penal Code was one ofcorporate liability which, within the meaning of sanctions, is expressed in punishing a legal person (bodycorporate) for committing a crime by pecuniary punishment or compulsory dissolution.
Illegal handling of narcotic drugs and psychotropic substances in small or large quantities ispunishable by different lengths of imprisonment while the handling of large quantities by a group of
persons or a criminal organization is punishable by two to ten years imprisonment. It is a criminal offence
to induce a person or a minor (a more serious criminal offence) to illegally consume narcotic drugs or
psychotropic substances; to prepare for distribution of narcotic drugs or psychotropic substances (which
is a rather exceptional provision as the Penal Code has generally decriminalised the preparation of acrime); as well as to violate the requirements for handling precursors and related reporting.
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Illicit international traffic and transit of narcotic substances are not deemed as crimes against publichealth but are punishable pursuant to section 392 of the Penal Code as smuggling of merchandise that isprohibited or requires a special permit by law, by a pecuniary punishment or by up to five years
imprisonment. The same act, if committed by an official taking advantage of his or her official position,or by a group, is punishable by five to ten years imprisonment. The court shall confiscate the substanceor object which was the direct object of the commission.
In the Penal Code smuggling is classified in the division of tax frauds in the chapter of economic
offences. Although, theoretically it is not impossible to charge a person with illicit trafficking as well as
jeopardising public health, with regard to the same batch of narcotic substances, judicial practice has
shown that if there are features of illicit traffic a person is punished only for that crime. When talking
about combating narcotic crimes we cannot ignore certain problems involved. Officials assigned to deal
with narcotic crimes in prefectures often lack professional training and experience, even on the
management level. As the dealers operating in the territory of a county are active not only all over the
republic but also abroad, relevant information should be gathered and disseminated but local police
authorities do not have the resources. Surveillance information on narcotic crimes is received randomly.
The solutions to this problem proposed by the Central Criminal Police are continuous training,surveillance and analysis. Duplicating each others work must be avoided, information must be accessible
to all officials working in this field and the Central Criminal Police, local prefectures and the Prosecutor s
Office must enhance cooperation when introducing a single practice. Educational institutions offering
police oriented education must include in their curriculum basic and in-service training in the field of
narcotic offences. I, myself, may add that prosecutors and judges also need this kind of training,
especially when bearing in mind that, as of next year, the role of the Prosecutor s Office in preliminary
investigation and adversial procedure will increase considerably.

IV. MONEY LAUNDERING
Money laundering became a criminal offence in Estonia as of July 1, 1999 when the Money
Laundering Prevention Act, passed by the Riigikogu on November 25, 1998 entered into force. In the
Republic of Estonia money laundering is defined as the conversion or transfer of, or the performance oflegal acts with, property acquired as a direct result of an act punishable pursuant to criminal law, thepurpose or consequence of which is the concealment of the actual owner or the illicit origin of theproperty.
Two new paragraphs were entered into The Criminal Code that were titled Money Laundering and
Failure To Follow The Requirements of the Money Laundering Prevention Act . In the new Penal Codethe regulation is similar: paragraph 394 is titled Money Laundering and according to that money
laundering is punishable by pecuniary punishment or by up to five years imprisonment. If money
laundering is committed by a group of persons or by a criminal organization, repeatedly (at least twice) oron a large scale the punishment is two to ten years imprisonment. If such a crime is committed by a legal
person the sanction is either pecuniary punishment or compulsory dissolution. The court shall confiscate
the direct object of the commission. Failure to comply with the identification requirement, failure tonotify suspicions of money laundering to the financial intelligence unit by the head or a contact person ofa financial institution or an entrepreneur or the submission of untrue information are separately
criminalised and punished by pecuniary punishment or up to one year imprisonment.

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On June 25, 1999 Estonia signed, and on March 8, 2000, ratified the Council of Europe 1990
Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime. According toarticle 6 of the Convention, Member States may establish which intentionally committed offences shall bedeemed as crimes:
・ the conversion or transfer of property, knowing that such property is proceeds of crime, for the
purpose of concealing or disguising the illicit origin of the property or of assisting any person who
is involved in the commission of the predicate offence to evade the legal consequences of his
actions;・ the concealment or disguise of the true nature, source, location, disposition, movement, rights withrespect to, or ownership of, property, knowing that such property is proceeds of crime;・ the acquisition, possession or use of property, knowing, at the time of receipt, that such property
was proceeds of crime;・ participation in, association or conspiracy to commit, attempts to commit and aiding, abetting,facilitating and counselling the commission of any of the offences established in accordance withthis article.
According to the Convention Member States may also establish whether:・ a predicate offence shall be considered as a criminal offence;・ the above mentioned offences committed by a person who has committed a predicate offence shallbe considered criminal or not;・ knowledge, intent or purpose required as an element of an offence set forth in that paragraph may
be inferred from objective, factual circumstances.
The Republic of Estonia has established that predicate actions must be separately punishable ascriminal offences and that it is also possible to punish a person for money laundering when he/she hashimself committed the predicate offence.
In practice, no criminal cases concerning money laundering have reached court judgement. Twocases have been referred to the court and several cases are still under investigation. So far none of themoney laundering cases has been connected with illicit trafficking in narcotic substances. Predicate
offences are mainly of an economic nature: misuse by an official of his or her official position, tax
offences and cases of bankruptcy, where owners attempt to maintain control over assets that belonged tothe bankrupt enterprises and were at their disposal.

Example One
A moratorium was declared on a bank and without the consent of the moratorium administrator theformer leaders of the bank could not conduct any transactions. But they learned that it was most likelythat bankruptcy proceedings would be commenced and so they sold the assets of the subsidiaries of thebank for a very low price to other companies which sold them on. These companies were in fact
controlled by the former bank leaders and the leaders of the companies were only puppets following
their orders.

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Example Two
Another bankruptcy case, where just before the commencement of the bankruptcy proceedings
company assets were transferred to another company to cover a fictitious debt. The company, in turn, soldthe assets on trying to make it look as if they had acquired them in good faith.
These two criminal cases are currently being heard in court but there is no judicial decision yet.
Example Three
A preliminary investigation is currently being conducted into a case where, during the years 1998 to2000, a company owned by a real estate businessman received more than 44 million kroons through offshore companies. To that end money received allegedly from the timber business was transferred to theaccounts of so-called shelf companies (companies that are not actually economically active). Cash was
drawn from the accounts and delivered to the office of the real estate company. Fictitious loan agreements
were then concluded with offshore companies to legalise this cash in the vaults of the real estatecompany.

A. Effective Investigation Methods for Gathering Evidence in Cases of Money Laundering andDrug Related Crimes
Effective investigation methods for gathering evidence in cases of money laundering and narcotic
crimes are to a large extent the same as those used for investigating organized crime in every field ofactivity. The admissibility of evidence and methods for gathering the evidence depends on thecompatibility with requirements established by the Code of Criminal procedure and the Surveillance Act.
1. Criminal Intelligence
In any organized crime related criminal case (I am talking about cases based on surveillance, whichmeans that proceedings are commenced on the initiative of a law enforcement authority and not becauseof a complaint) formalising the evidence must be preceded by the gathering of information and analysis.
So far systemised analysis has been conducted mostly by the Central Criminal Police but we should notunderestimate the contribution of the local prefectures. Information is being gathered on the sources andchannels of large-scale narcotic crimes, on the persons involved as well as on the activities, structure anddynamics of criminal organizations. In the field of economics, surveillance is used for checking
suspicious transactions and companies whose actual activities and financial status do not correspondeither to the officially registered fields of activity or to their documented financial status. Criminal
intelligence may result in commencing actual criminal proceedings but also information gathered, but not
actually used, might prove to be useful in the future. Surveillance information is formalised as evidence
by a report accompanied, if necessary, by database extracts proving the use of the means ofcommunication, sound or video recordings and their transcripts. In certain cases statements of police
officers may be used but so far this area has been poorly regulated and the courts have neither common
practice nor serious precedents.
2. Surveillance
According to the Surveillance Act, surveillance activities are divided into special and exceptional
surveillance activities. The police may conduct the following special activities without applying for thepermission of the court: covert collection of information by persons who are engaged in surveillance
activities or recruited for such; covert collection of comparative samples, and the covert examination andinitial examination of documents and objects; and covert surveillance and covert identification.
Exceptional surveillance activities that require the permission of the court are: covert entry for the121

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purpose of collecting and recording information and installing the necessary technical appliances; covert
examination of postal items; wire tapping and recording of messages and other information forwarded bytechnical communication channels; and staging of criminal offences. In cases of urgency, court
permission for declaring activities justified may be applied for after the commencement of the activities,
but not later than on the next working day. If the court refuses to issue a permit the activities must be
terminated promptly. It is pointless to emphasise how effective these measures are but, due to the current
legal regulations and additional bureaucratic rules within the agencies, the commencement of exceptional
surveillance activities is a painstaking process, and therefore, often lags behind the quick and persistent
operation of criminals.
3. Undercover Operations
Undercover operations are something that might be effective in cases of economic and narcotic crimes
but their implementation in Estonia is problematic. So far short-term undercover operations have been
exercised particularly in the fields of combating narcotics, illegal alcohol and cigarettes as well as inrevealing gun trafficking and cases where officials are taking bribes. In cases of undercover operations
where the activities of an undercover agent are qualified as criminal (for example when an agent sells a
gun or offers a bribe) permission for staging a criminal offence must be applied for from the court as theaction is considered to be an exceptional surveillance activity. Undercover operations related to narcotics
are also based on the provisions of the Narcotic Drugs and Psychotropic Substances Act, which permits
the handling of narcotic drugs and psychotropic substances for preventing, detecting and combating
narcotic crimes. In undercover operations agents over the years have played all kinds of roles: as buyers,
sellers, deliverers, suppliers, retailers, financers and corrupt officials. In many cases during the staging ofa crime an agent has offered a bribe or a deal of some kind to an official suspected of corruption.
Undercover work in Estonia is problematic because of the smallness of the country - people know eachother or have been in contact at some time or another. Therefore, instead of police officials ordinary
citizens or former criminals willing to co-operate have been recruited as temporary undercover agents.
But there are certain risks involved. Of all kinds of undercover work short-term operations are mostcommonly used because in the case of deep undercover assignments the risk of being exposed is great.
Undercover store fronts are also seldom used because of the lack of resources and the risk of exposuredue to the smallness of the country.
4. Immunity
Immunity from liability for crimes committed is not applied in Estonia as it is precluded by law.
Unless the crime has been committed on the basis of the permission issued by the court to imitate a crime,
the person is held liable for his/her actions. Prior to September 1, 2002 section 501 of the Criminal Codewas valid, on the basis of which the court or the prosecutor could release the convicted offender frompunishment if important evidence provided by him/her resulted in the finding out of the truth and theconviction in a criminal case of another person/persons. This meant that in order to release a person frompunishment it was necessary for: a) the person to be found guilty of all the crimes committed byhim/herself; b) the case in which the person rendered assistance being closed after the final judicial
decision; c) the prosecutor agreeing to submit an application for the release of the person frompunishment; and d) the court being willing to comply with this. Assessing the extent of assistance was a
totally subjective criterion and was not thoroughly regulated. The new Penal Code does not provide forthe release of a person from punishment and the only tools in the hands of police/prosecutors are: theimposition of minor preventive measures such as a signed undertaking not to leave their place ofresidence, probation or bail instead of holding a person in custody or assistance in premature release of
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5. Protection of Witnesses
A witness protection system is still being set up. Currently negotiations are being held with otherBaltic countries and Finland to establish a joint witness protection programme. The geographic positionand small area of Estonia, its language and financial situation does not enable us to implement a classicalmodel of witness protection where a key witness is given a new identity and gets a new place to live as
well as a new job. However, in Estonia a witness is allowed to remain anonymous if he/she has ajustified reason to be afraid for him/herself or the well-being of his/her relatives. The interrogation recordof an anonymous witness is enclosed in the criminal file under a fictitious name. A sealed envelope withinformation concerning the name and contact information of the witness declared anonymous is safely
located in the vault of the investigator and later in that of the court. Interrogation of an anonymous
witness in the court is conducted separately, in the presence of only the panel of the court. The defence
attorney and the prosecutor may question the witness in writing through the court. There have been many
problems implementing the anonymous witness system and currently higher courts are trying to limit the
exploitation of anonymous witnesses relying on the precedents of the European Court of Human Rights.
6. Controlled Delivery
The definition of controlled delivery is used in the Customs Act but the requirements of the Code of
Criminal Procedure and the Surveillance Act must be adhered to as the controlled delivery method
comprises several investigative surveillance actions. The controlled delivery method could serve as aneffective means for detecting a chain of narcotic crimes. It requires, however, cooperation between thepolice, customs and the border guard as the custom authorities have no right to commence exceptional
surveillance activities and the customs frontier usually runs along the state border. It is also important toco-operate with other countries as the above mentioned method must be authorised in every state theparcel crosses (in practise there have been problems with the Netherlands when monitoring the route of
narcotics to Germany). It would be practical to conclude relevant agreements with other countries similar
to the one Estonia has concluded with Finland.

B. The Creation of a System of Notification of Suspicious Transactions and the Establishment andOperation of the Financial Intelligence Unit (FIU); Cooperation with Banks and other Financial
Institutions
With the adoption of the Money Laundering Prevention Act the Financial Intelligence Unit wasestablished. The FIU verifies information relating to suspicious transactions pursuant to the procedureprovided for in the Code of Criminal Procedure takes the necessary measures to preserve property and, if
elements of a criminal offence are detected, sends material to a pre-trial investigation authority for adecision to be made on the commencement of criminal proceedings. The Financial Intelligence Unit is a
structural unit of the Police Board within the administrative area of the Ministry of Internal Affairs.
Currently seven persons work in the Unit: One chief superintendent, three leading police inspectors andthree senior officials.
The functions of the Financial Intelligence Unit are:・ to collect, register, process and analyse the information received. In the course of these activities,
the significance of the information submitted to the Financial Intelligence Unit for the prevention,
establishment or investigation of money laundering and criminal offences related thereto isassessed and a decision is made on the use of the information;・ to inform persons who submit information to the Financial Intelligence Unit of the use of theinformation in the prevention, establishment or investigation of money laundering and criminal
offences related thereto, with the aim of improving the performance of the notification obligation;
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・ to conduct investigations into money laundering, improve the prevention and establishment ofmoney laundering and inform the public thereof;・ to co-operate with credit and financial institutions, entrepreneurs and police authorities in theprevention of money laundering; and・ to organize foreign relations and the exchange of information.
The Financial Intelligence Unit maintains a database which includes information received in notices
submitted by credit and financial institutions and other relevant undertakings on transactions about which
there is a suspicion of money laundering, all suspicious and unusual transactions and acts, as well as
additional information on transactions, their participants and other circumstances related to thetransactions which are collected in cases provided by law.
According to the current Money Laundering Prevention Act it is mandatory for credit and financial
institutions to identify all persons or representatives of persons who carry out non-cash transactions
involving sums of more than 200 000 kroons or cash transactions involving sums of more than 100 000
kroons.
Credit or financial institutions are also required to identify any person about whom there is a
suspicion that the money which is the object of the transaction is derived from criminal activity.
According to the Money Laundering Prevention Act insurers, insurance agents, insurance brokers,
investment funds and professional securities market participants are considered to be financial
institutions. However, provisions of this Act extend also to those undertakings which are not credit or
financial institutions but which can be used for money-laundering purposes:
1) undertakings the principal or permanent activity of which are transactions involving real estate or
the organization of gambling or lotteries, and undertakings which operate as intermediaries in suchareas of activity;2) other undertakings which carry out, or act as intermediaries for, transactions during which theyreceive, act as intermediaries for or pay out more than 100 000 kroons in cash, more than 200 000
kroons in the event of a non-cash settlement, or more than 200 000 kroons in total as cash and noncash payments in the event of both a cash and non-cash settlement for a transaction or fortransactions which are clearly interconnected.
According to section 10 of the Act it is prohibited to carry out the transaction if it is impossible toidentify the person on whose behalf, or for whose account, another person is acting. The credit or
financial institution or the relevant undertaking is also required to inform the Financial Intelligence Unit
immediately of an expression of intent by the person to carry out a transaction, or of a transaction which
has already been carried out by the person.
The Money Laundering Act also provides that a credit or financial institution has the right to refuse to
carry out a transaction if a person does not submit documents certifying the legality of the source of themoney or other property which is the object of the transaction despite a corresponding demand having
been made.
According to section 13 of the above-mentioned Act the head of a credit or financial institution has toappoint a person to be a contact for the Financial Intelligence Unit. The duties of the contact person are:・ to monitor compliance with money laundering prevention requirements in the credit or financial
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・ to inform the head of the credit or financial institution in writing of deficiencies in compliance with
the internal audit rules.
In addition to the general identification requirement, credit and financial institutions are required to
notify the Financial Intelligence Unit immediately about any suspicion of money laundering. In the eventof justified suspicion of money laundering, the Financial Intelligence Unit may suspend a transaction or
impose restrictions on the use of money in an account for up to two working days from the first attempt tocarry out the transaction.
According to section 17 of the said Act credit and financial institutions and undertakings andemployees thereof and persons acting on their behalf are not liable for damages which result from failure
to carry out a transaction, or from failure to carry out a transaction within the given term and which is
caused to a client in connection with informing the Financial Intelligence Unit of a suspicious transaction,
nor can they be accused of a breach of a confidentiality requirement imposed on them by law or contract.
The Money Laundering Prevention Act provides for the following liability for committing amisdemeanour in the event of institutions/undertakings and their employees who do not perform their
obligations:
Section 26 1 Violation of requirement to register and preserve data
(1) Violation of the requirement to register and preserve data provided for in the Money Laundering
Prevention Act is punishable by a fine of up to 100 fine units (a fine unit in Estonia presently is 60
kroons).
(2) The same act, if committed by a legal person, is punishable by a fine of up to 20 000 kroons.
Section 26 2 Failure to submit or late submission of mandatory information
An employee of a credit or financial institution who fails to submit, or does not submit on time,
mandatory information provided for in the Money Laundering Prevention Act to the contact person orhead of the institution shall be punished by a fine of up to 200 fine units.
Section 26 3 Failure to implement internal security measures
The head of a credit or financial institution who fails to implement the internal security measuresprovided for in the Money Laundering Prevention Act shall be punished by a fine of up to 200 fine units.
Section 26 4 Illegal notification of information submitted to the Financial Intelligence Unit
The head, contact person or another employee of a credit or financial institution who unlawfully
notifies a person whose activities involve a suspicious transaction, or a third person, of information
submitted to the Financial Intelligence Unit shall be punished by a fine of up to 300 fine units.
Section 26 5 Failure to comply with the identification requirement
An employee of an undertaking specified in subsection 5 (1) of the Money Laundering Prevention Act
who fails to comply with the identification requirement provided by law shall be punished by a fine of up
to 300 fine units.
Extra-judicial proceedings concerning these misdemeanours shall be conducted either by police
prefectures or the Financial Supervision Authority.
In addition to the above-mentioned Act the Governor of Eesti Pank (The Bank of Estonia) has
adopted a Decree on the Procedure for the Internal Security Measures of Credit Institutions for the125

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Prevention of Money Laundering and a List of Suspicious and Unusual Transactions. According tothis Decree in order to decide whether a transaction or operation is suspicious or unusual, credit
institutions must pay special attention to:・ the content and extent of the economic activity of the client and a good knowledge thereof (duediligence); and・ clarification of the background to transactions and operations that have the features stipulated in
section 6 of the Money Laundering Prevention Act.
Such transactions and operations of clients that lack a definite economic or legal justification anddiffer from the ordinary economic activity of clients shall be considered as suspicious. Also cases where
the credit institution has reason to suspect the illicit origin of the assets that are the objects of suchtransactions.
The Decree includes a list specifying suspicious and unusual transactions and operations ortransactions linked to each other such as:
・ depositing an extraordinarily large amount of cash by a client who usually uses cheques and othersimilar instruments in his/her business activities;
・ a considerable increase in cash payments to the client s account without any obvious reason,
especially if the amounts paid to the accounts are deposited in the account for a short period of timeor the next beneficiary of the transfer of such amounts cannot be linked to the ordinary activities of
the client;・ numerous accounts of the client that are individually small and inconsiderable as to their amount
but which, when summarised, form the amount stipulated in Article 6 of the Money Laundering
Prevention Act;・ cash transactions of legal persons, cash deposits as well as cash withdrawals, in case normal
activities would provide for non-cash transactions;・ constant cash payments to the client s account in order to make money transfers and pay invoices orfor other financial instruments;
・ clients transactions with the aim of exchanging large amounts in notes of small denominations fornotes of bigger denominations;・ consistent exchange of cash for foreign currency;
・ depositing transactions in cases where counterfeit money or any other similar forged instruments
are discovered;・ large deposit transactions performed through ATMs;・ circulation of the client s funds (money) between various banks and offices without any economic
grounds;
・ investment transactions of the client in foreign currency or securities, when the sources of theforeign currency or securities are unknown or do not comply with the potential of the client or theusual economic operations of the client;・ trading in securities without an understandable reason or in an unusual situation;
・ payments made by a large number of persons to the same account without providing sufficient
payment details;
・ payments to the client s account that are received from the accounts with banks or financeinstitutions of foreign countries where evidently active drug trading is performed;
・ routine or frequent payment to the client s account (or from the account) exceeding the threshold
amount stipulated in Article 6 of the Money Laundering Prevention Act from countries (or to thecountries) where evidently active drug trading is performed;
・ frequent transactions in traveller s checks without obvious economic or legal justification;・ unexpected repayment of a problematic or bad loan;
・ suggestions of lending against such securities, the sources of which are unclear or unknown;
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・ investments in objects or instruments that have no logical connection to the previous businessactivity of the client;・ turnover of the client s account is out of proportion to its normal economic activity;
・ short-term deposits of a client who is a foreign resident if, upon the expiry of the deposit term, themoney is withdrawn from the account;・ a deposit transaction made from a foreign country to the account of a local client if this is followed
by withdrawal of the funds from the account.
The Minister of Internal Affairs has adopted a regulation which establishes the requirements andcontents of the notices submitted to the Financial Intelligence Unit. The FIU must examine notices
immediately after their submission and if no features of money laundering are detected issue written
permission for the performance of the transaction.

C. Freezing of Assets, Confiscation, Seizure and Recovery of Legal Expenses
Section 1461 of the Code of Criminal Procedure provides for the freezing of assets in case of suspicion
of money laundering. Property, which is the object of suspicion of money laundering, is frozen by the
preliminary investigator conducting the proceedings in the criminal offence of money laundering in order
to secure a request for international legal assistance, seizure or civil matter if other measures are
exhausted.
The difference compared with an ordinary freeze of property is in the fact that, in this case, theproperty can be frozen only with the consent of a judge (a prosecutor s sanction is not enough).
The Code of Criminal Procedure imposes, upon judgement for conviction, compensation of the valueof the proceeds on convicted offenders. Legal costs, which a convicted offender has to meet consist ofamounts collected for the benefit of witnesses, victims, experts or, in connection with expert assessment,
for the benefit of state forensic institutions, other agencies or legal persons, and amounts paid or payable
to specialists and impartial observers of investigative activities; amounts spent on the storage, forwarding
and investigation of physical evidence; amounts payable for the participation of sworn advocates and;bailiff s fees and other costs which are borne by a preliminary investigation authority or a court inconnection with the proceedings in a criminal matter.
Thus, for example, the costs related to the extradition of a person from a foreign state have been
reclaimed from a convicted offender.
Section 83 of the Penal Code allows the court to apply confiscation of the objects used to commit anintentional offence and of the assets acquired through the offence, if these belong to the offender at thetime of the making of the judgement. In the absence of the permission necessary for the possession of a
substance, object or organism (firearm, drugs, etc.), such substance, object or organism shall certainly be
confiscated.
As regards drugs, the Chapter of the Penal Code on Offences against Public Health includes aprovision which allows the court to confiscate an object or substance, which was the direct object of thecommission of the offence, or an object used for the preparation of such an offence.
If the property gained by criminal means has been transferred or used, or if its confiscation is notpossible for some other reason, the court may reclaim the payment of the sum which equals the value ofthe property to be confiscated.
The state shall acquire the ownership of confiscated property or, in cases stipulated in international
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agreements, it shall be returned to another state.

D. Shifting the Burden of Proof to the Defendant
As mentioned before, no judicial decision on money laundering has ever been made in Estonia.
Therefore there is no court practice related to the burden of proof in this area. However, in judgements
concerning tax offences judges have been of the opinion that in certain cases the burden of proof lies withthe accused at trial.
For example: a pre-trial investigation proved that a person managed a company which offeredservices and/or sold goods and added VAT (value added tax) to the services/goods. Therefore, he had topay VAT to the state withholding the sum which the company had paid for purchased services/goods toother companies. The investigation also proved that the company did not pay VAT and that it had notbought any services/goods from other companies liable to value added tax i.e. the company had no rightto recalculate VAT. The accused at trial claimed that the company had bought goods/services from othercompanies i.e. it had expenses. However, he could not specify from whom, or what amount ofgoods/services, the company had bought. Neither could he submit any account of charges. With regard toa situation like this Estonian courts have come to the opinion that an accused at trial must be able to provethat the company had incurred such expenses - oral claims are not enough. The accused has to actively
defend him/herself (submit the necessary documents or offer the court, or a prosecutor, an actual chance
to check his/her claims).

E. State of Affairs and Problems Concerning International Cooperation
1. Mutual Assistance
Mutual assistance in criminal matters is carried out on the basis of the 1959 European Convention on
Mutual Assistance in Criminal Matters according to which the Ministry of Justice is the national central
authority responsible for the co-ordination of international relations concerning legal assistance. Several
bilateral and multilateral agreements, based on the above-mentioned Convention, concluded by the
Republic of Estonia also regulate certain aspects of mutual legal assistance. Such agreements have beenconcluded with Latvia, Lithuania, Finland, Ukraine, Poland, the USA and the Russian Federation. On thebasis of these agreements the Public Prosecutor s Office may also act as a central authority co-ordinating
legal assistance.
International police cooperation is carried out with the assistance of the International Criminal Police
Organization, Interpol, the European Police Office, Europol, and the International Criminal Intelligence
Department of the Central Criminal Police, which acts as their national unit in Estonia. In order to makepolice cooperation more efficient Interpol has been included as an entitled subject in several international
treaties and conventions. Cooperation between the Republic of Estonia and Europol is regulated by anagreement of cooperation. Through the International Criminal Intelligence Department of the Central
Criminal Police it is possible to submit inquiries and applications for professional assistance to the law
enforcement authorities of foreign countries which are members of Interpol.
Through the International Criminal Intelligence Department of the Central Criminal Police it is also
possible to exchange surveillance information with other countries and to co-ordinate cross-bordersurveillance, carried out with the help of liaison officers representing European Union member states andcooperation partners of Europol who are located at the Europol Headquarters in The Hague.
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The slowness of the procedures related to legal assistance is the biggest problem hinderinginternational cooperation.
2. Extradition
With regard to extradition, Estonia follows the 1957 European Convention on Extradition which
Estonia signed on 4 November 1993 and ratified on 19 February 1997.
According to the said Convention the Contracting Parties undertake to surrender to each other all
persons against whom the competent authorities of the requesting Party are preceding against for an
offence or who are wanted by the said authorities for the carrying out of a sentence or detention order.
Extradition shall be granted in respect of offences punishable under the laws of both the requesting
Party and of the requested Party by deprivation of liberty or under a detention order for a maximum
period of at least one year, or by a more severe penalty. Where a conviction and prison sentence haveoccurred, or a detention order has been made in the territory of the requesting Party, the punishment given
must be for a period of at least four months.
If the request for extradition includes several separate offences each of which is punishable under thelaws of the requesting Party and the requested Party by deprivation of liberty or under a detention order,
but some of which do not fulfil the condition with regard to the amount of punishment which may beawarded, the requested Party shall also have the right to grant extradition for the latter offences.
The Government of the Republic of Estonia decides whether to extradite its citizens to othercountries. In 2001 Estonia extradited 23 persons and the same number of persons was extradited toEstonia. In 2002 Estonian extradited 17 persons and 38 persons were extradited to Estonia by other states.
To sum up, I would like to say that despite the fact that the Estonian authorities are well-aware of the
problem of drug trafficking, as well as money laundering, and try to take all possible measures to prevent
them and to bring offenders to justice, the criminal world has a head start and in order to avoid the worst
we need all the help we can get from countries and authorities who have long-term experience, thenecessary know-how and means to tackle such crime.

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PAKISTAN: NOT A SOURCE BUT A VICTIM COUNTRY

Syed Nayyar Abbas Kazmi *I. INTRODUCTION
In the last several decades the use and trafficking of drugs has created problems for society in generaland for law enforcement authorities in particular. The drug traffickers have always been a source of a
relatively high level of crime but especially those of the modern day who are much more wealthy,
powerful and even influential to the extent that they can pose a threat to national and international
security. In some countries the drug trafficking organizations even have their own armed personnel.
Drug trafficking involves an entire economic process including cultivation, harvesting, transportation,
distribution and sales.
Enforcement efforts can be targeted against any aspect of this illicit economic system. A systematicassault at all levels of illicit activity within the network is most likely to produce successful results.

II. ANTI NARCOTICS FORCE PAKISTAN - AN OVERVIEWIn February 1995 the Anti Narcotics Force (ANF) was constituted, which is now the Premier Law
Enforcement Agency in the field of narcotics control. This composite and highly mobile force was given
intensive training with a change in basic tactics from static check posts to mobile operations. Moreover
tireless efforts by the Anti Narcotics Force of Pakistan to strengthen national and international
cooperation in the war against illicit drug production have finally borne fruit, with the country having
been declared Poppy Free by UNDCP.
The Anti Narcotics Force of Pakistan has made remarkable efforts to dismantle and unearth the drug
mafia and seized huge quantities of illicit drugs and precursors and made thousands of arrests. The
success was massive and unprecedented and jolted the entire drug mafia. In this context thecommendable performance of ANF Pakistan speaks for itself.
A. The Special Investigation Cell (SIC)
The Special Investigation Cell is part and parcel of the Anti Narcotics Force. It has the same
objectives and mission, nonetheless, its modus operandi are somewhat different: more scientific than therest of the force and its performance due to these distinguishing characteristics has been manifold. Be it
seizures, arrests, investigations or gathering of intelligence, SIC has always been ascending in attempting
to achieve its objectives. It has a commitment to its mission and will continue to fulfil this challenging
mission.
B. Current Drug Situation in Pakistan
At the time of independence in 1947, Pakistan was deficient in Opium, as it could not meet the* Inspector, Special Investigation Cell, Anti Narcotics Force, Narcotics Control Division, Pakistan.

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requirements of its own Opium addicts, whose number at that time was fairly limited. Up until 1956, thecountry imported Opium from India. Thereafter, only the production of licensed Opium for medical
needs was permissible in a few selected areas and under strict control. Even subsequently, the number ofOpium addicts in Pakistan never touched an alarming level. The production of licensed Opium continued
until 1979 when two important developments i.e. The Islamic Revolution in Iran and the Promulgation of
the Prohibition Enforcement of Hadd Order 1979 in Pakistan took place.
C. Impact of Afghanistan
Afghanistan emerged as a major drug producer in the 1990s. It accounts for more than 70% of global
Opium production. The bulk of Afghan Opium is processed into morphine base in Helmand, Nimroz,
Nangarhar, Oruzgan, Kandahar, Badakhshan, Konar and Paktia provinces of Afghanistan and thensmuggled into Pakistan for local consumption and onward transportation to other parts of the world.
Afghanistan, the source country of the illicit drugs is the next-door neighbour of Pakistan. The PakAfghan border stretches from north-east to south-west over an area of 2,538 kilometres, while the PakIran border stretches over an area of 900 kilometres in the south-west.
D. Drugs Smuggling
Afghanistan is a major source country for the cultivation, processing and trafficking of opiate andcannabis products. Morphine base, heroin and hashish produced in Afghanistan are trafficked worldwide.
Narcotics remains the largest source of income in Afghanistan due to the decimation of the country s
economic infrastructure caused by years of warfare. Following the withdrawal of the Soviets ten years
later, civil strife ensued in Afghanistan.
Hashish originating in Afghanistan is trafficked throughout the region, as well as to international
markets. Although the bulk of the hashish intended for international markets is routed through Pakistan
and sent by sea, air, or by road. Gulf Countries and especially Saudi Arabia, UAE, Oman,etc. areconsidered suitable for the hashish produced in Afghanistan. The Coastal area of Baluchistan and the
Seaport of Karachi is being used by the traffickers for the shipment of hashish and other narcotics to Gulf
and other countries. Due to large seizures made by the ANF, the smugglers have changed their modus
operandi and now the mother ship anchors in deep waters and high-speed motor boats carry the drugs up
to the mother boat. The same method is used while unloading the drugs. From April to June smuggling
by sea remains at its peak and diminishes in July- August due to rough weather. On the other hand during
this period humidity severely damages the quality of the drugs; particularly hashish.
While moving on the road the smugglers are well armed and use highly sophisticated communications
equipment to monitor the movements of law enforcement agencies. These smugglers weaponry goes far
beyond simple assault rifles, to include anti-tank rockets and anti-aircraft stinger missiles. Roughterrain and flexibility also aid the smugglers in transport methods. They travel in armed convoys,
sometimes using speedy vehicles, sometimes camel caravans and motorcycles.
E. Smuggling Routes
Drugs are being smuggled from Afghanistan into Pakistan by trespassing the long stretch of border byusing different means of transportation i.e., vehicles and camel caravans. These drugs are being
smuggled to Iran, the Middle East and onward to Europe, USA and other countries of the world. Acetic
anhydride, the main precursor used in the manufacturing of heroin is smuggled into Afghanistan throughPakistan mainly from European countries. However, it is also being smuggled from China via the
Khunjerab Pass and Dubai by sea and by air.
Heroin is trafficked to worldwide destinations by many routes. The traffickers quickly adjust131

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smuggling routes based on political and weather-related events. Reports of heroin shipments from North
Afghanistan through the Central Asian States to Russia have increased the use of Tajikistan as a frequentdestination for both opium and heroin shipments. Heroin also continues to be trafficked fromAfghanistan into Pakistan. Seizures are frequent at Pakistan s International Airports. Heroin is also
smuggled by sea on vessels leaving the port city of Karachi.
F. Drugs Manufacturing
Before 1981 heroin-manufacturing laboratories were initially located in Herat Province ofAfghanistan near the Iran border, these heroin laboratories were shifted from Afghanistan to Pakistan due
to the simultaneous Islamic revolution in Iran and the Russian intrusion in Afghanistan. Theselaboratories were initially located in the villages of Tehsil Landikotal as well as in Choora Valley of
Khyber Agency. These laboratories were mainly operated, managed, and financed by Afghan Refugees
whereas Afridi and Shinwari tribes provided local protection and land. Operations against these drug
manufacturing labs were conducted in different phases. In 1986, an operation against heroin labs was
carried out and the Heroin Labs were destroyed. The last operation conducted against the Heroin Labs
was in December 1996. The Taliban s liberal policy regarding cultivation of opium and the continuouspressure of the Pakistan Government on local Maliks, forced the remaining laboratories to move back to
Afghanistan.
G. Enforcement
Just to acquaint you with the performance of the Anti Narcotics Force during the last few years, someof the statistics are given below:
Year

Persons
Arrested

Morphine

HeroinHashishOpium

Others

1999

536

-

2143.846

25546.569

7662.742

231 ltrs AA

2000

656

3060.500

1847.529

36742.623

4241.860

42 ltrs AA

2001

601

1199.000

3068.168

29983.870

2626.350

-

2002

474

-

4361.438

22443.995

924.970

-

2003

198

300.00308.86811615.067

2548.650

12379 Kgs
opium straw(30-06-03)

H. Special Courts
Special Courts have been established under the Control of Narcotics Substances Act-1997 and havethe exclusive jurisdiction to try an offence cognizable under this Act. After the establishment of theSpecial Courts quick and speedy decisions are being announced. On the contrary these drugs cases werelying pending in other courts for years due to the enormous number of cases.
I. Drug Trafficking Trends
Over the years, it has been observed that drug trafficking trends are rapidly changing.
Criminal groups adopt various strategies to hoodwink law enforcement agencies by adopting newmodus operandi of transporting drugs to different destinations. A few glimpses of new methods are as
follows:
1. International
Drug routes(i) Newly built Eldoret airport in Central Kenya is being used for drug trafficking throughcargo flights because of its lack of modern technical equipment, which are in the process of132

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installation.
(ii) Entebbe airport (Uganda) is considered a soft touch regarding drug trafficking due to a lackof modern technical/interception facilities.
(iii) Dubai, Bombay, Dacca and Colombo are being extensively used as transit airports.
(iv) Commercial containers, with mislabelled boxes, holding Acetic Anhydride, are beingtransited from Busan Port, South Korea to Afghanistan via Bandar Abbas Port, Iran.
Couriers(i) Initially African couriers were used but now European and locals have also becomecouriers.
(ii) At least two couriers carry one consignment to its destination. The use of multiple couriers
is arranged to conceal any direct links.
Concealments(i) African drug traffickers use different portable articles for the concealment of drugs, which
are later dispatched through courier services/mail.
(ii) Africans bring special spray nozzles from Africa to fill heroin inside small cavities of itemsof daily use.
(iii) African ladies usually wear a hair attachment sewn to their head and heroin is concealed
inside.
2. Domestic
Drug Routes(i) From NWFP to Europe and USA, small quantities of drugs are being sent through air
couriers.
(ii) Large shipments are also sent through Makran coast and the coastal belt of Karachi.
(iii) Sri Lanka and Dacca are the new destinations from coastal areas of Karachi for large
shipments by sea.
Couriers(i) Besides Africans, Pakistanis are also swallowing heroin filled capsules.
(ii) Taxi drivers, supplied with mobile telephones by the African drug traffickers based inPakistan are facilitating the supply of drugs from one place to another and even storage atsafe places.
(iii) Drug couriers are mostly using Karachi, Lahore and Peshawar airports.
Concealments(i) Heroin is also concealed in formation signs (Uniform Badges).
(ii) Books, greeting and birthday cards filled with heroin are registered through mail courier
services.
J. Concealment in Capsules
This is the most common method of concealment and has been used by drug traffickers for years.
1. Heroin Filled Capsules
Carrying heroin filled capsules inside body cavities is considered to be the safest way of smuggling
drugs. Most of the couriers of various nationalities, especially Africans are using this modus operandi.
Some of them swallow capsules while others conceal the capsules inside their body through the rectum.
Sometimes it becomes difficult to detect such capsules as the machine throws X-rays towards theobject, which scatter in different directions and some rays reflect which cannot form a clear image. Thisoccurs due to the reflecting capability and hardness of the aluminium foil/ capsules. A remedy to thisproblem is a Barium Test, which is an effective tool to detect such capsules. Even with this test, one
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cannot see the capsules but the process helps the doctors make an opinion due to the unusual shape of thestomach and intestines.

III. EXCHANGE OF INFORMATION
Exchanging information and intelligence between ANF and the other law enforcement agencies of theworld by establishing focal points on each side can enhance cooperation between the countries. Theinternational strategy maintains interdiction as an important component and emphasizes the Pakistan
government s pursuit of cooperative efforts with other nations, having the political and economic will to
defeat international drug syndicates.
Cooperation with foreign law enforcement agencies and Drug Liaison Officers is essential to the ANF
mission, as the trafficking organizations responsible for the drug trade inside Pakistan do not operate
solely within its boundaries. To further support this mission, a number of countries are operating inPakistan through their diplomatic missions. The ANF has always cooperated with them by remaining
within the legal purviews.
All these foreign countries actively participate by developing sources of information and an effective
flow of information about the drug traffickers by the foreign agencies to ANF has always been very
helpful in launching timely interdiction operations.

IV. EXTRADITION TREATIESThe ANF, being the premier Federal Agency, deals with narcotics issues exclusively and operates on
the basis of her own national enacted legislation i.e. CNS Act-1997, which grants them wide ranging
powers to exercise within their national territories for their own purpose as well as in cases oftransnational drug trafficking in collaboration with the accredited International Law Enforcement
Agencies. Pakistan has ratified the Single Convention on Narcotic Drugs- 1961, the UN Convention on
Psychotropic Substances 1971, the UN Convention-1988 and other treaties. The Extradition Treaty with19 countries was concluded by the then British Government, which was adopted by Pakistan. The namesof countries are as follows:
Argentina
Cuba
GreeceMonacoSwitzerland

Austria
Denmark
Iraq
Netherlands
U.S.A.

Belgium
EcuadorLiberia
PortugalYugoslavia

Columbia
FranceLuxembourg
San Marino-

Pakistan has directly concluded Extradition Treaties with the nine countries listed below:
Australia
Nigeria

Egypt
Saudi Arabia

Iran
TurkeyItaly
Uzbekistan

Maldives-

On the other hand the Government of Pakistan has signed Memorandum of Understandings to makejoint efforts for the control of drugs trafficking with China, Egypt, Iran, Kyrgyzstan, Nigeria, Russia,
UAE and Uzbekistan. While six fresh MOUs with Italy, Kuwait, Morocco, Romania, Syria and Turkey
are under process.
Pakistan has received requests for the extradition of 23 accused persons so far and out of these sevenpersons have been extradited to the respective countries and the rest of the cases are pending with thecompetent courts.
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V. CONTROLLED DELIVERY (CD) OPERATIONSControlled Delivery Operations are conducted under the 1988 UN Convention and the Government ofPakistan was keen enough to join the international community by allowing these to be conducted under
the CNSA-1997. A deliberate effort was made to streamline the procedures involving the conduct of CD
operations keeping in mind the national and international laws. Comments and suggestions were asked
from concerned agencies and different DLOs and a detailed Standing Operating Procedure (SOP) was
formed.
As a result of a CD operation a big gang involved in the illicit export of drugs to different countries
was unearthed for the first time and all the members were arrested in Saudi Arabia and Pakistan
simultaneously. Moreover an all time record seizure of acetic anhydride was also made as a result of a
successful CD operation. Apart from these there are some other CD operations in progress.

VI. JOINT INVESTIGATION & BORDER CONTROLAs ever the US government has been the largest donor and has played a major role in strengthening
the efforts in Pakistan against the drug traffickers. The ANF has always extended its help to foreigncountries and made all-out efforts in joint investigations pertaining to drugs smuggling and to unearth thegroup/s involved in this heinous crime.
As already described Afghanistan is the buffering state between Russia and Pakistan and there isinhospitable and difficult terrain between these two countries. To penetrate the drug Mafia operating inthese border areas is an arduous task for law enforcement agencies of these countries. To combat thissituation bilateral agreements on joint efforts towards control of narcotics trafficking have been signedwith Russia, Kazakhstan and Uzbekistan. Timely and credible information regarding drug related
activities could help to check the border areas, as this long and porous border cannot be sealed off.
Pakistan has experienced illegal immigrants, mostly from Afghanistan. The illegal immigrants have not
only caused social and other problems but drug trafficking also. Due to inaccessible and hilly borderareas it is impossible for either country to stop illegal immigration and border crossings.

VII. MONEY LAUNDERING
A. Introduction
Money laundering as a crime is a fairly recent phenomenon. It has emerged as an internationallyrecognized crime in the last two decades as a consequence of an upsurge in the illegal trade of narcotics.
Possession and control over money is a major concern of a criminal. It is a criminal s sole concern innarcotics and white-collar crimes. Money laundering is a multi dimensional crime with transnational
characteristics. It implies the concealment and legitimization of proceeds from a broad range of criminal
activity. Profits from criminal acts including tax evasion, bank fraud, corruption by public officials,
narcotics and terrorism are laundered by their perpetrators. Drug traffickers are the main beneficiaries ofmoney laundering.
B. Objectives
Broadly speaking, the only logical objective of a money launderer is to use his dirty money in alegitimate way with impunity after it has been laundered. However, the aims and objectives of money
launderers may vary considerably depending on the nature of their crime and the resulting proceeds
thereof. Thus, the money laundering objective of a narcotics dealer may be considerably different from135

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the money laundering objective of an ideologically motivated terrorist. However, the common featureremains the utilization after legitimization of illegitimate wealth .
C. Money Laundering in Pakistan
Money laundering, at present is not recognized as a criminal offence in Pakistan. However, Pakistan
does recognize its international obligations in this context. It has been a party to the Vienna Convention
since October 25, 1991, and is under a legal obligation to eradicate narcotics related business and criminal
activities including money laundering. In Pakistan, money laundering is carried out through two methods
i.e. banking and the private sector.
Some forged identity documents can be procured and can be used to open a personal or a corporate
account in any bank. Money laundering has been carried out through banks for a wide variety of
purposes. The State Bank of Pakistan has recently issued regulations to banks in this respect. The private
sector is more extensively used for money laundering purposes.
The Hawala and Hundi system is a lucrative business and is being used for remitting funds in and outof the county by the public.
Black money is also present in the unregulated economy. Successive governments with a view tolegalize the available black money have enacted laws. For instance, tax incentives were offered by thegovernment for legalizing foreign exchange available in the black market through the Protection of
Economic Reforms Act, 1992.
Laws dealing with narcotics and corruption were implemented in 1997 and 1999, namely the Controlof Narcotic Substances Act, 1997 (CNSA) and the National Accountability Bureau Ordinance, 1999
(NAB). Although these laws do not exclusively deal with money laundering, however, they do containprovisions, which may be invoked for freezing and forfeiture of assets acquired through narcotic andcorruption related sources.
D. Major Beneficiaries of Money Laundering・ Drug Barons
・ Drug traffickers also involved in others crimes
・ Foreign criminals using Pakistan for money laundering through local partners
E. Common Conduits Used For Money Laundering
1. Formal Methods
・ Banks have been the channels used for money laundering・ To open accounts in banks fraudulently and to use them for money laundering・ Other formal methods, including, credit cards, travellers cheques, etc. are not commonly in vogue
2. Non Formal(i) Hundi / Hawala
・ Age old method - money can easily be remitted through this informal and unregulated channel
・ This is a simple and untraceable method
・ Cash is paid at one point in a certain currency, which is delivered at a desired location anywherein the world・ Business is done without any footprint or traces
3. Prize Bonds
Prize bonds with high prizes are bought off the counter, taxes are paid and black wealth gets
whitened.

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4. Sham Real Estate Schemes
Investments in real estate are made and high profit margins are declared. Housing societies areused in this method. Huge chunks of land at a low cost are purchased, developed, and then sold in
the form of plots. Inflated costs are shown as profits, taxes are paid and black money getslaundered.
5. Hotel Industry/ Retail Businesses
Hotels and restaurants, superstores and fast food points are declared as generating high saleproceeds. Profits are declared and taxes paid.
6. Film Industry
Cheap films are produced with minimum possible investment. High profits are declared andmoney is laundered.
F. Pakistan and Anti Money Laundering Laws
1. International Laws
Pakistan has ratified the following conventions and has taken up the implementation of
obligations under international law:(i) UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988
・ The Single Convention on Narcotics Drugs-1961 had earlier addressed this problem. It was later
amended through a Protocol in 1972. Later, it became the UN Convention against Illicit Trafficin Narcotic Drugs and Psychotropic Substances, 1988. It was adopted on the basis of UN
General Assembly s Resolution 39/141 on 14 December 1984.
・ Pakistan joined the convention in 1991. More than 60 countries have ratified the Convention sofar.
(ii) UN Convention on Transnational Organized Crime
This Convention has not yet entered into force. However, Pakistan has signed it andparticipated in all the proceedings.

(iii) Asia Pacific Group (APG)
・ This is an Australia based informal group. It was established in 1997. Its objective is to pursue
implementation of FATF Recommendations in member states.
・ Its aim is to highlight the negative implications and recommend measures for dealing withmoney laundering.
・ Pakistan has been a member of the APG since July 2000.
・ Pakistan regularly submits annual reports to the APG.
・ However, the recommendations of the APG cannot be fully acted upon due to the absence ofAnti-Money Laundering Laws in Pakistan.
2. National Laws
There are no laws directly dealing with money laundering, however a draft bill is underconsideration. There are a few Acts and ordinances which partly address money laundering;
however, in an indirect manner:(i) Control of Narcotic Substances Act, 1997 (CNSA)(ii) National Accountability Bureau Ordinance, 1999 (NAB)
Although these laws do not exclusively deal with money laundering, they contain provisions
which may be invoked for freezing and forfeiture of assets acquired through narcotic andcorruption related sources.
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Control of Narcotic Substances Act, 1997
・ Section 67 (1) of CNSA requires banks and financial institutions to pay special attention to all
unusual patterns of transactions having no apparent economic or lawful purposes.
・ The section imposes strict obligations upon a manager or a director of such a bank or financial
institution to immediately inform the Director General, Anti Narcotics Force, if it is suspectedthat a suspicious transaction having a nexus with illicit narcotic activities is being conducted. A
violation of this provision is punishable with imprisonment for three years with or without fine.
・ Section 31 (1) (d) empowers an investigating officer to ask for information from a bank or any
financial institution.
・ There are many other provisions in the CNSA empowering the authorities to freeze assets,
which they suspect to have been acquired through illicit dealings in narcotics and courts are
there for forfeiture of such assets.
・ Such wide-ranging powers facilitate the authorities in effectively interdicting the proceeds fromnarcotics trading; if not strictly preventing money laundering.
The National Accountability Bureau Ordinance, 1999
・ Section 20 makes it obligatory upon the managers and directors of banks and financial
institutions to inform the Chairman of the National Accountability Bureau immediately of any
transaction, which they suspect to be unusual and involves huge sums of money and does nothave an apparently genuine economic or lawful purpose.
・ A violation of this obligation is made punishable with five years imprisonment with or withoutfine.
・ Section 20 requires that the burden of proof shall be discharged by the suspect or the accused inproving his innocence.
Prudential Regulations - State Bank of Pakistan, 2002
Most recently, the State Bank of Pakistan has issued Prudential Regulation No. XII and XIII tosafeguard the banking sector from the menace of money laundering and other unlawful activities.
The regulations stress the importance of the Know Your Customer rule and require a bank to takeall required measures to ascertain the actual identity of their customers and to vigilantly guard
against suspicious transactions.
G. Proposed Anti-Money Laundering Ordinance 2002
This law is in draft form and it is still under consideration by the government. The draft bill proposesvarious measures for combating the menace of money laundering, including the offence of money
laundering, predicate offences, punishment, establishment of a National Advisory Committee forcombating money laundering and the establishment of a Financial Intelligence Bureau, etc.
H. Recommendations
・ The UN, international and regional agencies should adopt anti-money laundering treaties andconventions having legally binding provisions with a view to counter the problem.
・ Efforts should be directed towards effective implementation of the existing anti-money laundering
conventions in their signatory states in letter and spirit.
・ Non-signatory and non-ratifying states must be encouraged to sign and ratify the anti-money
laundering and related conventions.
・ States with anti-money laundering legislation should bring their laws in conformity with others
having similar legislation in order to remove the existing deficiencies in their systems so as todeprive the money launderers from taking advantage of loopholes.
・ Banks and financial institutions should be encouraged to offer information to the law enforcement
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agencies. Incentives should be offered for this purpose. For instance, in some countries their law
offers exemptions to banks from various penalties if they volunteer information regarding
suspicious transactions.
・ Increased cooperation should be effected between law enforcement agencies and financial
institutions within the country.
・ Officials from financial institutions and law enforcement agencies should be provided cross training
opportunities within each others disciplines for increasing their understanding of technical issues.

VIII. CONCLUSION
Drug money has all the chances to be diverted towards the ills of society, which includes
terrorism/corruption and posing a threat to the stability of any government, which works against the
motives and interests of drug barons. The crime of money laundering is a corollary of other crimes. This
crime is committed in a most organized manner and is very difficult to detect and prosecute successfully
as compared to other offences. It is committed to conceal the origin of the proceeds of its predicate
offences. No matter how large the profit of the drug trade, drug money is almost worthless until it can be
moved into legitimate financial and commercial channels. This thing makes drug money an evil and it
causes a profound subversive effect on democratic society, legitimate economies and government
institutions.

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LEGAL APPROACH TO COMBATING ILLICIT DRUG TRAFFICKING AND
MONEY LAUNDERING IN THAILAND

Krirkkiat Budhasathit *I. THE CURRENT SITUATION OF DRUG PROBLEMS
A. Drug Related Crime
During the last decade (1992-2002), a dramatic number of drug problems have been found in
Thailand. Although the Thai Government has applied extreme measures to suppress drug trafficking, thenumber of drug cases and offenders throughout the country are still high. The drug problem of Thailand
nowadays is that the country is frequently used as a transit place to the international market while theepidemic within the country is also radical. The number of domestically produced drugs like opium,
marijuana and methamphetamine are far less than those smuggled from neighbouring countries. The
drugs that are found in most tourist cities around the country are marijuana, heroin, ecstasy, ketamine,
cocaine and methamphetamine. Traditional drugs like opium, marijuana, and kratom plants are prevalent
in many areas of the country while volatile substances are epidemic in slums and dense communities.
Number of Drug Cases and Offenders in Thailand during 1998-2003
Year

Number of Cases

Number of Offenders

1998

193,502212,519

1999

206,170

223,294

2000

222,498

238,153

2001

205,426

218,218

2002

179,866

189,998

2003 (Jan-Mar)

18,11919,252

Methamphetamine is the most serious drug problem in Thailand and its become an epidemic in every
region. The supply of methamphetamine, which comes from both inside and outside Thailand, has
expanded intensively. Big syndicates mostly control the drug producers and traffickers because only thelarge and reliable wholesale traffickers can make direct contact with the manufacturers. These syndicatedgroups deliver methamphetamine and other drugs to medium and small-scale traffickers before
distributing to retailers or users. In 2002, 95.9 million methamphetamine tablets were seized, which is thehighest figure ever recorded.
The methamphetamine is mainly produced around the Golden Triangle area and smuggled through theThai northern border as the main route. Instead of carrying the drugs through the border channels, thedrug traffickers use various methods to transport the drugs i.e. drug caravans escorted by armed forces,
sneak into the jungles nearby the northern border and store the drugs at villages along the Thai border as a
hub before distributing it to other areas. Moreover, there is evidence that during the last two years a hugeamount of drug smuggling is taking place using sea routes. The drugs originate from the producing areain the north and are transported to a bay in the central part of Myanmar before being carried in fishing* Secretary of the Criminal Court, The Criminal Court, Thailand.

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boats to the southern part of Thailand. Another main route is along the Mekong River, which is near tothe producing area, to the north and north-eastern part of Thailand. For smuggling inside the country, theland route is popularly used to smuggle methamphetamine tablets from one place to another. The
producers and smugglers are mostly hill tribes including Chinese haw and Thais and some of them arefound to have a connection with overseas foreigners.
Marijuana growing is found throughout the country but its concentration is mostly in the north-easternregion. Local production may be enough for domestic demand but the total production is not sufficient to
supply international markets. Meanwhile, smuggled marijuana from neighbouring countries to Thailand
is not only delivered to international markets but distributed in the country as well. The eastern seashore
is used as a main route to transport marijuana via Thailand to other countries. Large quantities ofmarijuana products are gathered in the sea-connected provinces before being loaded into fishing trawlers,
to be carried through the Thai gulf and reloaded onto cargo ships waiting in the open sea. For marijuanaabuse, the situation during this period is stable since this drug is quite cheap and available in all regions.
In addition, it is not a hard-core drug like heroin or methamphetamine.
The volatile substances epidemic tended to be less radical last year. Glue, thinner, and lacquer are
still the three kinds of abused volatile substances in Thailand. People who abused these substances were
the same groups; i.e., out of school youths, street kids, and some adults living in slums throughout thecountry. However, due to the heavy measures being taken against hard-core drugs, there is a possibility
that the situation of volatile substance abuse will become more severe.
The epidemic situation of club drugs like ecstasy, ketamine, and cocaine during this period seems to
be more severe than the previous period. One reason is the price of these worldwide popular drugs tends
to decrease each year. For example, the retail price of ecstasy in the early period ranged between 8001500 Baht per tablet but it recently costs between 350-600 Baht. The Thai authorities seized eight
kilograms of cocaine in 2001, which was two times higher than in 2000. Ecstasy and cocaine are mainly
smuggled by foreign drug traffickers from Europe and Latin America before distributing them to theirdrug networks in Thailand and neighbouring countries. Meanwhile, ketamine is imported from countries
in South Asia and Eastern Europe. However, most ecstasy traffickers and dealers in Thailand have been
recently known to distribute ketamine and cocaine at the same time. Ecstasy and ketamine are usuallyused together by drug abusers in entertainment places since both drugs have similar effects. Ecstasy is
usually imported into the country from two sources: from overseas countries via international airports or
seaports and from a neighbouring country in the south of Thailand. As ecstasy is increasingly spreadingin Thailand and has a high price, some drug traffickers have tried to make ecstasy tablets in Thailand. For
example, the police arrested a Canadian and his Thai wife in November 2001. They were charged withusing his kitchen as a drug lab and they had a simple stamping machine to produce small quantities of
ecstasy tablets. The raw materials, MDMA and precursors chemicals were smuggled from a European
country. The police found 3,300 ecstasy tablets and 20 bottles of ketamine in their house during the raid.
Major abusers of these club drugs were found to be youths, students, and wealthy people in big or tourist
cities i.e. Bangkok, Phuket and Pattaya.
Smuggling of precursors, chemicals and equipment used in drug manufacturing has become more
serious along the Thai-Myanmar border. The manufacturers are provided chemicals and equipment fromThai conspirators. The crucial exit is at a permanent checkpoint in Mae Sai and Tachileik District,
Chiang Rai Province. The Thai government set up the Precursor Chemical Control Committee in 1993 toformulate a national strategy on precursors control, to supervise the precursor control and implementationand to develop cohesive efforts among concerned chemical control agencies i.e. the Food and Drug
Administration, Industrial Works Department, Customs Department, Department of Internal Trade, Police
Narcotics Suppression Bureau, Office of Permanent Secretary of Ministry of Interior, Foreign Trade
Department, Pharmaceutical Organization and the Office of Narcotics Control Board (ONCB). Twentythree chemicals are controlled in accordance with the 1988 UN Convention and more than sevenprecursors and chemicals, which are not listed in the 1988 UN Convention are also put under control.
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Currently, caffeine has becomes one of the crucial substances because it is a major ingredient ofmethamphetamine tablets. Each tablet is generally composed of 60 mgs. of caffeine and 23 mgs. of
methamphetamine and 7 mgs. of other binding substances. As a result, the government has enforced theCommodities Control Act 1952 to control the possession, transformation and transportation of caffeine
throughout the countries as well as the Import and Export Act 1979 to control the import in and export ofcaffeine out of the country. Thai border authorities now severely control the smuggling of chemicals andequipment from Thailand to the producing sites along the border. According to the Commodities Control
Act 1952, the possession, transformation and transportation of caffeine without permission is subject toimprisonment for 10 years.
Drug Seizure throughout the Country During 1998-2003
Weight: Kilograms
Year

Heroin Meth-Amphetamine

Ecstasy

Opium

Dried
Volatile
Marijuana Substances

1998

577

3,012
(33.5 Million tablets)

1(5,920 tablets)

1,772

2,890

599

1999

404

4,518
(50.2 Million tablets)

5(21,794 tablets)

2,046

14,684

4,141

2000

384

7,549
(83.9 Million tablets)

18(72,182 tablets)

1,595

10,323

455

2001

474

8,459
(94.0 Million tablets)

17(67,539 tablets)

2,289

10,921

360

2002

634

8,635
(95.9 Million tablets)

37(149,587 tablets)

4,034

12,122

453

2003(Jan-Mar)

138

1,942
(21.6 Million tablets)

14(57,083 tablets)

9,721

1,111

52

Seized opium includes raw and cooked opium and opium poppy plants
B. Money Laundering Situation
After the Anti-Money Laundering Act became effective, there were evidently changes in domestic
money laundering. Over-the-counter banking transactions are carried out in amounts just under theamount set forth in the law (2 Million Baht) in order to avoid the transaction being reported. Many
offenders opt to carry cash from one place to another or keep it at home. They also convert the money togold, jewellery, real estate, shares, vehicles or other property instead of depositing it in financial
institutions. Some offenders set up high risk businesses such as jewellery shops, oil trading companies,
tour companies, foreign exchange, real estate companies and entertainment places to launder their money.
There are many money laundering transactions along the Thai-Myanmar border in the northern
region. Most of the cases are drug payments. The most popular method is cash carried across the border;
nevertheless, some traffickers open a bank account in their nominees names to receive moneytransmissions. In the southern region, cash is also frequently used for the payment of drugs and evaded
custom products. Meanwhile, gambling is the main cause of money transactions along the ThaiCambodia border.
In brief, offenders generally avoid the anti-money laundering law by transferring money via the142125TH INTERNATIONAL TRAINING COURSEPARTICIPANTS PAPERS
following channels:
1. Banking transmissions using a false I.D. or fraudulent papers to pay the import price or repay a loan
higher than the real value.
2. Underground transmission via foreign exchange, travel businesses or gold and jewellery shops.
3. Hire a person to carry cash and deposit it in foreign bank accounts. There is a loophole in theregulations that does not require cash-carry reports. The most common destination countries are
Hong Kong, Singapore and Australia.
Case Example
The police stopped and searched a pick-up truck driven by Mrs. A. They found three Million Baht
cash hidden in the trunk s side compartment. Mrs. A admitted that Mr. B hired her to deliver the money in
Chiang Mai province in the northern region.
The money and vehicle were seized, the police went to search Mrs. A s house and found a small
amount of methamphetamine. Mrs. A was indicted for possession of drugs. She was bailed on 200,000
Baht cash, but finally she pleaded guilty. The Criminal Court rendered judgment and sentenced her to six
months imprisonment and a fine of 5,000 Baht; nevertheless, the sentence was suspended for two years.
The police reported the matter to the AMLO.
The AMLO officials made a preliminary examination. They found that Mrs. A had committed a drug
offence (drug possession) and were convinced it related to the drug dealing. The matter fell under thepredicate offences under the AML Act. The officials, therefore, reported it to the Secretary General forreview and then forwarded it to the Transaction Committee.
The Committee considered that there was convincing evidence and then ordered a 90 days temporary
seizure of the 3 Million Baht police-seized cash, 200,000 Baht bail money and the truck which Mrs. A
drove. The AMLO took further steps by submitting the documents to the Prosecutor for filing thepetition. The Prosecutor; nevertheless, required additional statements to support the evidence. After the
AMLO officials finished the additional statement, the Prosecutor then filed a petition to the Civil Court
for forfeiture of Mrs. As property. The Prosecutor also filed a petition for the provisional seizure of all
three properties prior to the Civil Court issuing a forfeiture order. The Civil Court granted the provisional
seizure order and the property was retained by the Secretary General of the AMLO. The Civil Court set adate for a hearing and ordered a notice to be posted at the Court and have the matter published for two
consecutive days in a local well known newspaper. Copies of the notice were passed to the AMLO for
posting at the AMLO and the police station where the properties were seized. A copy of the notice wasalso mailed to Mr. C, the truck s owner according to the registration plate.
The Civil Court then commenced the hearing. Mr. C appointed a lawyer to file a petition to claim histrue ownership. He claimed that the truck was hire-purchased from him and not related to the drug
offence. After the hearing, the Civil Court ordered the forfeiture of two amounts of cash totalling 3.2
million Baht and returned the truck to Mr. C.

II. SPECIAL MEASURES AGAINST DRUG TRAFFICKING
A. Controlled Delivery
The Narcotics Act B.E. 2522 (1979) as amended in 2002 provides legal power to use controlled
delivery channels by competent officials. Section 15 in Para I and II provide that: No person shallproduce, import, export, dispose of or possess narcotics of category I, unless the Minister permits asnecessity for the use in government service. The application for the permission shall be in accordancewith the rules, procedure and conditions prescribed in the Ministerial Regulations.
Since this Section was just amended at the end of 2002, there are no Ministerial Regulations issued
yet. As a result, controlled delivery in Thailand is pending.

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B. Communication Interception
Access to communication interception may be granted under the Narcotics Control Act B.E.2519(1976) and the Anti-Money Laundering Act. This measure is a new part of the Narcotics Control Act
1976 as amended by the fourth revision in 2002. Section 14 four allows competent officials to intercept
the communication of a suspect by the permission of the Chief Judge of the Criminal Court. The
procedure begins when there is a reasonable ground that any information communicated via post,telegraph, phone, facsimile, computer, other communication instruments and electronic or otherinformation technology communication is used or may be used for the purpose of the commission of anarcotics offence. The officials then request the approval of the Secretary-General of the ONCB and thensubmit a request to the Chief Judge for communication interception. The Chief Judge will consider theaffect of individual rights and if he believes that there is reasonable ground that a narcotics offence has
been or will be committed and the information may be received by granting the access and there is noother method more suitable and effective, the permission will be granted. The Chief Judge may permit
the interception for a period not over 90 days each time and he may change the permission depending on
the circumstances. The information obtained must be kept and used only for the investigation and as
evidence in the prosecution case.
Since this Section has just been added to the Narcotics Control Act and the ONCB is in the process ofcoordinating with competent officials to comply with the regulations to utilize this method, there are few
requests submitted to the Chief Judge of the Criminal Court.
The Anti-Money Laundering Act also provides the communication interception power. When there isa reasonable ground that an account at a financial institution; equipment or communication device; or any
computer has been used or may be used for the commission of a money laundering offence, thecompetent official designated by the Secretary-General of the AMLO shall submit a petition to the Civil
Court to grant access to the information of such sources. The Civil Court may grant access not longer
than 90 days each time.
The provisions under the Narcotics Control Act and the AML Act are quite similar; however, there
are some differences. The power to grant access under the Narcotics Control Act vests solely with theChief Judge of the Criminal Court, while all judges of the Civil Court may use such power under the
AML Act. In addition, the Narcotics Control Act clearly mentions that information obtained by theaccess may be used in the investigation and as evidence in the trial of narcotic cases. The AML Act does
not have the same provisions.
Communication Interception under the Narcotics Control Act
Year

Amount

Method2003*

9

Wire-tapped

Source: the Criminal Court *counted at the end of July
Communication Interception under the Anti-Money Laundering Act
Year

Amount

Method2001

1

Wire-tapped

2002

7

Wire-tapped

2003*

5

Wire-tapped

Source: the Civil Court *counted at the end of July

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C. Utilization of Informants
To suppress illicit drug trafficking effectively, information is very important. The ONCB and the
AMLO generally accepts the utilization of informants. The ONCB provides rewards to informants whogive information relating to narcotics according to the Prime Ministerial Office Regulation Re: Rewards
in Narcotics Case B.E. 2537 (1994). The Regulation rules that the reward may be paid to an informant
who informs the competent official and it leads to the arrest and seizure of the narcotics. The reward is
calculated according to the weight or number of tablets seized. For example, the informant will receive
10 Baht for each gram of seized heroin or 5,000 Baht per 500 tablets of Methamphetamine (for the
portion over 500 tablets, the reward is 3 Baht each). The reward will be paid from the ONCB budget.
The informant, who gives information about property related to the commission of a narcotics
offence, will receive not over 10 % of the appraisal value of the forfeited property less the expenses forappraisal or auction sale. In this case, the reward will be paid from the Narcotics Control Fund.
The AMLO will reward the informant, who gives information in the predicate offence or money
laundering offence, or information concerning assets related to the commission of an offence. However,there must be a proceeding against any property in such case in order to qualify the informant for areward. The AMLO uses its annual budget to pay the reward.
D. Witness Protection
The Witness Protection in Criminal Case Act B.E. 2546 (2003) will be effective by the end of thisyear. This Act will provide general protection to witnesses and their relatives. The general protection is tosafeguard the witness or provide a cover name, address, picture or any personal identifying information as
the case may be. Moreover, in some particular cases i.e. offences related to drugs, anti-money laundering,anti-corruption, customs or organized crime, the witness may receive special protection by requesting itfrom the Minister of Justice. The special protection includes providing suitable shelter, an allowance,
education or a change of name or any registration records. The responsibility of witness protection willvest with the Witness Protection Office, Ministry of Justice.

III. LEGAL FRAMEWORK TO COMBAT DRUGS
A. Overview of Criminal Litigation in Thailand
The main provisions of criminal procedural law are contained in the Criminal Procedure Code
B.E. 2478 (1935). This Code generally applies to trials of criminal cases, including drugs cases, in all
Courts of Justice. However, asset forfeiture under the Anti-Money Laundering Act B.E. 2542 (1999)
will be tried in the Civil Court and subject to the Civil Procedure Code.
Usually, four types of personnel of the law are involved in criminal proceedings. They are police
officers, prosecutors, lawyers, and judges. The investigation and inquiry in order to find offenders andestablish their guilt is the responsibility of the police officers. In many drug cases, the police officers may
be teamed up with officials of the Office of the Narcotics Control Board (ONCB) or the Anti-Money
Laundering Office (AMLO). When the investigation and inquiry is finished, the file of the inquiry will be
submitted to the prosecutor for consideration and the offender will be indicted if the prosecutor concludes
that there is enough evidence to support a conviction. As regards criminal cases, the court in a district
where an accused resides or is arrested, or where an inquiry official makes an inquiry has jurisdiction
over the cases. Nevertheless, the Criminal Court, which is situated in Bangkok, has discretion either totry or adjudicate criminal cases arising outside its territorial jurisdiction brought before it or to transfer
them to the court having territorial jurisdiction. At the trial, it is the burden of the prosecutor to prove
beyond a reasonable doubt to the court that the defendant is guilty as charged. The court will conduct a
trial by hearing evidence from both sides in open court and in the presence of the defendant. It should
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also be added that the accused or defendant is entitled to full legal representation. In certain cases, it isobligatory on the part of the judge to call upon and appoint a lawyer in his/her defence.
B. Narcotics Control framework
The narcotics control laws of Thailand may be classified into three groups:
1. Laws on Designating Powers and Duties of Competent Authorities
Narcotics Control Act B.E. 2519 (1976)
This Act codified the establishment of the Narcotics Control Board (NCB), the establishment of
the Office of the Narcotics Control Board (ONCB), and the empowerment of the NCB, ONCB, andcompetent officials.
Act on Authorizing Naval Officials for the Suppression of Some Offences Committed at Sea (No. 4)
1991
This Act authorizes naval officers to inspect, search, and force a vessel suspected of having
narcotic drugs to remove cargo or things in the vessel for examination. The Act also empowers
them to seize or force the vessel or conduct any actions in order to bring the vessel to a convenient
place for inspection, inquiry, or prosecution. The naval official may seize the vessel until a final
non-prosecution order is issued or otherwise ordered by the court in case the accused is prosecuted,
and may arrest and hold in custody the accused, not exceeding seven days. After that the accusedhas to be released or sent to the inquiry official together with the file of inquiry.
Act on Measures for Suppression of Offenders in an Offence Relating to Narcotics B.E.2534 (1991)
This Act codifies the provisions of the three significant measures to tackle illicit drugtrafficking. These are 1) forfeiture of assets 2) conspiracy, and 3) expansion of jurisdiction.
These measures are effective tools to eradicate drug trafficking networks because if they do nothave vast assets, they cannot continue large-scale operations.
2. Laws on Controlling Narcotics and Drugs
Psychotropic Substances Act 1975
This Act codified the control of psychotropic substances by classifying psychotropic substances
into four categories (schedule I-IV). The Act directly resulted from the Convention of Psychotropic
Substances 1971 of which Thailand is a Party.
Narcotics Act 1979
This Act codified the control of narcotic drugs by classifying them into five categories
depending on the degree of their harmful effects in order to establish the proper punishment foroffenders committing drug offences in each category.
Emergency Decree on Controlling the Use of Volatile Substances 1990
This Emergency Decree codified the control of volatile substances by establishing offences andpunishment.
Commodities Control Act, 1952 (No.11 as amended in 2000)
This Act codified the control of certain commodities, which are essential chemicals andprecursors likely to be used in producing narcotic drugs in 76 provinces of Thailand, e.g. caffeine.

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3. Law to Rehabilitate Drug Abusers
Narcotic Addict Rehabilitation Act B.E. 2545 (2002)
In the past, Thailand had two drug addict treatment and rehabilitation systems: 1) Voluntary
System for drug addicts to voluntarily apply for treatment in various treatment centres, and 2)
Correctional System for drug addicts who were sentenced to be imprisoned or on probation.
However, they were not effective enough. The relapse rate of the addicts was very high or nearly
100%. Therefore, the Narcotic Addict Rehabilitation Act 2002 was enacted and enforces acompulsory system to improve the effectiveness and efficiency of the drug addict s rehabilitation, orto help them stop using narcotic drugs as much as possible with two major objectives: 1) drug users
or addicts are required to be treated and rehabilitated properly, and 2) if the result of therehabilitation is satisfactory, the drug addicted offenders shall be relieved from the alleged offence
and be released at liberty so that they will not have a criminal record as a drug offender and can bereintegrated into society happily. This Act codifies the establishment of the Narcotic Addict
Rehabilitation committee and their power and duties, localities for identification and rehabilitation,
alleged offences, the procedure for identification of alleged drug offenders, the requirement of theprocedure of rehabilitation and the assessment of rehabilitation results.
C. Anti-Money Laundering Framework
Thailand promulgated the Anti-Money Laundering Act B.E. 2542 (1999) (AML Act) in March 1999
and it has been effective since August 20, 1999. This Act directly resulted from the 1988 United Nations
Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, which Thailand
become a member of through the Instruments of Accession in 2002. This Act criminalizes money
laundering and related conspiracy and establishes the Anti-Money Laundering Office (AMLO) to performfunctions, among many things, as the financial intelligence unit in Thailand and pursue a civil forfeituresystem to confiscate assets involving the predicate offences.
The AML Act consists of seven chapters and 66 sections, which includes eight predicate offences asfollows:
1. Offences under the narcotics laws.
2. Offences of trafficking in or sexual exploitation of children and women.
3. Offences of cheating and fraud on the public.
4. Offences of misappropriation or cheating and fraud under the laws governing commercial banks
and financial institutions.
5. Offences of malfeasance in office or judicial office.
6. Offences of extortion or blackmail committed by criminal organizations.
7. Offences of customs evasion under the customs law.
8. Offences of terrorism (This predicate offence was added to the AML Act on 11 August 2003).
D. Money Laundering Offences
The AML Act has criminalized the money laundering actions of any persons whoever:
1. Transfers, receives a transfer or converts an asset involved in the commission of an offence for the
purpose of concealing or disguising the origin or source of an asset or for the purpose of assisting
another person (s) to avoid or receive a lesser penalty for the predicate offence; or
2. Acts in any manner whatsoever for the purpose of concealing or disguising the true nature of theacquisition, source, sale, transfer or ownership of an asset involved in the commission of an
offence (Section 5).

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The penalties are imprisonment for one to ten years or a fine of 20,000 - 200,000 Baht or both. If the
defendant is a corporation, it will face a fine of up to 200,000 - 2,000,000 Baht (Sec. 60-61). Whoever
undertakes the action of aiding and abetting either before or during the commission of an offence, ormaterially assists the offender to escape or avoid the penalty or gains a benefit from the commission of an
offence shall receive the same punishment as the principal offender (Sec. 7). Any person attempting tocommit the offence of money laundering is subject to the full scale of the penalty (Sec. 8).
The AML Act imported the conspiracy and extraterritorial jurisdiction principals from the Act on
Measures for Suppression of Offenders in an Offence Relating to Narcotics B.E.2534 (1991). In case two
or more persons conspire to commit the money laundering offence, they will each receive a half penalty.
However, if the offence is committed as a result of conspiracy, the conspirators shall receive the full
penalty (Sec. 9). Regarding extraterritorial jurisdiction, even when the money laundering occurs outside
the Kingdom of Thailand, the case may be prosecuted in Thai courts if (i) a Thai national or resident is anoffender, or (ii) an alien commits the offence with the intention of having consequence in the country, or
the Government is the injured party, or (iii) when an alien committed an offence under the other state s
law and he appears on Thai territory and is not yet extradited under the Extradition Act (Sec. 6).
Money Laundering Criminal Cases Filed in the Criminal CourtYear

New Cases Filed

Predicate Offence

2001

4

2002

-

-

2

2003
(End of July)5

Cheating (1), Narcotics (3) and Narcotics
and Customs Evasion (1)3Narcotics (3),Malfeasance in Office (1)Cases Finished

1

E. Financial Intelligence Unit
The AMLO has performed the financial intelligence functions under the AML Act. Morespecifically, the law requires that:- Banking and Financial institutions (including credit financing businesses, securities dealers,insurance companies and other legal entities in the finance business), land registration offices andinvestment consultants are required to report cash transactions of 2,000,000 Baht or more, or 5,000,000
Baht or more in a property transaction to the AMLO.
- A suspicious transaction of any size must also be reported. Transactions of this type are, forinstance, an unusually complicated transaction or with features that are unusual or seem uneconomic on
their face or seem designed to avoid reporting under the AML Act or where there is any hint it is possiblyconnected to a predicate offence.
- Financial institutions are required to have their customers identify themselves and record certain
statements of fact regarding reportable transactions. The records must be retained for five years.
F. Cooperation of the Financial Institutions
When the AML Act first came into effect, the banks and financial institutions, which are subject to thelaw, were confused with their new duties. Some bank staff advised their customers to separate
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transactions into amounts less than the specific number prescribed by the law. The reason for this was toreduce the bank s responsibility to report the transactions. As time passed, the financial institutions began
to understand the law and now cooperate quite well. The AMLO received 605,176 transaction reports
during 27 October 2000-31 December 2001, valued at 36,633 Billion Baht. The transactions areclassified into 232,013 cash transactions, 356,587 property transactions and 16,576 suspicioustransactions. The AMLO also examined an additional 181 suspicious transactions reported by otherintelligence agencies.
G. Assets Forfeiture
1. General Provisions
Under the Penal Code B.E. 2499 (1956) which generally applies to all criminal cases, any
property as provided by the law that any person makes or possesses to commit an offence shall be
forfeited (Sec. 32). In addition, the court may order forfeiture of the property, which is used orpossessed for use in the commission of an offence by a person, or the property acquired by a person
through the commission of an offence unless the owner of such property does not connive with theoffence (Sec. 33). The property forfeited under the Penal Code shall become the property of theState.
In addition, Section 30-31 of the Act on Measures for the Suppression of Offenders in an
Offence Relating to Narcotics B.E. 2534 (1991) (the MSOORN Act) and Section 116 of thePsychotropic Substances Act B.E.2518 (1975) have similar provisions and process to the Penal
Code. However, when the court orders the forfeiture, the property will devolve to the Narcotics
Control Fund or the Ministry of Public Health as the case may be.
State(Penal Code)

Asset

Inquiry
Official

Prosecutor

Court(Criminal)

Narcotics Control Fund(The MSOORN Act)

Ministry of Public Health(Psychotropic Substance Act)

2. Special Forfeiture under Narcotics Related Laws
According to the Act on Measures for the Suppression of Offenders in an Offence Relating toNarcotics B.E. 2534 (1991) (the MSOORN Act), the property connected with the commission of an
offence related to narcotics may be forfeited. The Act provides a definition of narcotics offencesthat the production, importation, exportation, disposition or possession for disposition of narcotics,
and also includes conspiracy, aiding and abetting, assisting or attempting to commit such offences.
The Property Examination Committee and the Secretary-General of the ONCB have authority toissue both the property examining order and restraining or seizure orders. In case there exists a
reasonable ground that the property is connected with the commission of an offence related tonarcotics, the Committee or the Secretary-General will order an examination. If the owner of theproperty cannot adduce evidence to prove that the examined property does not relate to the offence,or he has accepted the transfer of the property in good faith and for value, or reasonably acquired
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the property on account of good moral or public charity, the property will be seized or attached.
The Committee may issue a provisional seizure order if there is a reasonable ground that theproperty will be transferred, removed or concealed during the examination. The seized property
will be retained by the ONCB. In the case that the property is not suitable to retain, the SecretaryGeneral may order an auction sale or utilize such property for official purposes. After theprosecutor has issued a prosecution order of the main narcotic case, he may file a petition to the(criminal) court to forfeit the seized property. The petition may be filed later but before the court
passes the judgment. When the petition is filed, the Secretary-General of ONCB makes a petition
published in a local newspaper for two consecutive days. A copy of the petition will be posted at
the ONCB and police station as well. If there is evidence that shows that any person may be theowner of the property, a registered letter shall be sent to him. Such process is to ensure that aperson s rights over their own property are protected. The court shall conduct the trial and theprosecutor has the advantage that prima facie the property connected to the commission of an
offence related to narcotics, will be forfeited unless the person claiming to be the owner can prove
his/her innocent ownership (see more details in Burden of Proof). The property forfeited under the
MSOORN Act shall devolve to the Narcotics Control Fund. From 1 January 2001 to 20 March
2003, there were 2,139 cases of temporarily seized assets valued at 1,380.1 Million Baht. At
present, there is a total value of 156.6 million Baht of property finally confiscated by the court andvesting to the Fund. However, this act still has some loopholes and difficulties in enforcement, as it
only applies to criminal cases. If the court dismisses the criminal charge, the property will be freed
too.
The Narcotics Control Fund is managed by a sub-committee comprised of many government
agencies. The sub-committee has the authority to issue regulations of fund management, subject tothe approval of the Narcotics Control Board. In 2000, the sub-committee issued regulations toallow government and private agencies, which are related to the suppression and prevention of
narcotics, treatment or rehabilitation of drug abusers, to utilize the properties of the fund and to pay
a reward to the informant and competent officials. In particular, the sub-committee may grantmoney payments or support properties of the fund to the government and private agencies:
1. Supporting the suppression and prevention of narcotics and the treatment or rehabilitation of
drug abusers.
2. Supporting the education, training and seminars on the topic of the suppression andprevention of narcotics and the treatment or rehabilitation of drug abusers.
3. Supporting consultants, locally or abroad, to hire consultants or expertise on the training or
seminars in the above clause.
4. Supporting activities or services which will be useful to the suppression and prevention of
narcotics, treatment or rehabilitation of drug abusers.
5. Supporting the cooperation among relevant agencies connected with the above matters,
domestically or internationally.
Therefore, the Narcotics Control Fund, in practice, has provided a channel to government
agencies to share assets forfeited under the MSOORN Act.

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Process to Forfeit the Asset under the MSOORN Act

Connected with the commission of an offence
Relating to narcotics (sec. 19)

｝

Asset

Secretary-General Of
ONCB or The Committee-order the examination (sec. 19,22)-order seizing or attaching asset (sec. 22,23)｝-file petition (sec. 27)-Publication｝

Prosecutor

Court(Criminal)

Government and private agencies, which are
related to the suppression and prevention of
narcotics, treatment or rehabilitation of drug
abusers

Narcotics
Control
Fund

Actions Undertaken under the MSOORN Act
Type of Asset: Million Baht

Year

Examination(Case)

Seize/Attach(Million Baht)

Cash

DepositMoveable
Asset

Real
Property

1998

284

174.3

70.7

60.1

22.2

21.3

1999

257

168.1

39.7

76.2

31.8

20.4

2000

449

240.2

44.2

99.5

50.1

46.4

2001

811

479.2

106.2

134

141.3

97.7

2002

1042

567.6

118.9

156.6

175.7

116.4

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3. Forfeiture of Assets Under the AML Act
Narcotics offences are one of the eight predicate offences under the AML Act. This Act
facilitates the forfeiture of drug-related assets, which may escape the loopholes under the
MSOORN Act. It is easier to forfeit drug-related assets under this Act than under the MSOORN
Act because it is civil forfeiture and need not be carried out along with criminal proceedings.
Actually, the process is quite similar but the AMLO is responsible in this matter. When there is
probable cause that any transaction is involved or may be involved in the commission of a money
laundering offence, the Transaction Committee can provisionally restrain a suspicious transaction
for examination three working days on reasonable grounds, or ten days with convincing
evidence . When there is urgency, the AMLO Secretary-General can himself use the same powerwith the Committee. If there is a reasonable ground that there may be a transfer, distribution,
placement, layering or concealment of any asset related to the commission of a (predicate) offence
during the examination, the Transaction Committee or the Secretary-General of the AMLO canorder provisional seizure for up to 90 days. The public prosecutor through a civil forfeiture system
may then pursue forfeiture of the assets. In the case of provisional seizure and forfeiture, theburden of proof lies with the claimant to prove the assets were legally obtained. Third parties will
have one year to file a petition to claim property after the Civil Court has rendered an order.
Nevertheless, the forfeited asset under this Act will devolve to the State. The asset sharing underthe AML Act, consequently, is practically much more difficult than the MSOORN Act.
Asset Forfeiture Under the Anti-money Laundering Cases Filed with the Civil CourtYear

New Cases Filed

Cases Completed

Outstanding

2001

37

7

30

2002

56

15

71

2003*

47

15

103

* As at the end of July

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FLOWCHART OF ASSET FORFEITURE UNDER THE ANTI-MONEY
LAUNDERING ACT

Financial
Institutions

Land
Official

Investment or Capital
Advisers

Report Suspicious Transaction
Seize
RestrainAnti-Money
Laundering Office
Adequate Evidence
Transaction Committee or
Secretary-General of AMLO

3 days ＊(sec. 35)

90 days ＊(sec. 48)

10 days ＊(sec. 36)
Prosecutor

ReportAnti-Money
Laundering Board

Anti-Money
Laundering Board
Civil Court
Notice & Publish in Newspaper
Forfeit
Owner

ReturnSTATE* There is probable cause that transaction may involve a money laundering offence** There is evidence to believe that transaction may involve a money laundering offence
H. Burden of Proof
The prosecutor generally has a duty to prove the offence beyond a reasonable doubt in all criminalcases. In the asset forfeiture proceedings under the MSOORN Act and the AML Act, however, theburden of proof shifts to the person who claims ownership of the seized asset. These two laws have thesame principal. If there is evidence showing that the offender is involved or used to be involved in thecommission of an offence relating to narcotics (predicate offences or offences of money laundering), thepresumption is the asset related to an offence. The offender then has a duty to prove that he is the true
owner and the asset is not related to any (narcotics or predicate) offence; or he has received the transfer ofownership honestly and with compensation or he has acquired the asset honestly and morally, or bycharity.
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IV. INTERNATIONAL COOPERATION
Since the narcotics epidemic is a global problem that needs a global response and international
cooperation, Thailand has acceded to be party to the three United Nations Conventions on Drugs Control:
1. Single Convention on Narcotic Drugs, 1961, as amended by the 1972 Protocol
2. Convention on Psychotropic Substances, 1971
3. United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances
1988.
As a result, some narcotics control laws of Thailand were enacted in order toharmonize with theseconventions, e.g. Psychotropic Substances Act B.E.2518 (1975) that was harmonized with theConvention on Psychotropic Substances 1971, and the AML Act 1999, that follows the 1988 UN
Convention. However, many of the measures required by the 1988 UN Convention had already been
codified in previous narcotics laws that were enacted and enforced before the establishment of the 1988
UN Convention such as communication interception was codified in the Narcotics Control Act 1976
(Section 14 fourth); or Extradition Act 1929.
A. Extradition
Extradition to a foreign state is possible under the Extradition Act B.E.2472 (1929). Those fugitives
who are accused or convicted of an extraditable crime may be surrendered on the request of a foreignstate made through diplomatic channels to the Ministry of Interior. The prosecutor will apply to the court
for an arrest warrant. The fugitive who has been arrested will be brought before the court. The court willhear evidence adduced to ascertain that the fugitive has been accused or convicted of the alleged offence
and such offence is extraditable. However, the court may refuse to surrender the fugitive if the offence is
one of a political nature or the conviction is made by political motive. So far, there are ten countries thatentered the treaty on extradition with Thailand, namely the United Kingdom, Belgium, Indonesia, thePhilippines, United States of America, China, the Republic of Korea, Laos, Bangladesh and Cambodia.
Other countries may request extradition from Thailand by reciprocal practice.
B. Mutual Legal AssistanceRealizing that the growth of transnational crime has become a severe problem, Thailand enacted the
Mutual Legal Assistance in Criminal Matters Act B.E. 2535 (1992) as an important piece of legislation tocombat international crime. The Attorney General will be responsible as the Central Authority, who will
have the authority and function to receive requests seeking assistance and carry out any acts necessary forthe success of such assistance.
The scope of mutual assistance under this Act generally are:
1. Taking testimony and statements of persons
2. Providing documents and information in the possession of Government agencies
3. Serving legal documents
4. Search and seizure of articles
5. Transferring persons in custody for testimonial purpose
6. Locating persons for the purpose of investigation, inquiry, etc.
7. Initiating criminal proceedings
8. Forfeiting of Seized properties
Thailand may provide assistance to a country that has no mutual assistance treaty but the foreigncountry must state clearly that it commits itself to assist Thailand in the same manner upon request. In
case of the forfeiture of property, the foreign court must render final judgment to forfeit such property and
it is forfeitable under Thai law.

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C. Investigative Cooperation with Neighbouring Countries
Thailand regularly exchanges drug information and intelligence with many countries, particularly
with its neighbouring countries; i.e., Myanmar, Laos, Cambodia, and Malaysia. The exchange ofintelligence and information has been carried out by agency to agency to make this cooperation run
smoothly and successfully. There are also international meetings between concerned authorities of these
intelligence agencies every year. Investigative cooperation is done both through formal and informal
channels. A channel of cooperation was strengthened in 2002, when five Border Liaison Offices were
established near border areas around the country. Two are located at the Thai-Myanmar border; one islocated at the Thai-Laos border; the other two are located at the Thai-Cambodian border. In addition,
successful intelligence exchange operations with Singapore, China, and Japan have also been carried out.
The First Narcotics Control Cooperation Meeting between Thailand and the People s Republic of China
was held in January 2002, and both sides agreed to organize this kind of meeting every year. In addition,
both countries have exchanged their drug liaison officers to work closely in exchanging drug informationfor over a year while Japan has stationed a liaison officer in Thailand.
D. Technical Support for Intelligence Operations
Several countries have supported Thailand s drug control agencies by providing training andknowledge on drug intelligence and suppression both inside and outside the country. Such countries are
the United States, Australia, United Kingdom, Japan, and UNDCP.

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REPORTS OF THE COURSE
Group 1

EFFECTIVE CRIMINAL INVESTIGATION

Chairperson
Co-Chairperson
Rapporteur
Co-Rapporteur
Members

Mr Shankar Jiwal
Mr Hiroaki Kanosue
Mr Antonio Bartolome
Ms Kyoko Muto
Mr Phub Dorji
Mr Syed Nayyar Abbas Kazmi
Mr Hikoichiro Fujisawa
Mr Takashi Kume

(India)(Japan)(Philippines)(Japan)(Bhutan)(Pakistan)(Japan)(Japan)Advisers

Deputy Director Tomoko Akane (UNAFEI)
Prof. Sue Takasu(UNAFEI)
Prof. Hiroyuki Shinkai(UNAFEI)

I. INTRODUCTION
In the last several decades, the abuse and trafficking of drugs has created problems for society ingeneral and for law enforcement authorities in particular. Drug traffickers have always been responsible
for serious types of crime but especially those of the modern day are much wealthier, powerful and eveninfluential, to the extent that they can pose a threat to national and international security. In somecountries the drug trafficking organizations even have their own-armed personnel. Satellite systems andrevolutions in computer technology support the drug mafia in such a way that sometimes law enforcers
wander in the dark to look for their footprints and traces. Drug trafficking involves an entire economic
activity commencing with cultivation, harvesting, transportation, distribution and sales. Enforcement
efforts can be targeted against every aspect of this illicit economic system. A systematic attack at alllevels of illicit activity within the network is most likely to produce successful results.
It is an internationally accepted fact that the drug business is the finest form of organized crimecommitted by the drug mafia- the most powerful and lethal segment of the underworld. The premier law
enforcement agencies against narcotics trafficking are entrusted with the sensitive task of combating the
drug menace so as to make this world drug free .
However, a new phenomenon has gained strength over the past few years, i.e. the existence of
medium and small size drug organizations, which have taken over both domestic as well as international
trade. They confront no problems in the procurement of drugs originating from different countries. To
tackle this mammoth problem composite and highly mobile forces should be given intensive training witha change in basic tactics from static check posts to mobile operations and from national limits tointernational boundaries. Drug traffickers change their modus operandi and drug routes as well. It has
become easier for narcotic traffickers to operate their drug syndicates in different countries and territories.
In this context, the exchange of drug related information and trends among the various countries canbecame a useful weapon against drug traffickers. Conferences and seminars are considered to be a better
forum for the exchange of experience.

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On the other hand, drug money has all the chances to be diverted towards the ills of society, which
includes terrorism/corruption and posing a threat to the stability of any government, which works against
the motives and interests of the drug barons. Money laundering crime is a corollary of other crimes. This
crime is committed in a most organized manner and is very difficult to detect and prosecute successfully
as compared to other offences. It is committed to conceal the origin of the proceeds of its predicate
offences. No matter how large the profit of the drug trade, drug money is almost worthless until it can be
moved into legitimate financial and commercial channels. This obsession makes drug money an evil andit causes a profound subversive effect on democratic society, legitimate economies and government
institutions.
Our group would hereby like to focus on the conventional investigative techniques to combat drugtrafficking and discuss how to improve them. Before going into details, we look into the current criminal
situation of drug related crimes in each country.

II. THE CURRENT SITUATION OF DRUG RELATED CRIME IN THE
PARTICIPATING COUNTRIES AND REGIONS
The members of the group have surveyed and gathered information from the participants of the 125th
international training course regarding the situation of drug related crime in their respective countries andregions.The abridged result is described in the following sections.
A. Cannabis and Derivatives
Cannabis continues to be the most abused drug in participant countries with almost all of them
reporting varying degrees of wild growth and illicit cultivation except Pakistan, Japan, Laos, Malaysia
and the Maldives. Amongst producing countries India, Egypt, Estonia, Bhutan, Tanzania, Indonesia andthe Philippines have reported cannabis resin trafficking to destinations like USA, Europe, Sri Lanka,
Bangladesh, Kenya, Australia, Japan, Malaysia and Taiwan. Countries in South East Asia and Tanzania
also face the problem of resin trafficking through their territories. Recent trends do not show a substantialchange in production and trafficking.
B. Opium and Derivatives
India is the largest licit producer of opium by gumming. Some of this opium gets diverted and islocally consumed and converted into heroin for local consumption and trafficked to neighbouring
countries like Sri Lanka, Maldives, and Middle East, etc.
Laos, amongst the participating countries is the largest producer of illicit opium and third in the world(estimated at 112.4 tons during CY 2002). The Laos Government has reportedly showed political will bylaunching a number of projects to eliminate Poppy cultivation by 2005. Poppy cultivation is also reported
in Egypt (South Sinai), and Estonia (generally individual enterprise).
Opium abuse is generally limited to producing countries and neighbouring ones. Heroin is abused inparticipating countries mainly in India, Pakistan, the Maldives, Laos and to a varying degree in othercountries. India and Pakistan have raised concern with the increasing number of intravenous drug
abusers. Indonesia and Tanzania have also reported an increase in heroin abuse while Estonia hasreported fentanyl abuse too.

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Estonia, India, Laos, Pakistan, Tanzania and Thailand are also the conduit countries for trafficking.
Pakistan, in specific, has reported substantial trafficking of heroin produced in Afghanistan through its
territories.
C. Amphetamine Type Stimulants (ATS)Indonesia, the Philippines and Thailand and to a certain extent Estonia have reported production ofAmphetamine Type Stimulant (ATS) including MDMA. Most of these clandestine laboratories in thePhilippines are being run by Chinese nationals.
ATS abuse has generally seen a rise in all participating countries. Producing countries however, haveall classes of society consuming ATS, locally known as Yaba or Shabu . ATS production andconsumption is the main concern among South East Asian countries. Japan has reported ATS as theprimary drug of choice among abusers and involvement of foreign nationals in trafficking and retailing.
ATS trafficking has been observed from producing countries like Burma, China, North Korea via
South East Asia to Australia, Belgium, Guam, Indonesia and Japan, and Estonia have reported ATS
trafficking produced in Europe. Japan has reported MDMA trafficking originating from Europe as well.
Similarly, India has reported smuggling of Ephedrine to Myanmar for production of ATS.
D. Cocaine
India, Indonesia, and Egypt have reported that cocaine is being abused in their country. It isreportedly imported in large amounts from South America through the parcel system, airports andseaports. Tanzania also reported that cocaine comes from South America transiting to South Africa andEurope. Considering its high price, only the affluent members of society are the usual victims.
E. Other Drugs
Methaqualone produced in India is trafficked to mid-west Asian countries and East and South Africa.
Tanzania has reported incipient methaqualone production and trafficking towards South Africa.
Tanzania has reported trafficking and abuse of Khat (a kind of stimulant). Japan and Bhutan
additionally has the problem of solvents sniffing. Estonia has reported Gamma Hydroxybutyrate (GHB, asedative-hypnotic, and was originally developed as a sleep-aid) abuse.
Some detailed data of India and Japan are shown at the end of this paper. Also, one can get othercountries statistics provided by the United Nations Office of Drug and Crime (UNODC) on the website(http//www.unodc.org/unodc/en/global_illicit_drug_trends).

III. COLLECTION OF INFORMATIONThe collection of information is an indispensable activity to investigations. Here, our group would
like to focus on the ways of gathering information leading to the initiation of further individual
investigations. The group identified the following eleven items as important sources of information:
namely, informants, undercover operations, electronic/telephonic/postal sources, electronic surveillance,
wiretaps, custodial investigations, news media (publication and broadcast), other investigations, database,domestic and international information exchange and preliminary profiling.
A. Informants
Informant denotes any person who divulges information on the regular commission or conspiracy of
drug related offences and/or persons involved in them. This is an important part of human intelligence
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125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
and has certain advantages over technical intelligence. Informant handling requires a personal touch andis equally fraught with drawbacks associated with such double agents . In ideal circumstances, acombination of this human intelligence with technical intelligence should give optimum results.
1. Problems Encountered
The handling of informants may present certain practical difficulties. A general member of public hasa cynical attitude towards providing information to law - enforcers. Reasons vary from general apathy tofear of reprisal from the person being reported. They are also not willing to act as witnesses later. Certain
societies may also have a stigmatized attitude towards informants as reported by Bhutan and India. In theabsence of immunity, co-accused are less willing to cooperate as informants. Above all, it is possible thatan informant may just be trying to frame-up somebody. Unreliable and suspicious informants continue totrouble investigators. Inexperience of handling informants and mixing professional and personal
relationships need to be avoided.
2. Countermeasures
Winning cooperation of the public to act as informants can be achieved through education andconfidence building measures. Providing incentives [pre- seizure] and rewards [post seizure depending on
purity and quantity of the contraband] can rope in good informants. Background checks on informants
and online checks such as monitoring their communications to guard against a red herring or sell-out are
proven methods in India and Pakistan. Japan also maintains a database for such background checks. Nondisclosure of the identity of informants can counter their fear of exposure and reprisal. An added
advantage will be a Witness Protection Programme [as in the Philippines]. India and Philippines also
provide for immunity thus paving way for cooperation from co-accused. Criminalization of providing
false information is a suitable deterrent provided by statute in India, Pakistan and Bhutan. In thePhilippines, informants are informally favoured by remaining within the purview of the legal
jurisdictions. It makes the informant friendlier and builds up confidence on both sides.
B. Direct Information (Undercover Operations)
Investigators can go out in the field and gather information by themselves without disclosing theirstatus. This method can be called direct information gathering or more directly undercover
operations . Undercover operations can be a powerful method of information collection. In somejurisdictions, it is even considered indispensable. On the other hand, however, there are some ambivalent
attitudes toward such activities.
1. Problems Encountered
When an officer is directly dealing with the bad guys the chances are high of exposure to high risk
and compromising the identity of the officer. On the other hand, sometimes, the same officer has toappear before the court as a State Witness, which gives ample chances to accused persons to identify him
and resultantly some harmful act can be done.
2. Countermeasures
It is suggested that when an officer is at a high risk of exposure, there must be the provision of backup teams. Firstly the undercover officer may avoid appearing before the court and if inevitable, video
teleconferencing or screens in the courtroom should be used to avoid the disclosure of the identity of theofficer to the defendant or public. If disclosure of the identity of the officer is not avoided then he shouldbe allowed to disguise his/her identity and be posted or transferred out of that particular jurisdiction of
work.

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C. Electronic/ Telephonic/ Postal Sources
Enforcement agencies often receive information through institutionalized channels such as throughletters etc. This modus has over time extended to sophisticated websites wherein informants can interact.
Similarly, 24 hours control rooms facilitate information through telephones. Complainants thus have thebenefit of being anonymous.
1. Problems Encountered
Though useful, such source of information is anonymous and requires to be verified. Anonymity, attimes, encourages criminals to mislead the law enforcement agency and exaggerate activities of rival
gangs. The utility of such information as weighed against its volume may be minimal, and its processing
is time consuming. Mischievous messages and attempts to tamper with websites are to be guarded
against. Different languages may be a handicap. Maintaining 24 hour control rooms may be a drain on
manpower resources. Though receipt of information is centralized it may require action over distantplaces. An absence of adequate response in such cases may lead to apathy on the part of the generalpublic.
2. Countermeasures
The general public can be encouraged to be more interactive by providing them with feedback on theinformation provided by them as far as it does not affect any inquiry/ investigation being undertaken.
Experienced control room managers can elicit useful information over the phone without compromising
the identity of their informant. Outsourcing the processing of information/managing control rooms can beconsidered at the primary level. Built-in language translation software and OCRs can be put to use topartly overcome the language barrier. Websites should have strong firewalls and regularly updated to
avoid tampering. Building up the credibility of an agency, a timely response and a good reputation go along way in encouraging the right type of people to come forth.
D. Electronic SurveillanceElectronic surveillance here refers to pro-active efforts of enforcement agencies in utilizing audio,
video, the Global Positioning System (GPS), satellite imaging and internet traffic management, etc. tocollect information and profile drug abuse and trafficking patterns. Such surveillance generally refers topublic domain. Wiretapping being more intrusive has been dealt with in the subsequent section. The point
to be borne in mind is the difference in legislation and issue of privacy, which differs from country tocountry.
1. Problems Encountered
The issue of privacy is quite important as it infringes upon the private life of citizens, the liberty
generally guaranteed as a basic right in all modern societies. Thus such enforcement surveillance should
only be in public domain. Even in the public domain too, it is debatable whether such surveillance becovert or public. Such equipment may be costly and require training for handling the same. Modern
criminals, being well aware of such techniques, may deliberately mislead investigators and use high-tech
technology to detect this type of surveillance. If located, such equipment may be easy to tamper with.
Criminals can put sophisticated equipment to equal use for counter-surveillance. Electronic surveillancealso suffers from handicaps such as the requirement of a power supply, availability of suitable range andfrequency in case of wireless transmission etc. Loss of equipment, at times, is possible as in the case of
GPS trackers. It is also easy to avoid detection of illicit cultivation by remote sensing if a canopy is usedor on mountainous slopes mixed with other plantations.
2. Countermeasures
Public opinion should be built to support surveillance in the public domain as an effective
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countermeasure against criminals. Sufficient checks and balances can be built into such systems, such as
compulsory disclosure after a certain period of time. This disclosure can be in one way allowed by giving
the public free access to information on such surveillance conducted. Legislation, wherever permissible,
to admit such information as evidence shall also lead to transparency. Officers should be sufficiently andselectively trained to handle such equipment and to act effectively against counter- surveillance. In-houseresearch, over a period of time, can be undertaken to overcome technical difficulties such as range,
frequency and camouflage etc. It is important to interweave the human intelligence with this type ofsurveillance to affect maximum gain.
E. Wire Tapping
Wiretaps, in terms of this discussion, basically covers telephonic voice and data interception. It may
be an efficient method to discover precursor information of criminal organizations and/or criminals. On
the other hand, it implies the risk to a higher invasion of privacy of individuals as it may contain
information relating to personal and business aspects of an individual. The advent of mobile telephonywith international roaming and Internet require monitoring the same by enforcement agencies but with
sufficient checks and balances provided for by the laws and rules. Provisions for wiretapping at the preinvestigation stage may vary from country to country. In Japan wiretapping is a limited investigative
weapon to a specific case: whereas in India, Pakistan and Bhutan it is frequently used as an important
method of collecting information by law enforcement agencies.
1. Problems Encountered
Invasion of privacy is a matter of rising concern throughout the world. In the absence of supportive
legislation and public understanding, wiretapping may not be possible. Even in the case of provisions,
wiretapping is highly technical and service provider specific. Mobile telephony interception may require
adequate coverage of data such as short messaging system [SMS] and mobile messaging system [MMS]
to be effective. The absence of satellite phone providers in a territory may pose a problem of effective
liaison. Individual encryption/ scrambling may delay decoding of interceptions. A strict framework oflaws and rules, though necessary, sometimes take a lot of time [e.g. exact transcription] and this is usedby criminals to their advantage [e.g. limited timeframe]. Too much reliance on wiretapping without
adequate field back up may lead to warped priorities.
2. Countermeasures
Wiretapping should be resorted to as the last measure of collecting information. Checks and balances
within and without the hierarchy of the agency should be in place, such as in India. Custom-madesoftware may be used to obviate difficulties faced due to different hardware and interconnectivity ofservice providers. Coordination and liaison with service providers is a must before the introduction of
new technologies. Sufficient supervision should be in place to avoid indiscriminate wiretapping and an
adequate mix with field intelligence.
F. Custodial Investigation
Sometimes a suspect conspicuously avoids vital information during custodial investigation and policequestioning thus it is hard to get such appropriate information. It depends a lot on the officer whointerrogates the suspect to squeeze and grasp the information from the suspect s version.
1. Problems Encountered
The problem that stands out is the limited time period before producing the suspect before the court.
Limited information about the suspect s background and past history causes stumbling blocks in a smooth
investigation. Similarly lack of coordination between different investigation agencies is also observed.

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2. Countermeasures
Each law enforcement agency should be equipped with highly talented and seasoned investigation
officers. During custodial investigation such police officers should be deputed to carry out theinvestigation keeping in mind the limited timeframe or lack of information. The other way to tackle this
impediment is to recommend a change in the legal framework on the part of policy makers to increase thecustodial investigation period with sufficient safeguards. Presence of an apex coordination agency can be
the solution to get rid of a lack of cooperation/coordination between the law enforcement agencies. These
agencies may develop a database, which should be shared on a need-to-know basis.
G. MediaAt the present time, the media covers almost all aspects of social life; therefore, it may discover thecrime through its own sources ahead of the law enforcement agencies. On the other hand, the law
enforcement agencies can distil information related to the crime that is not written in the article. The
situation of the dark society and/or the crime trend may be estimated through articles on economic
conditions, social events or the general social situation. Furthermore, if there is a campaign by the media
against a high-profile case, it can support the activities of the law enforcement agency to carry out an
investigation smoothly against political pressure. Therefore, the media, such as newspapers, television,and magazines etc. can be important information resources for law enforcement agencies.
1. Problems Encountered
The media sometimes exaggerates facts in order to arouse the curiosity of the general public. The
tendency is strong in the yellow journalism . In such a case, investigators should select articles whichcontain correct information. The media protecting the secrecy of their information source can be astumbling block for an investigative agency. When the media coverage is published, it is sometimes toolate to start an investigation. Some criminal organizations and drug barons have influence on the media.
They might even publish their own newspaper and criticize a law enforcement agency. Moreover, humanand budgetary resources are necessary to follow large amounts of information that the various media
produce.
2. Countermeasures
Law enforcement agencies must evaluate information carefully. In order to verify information,
continuous collection and analysis of information is necessary. The efforts of an agency to cope with themedia is also necessary. It is also important to maintain a good relationship with the media through press
conferences about the criminal investigations and through periodical information exchange. It may also
be useful to clip articles for future analysis. Use of an internet clipping service makes analysis more
efficient.
H. Other Investigations
Investigators can obtain information about criminal groups which engage in illicit drug trafficking,about the route of drug trafficking and price of drugs through other kinds of investigation. For example, aforeigner who was arrested for smuggling might have information concerning other illicit drug
smuggling routes. A suspect or a convict arrested for a completely different crime such as extortion may
have important information relating to drug trafficking or criminal organizations that are involved in
drugs.
1. Problems Encountered
It is very difficult to obtain statements about illicit drug smuggling routes or criminal groups from thesuspects of other criminal cases. He/she might be scared of the retaliation from the criminal group. In
case of the suspect arrested for drug trafficking, he would not disclose his/her involvement in an
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organized criminal group because it could lead him/her to an even heavier penalty. In such cases, it is also
very difficult to get information. Even when they make statements they may not tell the truth; it is very
difficult and time consuming to verify the statements. Strict time limitation for investigators to produce
the suspect before the court prevents him/her from probing additional information that seems irrelevantfrom the current case in question.
2. Countermeasures
For the suspect or the convict who is scared of retaliation from criminal groups, investigators usuallyneed to persuade them to overcome the fear and tell the truth. Provision of protection may lead todisclosing of information more easily. When the suspect is afraid that his/her penalty will be heavier,provision of an immunity system can be one of the solutions. With regard to this point, a participant from
India stated that the Indian Narcotic Drugs and Psychotropic Substances (NDPS) Act provides for strong
immunity. If a suspect of any crime discloses information concerning drug crime, he/she would be
exempted from both the drug crime and the original crime, even if the original crime is a very serious
one, such as murder.1 In the Philippines, the suspect will be exempted from responsibility for only the
drug crime in a similar case. Investigators should utilize additional information in verifying thestatements of such suspects.
I. Database
A database is a vital information bank for law enforcement agencies from which they can get
information about a criminal, his bio-data, associate details, vehicle registration, criminal records, bankaccounts and so on. This information can be used for an on-going investigation or for follow up actions or
as reference. The importance of a database as a source of information is unanimously accepted, but it has
its drawbacks/problems.
1. Problems Encountered
One of the foremost problems of a database is the huge quantity or volume of data it contains.
Maintenance of such a huge database requires additional resources. Outdated information because of theabsence of necessary personnel to update them is useless. Sometimes different agencies create individual
databases that contain similar information without any link to an existing one. In such a case, to sort out
which database has what information becomes extremely time consuming. Secondly, when an adequate
search procedure or subroutine is not established, it is difficult to get the right information in a given timeframe. On the other hand, if there is no database at the law enforcement agency, it takes a long time tocreate a useful database.
2. Countermeasures
The solution to counter the first problem would be differentiation between the intelligence databaseand criminal investigation database. It was suggested that the creation of a huge database only by the law
enforcement agency might not necessary because investigators can always consult other agencies fornecessary information. However, there are other opinions that a comprehensive database should bemaintained by the law enforcement agency in order to be effective. In either case, necessary resources
should be allocated in order to maintain an updated database. This would enable the police to access theright information in an appropriate time. To cope with the second problem, there should be a user-friendly
search procedure for any database. It is recommended that an adequate manual should be maintained.
J. Domestic and International Information Exchange
Today, in a very complicated society, information exchange is indispensable and becomes more
1

Section 64, NDPS Act. Although the legal provision states this, it is not applied since the promulgation of the act in 1985.

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important in order to expose the crime especially committed by organized criminal groups such as Mafia.
Because such organized criminal groups try to commit drug trafficking using the latest communicationequipment like the Internet backed by their abundant funds, and the modus operandi of such crimes isgetting more and more sophisticated.
1. Problems EncounteredFirst, as far as domestic information exchange is concerned, investigative agencies tend to withhold
information and are reluctant to exchange information with other agencies because of sectionalism,
distrust and jealousy among different law enforcement agencies. On the other hand, there are someagencies, such as hospitals, that should not disclose the information easily from the view point of theprotection of privacy.
Second, as far as international information exchange is concerned, routes can be mainly divided into
three ways, namely, the diplomatic channel, Interpol and inter-agency. Quick gathering of information isvital to the practical investigation. However, the diplomatic channel is not frequently utilized because it istime-consuming. Interpol is quite useful, but a requested country for information exchange is not obliged
to respond to such request. Informal information exchange among the respective countries law
enforcement agencies can be seen, but does not seem to be smoothly taking place.
Third, differences of legal system and languages among countries make information exchange further
troublesome.
2. Countermeasures
By establishing regular meetings (every six months or on a quarterly basis) among law enforcement
agencies, we can build up mutual trust and share information.
So as to have a faster and smooth exchange of information among international law enforcement
agencies, it is recommended that each competent agency have a memorandum of understanding (MOU)
as much as possible.
The group is of the opinion that each investigative agency should establish a common framework sothat they can exchange information smoothly. Establishing a common database can be envisaged. Inorder to overcome the differences of legal system and languages, continuous efforts in exchanging
information is necessary. Very sensitive information might be exchanged among high ranking officials ofrespective agencies.
K. Preliminary Profiling
Preliminary profiling is necessary to serve as a reference in cases for future operations. However thismethod of collecting information is considered a tedious task since it covers a wide variety of fields andneeds to be constantly updated. Like for example, in socio-economic profiling, there is a need to consider
the economic activity of a certain area to analyze the changing economic status of a certain individual
subject in question. Other areas to be considered, but not limited to these areas, are mail and parcel
profiling, air passenger profiling and baggage profiling. If we are able to organize centralized preliminary
profiling data where all the required necessary information is stored and analyzed regularly, then it will bea good source of information that can help law enforcement agencies in their day-to-day operations.
1. Problems Encountered
Preliminary profiling takes an enormous amount of time and resources considering that it needs aconsiderable period of time in storing all the data necessary before an analysis can be made. Failure in164

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storing the right data may result in a wrong analysis that may mislead the investigative agency in the
conduct of their operation, or even if you have stored the right data but you were not able to make theinterpretation and analysis properly, then it will still affect the planning for such future operations. The
Majority of the participant countries admitted lacking expert personnel to do the job and also the technicalequipment needed to keep-up with the advancement of technology the criminals are capable ofemploying.
2. Countermeasures
Considering the wide variety of information necessary, there is a need to strengthen cooperation
among the different organizations, private or public, to share all the data available. It is considered thatthe establishment of a special organization/task force be maintained to collect and analyze all theinformation. Trained and expert personnel should man these organizations to ensure that all the collected
information will be properly used for the maximum advantage of all investigating agencies.

III. MAJOR DIFFICULTIES IN THE COURSE OF INVESTIGATIONIn the course of the actual investigation of drug crime, there will be a number of problems. The
members of the group agreed to discuss their major problem areas in the investigation. Identified issues
are interrogation, bottom up investigation, search and seizures and financial investigation.
A. Interrogation
The interrogation/ questioning of the accused/suspect is to establish their extent of involvement incrime, modus operandi, associates, financial transactions, communication channels, safe houses,
habitudes, previous transactions and recovery of contraband. Custodial interrogation is within aframework of limited time and provisions of laws safeguarding self-incrimination. Investigators in
Bhutan, Pakistan and India get 24 hours before mandatory production to court or release. In thePhilippines, this limit varies from 12 to 36 hours depending on the type of offence. Japan allows 48 hours
for the investigator s and a subsequent 24 hours prosecutor s questioning limitation followed by a further
20 days [10 +10] possible custody on discretion of the court, Indian enforcement agencies also have theprovision of police custody at the court s discretion for a maximum period of 14 days.
1. Problems Encountered
Limitation of time becomes a serious handicap in case of difficulties in getting online/quick response
from other agencies for cross- checking/ verification of a suspect s statement. Capital seizures involving
large numbers of accused, locations and quantity of contraband coupled with manpower constraints may
affect interrogation. Handling a suspect bent on misleading or non- cooperation requires certain
experience and expertise. Such lack of expertise may also lead to missing certain important information
due to oversight. Odd timings and locations may not offer ideal infrastructure for interrogation e.g. a oneway glass panel. Important and multilateral cases may require involvement of multiple agencies. Lack ofwillingness to allow joint interrogation for want of sharing credit or reward is quite possible. Difficulty ininterpretation of a foreign language or interference by facilitators may slow down interrogation.
Overlooking their psychological status/ profile misleads the investigator. Similarly, social status or
security concerns for a suspect may warp priorities of interrogation. Such situations are sometimes faced
during the interrogation of kingpins. Failure to properly consolidate and reduce theirobservations/statements in writing is sometimes noticeable, even amongst experienced investigators.
Above all, these psychological profile techniques of interrogation are very important. Similarly,
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media may affect the process of interrogation.
2. Countermeasures
Training of investigators in techniques of interrogation [hot and cold, rapid fire, confrontation, etc.]
shall obviate the problems of wastage of time in getting down to business. Prosecutors and the court
should be liaised with in case of an additional time requirement. Apart from training, choosing
appropriate personnel for the job is necessary. This may require personality profiling of personnel as well.
Checklists and questionnaires should aid the investigator. The questionnaires should be able to bring out
the personal and financial profile of suspect. Use of techniques like polygraph tests can be taken wherepermissible. Depending on the seriousness of the case, the level of interrogation [rank of officers] can be
adjusted and team interrogation facilitated with video recording etc. Team interrogation basically refers to
the same agency/case and can be conducted on a one-to-one basis with later sharing or simultaneously bymore than one officer. Video recording [e.g. in India] is used for internal evaluation and analysis ofinterrogation. Certain countries may have provisions of access by the defence in case of such video
recordings. Stand by teams for simultaneous raids, arrests, search, coordination and security should be a
primary concern of supervisors. Background checks and use of available databases should be made to
reduce time wasted on cross verifications. For joint interrogation/ coordination, proper guidelines should
be laid out. The regular review of cases and follow ups to check the same by higher-level officers canremedy this. Agencies should strive to improve infrastructure facilities at select locations/ use facilities ofother agencies. The task of liaising with the press should rest with a public relations officer [PRO] andinvestigators should not be troubled with it.
B. Bottom-Up Investigation
Most illicit drug trafficking is conducted by organized criminal groups. The ringleaders of such drugtrafficking usually occupy high status within the organized criminal groups. Following their instructions,
illicit acts such as production, transportation, trafficking and laundering of proceeds of drug trafficking
are systematically committed. Moreover, in recent years, worldwide criminal organizations collaborate
with one another and share the illegal tasks and proceeds of crime amongst themselves.
These criminal organizations always try to impede investigations. The Modus operandi of their crimeis becoming more and more sophisticated year after year. For example, the ringleader who occupies ahigh status in the organization manoeuvres behind the crime scenes but never comes to light.
However, illicit drugs trafficking causes a problem of global expansion of drug abuse. Profit from
illicit drug trafficking is used as a source of funds of these criminal organizations, and there is concernthat some of the funds are being diverted to finance terrorist activities. Moreover, money laundering issaid to cause serious damage to the world economy. On this account, it is necessary to eradicate it withthorough regulations and an uncompromising attitude. For that purpose, apprehension of end drug abusers
is not enough: exposure of the whole criminal organizations including arrest of the original ringleader is
indispensable.
From the above reason, this group hereby decided to examine an effective bottom-up investigative
method which initiates investigation from the level of an end drug user or an end dealer of the criminalorganization and leads to the level of a ringleader of the drug trafficking.
1. Problems Encountered
It is very difficult to convince the arrest end member to divulge information about the criminalorganization. They keep silent in fear of retaliation by their criminal organization against him/her andtheir family members.
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If the information is cut off at the level of an end member of the criminal organization, this poses a
problem to the investigators. The criminal organization usually gives the least information to the end
member in order not to be traced by the investigative agencies. The end member sometimes does notknow even the real name of the superior who gave instructions and sometimes does not have any
information about routes used for the drug trafficking, etc.
It is very difficult to arrest the top person of an organized criminal group if the investigator fails to get
a whole picture about the group from the end member by way of a bottom-up approach. Senior membersof the criminal organization never touch the drug directly. Consequently, there are only two ways toconvict them: (1) to prove conspiracy between the top and the end member and (2) to prove the existenceof proceeds from the drug trafficking. Testimony of end members is necessary to prove those facts.
In case of ethnic hierarchical organized criminal groups, it is more difficult to get information,
because the relationship between members is extremely strong and they use a different language.
On the other hand, for example, in a small town, organized criminal groups can easily identify each
investigator so that they sometimes put investigators under their surveillance. The investigation can beinterfered in various ways such as destruction of evidence. In most cases, such interference by theorganized criminal group sometimes starts as soon as the arrest of an end member.
Monetary support by senior members to end members may become a hindrance to acquire full
information of the criminal organization. Sometimes the end members become non-cooperative andrefuse to testify to upset the investigation. In some countries, the politicians who have close connections
with the organized criminal groups can put pressure on an investigation. Shortage of budget, humanresources and lack of proper training also become a hindrance to investigative agencies. Investigative
agencies now face a problem of their jurisdiction in the course of their criminal investigation comparedwith the current borderless trafficking committed by organized criminal groups. For example, extraditionof the suspect requires a complicated procedure.
Another problem of the bottom-up approach is that it takes too much time to arrest drug barons. In
other words, criminal organizations will have enough time to destroy evidence while law enforcement
agencies make efforts to trace the root of the drug trafficking.
2. Countermeasures
After due consideration of the above-mentioned problems, this group pointed out the necessity ofknowing the background of organized criminal groups as a prerequisite to the bottom-up approach. In
such case, utilizing informants and undercover operations are effective. In order to get honest statementsfrom the end members who are afraid of retaliation from their criminal groups, the interview technique ofthe law enforcers plays an important role. It is important to create a friendly atmosphere for the end
member to give his/her honest statement willingly. Moreover, the introduction of a witness protection
programme (WPP) including supply of a new house as a refuge or financial support is suggested. A WPP
can be more effective if it encompasses alteration of the witness identity.
Conducting various investigative techniques concurrently in order to conquer the difficulties ofproving the conspiracy of the top person of the drug trafficking groups is likely to prove effective. For
example, analysis of telephone records, communication interception, electric surveillance, financial
investigation and so on, should be incorporated. Above all, covert investigation is important in order for
an investigative agency to prevent the criminal organization from destroying evidence just after the end
member has been arrested. A comprehensive database that contains such information is useful for
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investigation.
Sufficient budget and human resources should be appropriately allocated; especially, theestablishment of a task force comprised of trained investigators may be effective to counter organizeddrug crimes. In case of borderless trafficking, law enforcement agencies should actively cooperate.
In India, there is a preventive detention system that entitles law enforcement officers to detain aperson for a maximum period of two years when there is probable cause that the detainee will commit
some illegal acts. This system contributes toward the tracing of the roots of the drug trafficking
syndicates.
Even though the bottom-up approach may be a basic and steady investigative method to reach the top
persons of the organized criminal groups, it may be considered tedious in some countries facing serious
problem such as large-scale cultivation or export of large amounts of drugs. Such countries need tosimultaneously focus on the root of the drug trafficking, that is, cultivation of drugs, utilizing such means
as satellite photography.
C. Search and Seizure
Investigations into drug crimes invariably involve conducting searches and seizures affected to gainmaterial evidence. This material evidence is important to prove actus reas like wilful possession etc. Suchsearches are conducted subsequent to obtaining a warrant from a jurisdictional court and standard
operating procedures define the method of execution and follow up e.g. making a list of seized articles
and handing over a copy of the same to the owner of the premises/suspect. The extent to which
enforcement agencies are permitted to carry out a search without a warrant in emergent circumstances
vary from country to country.
1. Problems Encountered
The aim of a search shall be defeated if it does not yield maximum advantage to the investigators.
This basically means that not choosing the appropriate timing for a search may not result in maximizing
the culpability of the accused. A typical example is striking before the accused has opened a package ofdrugs delivered to him and then leaving the defence with the plea of ignorance. Avoiding searches atnight and at places where customs inhibit the same may also have to be taken into consideration. Searches
bring investigators into direct contact and conflict with traffickers and physical harm. In Pakistan there isfrequent resistance by traffickers as the quantity of drugs transacted is substantial. This resistance can bearmed and dangerous. Lack of experience and time constraints can at times lead to improper/ insufficientcollection of evidence. Allegations by affected parties are not uncommon in countries like Bhutan
accusing the search parties of misconduct or misappropriation. This can be very demoralizing if further
exacerbated by the press. Searches, at times, may require an operation extended over a large area andbring more than one agency into play. With the source of information being handled by one agency,
coordination may be a problem. Lack of coordination may lead to leakage of information, compromising
the source of information and failed operations.
One of the interesting aspects that came up was the provision of laws relating to the execution of
warrants in case of emergent circumstances like the incidental presence of drugs not mentioned in thewarrant. The Japanese participants elaborated that there is an issue relating to the strict interpretation of
the contents of a search warrant as stipulated in Article 35 of the Constitution of Japan and Article 107 of
the Code of Criminal Procedure. For example, when an investigator obtains a search warrant for
stimulants and finds cannabis during the search, it is not possible to seize this cannabis with the warrant
in hand. If there is a suspect who actually possesses the cannabis, of course, that person can be arrested on
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the spot and the cannabis can be seized. Also, the investigator can retain the cannabis through voluntarysubmission by the witness and the owner of the premises during the search even though the suspect is notpresent. However, it is not possible when the suspect is not present and when the witness/ owner ofpremises does not cooperate. In such a case, investigators in Japan have to ask for another warrant fromthe court. Practices in other countries vary to the extent that under such emergent circumstances, seizure
can be affected in the presence of independent witnesses and the court informed appropriately.
2. Countermeasures
Selecting the appropriate time for the search should be part of the plan. This, however, has to bebacked with sufficient information and in/controlled deliveries can be backed with technical gadgets likelight sensors indicating the time the packages are opened etc. Advance planning, such as including
women officers in search parties when raiding, should obviate problems of customs in India and Pakistan.
Special task forces may be constituted in case of armed resistance and the services of specialists such ascommandos can be requisitioned. Investigators should be trained to carry checklists with them to avoid
committing procedural lapses. A mix of experience will avoid stress on young investigators during asearch. Leakage of information leading to failed search operations is another sensitive issue and can beovercome by working on a need to know basis and pacing effective internal intelligence within theagency to identify black sheep. Coordination is a difficult issue but can be tackled by suitable advanceplanning. Sharing the proceeds and credit can be an incentive for coordination and cooperation amongst
agencies. Debriefing at higher levels is also recommended. Suitable policy guidelines may also be laid forsuch compulsory cooperation among agencies.
With relation to the problem of strict regulation on search and seizure in Japan, one argument is thatin the case of drug offences, the seizure of drugs not listed on a search warrant should be permitted withnecessary restrictions imposed on the law enforcement agency by employing the rule of plain view asin the United States. However, there also exist concerns that the above argument may negate the role of asearch warrant and result in the violation of human rights because it may give the law enforcement
agency too much discretionary power to determine the items to be seized. It may be interesting to notehere relevant provisions in India. Search even without warrant is allowed in emergent circumstances in
the presence of independent witnesses after making a record of reasons for such an emergency in writing.
This extends to search with warrant where the searching party may come across other incriminating
evidence.
D. Financial Investigation
Drug trafficking has long been a source of revenue for crime groups, because the gap between the
manufacture/source price and the street price is enormously wide generating huge profit. It is important todeprive traffickers of their illegal profit, in order to make a forceful impact against organized drug crimes.
At the same time, since drug crimes are global in nature, international cooperation is indispensable.
1. Problems Encountered
Financial investigations involve document examination, analyzing banks/financial institutions/landrecords and tracking the money flow etc., making it time consuming. Absence of clear provisions in laws
may make financial institutions reluctant to maintain and provide such information. This is important inview of certain countries yet to experiment with anti- money laundering provisions. This also calls forcertain relevant expertise and experience like analyzing suspicious transaction reports and similar
proactive measures etc, to which investigators may not be exposed. ARS [alternative remittance systems]pose challenges in tracing money flow because of a lack of institutional records and their ethnic andtransnational nature. Drug proceeds over a period of time are transacted multiple times and thus comeunder the jurisdiction of other agencies like the internal revenue etc., a lack of understanding among these169

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agencies may lead to their working at cross purposes. Simultaneously bottle-neck/institutional weaknessof one of these may hamper or delay investigation e.g. lack of computerization of land records or
benami [non-existent parties] transactions in real estate. Even when proceeds are well tracked, thedifficulty in distinguishing clean from dirty money and their extent may pose problems e.g. in joint
ownership of companies/real estate/investments. Liquid assets require quick reactions as high mobility
makes them liable to be tempered within a very short time. Lack of international cooperation has
encouraged traffickers to go global and park their proceeds, away from the scene of the crime, and in safe
havens.
2. Countermeasures
Enactment of provisions compelling financial institutions to maintain records, report suspicioustransactions and provide information on request is a prerequisite. Investigators should be trained inanalyzing and chasing useful information. This can also be achieved by hiring experts, an appropriate
deputation mix and the creation of financial intelligence units [FIUs]. The core of ARS should be struckat by long-term surveillance and sustained investigation-enabling the tracking of the transfer of the corpusof the money. ARS can be further weakened by promoting institutional banking and encouraging nontainted money [e.g. repatriation of earnings] transfer through it. Plugging loopholes in procedures likeland registration and strengthening these institutions [e.g. computerization of records, stricter provisions
regarding power of attorney] shall go a long way in making it difficult to disguise dirty money.
Cooperation amongst domestic agencies should be improved by regular minuted meetings [e.g. regional
economic intelligence committees in India] and by appropriate bilateral/multilateral international
agreements. The burden of proof in the case of financial investigation assumes considerable significancedue to the history of difficulty in tracking and chafing ill-gotten wealth from clean money. Once themoney is tracked, it is desirable that the burden of proof explaining its source rest with the accused.
Participants from Japan expressed support for such a provision as provided by the laws in India and otherparticipating countries.

IV. FOLLOW-UP(Can continue even if the case is already filed in court)
The job of the investigator does not end when the case is already filled in court. It is always the
responsibility of the investigator until justice has been served; therefore, he/she must maintain close
coordination with the prosecutor to ensure that all the necessary evidence is provided, including that of
the witnesses. These are very important things to consider in order for the prosecution to successfully
convict the accused.
Follow-up also means that, information and evidence gathered as a result of the investigation
conducted on the accused, needs to be properly stored and analyzed. For example, the purity and impurityof the drug seized should be analyzed over a period of time to contribute to profiling.
There are also cases where the offender after having served his sentence, can still be a good source of
information. He might divulge information about his criminal association and organization. Therefore, itis advisable that the police investigator maintains contact with such persons.
Drug routes, the flow of money, telephone records, drug prices, modus operandi, link chart analysis,
association matrix and ethnic profiling should be properly analyzed and such analysis should be used forinternal circulation, feedback and database update for future operations.

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125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSEAll gathered and analyzed information should be disseminated with other investigating agencies and,if necessary, should be discussed periodically at a workshop because the information and analysis of one
agency might be different from that of another agency. During the workshop, such differences should besettled after the exchanging of notes and thorough comparison/analysis of all the available information.
In combating an organized crime group, there is difficulty in neutralizing/arresting all the members of
the group, including their leader, all at once. Most often it is always the ordinary member that is caught
and arrested or even if the leader is arrested, some of the members manage to elude arrest. Thesecriminals can always recruit new members and will continue with their criminal activities. However,their modus operandi in many cases will still be the same. In such case, the police investigator will nothave difficulty in going after this organized group if follow up is maintained properly. All the available
information stored and analyzed as a result of the follow-up will point to this group. The police
investigator can identify drug routes and the flow of money, etc. and can prepare a good plan for future
police action against this criminal group.
Information gathered will also show recent developments in the trend of activity of the criminal groupand it is therefore necessary for the investigating agency to consider if there is a need for changes in legal
provisions/bilateral agreements. It is a known fact that criminals, particularly organized transnationalgroups, are taking advantage of the fast changing technology and the investigators are sometimes left
behind because of restrictions in the provisions of the law. In the case of bilateral agreements that wereentered into some years ago they may no longer be applicable because of new developments intechnology.
For these reasons, but not limited to these reasons, follow-up must always be maintained in order tokeep track of the criminals; it is a continuous and unending process.

V. METHODS TO IMPROVE INVESTIGATION
Criminals nowadays are becoming more sophisticated and can easily get away scot-free from the law
enforcement officer. In this regard, the group discussed the need to improve conventional investigation
methods that can be adopted in order to ensure the criminals will be arrested and be brought to the bar ofjustice.
Several measures were mentioned in our discussions and thus can be categorized into the following
three areas; intra-agency measures, inter-agency measures (domestic), and international forum.
A. Intra-Agency
Expert investigators with vast of experiences in the field of investigation should conduct on-the-job
training for those who are rookie investigators. For example, in the case of custodial investigation,
investigators must be trained in behaviour analysis and be able to decipher the body language of thesuspect under question to determine whether he/she is telling the truth or otherwise. It is also necessarythat the police investigators should maintain a checklist/booklet wherein he/she can easily refer to thestandard operating procedures that must be followed.
Analysis of failed operations in the respective agency is also necessary in order to determine the cause
and reason why such operations were not successful. Debriefing after every operation is therefore a mustso that those failures and weaknesses will form the basis for corrections and improvement in the planningand actual conduct of future operations.
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Similarly, a combination of human and technical intelligence is also necessary to improve themethods of conventional investigation since the criminals are highly technical. The use of such technicalintelligence is to assist the investigator in the conduct of their investigation where only the use of suchtechnical equipment can address the solution of a particular case.
B. Inter-Agency (Domestic)
If the individual investigation agencies try to keep the information to themselves because they do notwant to share the credit, that is not effective. By sharing the information with others, the information heldby the individual agency will also become updated. In order to share the information, conducting a liaison
committee meeting among investigation agencies involved in drug offences will be effective. By
conducting such a meeting regularly not only can we share the information but also we can becomeacquainted with other investigation agency personnel and thus create a closer working relationship.
Sharing of information can also be done through the deputation of personnel among agencies.
On the other hand, an interactive feedback loop between prosecutors and investigators should bemaintained in order to maintain a constant and regular follow-up on the status of a certain case before it isfiled in court for trial and during the duration of the trial to ensure that all the necessary witnesses andevidence are properly presented for the conviction of the accused.
C. International Forums
There are three forms of international investigations: through mutual legal assistance [MLA],
memorandum of understandings [MOUs], and Interpol. In either case in order to conduct a smooth
investigation, several additional features are necessary. Firstly, it is desirable to have a working levelmeeting among involved nations. At this meeting, an information exchange regarding specific cases andagreement/confirmation regarding detailed procedures for international investigation should be discussed.
This may make it possible to decrease the response time when actual cooperation is requested. Moreover,by repeatedly having such meetings, it might result in simplified procedures.
Secondly, placing personnel at embassies etc., as a liaison officer from the investigation agency, isvery effective because the liaison officer can help iron out the administrative process of an actual mutual
assistance case. Additionally, such liaison officers can share informal information and perform some
informal coordination with the investigative agencies in that country.
Thirdly, it is important to actively participate in various international training courses and forums thatare held by the UN and other international organizations. Through this participation, the global trend
regarding drug trafficking and money laundering and the latest information regarding international
measures can be acquired. It will widen the investigators perspectives in combating the menace of drugtrafficking.
Moreover, to overcome the barriers of entering mutual assistance with other countries, participation in
the above meetings will allow each country to settle the conflict of each local judicial and legal
framework because the latest precise information will be acquired.
Lastly, database sharing or creating mutual link measures will be effective among countries
maintaining close cooperation/and or bilateral cooperation, etc.

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125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
VI. CONCLUSION
Our discussion has been focused on the conventional investigative techniques to combat drugtrafficking. However, besides the improvement of conventional investigative methods, we need to beequipped with the latest techniques and weapons, as the criminals always tend to be one step ahead of law
enforcement agencies. We would like hereby to conclude our paper hoping for a peaceful world without
any place for criminals.
APPENDIX A
National Drug Law Enforcement Statistics
As Reported up to June 30, 2003 (India)
Year

1999

2000

2001

2002

2003

1. Seizures of Various Drugs in Kg. with No. of Cases
Opium

Seizures

1635

2684

2533

1867

643

Cases

927

1257

1205

1167

301

Seizures

36

39

26

66

18

Cases

125

142

146

148

85

Seizures

861

1240

889

884

300

Cases

2937

2841

3891

4328

1546

Seizures40113

100056

86929

88137

23418

Cases

6518

6073

7613

3687

1900

Seizures

3391

5041

5664

3300

911

Cases

2500

2078

2117

2121

661

Seizures

1

0.350

2

2

1

Cases

4

5

10

5

4

474

1095

2024

11130

Cases

8

31

8

7

Seizures

-

426

930

126

2234

Cases

-

8

5

4

5

L.S.D.

Seizures

240

0

0

0

(Sq. paper)

Cases

3

8

0

0

AceticAnhydride

Seizures

2963

1337

8589

3288

4

(in ltrs)

Cases

7

14

8

4

1

3

0

0

11

0

0

Morphine

HeroinGanja

HashishCocaineMethaqualone Seizures

Ephedrine

Amphetamine Seizures
Cases

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RESOURCE MATERIAL SERIES No. 65

Year

1999

2000

2001

2002

2003

13490

15065

16315

12318

4974

92

92

133

172

40

2. Persons Arresteda) No. of person arrested
including foreignersb) No. of foreigners arrested

3. Action Taken against Persons Involved in Drug Traffickinga) No. of persons prosecuted

10841

19162

12358

12496

2237

b) No. of persons convicted

2891

4447

3419

5310

797

c) No. of persons acquitted

4632

5416

4712

5089

818

4. Action Taken Under PITNDPS* (Ndps) Act, 1988
No. of detention orders issued
under PITNDPS Act

56

73

61

65

8

Nos. detained

44

73

46

63

8

5. Destruction Of Narcotics Drug Yielding Plants (with reported Potential Yield)a) Poppy Plants
Area (in acres)
Potential Yield (in kg.)

729

379

44

539

13125

6817

512

6468

66

50

124

73144

65324

174818b) Cannabis Plants
Area (in acres)
Potential Yield (in kg.)

6. Destruction of Manufacturing Facilitiesa) Facilities detected and quantity of finished drugs seized in kg.
Heroin

36

1

5

28

1

Facilities detected

3

5

6

7

1

Hashish

-

-

-

-

Facilities detected

-

-

-

-

197

0

0

442

Facilities detected

2

0

0

1

0

Morphine

0

2

0

5

1

Facilities detected

0

4

1

1

1

b) Nos. of persons arrested

10

9

11

13

1

Methaqualone

1740125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
Year

1999

2000

2001

2002

2003

4

c) Incriminating material seized in kg.
Acetic Anhydride

73

2

1

1466

Acetyl Anthranillic Acid(ltrs.)

-

-

-

-

Acetyl Anthranillic Powder

-

-

-

-

Acetyl Chloride

0

1

0

4

20

Ammonium Chloride

0

8

1

5

1

Diethyl Ether

0

0

0

0

Methenol

-

-

-

-

Opium

0

2

2

7

Opium Solution (ltrs)

0

23

36

34

Sodium Carbonate

402

5

1

99

7

66

7. Disposal of Seized Narcotic Drugs and Psychotropic Substances
Opium

25

11

20

1

Morphine

-

-

-

-

Heroin

39

1

2

5

2

Ganja

4558

2081

88

8718

588

Hashish

48

55

22

77

38

Cocaine

-

-

-

-

Methaqualone

8

0

0

0

Ephedrine

-

-

-

48

L.S.D (Sq. paper)

-

-

-

-

Acetic Anhydride (ltrs)

-

-

-

-

Amphetamine
8. Forfeiture Of Propertya) Value of property
forfeited (Rs.)
No. of casesb) Value of property frozen(Rs.)
No. of cases

615505113246464

162663023636425

1

3

1

10

7456247

5370283

2092803523300

7

4* PITNDPS- Prevention of Illegal Trafficking in Narcotic Drugs & Psychotropic Substances

175

RESOURCE MATERIAL SERIES No. 65

APPENDIX B
National Drug Law Enforcement Situation
as of October 2002 (Japan)
Number Arrested for Violation of the Opium Law in Japan, by Year
1993

1994

1995

1996

1997

1998

1999

2000

2001

Total

132

222

172

141

161

134

128

67

49

Illegal Cultivation

62

128

111

102

95

95

85

48

20

47.0 ％

57.7 ％

64.5 ％

72 ％

59 ％

71 ％

66.4 ％

Ratio

72 ％ 40.80 ％Data obtained from the Ministry of Health, Labour and Welfare, the National Police Agency, and the Japan Coast Guard.

Progression of Arrested Cannabis Related Criminals and Volume of Seizure in Japan
1993

1994

1995

1996

1997

1998

1999

2000

2001

Number of arrested cases

2,871

2,675

2,314

2,098

1,874

2,111

1,764

1,815

2,321

Number of arrested criminals

2,055

2,103

1,555

1,306

1,175

1,316

1,224

1,224

1,525

Dried cannabis(including
cannabis
tobacco)612.0kg

290.1kg

208.1kg

172.7kg

155.1kg

120.9kg

565.9kg

310.3kg

844.0kg

Cannabis resin

29.7kg

97kg

130.7kg

145.1kg

107.4kg

214.6kg

200.3kg

185.4kg

73.5kgVolume ofseizureData obtained from the Ministry of Health, Labour and Welfare, the National Police Agency, the Ministry of Finance,
and the Japan Coast Guard.

Number of Stimulant Drug Offences and Amount of Drugs Seized in Japan, by year
1993

1994

1995

1996

1997

1998

1999

2000

2001

Cases

21,671

20,05623,731

26,95927,15222,753

24,41926,22725,060

Number Arrested

15,495

14,896

17,364

19,666

19,937

17,084

18,491

19,15618,110

Amount of Drug Seized

96.8kg313.8kg

88.4kg652.2kg

172.9kg

549.7kg 1,994.5kg 1,030.5kg

419.2kg

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125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
Number Arrested among Violators of the Narcotics and Psychotropics Control Law in Japan,
by Year and by Drug
1993

1994

1995

1996

1997

1998

1999

2000

2001

N.A. ％ N.A. ％ N.A. ％ N.A. ％ N.A. ％ N.A. ％ N.A. ％ N.A. ％ N.A. ％Heroin111 31.4

79 23.0

82 24.6

38 13.8

49 20.6

65 23.5

52 18.2

48

19

36 13.3

Cocaine126 35.7

136 31.7

129 38.6

94 34.2

64 26.9

98 35.4

87

304

63

25

58 21.4

Psychot
ropics

84 23.8

91 26.5

64

1.2

78 28.4

63 26.5

44

159

57

199

35

14

42 15.5

Others32

9.1

37 10.8

59 17.7

65 23.6

62 26.1

70 25.3

90315

108 42.5

135 41.8

Total

353 100.0

343 100.0

344 100.0

275 100.0

238 100.0

277 100.0

286 100.0

254 100.0

271 100.0

Drug Seizures Relating to Narcotics Offences Classified by the Type of Drug in Japan
Total Number
Compared with Previous Year

Item
2000

2001

Heroin

7.0kg

4.5kg

− 2.5kg

Cocaine15.6kg23.7kg＋ 8.1kg

LSD

Equivalent to 53,087 tablets

Equivalent to 644 tablets

Equivalent to − 52,443 tablets

MDMA

78,006 tablets

112,742 tablets＋ 34,736 tablets

Raw Opium

9.0kg

11.4kg＋ 2.4kg

Cannabis Fiber

185.4kg

73.5kg− 111.9kg

Dried Cannabis(including cannabis tobacco)

310.3kg

844.0kg＋ 533.7kg

Changes in the Number of Violations of the Law on Special Provisions for Narcotics in Japan

Violation of Article 5(Illegal import, etc. as business)
Violation of Article 6(Concealment of illegal profit, etc.)
Violation(Reception of illegal profit, etc.)

Source:

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

1

3

2

4

24

26

24

19

32

11

2

2

2

1

1

3

1

The General Situation of Administrative Measures against Narcotic Drugs and Stimulants Abuse Compliance And
Narcotic Division, Pharmaceutical and Food Safety Bureau, Ministry of Health, Labour and Welfare, Tokyo, Japan.
October 2002.

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RESOURCE MATERIAL SERIES No. 65

Group 2

COUNTERMEASURES AGAINST ORGANIZED CRIME

Chairperson
Co-Chairperson
Rapporteur
Co-Rapporteur
Members

Mr Aro Siinmaa
Ms Diah Ayu Hartati
Mr Krirkkiat Budhasathi
Mr Masato Nakauchi
Mr Mohamed Gamal El Miggbbir
Mr Hussain Rasheed Yoosuf
Mr Toshihiro Suzuki
Mr Ichiro Watanabe(Estonia)(Indonesia)(Thailand)(Japan)(Egypt)(Maldives)(Japan)(Japan)Advisers

Prof. Toru Miura
Prof. Yasuhiro Tanabe
Prof. Kenji Teramura(Japan)(Japan)(Japan)I. INTRODUCTION
Organized crime is profit orientated and thus drug trafficking has become one of the fundamental
sources of income for a large number of criminal organizations. At the same time criminals are interested
in being able to enjoy their illegal proceeds without interference from law enforcement agencies, so theissue of money laundering is also increasingly becoming an international concern. Competent authorities
of most countries have recognized that in order to cope with these global threats a new level ofinternational cooperation has to be reached, but different legal systems based on different cultural andhistorical backgrounds have made this task difficult to accomplish. In order to coordinate international
efforts to battle organized crime the United Nations passed the Convention against Transnational
Organized Crime (hereinafter referred to as UN TOC Convention ) in the year 2000. Besides othersuggestions this convention also encourages countries to allow the appropriate use of special investigativetechniques as controlled delivery, electronic and other forms of surveillance and undercover operations.
The UN TOC Convention also requires criminalization of participation in an organized criminal groupand obstruction of justice as well as points out the necessity for transfer of criminal proceedings,
protection of witnesses or victims and the possibility of granting immunity from prosecution to a person
who provides substantial cooperation in the investigation or prosecution of an offence covered by theConvention. It can be said that the UN TOC Convention manifests the bare fact of reality thatconventional investigative tools are not sufficient to dismantle powerful criminal syndicates that have astrong infrastructure and effectively enforced rules of their own.
This report tries to approach the problem of transnational organized crime in the guiding light of the
UN TOC Convention by at first collecting and analyzing information on the nature of organized crime inparticipating countries and after that researching the possibilities to use special investigative techniques
under the conditions prescribed by each country s domestic law. The paper mainly focuses on the aspectof following proper procedure to secure admissibility of evidence in court. It is vital to acknowledge thatjoint efforts of different law enforcement agencies both domestically and internationally and especiallyclose cooperation between investigators and prosecutors are inevitable in order to convict organizedcriminals. Every sub-topic of the report also addresses the issue of balance between the fundamental
rights such as privacy of individuals and the efforts of law enforcement to protect the society against the178125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
menace of organized crime. Unfortunately the utilization of special investigative techniques introduces ahigher level of risk for law enforcement officers, but as criminals constantly take risks in their operations,counter operations must also involve taking calculated risks in order to achieve satisfactory results. Whiletackling organized crime investigators and prosecutors have to maximize their personal commitment andcreativity and not merely follow the law but explore every possibility to interpret the boundaries of thelaw to the limit in order to match the attempts of the criminals to use the rules of legal procedure as aprotective shield.

II. SITUATION OF ORGANIZED CRIME IN PARTICIPATING COUNTRIES
We have surveyed and gathered information from the participants in this training course regarding thesituation of organized crime in their countries. The result shows that each country has a different
experience facing the organized crime groups as follows:
Bhutan, Malaysia and Maldives
They have no information about organized crime or transnational crime.
Egypt
Organized crimes in their traditional form are unknown in Egypt. Crime in Egypt is mainly of anindividual nature, or is in a form of gangs consisting of several members formed to commit a crime orcrimes, which subsequently disperse.
Estonia
The Estonian Penal Code, which codifies all criminal offences, has a special provision for organizedcrime that makes membership in, or the forming of criminal organizations or recruiting members theretoor leading such organizations or parts thereof punishable. Unfortunately during its period of validity there
has been only one case when a leader and members of an organized criminal group were actuallyconvicted by virtue of this provision. That particular group was engaged in organized car theft andsmuggling of stolen cars to Estonia. So from a strictly legal point of view the involvement of organizedcriminal groups in drug trafficking and money laundering has not been officially detected. On the other
hand the information provided by agencies that deal with analysis of criminal intelligence indicates that
drug trafficking is almost completely controlled by criminal organizations. One reason for the lack of
actual criminal cases is that due to the small size and population of the country the use of several effective
investigative methods is seriously handicapped. The structure and methods of organized criminal groups
in Estonia are similar to those of the so-called Russian mafia because many leaders and members ofcriminal organizations are of Russian or other former soviet republics origin, some of the groups havestrong ties with Russian organized crime. Estonian organized crime is also expanding its turf to Finland,
Scandinavia and Germany. The so called white collar trend in organized crime has become more
obvious during the last few years and according to The Estonian Central Criminal Police criminalorganizations are currently seeking new possibilities to invest their illegally acquired money into legal
business. Unfortunately to this day not a single scheme of laundering drug money has been actuallydetected and nobody has been indicted for such a crime.
India
The organized crime scenario has not been studied in depth so far. A typical hierarchical structure orsyndicate of large scale has not come to notice as far as drug trafficking is concerned. Crime involving
real estate operators has to a certain extent been influenced by organized gangs in its facilitation.
Organized gangs in the real estate sector and extortion in the movie making industry do generate
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RESOURCE MATERIAL SERIES No. 65

sufficient money which requires laundering. The real estate sector and the movie industry can at times
border on criminal activity if extortion or threats come into play otherwise they are mainly cases of tax
evasion. However, there is no clear link established between these crimes and drug trafficking.
Indonesia
Organized crime groups of West African origin are heavily involved in drug trafficking into
Indonesia. In many instances, these traffickers use female Indonesians as couriers. The presence ofNigerian crime enterprises, considered one of the international drug syndicates, has seemingly influenced
a number of local communities in Jakarta to support their drug trafficking activities as a means of
livelihood. The geographical location of Indonesia, the porous borders, inadequate customs personnel andother forms of law enforcement make it an attractive business location for drug traffickers.
Japan
Japan is a demand country for methamphetamines from the South East Asia region and has notrecognized the existence of clandestine laboratories yet. In this situation, Japan has organized criminalgroups involved in drug trafficking and smuggling. These groups can be categorized as some local
criminal groups called Boryokudan and some foreign criminal groups such as Iranian traffickers
groups , Chinese traffickers groups , Nepalese traffickers groups and so on. In fact, both types ofcriminal groups certainly create network links in the process of drug distribution. For example, Chinese
traffickers groups distribute stimulants to Iranian traffickers groups via Boryokudan groups and Nepalesetraffickers groups distribute cannabis resin to Iranian traffickers groups. Moreover, there was a case of a
Boryokudan group that knowingly received drug offence proceeds from an Iranian trafficker group. In
addition, the connection between these groups might be more complicated because of the establishmentof a network among some groups in the global market.
Laos
Laos has no information about classical structure organized crime groups but group commission ofcrime does exist.
Pakistan
Pakistan is a victim country being used as a transit route for drug trafficking from Afghanistan to theEuropean markets. The drug trafficking organized crime groups exist in Pakistan: however, they do nothave a clear identity like in some countries.
Philippines
In recent years, domestic production of methamphetamine has become a growing problem, but mostof the supply is smuggled into the Philippines from surrounding countries, primarily the Peoples Republicof China as well as the origin of the precursor chemical. The Philippines also serves as a transhipment
point to further export methamphetamine to Japan, Australia, South Korea, the U.S., Guam, and Saipan.
Based on the results of the Intelligence Workshop conducted by the Philippine Drug Enforcement
Agency (PDEA) in 2002, 11 transnational drug syndicates were identified to operate in the country while
the number of local organized drug groups was pegged at 215.
Tanzania
There are organized criminal groups committing major frauds, illegal firearms dealings, poaching,corruption, violent crimes, financial and economic crimes, illicit drug trafficking, money laundering andterrorism. They are defined as being involved in a structured group of three or more persons, existing fora period of time and acting in concert with the aim of committing one or more serious crimes or offencesin order to obtain, directly or indirectly, a financial or other material benefit. Before 1985, organized180

125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
criminal groups operated locally. But now the scene has changed. They are becoming more sophisticatedand international especially in illicit drug trafficking, frauds and terrorism.
ThailandDue to its location close to the golden triangle, where large supplies of drugs are made for the world
market, organized groups of drug producers and smugglers are dominant and have network links to many
countries. In addition, since the country has a policy of welcoming tourists in order to help their economy,
many international criminal groups use such channels to enter into Thailand and spread over the country.
Bangkok has become a hub for global organized crime syndicates, which use the city to transport drugs,
people and firearms, and to set up international prostitution rings. Related crimes such as false
documents, fraud and money laundering increase their volumes consequently. In the tourist areas, forexample, Pattaya, Russians and Japanese criminal networks are established and link to groups in theirown countries. Human traffickers from China also use Thailand as the transit place to get false documents
for their customers before transporting them to a third country.

III. SITUATION AND PROBLEMS OF NEW INVESTIGATION TECHNIQUES
A. Controlled Delivery
1. Definitions and Essence of Controlled Delivery
Controlled delivery is commonly recognized as the technique of allowing illicit or suspectconsignments to pass out of, through or into the territory of one or more states, with the knowledge andunder the supervision of their competent authorities, with a view to the investigation of an offence and theidentification of persons involved in the commission of the offence. (See Article 2 (i) of the UN TOC
Convention.)
The UN TOC Convention requires State Parties to use the necessary techniques to allow for theappropriate use of controlled delivery, if permitted by the basic principle of its domestic legal system(paragraph 1 of Article 20).
The goals of controlled delivery are:(i) To broaden the investigation to higher levels of the criminal organizations(ii) To get additional evidence in cases concerning organized smuggling(iii) To get proof that the violations of law are intentional(iv) To discover storage places for smuggled goods and seize additional contraband(v) To detect the final destination of smuggled goods
The controlled delivery method could be utilized inside one country s jurisdiction or it could be
conducted with international cooperation by allowing controlled transportation of smuggled goods overthe borders of one or more countries.
Controlled delivery could be carried out by:(i) Recruiting a cooperative suspect after initial recovery of the contraband(ii) Using a blind courier , by covert surveillance of the smuggled goods without the cooperation of
the suspect, in which case the suspect does not know, that the contraband was discovered bycustoms officials or the contraband is smuggled by a courier company that has not been informedof the controlled delivery(iii) Using the cooperation of the courier company for conducting the controlled delivery operation
2. Current Situation
Several participating countries of the 125th UNAFEI International Training Course have utilized
controlled delivery successfully, bringing to justice the leaders of criminal groups rather than merelyarresting couriers or seizing drugs which unknown persons own. Controlled delivery has been used, not
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RESOURCE MATERIAL SERIES No. 65

only domestically but also internationally, in cases where the consignments aere delivered to othercountries. However, each country has somewhat different laws and approaches in this matter. For
example, there are two types of controlled delivery, namely live controlled delivery that allows theoriginal contraband to be moved to its final destination under control of law enforcement officers andclean controlled delivery, in which case law enforcement agencies remove and substitute drugs with aharmless substance before allowing the consignments to be delivered. In this connection, some countries
such as Egypt, Malaysia and Indonesia will allow only the live controlled delivery operations while some,such as Japan and Estonia, can accept clean and live operations. Thailand, which is in the front line in thefight against drug crimes, has just had controlled delivery provisions incorporated into her laws last year
and is in the process of using this method. Also, the scope of controlled delivery is different from one
country to another. In some countries, beyond drug trafficking, this technique is used to investigate othertypes of crimes such as illegal firearms trafficking and money laundering. When the controlled delivery
technique is employed for money laundering investigations, it appears that, in some cases, a money
remittance is allowed under the supervision of the authorities. The purpose is to get a clear picture of the
final destination of the money and the crime network.
3. Common Issues, Problems and Solutions(i) Live operations and clean operations
As mentioned above, the members of the group recognized that controlled delivery is one of the good
methods for arresting suspects and seizing illicit drugs. We also discussed the differences between the useof live and clean controlled delivery operations. In other words, we sought to determine which operation
would be more effective. With regard to both operations, we analyzed the advantages and disadvantages
as follows:
Advantages for live controlled delivery operations
・ Possibility of obtaining indefensible evidence that the suspects have conducted drug smuggling, inparticular the chance of disclosing the transaction of drug trafficking and of annihilating organizedcriminal groups
・ Reduction of the risk of controlled delivery operations being exposed by the suspects, especially incases in which the final destination of the delivery was unclearDisadvantages for live controlled
delivery operations
・ Burden of carrying out the surveillance・ Hazardous aspect of the disappearance of the drugs and the suspects Advantage for clean controlled
delivery operations
・ Prevention of the disappearance of the drugs or other smuggled itemsDisadvantage for clean
controlled delivery operations
・ Risk of disclosing the controlled delivery operation
・ Risk of losing the evidence of the fact that the suspect is conducting drug smuggling
As a result, it is always necessary to consider the checks and balances before law enforcement
agencies decide to launch controlled delivery operations. In addition, before performance of suchoperations, it will be necessary to collect and evaluate all available information on whether the delivery
situation is part of a systematic smuggling operation, if the recipient is a member of a criminal group andwhether he has a prior criminal record. Utilization of informants should also be considered. Before
arresting or approaching the offender, law enforcement agencies should analyze information about
him/her including their, contacts, means of communication and address to evaluate the possibility ofrecruiting the suspect after arrest. At this point it is to be decided, if the offender can be recruited for thecontrolled delivery or the controlled delivery should be carried out by covert surveillance of the offender
to the final destination of the smuggled goods.

182

125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE(ii) How to use the results of controlled delivery as admissible evidence in the trial stage
Controlled delivery is mostly conducted in the investigative stage of a criminal case for assembling
information to reach the criminal networks. Nevertheless, the officers who employ this technique must
carefully plan and prepare the operation in order to guarantee the success of the seizure and arrest andensure the evidence can be used at the trial stage. When law enforcement officers detect contraband, it isessential to mark the evidence, packages, containers, etc. to be able to identify them after seizure at the
final destination. The contraband should be tested, weighed and evaluated by credible experts. The parcel
or container should be photographed or videotaped before and after the search and after its preparation forcontrolled delivery. Each respective countries procedural law should be applied in order to guarantee theadmissibility of the evidence. In this phase of planning of the operation the customs- or police officers
should consult prosecutors to avoid misinterpretation of legal details and conduct the controlled delivery
in a way such that it can be used as admissible evidence in court. All necessary warrants to conduct
electronic surveillance or searches and seizures etc. should be obtained before carrying out the actual
operation.
(iii) The cooperation of concerned law enforcement agencies at the international level and national
level
Controlled delivery may be conducted within only the country where the drugs are detected or withthe cooperation of countries from where the drugs are originated, transited and where they are delivered
to the receiver. The major concern is that in order to get good results the controlled delivery should often
be done promptly and without any delay to prevent the awareness of targeted offenders. Therefore
cooperation of all concerned authorities is required. On the international level, the cooperation may beachieved through bilateral or multilateral agreements between countries, good contacts between law
enforcement agencies and by regular information exchange. It should be pointed out that in order to
conduct successful controlled delivery, the concerned countries should have already established good
relations before starting the process. It would be useful to have mutual understanding treaties or
guidelines beforehand for smooth cooperation among the concerned countries. The same approach can beapplied to domestic operations as well. Many authorities may be involved in conducting a controlled
delivery operation i.e. police, customs office, narcotics office, border guard, port officers, courier
services, telecommunication companies. Therefore, these authorities will have to cooperate with eachother. One way to organize smooth operations is to set up fundamental guideline for the concerned
authorities to be followed in a controlled delivery situation.
(iv) Utilization of cooperative offenders for controlled delivery
The cooperation of an offender to carry and deliver the detected drugs to his criminal network under
supervision of law enforcement officials is also recognized as one method of controlled delivery.
However, comprehensive prior arrangements among competent authorities will be needed before starting
this process. One of the difficulties in employing this technique is to negotiate with the offender for theircooperation. Some countries may provide an immunity system subject to their laws to facilitate suchcooperation. On the other hand, many countries do not have such a system and officers have to rely on theso-called gentleman s agreement in negotiations with the offender. Usually the operating officers may
not be able to give any promises to the offender. In this case it is essential for investigators to cooperatewith prosecutors, who have first hand knowledge of the sentencing system and who can influence thesentencing at the trial stage. If the respective country has a plea bargain system, the prosecutors could
directly inform the offender of the difference in imposed penalties in case of refusing or accepting
cooperation. In the absence of a plea bargain system the prosecutors may still indirectly influence thecourt proceedings.If the offender agrees to cooperate, investigators have to evaluate his/her characteristics
as to his/her ability to carry out orders and whether his/her unusual behaviour could jeopardize theoperation. Law enforcement officials should undertake this kind of an operation only in cases that they183

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are confident of the offender s reliability, because otherwise there is a significant risk of losing track of
the offender as well as of the controlled item. This is one reason why investigators often prefer clean
controlled delivery.
(v) Combination of controlled delivery with other investigation techniques
Besides being an independently recognized investigative method controlled delivery is actuallyconducted with a combination of different investigative and surveillance methods that are utilized tocontrol the movement of the item in question. The process of controlled delivery may be initiated on theinformation provided by the informants. The informants or undercover agents may also be used toaccompany the delivered item or the cooperating offender. Physical covert surveillance of the delivered
item or the criminal is often used. Electronic surveillance should also be an essential part of the delivery.
For example, if an electronic device attached to the delivered item could be used to position the locationof the item or notify the investigators of the disclosure of the item, it would make the controlled delivery
almost perfect. In such case the officials would know the appropriate time to enter the offender s house,
office or other respective location and arrest him with the evidence. However in most of the countries
regular investigators are not qualified to operate electronic surveillance equipment and therefore experts
or special units should participate in carrying out the operation.
(vi) Appropriate timing to enter the targeted house/location
The most difficult point of controlled delivery operations is to decide on the appropriate time to arrest
the offender along with the controlled item in order to create strong evidence. If the law enforcement
agency enters into the targeted house/location before the parcel is opened, the offender may raise an
excuse that the parcel is delivered as a mistake and he/she has an intention to return it to the courier
service. In addition, early arrest may cut off the offender from the criminal network or alert the higher
levels of his/her organizations, which the operation is intended to reach by employing controlled delivery.
On the other hand, the delay of arrest will increase the probability of the criminal s escape or losing trackof the offender and the controlled item. Appropriate timing of entering the house/location to make arrestor seizure, therefore, is of utmost importance. Nevertheless, officers should not enter the suspect shouse/location before he/she has completely opened the parcel. When the parcel has already been opened,
he/she cannot decline being the recipient. As aforementioned, law enforcement agencies may have to relyon an advanced electronic device to inform them of the right time to enter the offender s house/location
and arrest him with the incriminating evidence.
(vii) Limitations on the usage of the controlled delivery method
Controlled delivery, especially live CD, is an investigative method involving a high level of risk andrequiring vast professional skill and knowledge on the part of the investigator. When controlled delivery
is employed, we should consider the cost-effectiveness and the time frame constraints for this method
compared to other investigative techniques in advance. Nevertheless, we recognize it ought to be abeneficial technique to establish a link between the illicit drugs exposed and high-level criminals toachieve the goal of combating organized crime. In order to operate controlled delivery effectively, weneed to combine it with other appropriate techniques such as utilization of the informant, the undercoveragent and an electronic indicator for a parcel opened, and to fully conduct the follow-up investigation to
gain the evidence which can identify it as an organized crime. It is also critical to conduct the skill-up
training with sharing the best practice before launching the operation and to establish a close relationshipwith the related authorities for the realization of a speedy and smooth operation.
B. Electronic Surveillance and Communication Interception
1. Introduction
There is no concrete definition of this investigative technique. However, it is recognized that some184

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types of electronic devices such as audio recording, visual recording or wiretapping, will be employed in
the investigation. Utilization of electronic surveillance and communication interception are very usefulmeasures for obtaining information of the existing criminal activities and also being able to identify
future offences. It is one of the best methods of collecting critical evidence with low risk since theoperator and investigator can monitor from a remote distance. The evidence will be admissible andreliable for the prosecution and trial. On the other hand, the application of these methods is a very
sensitive issue due to the concern with abusing individual privacy rights.
The goals of electronic surveillance are:(i) To gather strong and precise evidence with low risk.
(ii) To expose the nature of a criminal offence (organizational structure, network, process, activity
and so on).
2. Current Situation
All countries of our group members cover electronic surveillance and communication interception as
an investigative technique within their legal framework. Nevertheless, every country, except Egypt, has
few cases of conducting wiretapping. One reason may be the safeguard of privacy rights so strict
conditions are applied. In concrete terms, all countries are able to use this technique but subject to various
conditions. For example, electronic surveillance in a private place such as a residence in the Maldives andJapan is disallowed. However, Egypt, Estonia and Thailand allow it upon permission from a judge while
in Indonesia the investigator in a drug case may conduct the surveillance and then submit a report to a
court for approval later. In public places, Indonesia, the Maldives, Thailand and Japan do not requireprior permission, but Egypt and Estonia require a warrant by a judge.
Beside the legal issues, another general constraint that every country is now facing is theinfrastructure and technology issues. Even though electronic surveillance is very effective, thegovernment has to invest a lot of money in order to employ high technology devices. In addition, newcommunication technologies are introduced to the world market many times a year, particularly multifunction wireless phones, which are used by the organized crime groups. The cyber world and Internet
makes money movement easily and can facilitate money laundering as well. The interception ofinternational electronic mail carriers such as Hotmail and Yahoo will need extra cooperation at theinternational level. Therefore, it is difficult for law enforcement agencies to keep up with the criminals
due to lack of expertise and a shortage of budget.
3. Common Issues, Problems and Solutions(i) Prior approval
In order to protect the rights of privacy of people, it is absolutely essential that permission is obtained
from a judge before starting the process of communication interception. In this case, Indonesia has a
special provision that grants the Chief of the National Police or the Prosecutor General to issue suchpermission. In addition, for the drug cases the investigators can wiretap telephones without warrant for a
maximum of 30 days and then submit a request to court for approval. In general, the request of aninvestigator to use this method will be strictly scrutinized by a judge or other authority before granting
permission. In most cases, the interception of either a mobile or fixed-line phone shall be equally subject
to the prior approval criteria. With regard to the interception of electronic communication like e-mail or
website tracing, prior permission is also required. However, in Estonia and Maldives this method isunavailable because of the infrastructural issue. On the other hand, Thailand has faced a technicalproblem regarding interception of pre-paid phones since there is no ownership registration for suchphones.
There are some different approaches among countries regarding electronic surveillance with theconsent of persons, such as an audio recorder or wireless microphone attached to an informant or
undercover agent, who will participate in the communication with an offender. Indonesia, Thailand and
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Japan do not require a prior warrant to do it in public places while Egypt and Estonia always need awarrant issued by a judge regardless of the location.
(ii) Scope of criminal offence
As mentioned, electronic surveillance and communication interception does affect privacy rights, thismethod should be executed when necessary. In other words, it should be conducted in critical criminal
investigations such as when other investigation techniques have not worked or appear unlikely to
succeed or would be too dangerous to try. In addition, it shall be applied to investigations in only serious
crimes or offences related to organized crime groups. Japanese law provides a clear framework ofapplicable crimes in which this method can be used such as offences relating to drugs, firearms, humansmuggling and organized homicide. Thailand currently can only use this method for offences under the
narcotic control law and the anti-money laundering act. Indonesia applies this method to only serious
crime cases (imprisonment over 5 years) and drugs cases.
(iii) Duration
The available period for conducting electronic surveillance and communication interception varies
from country to country. We found the range from ten days at the first stage in Japan up to a maximum of
90 days in Thailand. Mostly, the average available period is not over 30 days. In a particular case where
electronic surveillance is conducted in a public place and no prior permission is required there would beno time limit.
(iv) Approach to non-relevant information
When carrying out communication interception, it is very important to analysis the information
received as to whether it is useful and can be used as evidence or not. On the other hand, there will be a
lot of non-relevant information in the case i.e. social talk or private discussions. This information should
be deleted or cut off since it is generally not admissible in court. The disclosure of such information,even not related to the case, is prohibited to protect privacy rights. However, during electronic
surveillance and communication interception, if the investigator unexpectedly found information
involving other crimes or a plan to commit imminent crimes outside the scope of the permission, forexample, to commit some serious crimes such as murder or firearms trafficking. In this situation, there
will be a hard decision for the investigators to make. The official may opt to interfere to safeguard a
person s life but this may tip-off the suspect and make him aware of the communication interception. On
the other hand, such information gathered under the permission of one case may be not be admissible inanother case subject to the law of each country. The best solution in such a situation may be to establish alegal framework or guidelines which the investigators can follow. However, it will depend on case-bycase situation.
(v) Post-interception requirement
The process of post-interception is very complicated. In addition to sorting out the non-relevant
information, harmonizing the relevant information and making records, there are still some points ofconcern. We categorize them as follows:
Preservation of evidence
For keeping the eternal evidence, it should be required:- Wiretapping
・ Creation of a transcript and a summary report(Thailand and Japan - submitting a transcript to the court after that; Egypt - submitting a summary
report to the court after that)・ Sealing the record- Other devices (audio recording, visual recording)186

125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE・ Creation of a report and submission to a court- Wiretapping and other devices
・ Identification by voice analysis
Analysis of the record
Regarding the evidence acquired by those activities, officials should take the necessity action tofacilitate its use in a trial. The following action should be taken:
・ Translation of foreign languages (Introducing a system to secure competent translators)
・ Analysis of slang expressions by appropriate experts
・ Analysis of encryptions by appropriate experts(vi) Cooperation of communication carriers
Unless the provisions of laws clearly specify, the communication carriers such as Telephone
Companies or Webmasters will be reluctant to cooperate with the law enforcement. The carriers always
try to avoid access to their customers since they are afraid of probable litigation and losing customers.
The cooperation of the carriers will help reduce the time it takes to connect the intercepting device to thephone operating device. In Japan, particularly, an observer from the phone company is required to attend
the wiretapping with the investigator all the time. In the case of international electronic message carriers
e.g. hotmail or yahoo, cooperation may be sought from the local providers who subsidize the service fromsuch carriers.
(vii) Further action
From our discussion, we recognize that electronic surveillance and communication interception is an
important tool for law enforcement to get reliable information and evidence to combat serious crime.
With the different situations in each country, it is indispensable to explore such tools for further effective
use and each country may broaden the scope of their legal framework to facilitate such techniques while
paying heed to privacy rights. From a technical point of view, the government should consider allocatinga sufficient budget to employ any useful electronic devices to keep up with the criminal groups.
Investigators and relevant officials should also learn and be trained in these high technology techniques.
Additionally, officials who are engaged in wiretapping should be respectful of human rights, no matter
when, where and what he/she does.
C. Undercover Operations
1. Definitions and Essence of Undercover Operations
Undercover operations are the actions that are undertaken by law enforcement to infiltrate criminalorganizations, to disclose the mystery of the crime, and to arrest criminals by disguising themselves incivilian clothes, using fake IDs and engaging in criminal activities.
There are various types of undercover operations; for example, one of the simple undercover
operations is where an officer pretends to be a customer and buys drugs from pushers or drug traffickers,
and accordingly arrests them with search and seizure powers. Of course, there is a type of deep
involvement case, where undercover officers infiltrate criminal groups and become a member of thegroup in a more sophisticated manner and for an extended period, and gather information and evidence.
This type of operation enables the police to obtain information even about future criminal activities.
Undercover operations cover a wide range of the investigation area from intelligence-gathering toevidence-collecting.
The initial targets of this investigative technique are usually the big dealers or criminals . Then, theofficer(s) usually start going after the small fries, accumulating suspects and case materials as they go.
The police supervisor, and sometimes, prosecutors make a decision early on about whether enough big
cases will likely be revealed.
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One of the main purposes of undercover operations is to gather enough information to enable a
successful prosecution. This technique is useful to obtain physical evidence (by purchasing drugs orother contraband). However, it is believed that undercover operations are effective in combating crime
especially committed by members of organized criminal groups who conspire in secret. Therefore,
Article 20 Para 1 of UN TOC Convention encourages State Party to use undercover operations. In suchcases, without cooperation of the conspirator or insider, it is difficult to prove the clandestine criminal
activities.
2. Current Situation
Most countries have recently experienced a significant expansion in the use of undercover police
tactics as well as technological means of surveillance, especially in drug trafficking cases.
The variety of undercover operations is diverse. For example, in Egypt, the usual pattern is to bringthe undercover officer in as the girlfriend or boyfriend of an informant. Once it is clear to all the parties
involved that the officer is single again, another undercover officer is brought in the same manner. The
undercover officers use false names, false identifications, false household registration certificates andother false identification documents.
Most of the participating countries of the 125th UNAFEI Course use undercover operations.
However, as far as the countries of Group two are concerned, such a deep involvement of undercover
officers has not been experienced. One of the reasons is that such involvement is risky and dangerous forofficers. Another reason is the difficulty in proving the legality of the operation in case of such
involvement.
In Japan, in general, organized criminal groups called Boryokudan are tightly structured based on
personal trust, and therefore it is extremely difficult for undercover officers to infiltrate such strongly
united organizations.
Regarding money laundering investigation, storefront operations have been successfully conducted insome countries. In those cases, the undercover officers act on behalf of the criminals in placing or
layering the dirty cash, usually by collecting the cash from the suspects and moving it through theundercover channels to the bank account or other destination designated by the criminal. Even in sting
operations, the agencies set up a fake bank or firm, and they send money to destinations designated by thecriminal, until they finally determine the money laundering scheme and the location of the proceeds ofcrime.
3. Common Issues, Problems and Solutions(i) Legal issues
It is a common understanding that undercover officers are prohibited from inducing any plan tocommit a crime. The violation of this rule constitutes an entrapment defence.
The Supreme Court in the U.S. in 1992 held that law enforcement officers ...may not originate acriminal design, implant in an innocent person s mind the disposition to commit a criminal act, and theninduce commission of the crime so that the government may prosecute . Therefore, there are twoquestions: the first one is whether undercover officers induced the defendant to commit the crime. The
second one is, assuming the government improperly induced the defendant to commit the crime, whether
the defendant nevertheless was predisposed to commit the criminal act prior to first being approached bygovernment agents. In the U.S., inducement focuses on the government conduct, while predisposition
focuses on the defendant s actions and statements. Therefore, the mere presentation of the opportunity tocommit the crime does not constitute entrapment. Inducement now requires more than merely
establishing that an officer approached and requested a defendant to engage in criminal conduct. The
defendant must prove he/she was unduly persuaded, threatened, coerced, harassed or offered pleas basedon sympathy or friendship by the police.
On the other hand, the liability of undercover officers is also an issue. However, irrespective of the188125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
reasons, undercover officers should not be liable for their conduct, provided that the conduct is permitted
under the rules or regulations. If necessary, it is a must to give undercover officers immunity from civil
and criminal liability for actions undertaken in the course of undercover operations.
(ii) How to ensure appropriate operations
Although undercover operations can lead to a successful prosecution, there are various risks andheavy demands on officers. Undercover operations are one of the most notable exceptions to uniformed
duty and the most problematic area of law enforcement. There is always a risk that the officer s identity
will be disclosed. Of course, he/she may face unexpected situations at any time; for example, he/she may
be placed in a situation where they are compelled to break laws, even kill someone, by the demands of thecriminals. Especially in the case where the undercover officer is deeply involved in a criminal group for along period of time, he/she has to manage the numerous stresses inherent in this sensitive task.
Undercover operations require the officers to obtain special skills and experiences. In addition to that,
careful and well-organized planning and preparation is indispensable for ensuring successful operations.
In this context, it is essential to establish an appropriate guidelines for the use of undercover operations,like the Attorney General s Guidelines on Federal Bureau of Investigation Undercover Operations. Whatis allowed and what is not allowed for them should be instructed precisely, including the use ofgovernment money. For example, in a situation where an officer needs to maintain his/her credibility andcovert identity, he/she may be justified in participating in certain categories of criminal activities,
although the scope of such justification differs among countries. Needless to say, all situations cannot be
predicted; nevertheless, guidelines are still valuable for undercover officers by highlighting various
situations.
The authorization to initiate undercover operations is an important issue. In some countries, certain
types of sensitive undercover operations are required to obtain high level or even the highest levelapproval of the Justice Department, or the approval of a judge in advance.
It is also imperative that the undercover operations are closely monitored by the head of the agencies
and prosecutors to prevent any possible risks and problems. At the same time, it is the most crucial factor
to ensure the safety of the undercover officers. The other supporting officers always have to assist themand to be ready for action. The agent may reincarnate as a criminal or eventually become a double agent
if he/she is long and deeply involved in undercover operations. It is often pointed out that it may bedifficult to reintegrate the undercover officers into the law enforcement agency because his/her lifestylehas been totally changed.
Appropriate care should be provided not only during the operations but also after the operations.
Adequate training should be provided to undercover officers. This could give them the necessary skills,
as well as advice, to cope with highly stressful situations.
Recruitment is one of the major challenges. In some cases, the authorities need someone bold and a
new recruit may fit the bill. Recruits from out of town are sometimes preferred, as are ethnic-looking
recruits with foreign language skills and attractive females. The reason why new and inexperienced
officers are used is that someone who thinks, looks and acts like a police officer is not suitable.
It is important to consult with prosecutors and relevant agencies before stating undercover operations
in order to accomplish their mission.
In the U.S. any complex undercover operations are subject to review by an Undercover Review
Committee, which is a good tool to screen and monitor the undercover operations from both the legal andpractical point of view.
(iii) Combination of other techniques
The use of reliable informants in collaboration with undercover operations to reveal and to identify
criminal activities is very useful. In addition, the attachment of a listening device, a transmitter or any
other form of electronic surveillance, where it is not possible to be identified by the offender during
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undercover operations can be useful. Such recording devices can demonstrate not only strong evidence
to prove the fact but also legality of the operation itself.
D. Immunity System
1. Definition and Goals
The concept of immunity deals with an agreement binding prosecutors/competent authorities toterminate a present prosecution or to undertake not to conduct a future prosecution in respect of a
specified offence or offences, in return for giving testimony in court. This system compels a person totestify in return for the promise that he/she may not be prosecuted in the future. There are a variety oftypes of immunity: in some countries such as the U.S., cooperation agreements between prosecutors andsuspects is available, in which if the suspect agrees to plead guilty, to truthfully cooperate with theprosecution and to testify in court, the court will reduce the sentence based on a request by theprosecutors.1
Immunity is one of the successful tools to enhance the potential of witness cooperation for combatingorganized crime, including drug trafficking and money laundering. Without the testimony of witnesses,
we cannot always convict a person in court proceedings. If we obtain the cooperation of key witnesses in
return for granting immunity, we can then identify other criminals, and even reach persons of greater
culpability in organized criminal groups. When a co-accused is willing to cooperate and testify, it will
significantly contribute to reveal the whole story of the crime committed. Since the motivation forcooperation by a criminal is, in reality, to get lenient punishment or non-prosecution for his/her crime, agrant of immunity can facilitate the cooperation.
2. Current Situation
Some participating countries of the 125th UNAFEI Course such as Indonesia, Egypt, India, Pakistan,Philippines and Thailand, have an Immunity System.
As for Indonesia, Law No. 15/2002 - Section 43 stipulates that the government has to guarantee that areporter who reported the money laundering crimes cannot be prosecuted because of their reports or their
testimony.
Regarding India, NDPS Act 1985 section 64 (1) provides that the Central Government or the State
Government may, if it is of the opinion that with a view to obtaining evidence of any person appearing tohave been directly or indirectly concerned in or privy to the contravention of any of the provisions of thisact or of any rule or order made there under it is necessary or expedient to do so, tender to such person
immunity from prosecution for any offence under this act or under the Indian Penal Code condition of his
making a full and true disclosure of the whole circumstances relating to such contravention.
In the U.S., immunity is often utilized. In the U.S., there are two types of immunity: one istransactional immunity which protects a person from subsequent prosecution for any offence involved.
Another is use and derivative use immunity which provides that a person s testimony shall not be usedagainst him/her; however, he/she may be prosecuted for any crime based on other evidence. In the caseof use and derivative use immunity, it is required that the evidence that the prosecution proposes to use isderived from a legitimate source wholly independent of the compelled testimony. As far as federal
criminal procedure is concerned, it is required to seek a court order to compel testimony when immunity
is granted. In the U.S., the immunity system has proved to be effective in detecting organized criminalgroups.

1

Article 26 Para 3 of UN TOC Convention suggests Each State Party shall consider providing for the possibility, in accordancewith fundamental principles of its domestic law, of granting immunity from prosecution to a person who provides substantial
cooperation in the investigation or prosecution of an offence covered by this Convention .

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Immunity from liability for crimes committed is not available in the Republic of Estonia. This rule
does not apply only to crimes that have been committed on the basis of the permission issued by the court
to imitate a crime. Imitation of a crime is an investigative tool provided by the Surveillance Act and isutilized mainly as a legal basis for undercover operations or controlled delivery. Prior to September 1,
2002 section 501 of the Criminal Code applied in which prosecutors could apply to the court for the
release of a convicted offender from punishment if important evidence provided by him/her resulted in
the discovery of the truth and the conviction in a criminal case or cases of another person/persons. This
provision can still be used, if the offender provided important evidence before September 1, 2002. One
possible measure to secure cooperation of offenders is the utilization of the plea agreement systemprovided by the Estonian law of criminal procedure. Namely prosecutors can take into consideration theoffender s cooperation while proposing a sentence during the process of plea bargain negotiations or toreach a plea agreement with one offender and afterwards summon that offender as a witness at the trial ofother perpetrators of the same crime.
On the other hand, some countries such as Japan and the Maldives, have no immunity system or any
other similar system. For example, in Japan, according to the precedent, a confession is not admissible if
it was induced by a promise offered by the police officers or prosecutors that they would not be
prosecuted, and therefore an immunity system is deemed inconsistent with this rule.
3. Common Issues, Problems and Solutions
Although an immunity system could be utilized to effectively tackle organized crime, there are stillsome concerns for the introduction of immunity.
(i) Principle of equality
Under an immunity system, real criminals are actually immune from prosecution and punishment insome cases. This may raise an issue of whether this is unfair or not, or this is acceptable or not from thestandpoint of realizing justice.
(ii) Public perception
With an immunity system it is recognized that the state makes a deal with criminals. In countries
where plea-bargaining is not available, such kinds of deals may not be acceptable for the citizens. Since
criminal justice systems are different from one country to another because of each country s history,
culture and concepts, any particular system should be consistent with their citizens attitude toward crimeand punishment.
(iii) Possibility of abuse of the power
If prosecutors are careless or rely too much on immunity, people may lose confidence in the criminal
justice system and dilute the deterrent effects which criminal laws have.
Even though immunity is introduced or utilized, it is important to carefully review whether public
interests of justice derived from granting immunity to a person outweigh the mere prosecution of such aperson or not. The major factors to be considered in measuring the relevant interests should be as
follows; (a) the seriousness of the offence, (b) the importance of the evidence or assistance, (c) the
culpability of the person seeking immunity and his/her criminal history, (d) the credibility of thetestimony of the person seeking immunity, (e) whether protection of the public generally would be better
achieved by the proffered assistance or by prosecuting the person seeking immunity, (f) whether the
person seeking immunity is an accomplice who will be obliged to testify while charges against him/her
are pending, and (g) the perceived interests of any victims.
In this connection, it could be also better to establish clear guidelines and regulations for granting
immunity in order to ensure its fair and appropriate application, like the United States Attorney Manual.
In addition to immunity, Article 26 Para 2 of the UN TOC Convention states that each state party shall191

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consider providing for the possibility of mitigating punishment of an accused person who provides
substantial cooperation in the investigation or prosecution of an offence covered by this Convention.
Even though immunity or a cooperation agreement is not used, due consideration to such substantial
cooperation is of course fair and encouraged, and it will be beneficial to secure cooperating witnesses as
well.
E. Witness Protection Programme
1. Introduction
It is recognized that a witness is an essential factor to severely punish the members of an organizedcriminal group. As a result of the successful proof of the facts by a witness s testimony in court, it could
positively eradicate them. Therefore, witness protection is indispensable to protect a witness in theprocess of criminal investigation and trial.
For example, there are many types of threats against witnesses: threatening letters sent by theorganized criminal group, stalking around his/her house, and drive-by shooting at the witness s house.
Ultimately the group may try to murder the witness.
It is therefore, necessary to completely protect the witness and his/her family from fear of reprisal at
the hands of the organized criminal group.
The style of witness protection is different between each country. We recognize that in somecountries witness protection programmes are provided for all crimes and in other countries it is available
only for specified serious crimes.
2. The Existing Picture of Witness Protection Programmes
There are various types of witness protection programme. The typical measures of witness protection
are as follows:-

Concealing identity
Changing identity
Relocation
Escort and protection by police-

Social psychological and medical assistance
Providing suitable shelter
Financial aid, support and assistance
Helping the witness find a job

The measures in the trial stage are as follows:- Witness attendants- Screen to make witnesses invisible to defendant and spectators- Video link system
Each measure has some advantages and disadvantages. For example, concealing identity may be aneffective measure to prevent threats and violence to the witness, but it may be unfair to the rights of the
defence. The important point to note is to balance the necessity of witness protection and the rights of the
defence. Some countries make use of changing identity and relocation as proficient methods of witness
protection, but it cannot be utilized in small communities or if the witness doesn t want to do so. For
example, in some countries like Thailand, people have strong family and community bonds and mostwitnesses may not wish to relocate to another area. Some measures such as relocation are expensive and apolice escort requires manpower. With regard to financial support, it might happen that a witness will
give false testimony to enjoy the benefits of protection. So we need to consider whether or not the case isworth taking such measures and how long assistance should be given.
Another significant aspect of witness protection is whether or not it should be extended to thewitness s family members or persons in a close relationship with the witness.

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3. Current Situation(i) Thailand
In Thailand, the Witness Protection in Criminal Case Act will be effective by the end of 2003. Under
this Act, the responsibility of witness protection will be vested in the Witness Protection Office, Ministryof Justice (pending establishment). This Act will provide general and special measures for witness
protection. In general cases, the investigator, prosecutor, court or the Witness Protection Office, at therequest of a witness or related person that they may not be safe, will provide suitable protection to such
persons. The protection includes police escort and other measures. Moreover, in some specific cases i.e.
(1) offences relating to drugs, anti-money laundering, anti-corruption, customs, (2) offences against state
security, (3) offences relating to sexual exploitation, (4) offences relating to organized criminal groups,(5) offences which have an imprisonment term of at least ten years or more and (6) any case which the
Witness Protection Office deems fit, a witness may receive special protection. The Minister of Justice
may order the use of special measures for witness protection. The measures include relocation of awitness residence, changing the witness identity and record, providing living allowances for up to one
year and may be extended but for no longer than two years, and job training or education. An important
point to note in this Act is that both general and special measures can be extended to the witnesss spouse,
parents, children and persons in a close relationship with such witness, subject to their consent.
(ii) Estonia
In Estonia, with its small area and population, it is almost impossible to implement a classical modelof witness protection where a key witness is given a new identity, relocated and provided with a new job
inside the country. With relocation to other countries the language issue could become an obstacle.
Currently negotiations are being held with neighbouring countries to set up a joint witness protection
system or provide possibilities for relocating witnesses on a bilateral basis. Also a law is being drafted toprovide the necessary legal framework for witness protection. Estonian law does not currently include
special provisions for physical police protection of witnesses, safe houses or any other forms of
supporting witnesses. In practice it is left up to the goodwill and creativity of law enforcement agencies
and officers, as to how they can guarantee the safety of people whose testimony is essential for successfulprosecution. In this respect it is vital for police officers and prosecutors to work together and decide
which precautions are necessary to take. It is becoming more and more usual for police officers toaccompany important witnesses to trial, to drive them to the courthouse and back in case of a possible
threat to their safety. Often plain clothes policemen just casually watch the court proceedings as common
spectators or move around in the lobby of the court building where witnesses are waiting to be called totestify, to detect and prevent any attempts on the part of criminals and their associates to approach andinfluence the witnesses before giving their testimony. Police safe houses and apartments also exist in
reality and 24- hour physical protection is possible but not often applied because of the lack of manpower
and financial resources. More commonly witnesses are advised to stay with their friends or relatives
before trial and are instructed to contact investigators or prosecutors immediately in case of any
suspicious activities.
The most useful tool of witness protection in Estonia is the provision that allows a witness to remain
anonymous if he/she has a justified reason to be afraid for him/herself or the well being of his/her
relatives. The interrogation record (witness statement given at the preliminary investigation) of ananonymous witness is enclosed in the criminal file under a fictitious name and does not bare the signatureof the witness. A sealed envelope with information concerning the name and contact information of thewitness declared anonymous is safely located in the vault of the investigator and later in that of the court.
In practice the envelope also contains the original interrogation record that is signed by the witness, so thecourt can make sure that the statement enclosed in the case file has actually been given by the witness andhas not been manipulated by the police. Interrogation of an anonymous witness in the court is conducted
separately, in the presence of only the panel of the court. This usually takes place on a different date than193

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the main court session and often not even in the court building. Defence attorneys and prosecutors mayquestion the anonymous witness in writing through the court. The court has the right to refuse to ask thewitness any questions that might reveal his/her identity. After the new Code of Criminal Procedure enters
into force on July 1, 2004 the questioning of anonymous witnesses at trial will be done by telephone by
the court and the competing parties will still have to submit their questions to the court for evaluation andselection. There have been several problems implementing the anonymous witness system and currently
higher courts are trying to limit the exploitation of anonymous witnesses relying on the precedents of theEuropean Court of Human Rights. The basic limitation is that a guilty verdict cannot be based exclusively
on statements of anonymous witnesses. The courts have also made it clear that even in the interest ofprotecting the witness the police cannot create several anonymous witnesses out of one person, also it isprohibited for a witness to give different statements under his/her own name and as an anonymous
witness.
(iii) Other Countries
Egypt does not have specific laws including provisions for a witness protection programme andguidelines on how to utilize and coordinate witness protection, but in practice witness protection has
been carried out, for example, the witness home has been watched, they have been escorted to the courtby police and the Ministry of Social Affairs has helped them find a job and so on. However, changing
someone s identity cannot be used even in the interest of witness protection.
In Indonesia, they have witness protection programmes concerning terrorism crime and human rights
crime. Protection is given to witnesses, victims, investigators, prosecutors and judges, and also can beextended to their families. The protection includes protection of life and property, securing their identity
and mental care if necessary2. Under Law No. 15/2002 Sec. 42 concerning Money Laundering crimes,
protection will also be given to witnesses.
In Japan, the Code of Criminal Procedure was amended in 2000 to employ a new witness protection
programme at the trial stage. The aim of the amendment is to reduce the mental burden of a witness. The
outline of the amendment is below.
a) An attendant of the witness may be allowed in the course of examination (Art.157-2).
b) The setting up of a screen between a witness and an accused or/and between a witness andspectators may be allowed in the course of examination (Art. 157-3).
c) A video linked method of examination, where the witness (being out of the courtroom) testifies tothe questioner (being in the courtroom) through a video link, may be allowed in the course of
examination (Art. 157-4).
In the Maldives, there is no special provision for witness protection, and actually there are few cases
in which witness protection is needed. But the Maldives is now exploring witness protection programmes
in order to make provisions for the future.
4. Conclusion
Witness protection covers a wide range of arrangements from formal witness protection programme to
informal or temporary assistance such as police escort to and from trial. The methods of protection will
depend on the degree of the fear and apprehension of witnesses as well as the level of the possibility of
any types of violence or threat against them in each case. In addition, situations in this regard are different
among countries.
It is necessary to make guidelines for witness protection including the scope of the persons to beprotected and the methods available, because the issue of unfairness may arise without such guidelines.

2

PERPU NO.1/2002 Sec.33-34 concerning terrorism crime and under Government Regulation No.2/2002 Sec. 2-7 concerning
protection of victim and witness method in Human Rights Crime.

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In addition, it may be necessary to establish a committee that decides who should be protected and whichkinds of methods should be taken, and then checks the procedure. This system will also be useful in terms
of preventing the abuse of power.
Since witness protection is crucial to addressing organized crime, it should be carried out as much as
possible in accordance with the needs of each witness, taking into account the above-mentioned factors. It
should be noted that close communications with the witnesses are essential not only in ascertaining theirneeds but also in obtaining and maintaining their cooperation.
F. Shifting the Burden of Proof
1. Introduction
There are two interpretations regarding the burden of proof in general: one is the legal burden of
proof, which means the legal obligation of a party to meet the requirement of a rule of law that a
particular fact must be proved either by a preponderance of the evidence or beyond reasonable doubt.
This burden is known as the burden of persuasion in which a party must persuade a judge or jury that thealleged fact occurred. Another is the evidential burden, which means the actual obligation to produce
some evidence to support an argument in relation to the existence or non-existence of a particular fact.
The evidential burden may shift back and forth between the parties as the trial progresses; however, sucha shift does not affect the legal burden of proof. We here focus our discussions on the shift of the legal
burden of proof.
Even, as for the legal burden of proof, the shift of the burden of proof covers various kinds of rules 3.
One example is a rule that the burden of proof concerning a particular element (i.e., mens rea)constituting an offence is placed on the defendant by law. Another example relating to such a shift is arebuttable presumption that shifts the burden of proof, in which in case the basic fact is proved, the otherrelevant fact is then presumed by law and this presumption imposes on the party against whom it operates
the burden of proof as to the non-existence of the presumed fact. In this context, article 5 para. 7 ofVienna Convention of 1988 requires State Parties to consider the possibility that the onus of proof isreversed regarding the lawful origin of alleged proceeds liable to confiscation, to the extent that suchaction is consistent with the principles of its domestic law. The UN TOC Convention Article 12 Para 7
also provides similar content.
2. Current Situation
The fundamental principle in the constitution of many countries underlines the right of a suspect ordefendant to be presumed innocent unless he/she is proved guilty. Among the participating countries inour group, the Maldives is the only one country that does not have such a presumption in its laws. Whenthe prosecutor indicts the defendant in the Maldives, the prosecutor will submit all the evidence to thecourt and then leave it to the court to conduct a hearing from the defendant, who has to prove his
innocence. In other countries, the due process of law makes the burden of proof in criminal cases vest on
the public prosecutor. Nevertheless, some countries have a provision of shifting the burden of proof inparticular criminal cases to the defendant. For example, in Estonia, judges in court proceedings
concerning tax fraud offences have been of the opinion that in certain cases the burden of proof lies withthe accused at trial. Indonesia has similar provisions (Section 35 Law No. 15/2002 concerning money
laundering crimes and Section 74-75 Law No. 22/1997 concerning narcotics crimes). India also has
provisions in some laws to shift the burden of proof 4. In Japan, it is exceptionally permitted by the laws3

According to Black s Law Dictionary, the shifting of the burden of proof means transferring it from one party to the other, orfrom one side of the case to the other, when he upon whom it rested originally has made out a prima facie case or defence byevidence, of such a character that it then becomes incumbent upon the other to rebut it by contradictory or defensive evidence.

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to shift the burden of proof onto the defendant only if there is a reasonable ground to do so. Article 14 of
the Special Narcotics Law provides for a presumption where any property obtained during a period ofdrug trafficking or smuggling conducted repeatedly and continuously shall be presumed to be illicit
proceeds if the value of such property is deemed to be unreasonably large in the light of the offender soccupation or the offender s receipt of any benefit under any law or regulation during such period.
Prosecutors have to prove that the defendant was repeatedly and continuously involved in drug trafficking
over a certain period, the particular property was obtained during that period, the amount of his/her
legitimate income during that period and such property is unreasonably large from the viewpoint of
his/her working situation; the defendant then has to prove that such property was derived from legitimate
origins. There is a reasonable ground to presume that such unreasonably expensive property obtained
during such period is derived from drug trafficking and therefore this rule does not put too heavy a burden
on the defendant because he/she can easily explain the origin of his/her own property. This rule isapplicable to the offence of money laundering.
3. Common Issues, Problems and Solutions(i) Unconstitutional controversy
Shifting the burden of proof to the defendant is still a highly controversial subject. We have discussed
and found that, in the main criminal cases where the punishment is imprisonment or more severe, shifting
the burden of proof is nearly impossible except in the unique systems in some countries, as mentioned
above. However, in the case of criminal or civil forfeiture of proceeds of crimes derived from drug
offences or transnational organized crime, it is possible to apply this concept as the Vienna Convention
1988 and the Palermo Convention 2000 have recommended. This concept has been transferred into thedomestic laws of many countries such as India (Section 68-J of the Narcotic Drugs and Psychotropic
Substances Act 1985), Thailand (Section 29 of the Act on Measures Against Narcotics Offence), andJapan (Article 14 of Special Narcotics Law).
(ii) Level of Proof
Generally the standard of proof in criminal cases must be beyond reasonable doubt. Unless the burdenof proof is shifted, the prosecutor will have to prove the criminal case for the purpose of punishing thedefendant and confiscating the proceeds of crime up to the same level. When the laws accept the shifting
burden of proof in the case of the confiscation of the proceeds of crime to the defendant, the prosecutor
will be relieved to some extent; however, he still needs to prove a prima facie case.
G. Conclusion
The current paper mainly emphasizes and explores the utilization of special investigative techniquesin the battle against organized crime. These techniques, if used in a calculated and professional manner,
could prove to be very successful in order to broaden the investigations to higher levels of criminalorganizations. On the other hand no judicial decision can be based on only a single piece of evidence.
Therefore it is important to realize that one successful operation of controlled delivery, electronic
surveillance etc., might not be sufficient to secure the conviction of the offenders. Special investigative

4- Narcotic Drugs & Psychotropic Substances Act 1985, Sec.35 In any prosecution for an offence under this Act, which
requires a culpable mental state of the accused, the court shall presume the existence of such mental state but it shall be a
defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in thatprosecution.
-The Prevention of Money-Laundering Act 2002, Sec. 24 when a person is accused of having committed the offence under
Section 3 (money laundering), the burden of proving that proceeds of crime are untainted property shall be on the accused .

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techniques should always be supported by effective utilization of conventional investigative tools. It isalso obvious that the scope of special investigative techniques covered by this paper is not final and thearsenal of law enforcers must always be creatively supplemented by new methods in accordance with thetrends and developments of the criminal world.

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Group 3

EFFECTIVELY TRACING THE PROCEEDS OF CRIME,
FOCUSING ON COUNTERMEASURES AGAINST MONEY LAUNDERING

Chairperson
Co-Chairperson
Co-Chairperson
Rapporteur
Co-Rapporteur
Co-Rapporteur
Members

Mr Vilavath Thephithuck
Mr Jalalludin Bin Abu
Mr Tadayuki Sawada
Mr Esaka Deus Ndege Mugasa
Mr AsraMr Takashi Furusaki
Mr Sibounzom Bounlom
Mr Shozo Hirata(Laos)(Malaysia)(Japan)(Tanzania)(Indonesia)(Japan)(Laos)(Japan)Visiting Expert

Mr Hans G. Nilsson(EU)

Advisers

Prof. Senta KeisukeProf. Kei Someda
Prof. Tamaki Yokochi(UNAFEI)(UNAFEI)(UNAFEI)

I. SITUATION ON MONEY LAUNDERINGThe group examined the situation of money laundering in the thirteen participating countries, basedon the fact sheets prepared by the group and filled in by the participants of the 125th International Training
Course.
Out of thirteen participating countries, eleven countries have legislation criminalizing moneylaundering activities. In most cases, the predicate offences included drug offences and serious offences
listed in the legislation. The number of serious offences listed as predicate offences varied from aroundten to more than one hundred. In one country, all criminal offences are predicate offences for money
laundering.
Some countries have dealt with about sixty money laundering cases since the enactment of their antimoney laundering laws. But in many states, concrete statistics on money laundering cases are yet to beestablished, because their money laundering legislation is quite new. However, although not formallycharged, many participants stated that money laundering activities were found in their respective
countries, including those countries where money laundering is not yet a criminal offence. Someparticipants pointed out that most money movements are made not through financial institutions likebanks, but via more informal channels or by cash couriers, and thus it is very difficult to obtain
information on money laundering activities.
Some countries reported that their money laundering legislation is under review to more effectively
fight against it. Countries who have not yet criminalized money laundering are now working to introduce
new legislation or decrees, in order to criminalize money laundering and establish a Financial Intelligence
Unit (FIU).

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II. PROBLEMS IN RELATION TO CRIMINAL INVESTIGATION OF
TRACING MONEY, AND ITS SOLUTION, INCLUDINGCOOPERATION WITH FINANCIAL INSTITUTIONS
A. Problems
The group identified the following issues as problems in the criminal investigation of tracing money.
1. Procedures in Accessing Bank Data and the Issue of Bank Secrecy
It was observed that in some countries law enforcement officers are facing difficulties in obtaining thecooperation from banks and other financial institutions because these institutions decline to cooperate,
invoking bank secrecy. In obtaining bank records for the purpose of criminal investigation, somecountries have procedural requirements that could be a burden to law enforcement authorities, such as theconsent of the central bank, or long time and high degree of evidence needed to obtain a court order forthe production of bank records. Some participants stated that in practice it is not difficult to obtain theconsent from the central bank, but some participants pointed out that in some cases the requirement of theconsent or the court order would be a burden for law enforcement authorities dealing with transnationalorganized criminals, who make the best use of advanced technology and move money frequently andquickly.
2. Lack of Confidentiality among some Members of the Financial Institutions and Law Enforcement
Agencies
Even if there are legal frameworks to ensure the cooperation of the financial institutions, the fact thatthe investigation on a certain bank account is going on could be leaked to the person holding the account.
This can be done intentionally by corrupt bank officials or law enforcement officers, or inadvertently byan inappropriate processing by banks of the inquiry from investigators. For example, if a bank manager
sends a copy of the investigative inquiry to its all branch offices via facsimile without any security
measures, this inquiry can be seen by any employee and the risk of information leak would be very high.
3. Discretion of some Financial Institutions to Report Suspicious Transaction to FIUs
It was pointed out that if the rules governing the Suspicious Transaction Reports (STR) is not clear
enough, there is a danger that this could be abused by the financial institutions. Bank officials might
decide not to report a suspicious transaction by their clients by inappropriately interpreting the rules on
STRs.
4. Lack of Authority to Apply New Investigative Techniques
Investigative techniques such as the interception of electronic communication, undercover operations
and surveillance are very effective tools in the fight against money laundering. However, many countries
lack sufficient legal provisions authorizing law enforcement agencies to conduct these measures.
5. Lack of Special Skills in Accountancy or Information Technology among Law Enforcement Agencies
or FIUs
In analyzing financial documents such as bank records and accounting books of corporations, special
knowledge and skills in accountancy are essential. Many participants stated that the law enforcement
agencies and FIUs in their countries do not have enough staff members who have these skills. The samecan be said concerning the knowledge and skills in information technology, which is also essential indealing with sophisticated criminals.

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6. Non-Bank Financial Institutions, Alternative Remittance System (ARS) and Cash Transactions
It was noted that some countries do not have appropriate regulations to control non bank financial
institutions. Furthermore, the group agreed that there are many methods used to move money other thanusing the financial institutions, such as by using professionals (lawyers, notaries public, accountants etc.),
resorting to ARS including hawala, hundi or other types of underground banks, or simply moving
cash by cash couriers. This is eminent in countries without developed financial systems, but it is also
popular in countries which have a sophisticated network of financial institutions.
7. Absence of Anti Money Laundering Laws or FIUs
Above all, it was noted that some countries do not have FIUs and/or anti-money laundering laws,
although they are the essential tools in the fight against money laundering. Lack of political will was
identified as one of the reasons.
B. Solutions
The group discussed how to solve the above mentioned problems and came to a conclusion that thefollowing measures should be considered by countries to effectively cope with money laundering. It
should be noted that these measures are closely related, depending on each other.
1. Introduction of New Laws or Revision of the Existing Laws
First of all, countries without anti-money laundering laws should take steps to enact such laws as soon
as possible, and countries which do not have FIUs should have laws or regulations establishing them(problem (g)).
Countries which already have anti-money laundering laws and FIUs should consider introducing orrevising laws with a view to:(i) expanding the scope of the predicate offences (general);(ii) introducing new offences, criminalizing such conduct as the leakage of information or dishonest
STR reporting by bank officials (problem (b) and (c)), or illegal ARS (problem (f)) ;(iii) providing a legal framework for the cooperation between agencies and financial institutions
related to anti-money laundering activities (general);(iv) introducing clear standards for STRs (problem (c))(v) providing a legal basis which allows law enforcement officials to utilize new investigativetechniques (problem (d))(vi) establishing supervisory systems for non-banking financial institutions, professionals, legal ARS
and cash transactions (problem (f))(vii) providing fair and effective measures for investigation authorities to obtain bank records
promptly (problem (a))
2. Awareness Raising
In order to have the necessary laws or regulations mentioned in (a) above approved by the legislature,
it is essential to obtain understanding of ministers and high ranking officials, law makers, interested
groups such as lawyers and financial communities, and public in general. Thus it is very important tolaunch an active awareness raising campaign to promote the common understanding that anti-money
laundering measures are necessary (related to solution (a))The understanding of the public and thefinancial institutions will also be essential to enhance the cooperation of the financial institutions to thelaw enforcement authorities, as well as efficient STRs (problem (b), (c)).
3. Capacity Building
Training of law enforcement and judicial officers and staff of FIUs to provide them with skills andknowledge in the investigation of money laundering, accounting and information technology is very200

125TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
important to enhance their capacity. Measures should also be taken to provide them with sufficientequipment, especially Information Technology (IT) tools (problem (e)).
4. Establishment of a Regime for Cooperation and Coordination between Law Enforcement Officials andOther Relevant Agencies, Including the Financial Institutions
Having laws on paper is not enough to ensure the cooperation and coordination of activities in thefight against money laundering, including the investigation to trace the money. An effective regime toenhance the cooperation and coordination between law enforcement officials and other relevant agencies,
including the financial institutions, should be established. This could be realized, for example, by
establishing a coordination committee of agencies concerned.
5. Ratification of the UN Conventions
The United Nations Conventions, especially the 1988 United Nations Convention Against Illicit
Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna Convention) and 2000 United Nations
Convention Against Transnational Organized Crime (the Palermo Convention), are very useful
instruments in combating money laundering. In order to ratify these Conventions, countries have to enact
laws to implement their obligations. They will serve as guidelines in drafting laws (solution (a)), and canbe used in awareness raising campaigns to enlighten the public, officials, lawmakers and interested
groups that these Conventions are adopted by the General Assembly, thus the de facto global consensus(solution (b)).

III. ESTABLISHMENT OF LEGAL FRAMEWORKS (IMPLEMENTATION OF THE
RELEVANT UN CONVENTIONS AND OTHER INTERNATIONAL
STANDARDS) AND ITS PROBLEMS AND SOLUTIONS
A. Expansion of Predicate Offences for Money Laundering
1. Four Approaches to Define Predicate Offences
On this item the group deliberated on what are the predicate offences. As per the Palermo Convention
the term is defined as follows:
Predicate offences shall mean any offences as a result of which proceeds have been generated may
become the subject of an offence as defined in article 6 of this Convention1.
The Convention further defines and obligates States Parties to the convention to criminalize
laundering of proceeds of crime2. The offences are extended to criminalization of participation in an
organized criminal group3, corruption4 and obstruction of justice5 respectively, and also to all serious
crime which conduct constitute an offence punishable by a maximum deprivation of liberty of at least
four years or a more serious penalty6. Transnationality or involvement of an organized criminal groupmust not be made elements of these offences in domestic laws7.

1
2
3
4

Article 2 (h) the Palermo Convention.
Article 6, ibid.
Article 4, ibid.
Article 8, ibid.

5
6
7

Article 23, ibid.
Article 2 (b), ibid.
Article 34 (2), ibid.

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The group in their discussion came to the conclusion that there are four approaches which states apply
as far as predicate offences are concerned namely:(i) All crimes Approach(ii) List Approach(iii) Threshold Approach(iv) Mixed Approach meaning both list and threshold approaches
On the other hand the FATF 40 Recommendations (Financial Action Task Force Recommendations) 8
on the scope of the criminal offences of Money Laundering stipulate that:・ Countries should criminalize money laundering on the basis of the Vienna Convention and the Palermo
Convention.
・ Countries should apply the crime of money laundering to all serious offences with a view to including
the widest range of predicate offences. Predicate offences may be described by reference to all
offences or to a threshold linked either to a category of serious offences or to a penalty of
imprisonment applicable to the predicate offence (threshold approach) or to a list of predicate offences
or a combination of these approaches.
・ Where countries apply a threshold approach, predicate offences should at a minimum comprise alloffences that fall within the category of serious offences under their national law or should include
offences which are punishable by a maximum penalty of more than one years imprisonment or for
those countries that have a minimum threshold for offences in their legal system, predicate offences
should comprise all offences, which are punishable by a minimum penalty of more than six months
imprisonment.
・ Whichever approach is adopted, each country should at a minimum include a range of offences withineach of the designated category of offences9. Predicate offences for money laundering should extend to
conduct that occurred in another countries, which constitute an offence in that country, and which
would have constituted a predicate offence had it occurred domestically. Countries may provide thatthe only prerequisite is that the conduct would have constituted a predicate offence had it occurreddomestically.
・ Countries may provide that the offence of money laundering does not apply to a person who
committed the predicate offence where this is required by domestic law10.
Afterwards the discussion geared on the difficulties and the group earmarked the following:
The list approach seems to be more practical, since it is limited in scope hence making it easier for thelegislature to approve the bill.
On the threshold approach it was noted that if the minimum period of the deprivation of liberty is low,
this might cause difficulties for the legislature to approve the bill.

8

All FATF recommendations quoted in this paper are those which were revised in June 2003.

9

Designated categories of offences are listed in the Glossary to the newly revised FATF 40 Recommendations.

10

Last paragraph of FATF 40 Recommendation 1.

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Theoretically, both the all crime approach and threshold approach have some questions, i.e., there areother offences such as infanticide, rape, grievous harm, which don t generate profit. There is a possibilityof public concern that authorities abuse their powers, leading to some criticism from the pressure groups.
In addition, it might increase the workload of law enforcement agencies and judicial officials as well;hence the need for more personnel and equipment, especially in countries where the legality principle isapplied.
2. Degree of Mens Rea Required in Money Laundering Offences
The group noted that this is also one of the difficulties. This notion has a different interpretation andpenalty as far as states are concerned. In some countries, such as the USA, where they use the list
approach, they have a special provision in law which mitigates the burden of proof of the mental elementof the launderer: the prosecution is required to prove that the defendant knew the proceeds came from afelony, but not from a specific offence. Indonesia also has provisions on the mitigation of mens rea. In
Japan, there is no such special provision and the issue of the mental element is dealt with by theinterpretation of the general provisions on mens rea in the Penal Code.
3. Proof of the Predicate Offences
In some countries prosecutors have to prove predicate offences beyond a reasonable doubt, and insome other countries a lower degree of proof is enough, such as a balance of probabilities. In somecountries the conviction of the predicate offence must precede the indictment of the money launderingcase. On the contrary in other countries such as Japan and Indonesia conviction for a predicate offence is
not a pre-condition for instituting a money laundering case.
4. Measures to Solve the Difficulties
One component is the revision of the law but since the concept of money laundering is technical, we
need to train legal drafters overseas. Also law enforcement, judicial and financial institution personnel
need capacity building assistance.
In order to speed up the adoption of the bill in parliament, the awareness raising campaign, or someenlightenment activities targeting lawmakers, interested groups such as human rights activists or financial
institutions, and members of the public would be needed to obtain their understanding on the urgency intaking anti- money laundering measures. In this context, the existence of international instruments suchas UN Conventions can present a good argument in adopting relevant legislation.In addition to the
expansion of the predicate offence, the new law could also deal with the mitigation of the degree of proof,
which was mentioned above.
B. Confiscation, Freezing, Collection of the Value of the Proceeds of Crime, and Asset Sharing
At the outset, the group reviewed the relevant provisions in the Palermo Convention (Article 2 (g) and
Article 12), and in the Vienna Convention (Article 5), as well as recommendation 3 of the FATF 40
Recommendations.
The group discussed the scope of the proceeds of crime. It was introduced that Japan needed newlegislation to implement the confiscation provisions of the Vienna Convention and the Palermo
Convention, because the existing Article 19 did not sufficiently cover the scope of obligations under these
Conventions. Thus, in ratifying the Conventions other countries may need a thorough comparison ofthese Convention provisions and the confiscation provisions in their respective domestic laws.

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Also, there was a discussion whether the confiscation should be mandatory, or judges should havediscretion on this matter, and there was a general agreement that in drug offences and serious offences
involving organized criminal groups, the confiscation should be mandatory.
The meeting also discussed the difference between confiscation and forfeiture , since in Article
2(g) of the Palermo Convention and Article 1 (f) of the Vienna Convention, which states that
Confiscation , which includes forfeiture where applicable, means the permanent deprivation of property
by order of a court or other competent authority . The group noted that the Commentary on the Vienna
Convention, prepared by the United Nations, has an explanation on this issue, stating that the reference toforfeiture is made in order to meet the needs of some national legal systems, in which this was a more
appropriate term than confiscation and that the French and Spanish versions do not have the phrase
which includes forfeiture where applicable , since the term confiscation in French or decosimo in
Spanish were deemed to be the only appropriate ones.11
The group noted that the shifting of the burden of proof concerning the legitimate origin of assets,
dealt with by Group II, also needs attention.
The meeting also discussed the issue of civil and administrative forfeiture. It recalled the explanation
made by the visiting expert from the United States, as well as recommendation 3 of the FATF 40
Recommendations, which stipulates that states may consider adopting civil forfeiture.
Some participants expressed concern that this process (especially administrative forfeiture) could beabused to evade the criminal procedure, which requires proof beyond a reasonable doubt, but otherparticipants considered that civil forfeiture is an effective way to control the proceeds of crime, especiallywhen the offender cannot be convicted due to certain reasons, such as his/her absconding or death.
All participants of the group said that their countries have provisions on freezing of proceeds of crime(and as for the participants of the 125th course, only Bhutan and the Maldives do not have the freezing
provisions). It was noted that there are two possibilities in initiating the freeze procedure: one system
may only accept court orders as a basis for freezing, and the other system may authorize prosecutors or
law enforcement officers of a certain level to issue a freeze order.
As for the asset sharing, attention of the group was drawn to Article 5 paragraph 5 (b)(ii) of theVienna Convention and Article 14 paragraph 3(b) of the Palermo Convention which states may give
special consideration to concluding agreements concerning asset sharing. Views were expressed that
asset sharing was a very useful tool in the fight against transnational crime, which generate a large
amount of proceeds, helping to enhance cooperation between investigative agencies of the statesconcerned, and providing a fair compensation to the effort made by each agency. Some participantsquoted a saying that money makes enemies , and expressed views that a fight for money could
deteriorate a once friendly relationship between the agencies concerned. However, the meeting agreed
that the adoption of a legal framework to allow asset sharing merits serious consideration so as to enhanceinternational cooperation.

11

Commentary on the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988,
p30 (United Nations publication Sales No. E.98 XI.5, E/CN.7/590).

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C. Suspicious Transaction Reporting (STR) System and Financial Intelligence Unit (FIU)
The group reviewed the legal framework on STRs and FIUs in the international instruments, such as
FATF 40 recommendations and its adoption by the FATF Style Regional Bodies (FSRB), as well as
paragraphs 1(b) and 3 of Article 7 of the Palermo Convention.
It was confirmed that the minimum requirement for the FIU is for receiving, [... ],analysis anddissemination of STRs and other information regarding potential money laundering or terrorist financing 12.
The group also reviewed three options concerning the scope of the STRs. One approach is a genericapproach, where financial institutions are required to report all transactions, which they suspect or havereasonable grounds to suspect that the funds are the proceeds of criminal activities. The second approachis a threshold approach, where reports should be made on transactions exceeding a certain amount ofmoney. The third approach is a combination of these two.
As for the generic approach, it could increase the workload of the financial institutions, as they haveto make judgments in each transaction whether it is suspicious or not. This judgment is not of a nature to
be clearly stipulated in law. By each case, the customer s nationality, vocation, past transactions,transaction value, transaction form, and other factors should be comprehensively considered. However, it
is essential to establish certain guidelines for the financial institutions to help them in making a decision
to ensure the smooth operation of this system. In Japan, through FIU, Japan Financial Intelligence Office(JAFIO), Reference of STR is distributed, and revisions are made when necessary.
The threshold approach is easier for the banks to apply. However, there is a danger that the criminals
may evade the STR by dividing their transactions to several transfers below the threshold. That means, if
the transaction exceeding US$ 10,000 is subject to report, criminals may divide their transactions into
small lots such as US$ 9,900. In countries, which adopt the mixed type system such as Thailand, they
may not face these issues, but this will be a concern to countries which adopt the threshold approach.
There could also be a problem that the FIUs would be flooded by many reports.
The meeting discussed whether the FIUs should be equipped with any authorities concerninginvestigation and confiscation. It was noted that if the FIU is to have investigative authority, there should
be many personnel who have sufficient experience in the investigation field. Some participants suggested
that law enforcement authorities, with many experienced staff members, are more suitable for conducting
investigation based on the STR from the FIUs. It was also noted that even the mandate of the AntiMoney Laundering Office (AMLO) of Thailand, which have an investigative authority, is limited to a listof offences, and they transfer the case involving other offences not listed to appropriate investigative
agencies.
On the other hand, in case the FIU does not have investigative authority, such as Japan, it is important
to enhance function to collect and analyze adequate information, and to manage collaboration among
investigative agencies well. Especially, in case of the latter, we must say that the effectiveness of the FIU
function is poor, if the information the investigative agencies consider important is totally different fromthe information sent from the FIU. To address these issues, a framework for the enhancement ofcooperation and coordination among FIUs and other investigative agencies should be established, forexample by holding periodical meetings, so as to promote a common understanding of the problems
related to the information sharing.

12

FATF Recommendation 26.

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This issue is also related to where the FIU should be located whether under the central bank, orministry of finance, or ministry of justice or interior, or it should be an independent body. It was observedthat as far as the FIUs are vested with the minimum authorities mentioned above, countries may choose
any of the above options, depending on their policies.
To ensure the effectiveness and comprehensiveness of STRs, there should be some sanctions in casethe financial institutions do not abide by the STR rules.
We are seeing an increasing number of cases in which legal professions such as lawyers, certified
accountants and real estate agencies lend hand to money laundering by offering consultancy on financial
matters. This is the so called Gatekeeper issue and is becoming apparent, so measures should be put inplace as per Recommendation 12 of FATF 40 Recommendations.
It will be beneficial to oblige the legal professional to report to the FIU to some extent, but on theother hand, trust between the customer is crucial for the lawyer to execute his/her duty.
Unlike Financial Institutions that deal in a large number of transactions, lawyers provide service on an
individual basis. Thus it is relatively easy for the source of information to be revealed. There are somecountries that oblige lawyers to make a report, but sufficient safeguards will be important.
On the co-operation of FIUs, the group observed that where they exist they should be encouraged to
exchange information between each other and they should develop procedures to that effect. Where they
do not exist informal channels such as Interpol, should be used.
Also, the capacity building of relevant bodies, such as training of the FIU officials and the employeesof financial institutions, judicial personnel, as well as law enforcement officials, is of great importance inorder to maximize the STR system.
D. Customer Due Diligence (CDD) and other Measures Required by the FATF 40 Recommendations
1. Issues Faced
On this aspect the group centred their discussion on Recommendation 12 of the FATF which
stipulates: the CDD and the record keeping set out in Recommendation 5, 6 and 8 to apply to designatednon-financial businesses and professions such as casinos, real estate agents, dealers in precious metals
and precious stones, lawyers, notaries, other independent legal professionals, accountants and trust andcompany service providers.
Some participants observed that the issues of CDD measures such as financial institutions identify andverify the identities of the customers13 normally annoys customers who may decide to go to other banks
where the conditions on this aspect are less stringent.
The Group noted that it is especially difficult to identify customers when they conceal the person towhom the transactions actually effects, making use of another person appearing as an owner .
Identification of this issue of beneficial owners is one of the most challenging tasks in CDD.
On the professionals such as lawyers and accountants the group recalled the presentation of one
expert at the Ministry of Foreign Affairs Seminar on counter-terrorism Conventions for the purpose ofencouraging the accession to the Conventions by Southeast Asian countries, where he said lawyers in his
13

FATF Recommendation 5.

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country have gone to court to file for injunctions against the STR obligation by the legal professions.
All participants were of the view that in preparing a bill to require these professionals to exercise
STRs, they might face the same problems faced by the country of the expert above, especially challenges
from the professional associations.
2. Measures to Address the Situations
On the issue of verifying the identities of customers by financial institutions, participants observedthat the regulatory bodies especially central or reserve banks should enforce compliance to all financial
institutions by making sure they maintain the same standard and procedures. For those who default
sanction should be put in place to reprimand them. Also regulatory bodies should sensitize public that theissue has to be adhered to by customers hence they have to cooperate with financial institutions in theirbusiness transactions by giving correct details of their identities and documentation.
On identifying beneficial owners the group was of the view that special forms should be used withcomprehensive details and face to face business relationships or transactions should be used.
The group on professionals to report STRs, was of the view that they have to be encouraged to do it.
To start with their association should be asked to include the compliance in their regulations. Further theyshould be enlightened that they are supposed to report their suspicious transactions but not relevant
information obtained in circumstances whereby it is subject to professional secrecy or legal professional
privileges 14.

IV. PROMOTION OF INTERNATIONAL COOPERATION
A. Mutual Legal Assistance and Extradition
The group agreed that the measures were essential tools in fighting transnational organized crime. It
was agreed that articles 6 and 7 of the Vienna Convention, article 18 and 19 of the Palermo Convention,
Recommendation 35-40 of FATF 40 Recommendations should be the basis of the International
cooperation on these aspects.
Participants noted that they were implementing the measures but some countries when asked to
extradite criminals they invoke principle of dual criminality as provided in article 18 paragraph 9 of thePalermo Convention. Some countries exercise strict application of dual criminality while others are
flexible in applying it by taking into account the overall conduct of an offender, rather than simply
comparing the text of laws. Again there are other countries, which don t require dual criminality aspects
in non-coercive measures.
Some participants observed that the mutual legal assistance requests are costly and time consuming to
the requested countries and sometimes there is lack of trust and confidence. There is no room for dual
criminality in the Vienna Convention and the 1999 Suppression of Financing of Terrorism Convention.
But in the Palermo Convention, which covers a wide range of offences there can be room for a country to
invoke the dual criminality requirement, especially for serious crime.

14

FATF Recommendation 16.

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Political offences, capital punishment and the integrity of some central authorities were mentioned bysome participants as a stumbling block to extradition. Experiences were mentioned by Japan, Laos,
Indonesia and Tanzania, where they failed to obtain extradition of defendants or offenders. The meeting
noted the aut dedere aut judicare principle adopted by several UN Conventions under which the requested
country has to prosecute the person for whom extradition is sought if it refuses extradition solely on the
ground that the person sought is its national. Despite the problems participants agreed that states should
encourage to ratify the UN Conventions, especially the Vienna Convention, the Palermo Convention andadopt the FATF 40 Recommendations and join the body. Countries should enact domestic laws, which
will be an indicator of political will on the state concerned. The advantages of ratifying the conventions
and enacting domestic laws is that the states can benefit from the international technical assistanceprogrammes like training and equipment.
B. Exchange of Information among Law Enforcement Agencies
On this item, the group was in consensus that this is the most effective way of combatingtransnational organized crime because criminals have no geographical boundaries. So law enforcement
agencies should cooperate in exchanging information with one another, consistent with their respective
domestic legal and administrative systems as stipulated in article 27 of the Palermo Convention. Statesshould use the following fora as established channels of communication:(i) Interpol through the National Central Bureaux (NCBs)(ii) WCO through Regional Intelligence Liaison Offices (RILOs)(iii) Egmont Group through the Financial Intelligence Units (FIUs)(iv) Universal Postal Union through National Post Agencies
The group noted that the informal forum was faster than the diplomatic channels, which take a longtime. However, for the judicial trial formal channels have to be pursued for admissibility of evidence in acourt of law.
Japan gave an example of a case where the exchange of information with the law enforcement
agencies in the United States, followed by a prompt mutual legal assistance request, led to a successfulprosecution of a drug trafficking case.
Tanzania also cited three cases whereby an exchange of information was carried out among three
Anti-Narcotic Units in East Africa through the auspices of the East African Operational Meetings on
Drugs for the Directors of Criminal Investigation and the Heads of the Anti-Narcotic Units and big
seizures of heroine where recorded.
On the other hand, inter-agency cooperation of law enforcement agencies at the state level should be
encouraged to boost international cooperation. However, some countries pointed out the exchange of
information is hampered by lack of equipment and training.
C. Joint Investigation and Border Control
This issue was deliberated in depth and the group unanimously agreed that this is a very usefulmeasure to tackle cross-border crimes on condition that there should be bilateral, multilateral agreements
or arrangement in matters of investigation, prosecution and judicial proceedings in one or more states.
Sometimes it can be conducted on a case by case basis. This is stipulated in article 19 of the Palermo
Convention.

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It was introduced that Indonesia had a successful joint investigation with USA. And Laos also had ajoint investigation with Thailand especially along the borders. Tanzania via Southern Africa Regional
Police Chiefs Conference Organization (SARPCCO) and Eastern African Police Chiefs Conference
Organization (EAPCCO) has also conducted very successful joint investigations and operations.
The Group noted that the experience of Tanzania merits attention, where foreign investigators areinvited to participate in the joint operations and investigations as observers, South Africa offering
equipment with wide database especially on stolen motor vehicles. The participant of Tanzania introduced
that these joint operations and investigations are conducted on the basis of the various protocols. He also
noted that in the negotiation of certain protocols, it was difficult to reach consensus on certain articles.

209

PART TWOWork Product of the Sixth International Training Course on Corruption
Control in Criminal Justice

UNAFEIVISITING EXPERTS
THE ROLE OF OMBUDSMAN AND ITS CONNECTION WITH THE
CONTROL OF CORRUPTION

Judge Anand Satyanand *I. INTRODUCTION
New Zealand is a country which applies a number of tools of modern governance in its operation.
New Zealand s population is small (four million) and its Parliament comprises a single House ofRepresentatives without any written constitution. In its 160 year modern history it has followed a British
Westminster kind of government, but in the last 50 years has undertaken a number of adaptations to that.
For example, ten years ago, it changed to a mixed member proportional representation system ofelections, similar to Germany - where there are some members elected by citizens and others appointed
by political parties. Some 40 years ago in 1962 it became the first English speaking country to adopt
Ombudsman legislation calling for an independent officer of Parliament being able to inquire into
citizens complaints against the Government bureaucracy. Twenty years later in 1982 New Zealandenacted Freedom of Information legislation which now covers Government Ministries and Departments
and State-owned Enterprises as well as Local Government entities. In 2000 New Zealand passed
Whistle Blowing legislation to enable people to make disclosures about serious wrongdoing without
becoming endangered personally, in terms of their employment or otherwise.
So far as government administration is concerned, New Zealand has adopted modern means of public
sector management with a number of mechanisms available for redress of wrongs - the courts, recourse to
Ombudsmen for maladministration, freedom of information, and otherwise. New Zealand rates
consistently as among the least corrupt countries in the world. Each of the mechanisms referred to has
relevance in combating corruption.

II. DEFINITION OF TERM OMBUDSMAN
The term Ombudsman is Scandinavian, meaning something in the nature of entrusted person or
grievance representative . The part word man is taken directly from the Swedish (the old Norse word
was umbodhsmadr ) and does not connote any necessity that the holder be of the male gender. Indeed,
if one was to survey the present Ombudsman community worldwide, it would be seen that there are many
women Ombudsman. My tracing of the office will start with the Scandinavian grievance person since
this model is said to set a standard. I do acknowledge, however, that there are several precedents from
Asian (and other) settings of people, in former times, undertaking office to provide relief and redress tocitizens adversely affected by government action.
In earlier times it is also recorded that the Romans installed an officer called the tribune to protect
the interests and rights of the plebeians from the patricians. There are also writings in both China andIndia, which suggest that three thousand and more years ago, special officials were designated to functionin the manner of Ombudsmen. In China during the Yu and Sun dynasties it was the duty of theincumbent, who was called the control yuan , to report the voice of the people to the Emperor and toannounce the Emperor s decrees to the people . In India today there are Ombudsmen appointed in twelve* New Zealand Ombudsman.

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RESOURCE MATERIAL SERIES No. 65of the Indian states, though not at Federal level. The term for them is Lokayukta , an ancient word
revived so as to make it meaningful in a local sense in that country.
In 1809 Sweden appointed an official entitled the justitieombudsman to enquire into actions of thegovernment administration, including the military, and the courts. The establishment of this office wassaid to be a reaction to state absolutism and an assertion of individual rights and dignities of the citizen.
Nearly 100 years later, Finland appointed a similar person and Denmark followed likewise in 1954.
A. Essential Constituents of the Term Ombudsman
The Ombudsman Committee of the International Bar Association has described the office thus:
An Office provided for by the Constitution or by action of the Legislature or
Parliament and headed by an independent, high-level public official, who is
responsible to the Legislature or Parliament, who receives complaints from aggrieved
persons against Government agencies, officials and employees, or who acts on [his]own motion, and who has the power to investigate, recommend corrective action, andissue reports. 1
This contemporary definition of the term Ombudsman is not agreed to universally, but it does serve
as a starting point in defining the role.
B. Development of Concept
In the 1950s there was considerable discussion in many countries outside Scandinavia about
establishing a process to examine things undertaken by governmental administration. This was to bealongside and beyond the formal means of redress available through the courts or Parliament, or a freePress. The welfare state models in many countries had produced very large government bureaucracies.
There was concern in many quarters that a simple independent means of redress needed to be provided
for the individual citizen. The matter was neatly put in the following way by Professor D C Rowat in anarticle suggesting an Ombudsman Institution in Canada 2 :It is quite possible nowadays for a citizen s right to be accidentally crushed by thevast juggernaut of the government s administrative machine. In this age of the welfare
state, thousands of administrative decisions are made each year by governments ortheir agencies, many of them by lowly officials; and if some of these decisions arearbitrary or unjustified, there is no easy way for the ordinary citizen to gain redress.
In that country, and elsewhere, it was simply no longer possible to say that every person adversely
affected in an unfair manner by action of a governmental official, would have the resources or means toengage a lawyer. Court procedures could be both lengthy and expensive. The right of a person to consult
their individual Parliamentary representative, write to the newspaper, organise a petition or raise adeputation to see a Government Official or Minister, may have been no more effective. In England in the
1950s, a committee of the International Commission of Jurists, chaired by Lord Whyatt (a former Chief
Justice of Hong Kong) had suggested the establishment for the United Kingdom of some kind ofparliamentary commissioner.

1

International Bar Association.

2

DC Rowat, An Ombudsman Scheme for Canada

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journal of Economic and Political Science 1962 Vol. 28 No. 4 p. 543.

SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERSIn New Zealand, a similar debate was under way in a number of quarters - political, academic andamong those with the task of formulating policy. The debate quickened after the abolition of the Upper
House of Parliament in 1950. Consideration was being given to such things as an Administrative Court.
New Zealand observed with interest the establishment in 1954 of an Ombudsman responsible to theDanish Parliament or Folketing .
In 1962, New Zealand became the first English speaking Commonwealth (and indeed common-law)country to enact this kind of legislation, although there were a number of other jurisdictions in which
Bills had been introduced, or where the matter had been canvassed. The succeeding 35 years have seen
Ombudsmen installed in a great many countries. The international Ombudsman community now
numbers over 200 in about 100 countries or jurisdictions. As may be known, the office has been createdat both federal and provincial levels and it functions in a variety of constitutional settings.
C. Constitutional Position of the Ombudsman
To map the position of New Zealand s Ombudsmen in a constitutional sense, the New ZealandOmbudsmen are Officers of Parliament. They are appointed by the Governor-General on therecommendation of Parliament. Although it is not provided for in the law, there is a long standing
convention that all Members of Parliament (that is from all parties in the House) must agree unanimously
to the appointment. As a further mark of independence funding for the office is provided directly throughParliament. The Speaker of the House of Representatives is the person through whom the Ombudsmen
are accountable to Parliament. This independent accountability and financing arrangement ensures thatthe office has complete independence and cannot be pressured by any government department or Ministerof the Crown.
When the office was first established, the Ombudsman s jurisdiction was limited to the investigationof complaints from citizens about central government departments and organisations. In 1968 thejurisdiction was extended to education and hospital boards. In 1975, the legislation was amended andconsolidated into the Ombudsmen Act 1975. Under that Act, with effect from 1 April 1976, thejurisdiction of the Ombudsmen was extended to territorial local authorities (city, county and boroughcouncils) as well as to a variety of statutory boards (for example, catchment boards and electric powerboards). Additional offices to that in the capital city were established. The Ombudsmen Act 1975 also
contained provision for the appointment of more than one Ombudsman, one of whom would be appointed
Chief Ombudsman, with responsibility for the overall administration of the office and allocation of thework as between the Ombudsmen.
Professor Philip Joseph, in his textbook Constitutional and Administrative Law in New Zealand 2
ed 2002 Thomson has described the Ombudsman role as being that of a generalist with a disinclination
to intervene in specialist matters involving professional departmental judgment. When a policy is foundwanting, an Ombudsman may recommend departmental reconsideration or that a specific alternative
policy be adopted. But as he points out, Ombudsmen are, in general reluctant to second-guess actual
departmental decisions.
A descriptive passage from Bridled Power Oxford University Press 2 ed 1997 Oxford University
Press - authors Sir Geoffrey Palmer and Dr Matthew Palmer (the former a Prime Minister of New
Zealand in the late 1980s and the latter a Law Professor) sets out the following regarding Ombudsman
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RESOURCE MATERIAL SERIES No. 65

The Ombudsmen may reach the conclusion that a decision was unfair on a number ofgrounds. It could be:・ contrary to law;・ unreasonable, unjust, oppressive, or improperly discriminatory;・ made under an act, regulation or by-law that was unreasonable, unjust, oppressive or
discriminatory;・ based on mistake of fact or law;・ made in the exercise of a discretionary power used for improper or irrelevant purpose;・ simply wrong .
Where the Ombudsmen reach an unfavourable view of a decision they can say that:・ the matter should be further considered by the appropriate authority;
・ the omission should be rectified;・ the decision should be cancelled or varied;・ the practice on which the decision was based should be altered;・ the act, regulation or by-law on which the decision was based should be reconsidered;・ reasons should have been given for the decision; and・ other steps should be taken.
D. Jurisdiction of the Ombudsmen
When describing the jurisdiction conferred upon the individual Ombudsman, the term Ombudsman
may itself be misleading in a comparative sense. Different countries give to the Ombudsman different
functions and procedures. For example, in many jurisdictions, including the United Kingdom, the citizen
may not approach the Ombudsman directly. In Australia and New Zealand however direct contact is thenorm. In the United Kingdom and Northern Ireland, a citizen approaches the local Member ofParliament, who in turn makes a case to the Ombudsman. In some jurisdictions, the Ombudsman is
responsible for redressing breaches of human rights. This is so in several Latin American countries suchas Mexico, whereas in New Zealand that function has been undertaken by a separate Human Rights
Commission. In a number of other countries (for example, Ghana and Papua New Guinea), theOmbudsman may be charged with a specific responsibility of inquiring into allegations of corruption.
Differences also arise regarding appointment and tenure. A New Zealand Ombudsman is appointed
by Parliament and receives funding from that source, but in other jurisdictions the appointment may be by
the erstwhile governing party and funding may become dependent upon a determination of theGovernment of the day. In unicameral States such as New Zealand, the Ombudsmen may be responsible
to Parliament, and in bicameral States such as the United Kingdom, they may be responsible to the Lower
House of Parliament (for example to the House of Commons in the United Kingdom).
From the classic state-Ombudsman role as just described, there have also developed, in many places,
different kinds of Ombudsmen , some of whom use similar investigative methodology, but whose role
may be limited by circumstances or area. If the essence of the Ombudsman role is defending citizens
against the unfair administrative actions of the State, Human Rights Commissioners can be seen as
undertaking a kind of Ombudsman role, but are restricted to investigating alleged breaches of humanrights. There are also specialist offices such as Commissioners for Children, Health and Disability and
Police Complaints Authorities who may be undertaking Ombudsman-like work, but whose work is
confined within a specific area.

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The role of the Ombudsman, as a person who investigates complaints, has also led to the developmentof industry Ombudsmen , for example in banking and insurance. An Ombudsman for Northern Irelandin the 1990s, Dr Maurice Hayes, observed that the Ombudsman concept is one of the few to have passed
from the public sector to the private sector at a time when the tide of ideas is flowing in the opposite
direction . There has also developed, the notion of organisation Ombudsmen . In some countries, suchas the United States, if one has a dispute with a department store, university or a local authority, theperson designated to deal with that complaint, may be termed an Ombudsman .
Even that brief summary is not complete, because there may be other anomalies. In Australia, forexample, some Ombudsmen may deal with complaints about behaviour of the Police and others not
because of there being in place a separate stand-alone Police Complaints Authority. In Sweden and
Finland, complaints about the conduct of the courts are dealt with by Ombudsmen, whilst in mostcountries where there is a separation of powers - legislative, executive and judicial - the Ombudsman has
jurisdiction only over actions of the executive.
Owing to the threat of proliferation in New Zealand, it was thought important that the term
Ombudsman should not be seen to lose its currency. Legislation was passed in 1993 restricting use of
the term Ombudsman unless the particular industry which uses the term gains the approval of theerstwhile Chief Ombudsman and is able to guarantee certain kinds of delivery of service.
E. Relationship of Ombudsman Role to Courts and Ordinary Legal Processes
By undertaking a task which affects rights and involves examinations of organisations powers andresponsibilities, a question arises as to whether the Ombudsman office itself should be subject to judicial
scrutiny if its investigation and recommendation breaches appropriate procedural or jurisdictional limits.
In most jurisdictions the answer is yes . This susceptibility of the Ombudsmen to judicial review, whichsome would say is a discipline of its own, has led to a number of contemporary statements about thenature and efficacy of the role. The following examples suffice.
In 1984 in Canada, Justice Dickson delivering the unanimous decision of the Supreme Court of
Canada in British Columbia Development Corporation and another v Friedmann [1984] 2RCS 447 at
460,463. There he said:
The limitations of Courts are also well known. Litigation can be costly and slow.
Only the most serious cases of administrative abuse are therefore likely to find theirway into the courts. More importantly, there is simply no remedy at law available in agreat many cases...
Read as a whole, the Ombudsmen Act of British Columbia provides an efficient
procedure through which complaints may be investigated, bureaucratic errors andabuses brought to light and corrective action initiated. It represents the paradigm ofremedial legislation. It should therefore receive a broad purposive interpretationconsistent with the unique role the Ombudsman is intended to fulfil.
The judgment is also authority on the meaning and application of the phrase matter ofadministration . This phrase frames the Ombudsman s area of jurisdiction, is to be construed widely
encompassing everything done by governmental authorities in the implementation of government
policy . The Court held that only the activities of the legislature and the Courts should be excluded fromthe Ombudsman s scrutiny.

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The role of the Ombudsman in that country was also challenged in Re Ombudsman Act, decided in1970 (1970) 72 WWR 176. The Chief Justice of Alberta stated:... the basic purpose of an Ombudsman is provision of a watchdog designed to look
into the entire workings of administrative cases. ...[He] can bring the lamp of scrutiny
to otherwise dark places even over the resistance of those who would draw the blinds.
If [his] scrutiny and reservations are well founded, corrective measure can be taken indue democratic process, if not no harm can be done in looking at that which is good.
In Australia, the judgment of the Federal Court Aboriginal and Torres Strait Islander Commission v
Commonwealth Ombudsman (1995) 134 ALR 238 undertook a thorough review of the actions of the
Ombudsman and contains a number of statements distinguishing between the judicial function and the
Ombudsman function. The former was for making determinations on identified issues, the latter forinvestigating, reporting and making suggestions . Several other Australian authorities have alsodelineated the Ombudsman role. In Ainsworth v Ombudsman (1988) 17 NSWLR 276 at 283 JusticeEnderby of the New South Wales Supreme Court said:
It has always been considered that the efficacy of the [the Ombudsman] Office andfunction comes largely from the light [he] is able to throw on areas where there isalleged to be administrative injustice and where other remedies of the Courts and thegood offices of Members of Parliament have proved inadequate. Goodwill is essential.
When intervention by an Ombudsman is successful, remedial steps are taken, notbecause orders are made that they may be taken, but because the weight of its findings
and the prestige of the office demands that they be taken.
In Botany Council v The Ombudsman (1995) 37 NSWLR 357 at 363, the then President of the New
South Wales Court of Appeal, Justice Michael Kirby also traversed the difference between judicial andOmbudsman function:[The] Ombudsman lacks the powers to make orders as a Court may do. But the
sanction of the provision of a report to the responsible minister and to Parliament andthe requirement upon the Minister to respond promptly to any such report also affords
significant sanctions. These have proved effective in all jurisdictions in which the
Office of the Ombudsman has been created, to obtain reconsideration of administrative
action found by the Ombudsman to be unlawful, unreasonable, mistaken or wrong...
The Ombudsman s authority has also been challenged in Courts in other countries, including New
Zealand, although principally in recent times in regard to the freedom of information legislation
jurisdiction.
F. Official Information Act Role of Ombudsmen
The Official Information Act was added to the Ombudsman role in 1982. This second aspect is
responsible for much of the comment about the role in contemporary politics and in contemporary Press
coverage. Often one sees in the newspaper or in electronic media the words obtained under the Official
Information Act . This is a shorthand reference to a number of procedures which might have been
actioned before publication has taken place.
New Zealand is one of many countries where Parliament has determined that there should in general
be freedom of access to information so that people can play an informed role in the democracy. This218

SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERS
means, from a legal standpoint, that information is to be made available unless there is some withholding
ground able to be invoked. It is the Ombudsmen who determine whether the withholding tests have been
met. The position was different prior to the Official Information Act, when the Official Secrets Act 1951
was in force. This statute was modelled on United Kingdom legislation under which it was said, either
literally or notionally, that governmental or official information was the property of the Queen and heradvisers .
The drawbacks in this situation led to discussion in academic and political circles that there needed to
be a better way. In the civil service itself, there was a prevailing climate of change. A 1964 Circularfrom the State Services Commission to Permanent Heads of Government departments said that
information should be withheld only if there is a good reason . An Ombudsman investigation into the
Security Intelligence Service in 1976 highlighted the need for information access. In 1980, a committee
of senior civil servants chaired by a University academic produced a well-regarded report in favour of amore open approach with regard to information. This was the Danks Committee Report - Committee on
Official Information Towards Open Government Vol 1 General Report December 1980, which theauthors of Bridled Power (mentioned and cited above) described as follows:
The Danks Committee report, from which the 1982 legislation sprang, was adocument of high quality and considerable liberality. Titled Towards Open
Government, the report came in two parts. The reasons the committee articulated formore open access to official information could be summarised as follows:
・ a better informed public can better participate in the democratic process;・ secrecy is an important impediment to accountability when Parliament, press, and public cannot
properly follow and scrutinise the actions of government;
・ public servants make many important decisions that affect people and the permanent administration
should also be accountable through greater flows of information about what they are doing;・ better information flows will produce more effective government and help towards the more
flexible development of policy. With more information available, it is easier to prepare for change;
・ if more information is available, public co-operation with government will be enhanced.
The Danks Committee concluded:
The case for more openness in government is compelling. It rests on the democratic
principles of encouraging participation in public affairs and ensuring theaccountability of those in office; it also derives from concern for the interest of
individuals. A no less important consideration is that the Government requires public
understanding and support to get its policies carried out. This can come only from an
informed public.
To the surprise of some, legislation incorporating the committee s recommendations was passed
quickly and came into force in 1983. The Official Information Act provides for people to have access to
official and personal information held by Ministers of the Crown, government departments and local
authorities. If a particular request for information to one of these organisations is declined, the requester
has the right to ask an Ombudsman to investigate and review the decision.
The only reasons for refusing requests for information are those as set out in the Act. Upon taking up
a complaint, an Ombudsman must review the information at issue and assess it against the withholding
provisions set out. Some withholding grounds are conclusive: for example prejudice to the security or
defence of New Zealand, or serious damage to the New Zealand economy, or prejudice to maintenance of219

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the law. The Ombudsman sights the information to ascertain that the claim may be made and then makesa recommendation. Other withholding grounds are defensible by the public interest in freedom of
information. These include protection of trade secrets, or protection of legal professional privilege. The
Ombudsman sights the information and undertakes a balancing test, expressing the public interest in theparticular situation and making a recommendation. Those recommendations are then considered by thewithholding organisation and acted upon. There is a potential right of veto of an Ombudsman s
recommendation by the Cabinet. There has however been no occasion of use of the veto to date, which isa measure of the efficacy of the Ombudsman process. The Ombudsmen must also consider in each casewhether the right to preserve personal privacy constitutes a factor in deciding if information should beprotected or released. The Ombudsman must then determine whether or not the decision to withhold theinformation was made in accordance with the provisions of the official information legislation.
At the conclusion of an investigation, an Ombudsman may make a recommendation for release of theinformation at issue. In certain circumstances, this recommendation imposes a public duty upon theorganisation concerned to release the information. When undertaking investigations, the Ombudsmen
always keep in mind that the purposes of the legislation:
・ enable citizens to effectively participate in the making and administration of laws and policies;
・ promote the accountability of Ministers and officials;
・ provide for proper access by each person to information about that person; and・ protect official information to the extent consistent with the public interest in the preservation of
personal privacy.
In recent years the Ombudsmen have considered requests for:・ the level of salaries paid to chief executives and other Council officers;
・ the redundancy packages given to officers whose positions have been terminated;・ discussion papers presented to Ministers or committees for consideration;
・ detailed financial information;
・ employment related information, such as references provided in confidence;・ information about building permits and planning applications;・ the identities of informants.
It can be seen that there is a wide range of requests. There were approximately 1149 official
information request cases dealt with by the Ombudsmen s Office during this past year to June 2003.
Several well known cases have involved the Official Information Act including Police V Ombudsman[1988] 1 NZLR 385, TVNZ v Ombudsman [1992] 1 NZLR 106, Queenstown-Lakes District Council v
Wyatt Co NZ Ltd [1991] 2 NZLR 180 and Attorney General v Davidson [1994] 3 NZLR 143 and others,
all of which in some way have referred to the constitutional kind of situation now pertaining to freedomof information in New Zealand.

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III. DEFINITION OF CORRUPTION
The question of definition of corruption will clearly be covered in many other contributions to thisconference and in more detail than here. From a New Zealand perspective the head of its civil service,
the State Services Commissioner, Michael Wintringham, has said 3 that in his view Corruption is notinefficiency, poor management or even theft as a servant or fraud but rather the use of public office for
personal gain, usually involving bribery with at least two people involved, a buyer and a seller. This kindof definition is orthodox and can be compared readily with other contemporary sources. The AsianDevelopment Bank Anticorruption Policy says it is the misuse of public or private office for personal
gain .4 The Oxford Unabridged Dictionary has corruption as the perversion or destruction of integrityin the discharge of public duties by bribery or favour . Webster s Collegiate Dictionary on the other handsays corruption is inducement to wrong by improper or unlawful means (as bribery) . In some contexts
it is considered important and useful to distinguish between graft when the illicit act is proposed by theofficial and where corruption (so called) is limited to when the illicit act is proposed by the malefactor
citizen. The OECD has it in a 1996 publication as follows In examining conduct it is useful to make a
distinction between behaviours: illegal, i.e. that is against the law which covers criminal offences to
misdemeanours; unethical, i.e. against ethical guidelines, principles and values and inappropriate i.e.
against normal convention and practice. Corruption may fall under any of these headings. Its defining
characteristics are the misuse of public office roles or resources for private benefit, material orotherwise .5
A. Challenges Wrought by Presence of Corruption - [General]
At all events, the most notorious kinds of corruption can easily be recognised and described. So
whether the corruption be of large or small scale it is the questions of identification and eradication thatare important. In the context of India, then President Narayanan said in 1997 Corruption is one of thegreatest challenges now confronting [the country] .6 In another Asia Pacific state, Papua New Guinea,
Simon Pentanu Chief Ombudsman of that country in a speech called Dealing with Corruption given in
Canberra Australia in 1998, but published in June 2000, said ... the answer to corruption is becoming
clear and plain. It is by and large about leadership. Honest creative competent leadership throughout allarms of government. This type of leadership is all about self-empowerment, which is the only viable
antidote. ... We have to salvage ourselves and our ship of state .7
It can thus be stated that agreement will be reached without difficulty, that corruption is somethingwhich needs attention, even where in New Zealand for example, the number of cases may be small.
Corruption is not confined to any country or continent because a small amount of reflection will bring tomind for example the Matrix - Churchill or Cash for Questions scandals of recent times in the United
Kingdom, the Carrefours du Developpment scandal in France, each of the Flick, Barschell and Hesse
controversies in Germany and either the Watergate or Iran-Contra affairs in the United States.

3

New Zealand State Services Commission Annual Report 2000.

4

Asian Development Bank Anti-Corruption Policy April 1998 p.1.

5

Ethics in the Public Service, Current Issues and practice OECD 1996.

6

International Herald Tribune 13 August 1997.

7

Papua New Guinea Ombudsman Commission 2000.

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B. Challenges Wrought By Corruption [New Zealand]
The New Zealand State Services Commissioner put the matter of challenge in the following way.
If corruption is so rare in the New Zealand State sector, why should we be concerned about a handful ofcases. There are three reasons. First ... such cases undermine citizens confidence in public institutions ona scale disproportionate to the offence. In a country that relies largely on voluntary compliance with tax
laws, benefit administration and range of licensing and registration arrangements, citizens compliance isdirectly related to their trust in the way in which their personal information will be held, the honesty ofthe officials administering the law and citizens perception that all are treated equitably. This publicconfidence is fundamental to a successful civil society. Secondly our [New Zealand s] admirable trackrecord in these matters cannot be taken for granted. There are plenty of overseas examples todemonstrate that once it becomes established, corruption is difficult and costly to eliminate. Openness that is a willingness to acknowledge the risks and to prosecute those who transgress - is fundamental tominimising such risks. Finally, a State sector and private sector free of corruption contribute to a fairsociety and a well-performing economy. Neither equity nor efficiency are served by corruption. In recent
years international financial institutions which were once tolerant of, or at least philosophical about, adegree of corruption in countries where they were funding development programmes, have brought theeradication of corrupt practices closer to the top of their agenda .8
It may therefore be of interest to describe what may be termed the chemistry of the New Zealandpublic sector and the very limited amount of corruption that has been found to exist and to likewise
examine some of the mechanisms that ensure, for the moment that it is kept to a minimum.

IV. CONSTITUENT ELEMENTS OF NEW ZEALAND S PUBLIC SECTORThe New Zealand Public Service is comprised of 38 Government departments plus a number ofCrown Entities and State Owned Enterprises. As at 30 June 2003, the number of staff employedcalculated on a full-time equivalent basis was just short of 35,000. Latest estimates put the population of
the country at just over 4.0 million, there being two major ethnicities, European and Maori, the latterbeing 15%. To this should be added a smaller number of other groupings, people of Pacific Island
descent comprising 6% and those of Asian origin 5%. In other words, New Zealand can be described as apredominantly European but significantly multi-cultural country where in day to day living there isconsiderable evidence of Maori and Polynesian themes. Something of that same ethnic mixture comes tobe represented in those employed by the State.
During the past 20 years the New Zealand public sector has been the subject of widespread reform as
what is now known as New Public Management has come to be applied. This has had a number of
constituent elements. Laws governing labour organisations and the negotiating environment were passed.
State Owned Enterprises undertaking operations on a commercially viable basis were established. A
number of activities more suited to the private sector - such as railways, insurance, telecommunications
and banking were sold. A State Sector Act restructured public sector management and aligned the public
sector with private sector employment regulations. Employment came to be undertaken by means ofcontracts renewable after specific terms rather than employment being on a long-term and sometimes
lifetime basis. The foregoing and other items have had considerable effects on New Zealand life, a major
one being reduction in the number of public sector employees from more than 90,000 to 30,000 in that15-year period.

8

New Zealand State Services Commission Annual Report 2000.

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As to employment, it can be observed that along with countries of a similar kind, namely Australia
and Canada for example, employment patterns have been transformed during the 20th Century. In former
times, whereas there were emphases upon manual work and bread winning being the role of the malewaged person. These have been replaced by a number of more complex patterns - the involvement ofboth men and women and different ethnic groups, along with an expanding service sector, increased selfemployment, part-time employment and job sharing. This has created, in the public sector as well, moredemand for the highly skilled, with increased waged dispersion based on skill levels and greater
variations in hours and conditions. In accordance with relatively new employment legislation, New
Zealanders, by and large (inclusive of working in the public sector), enter individual contracts of
employment with their department or Ministry. This is so at all levels with the Chief Executive very
often having a specific contract with the responsible Minister. These contracts provide for particularlevels of performance that are expected. It can be stated that, in the context of general employment,
people in the State sector are well paid in New Zealand terms. Put in another way, there is no great
disparity between ordinary wages earned in the public sector with ordinary wages earned by employees in
the regular business community.
The next relevant factor in describing the New Zealand community relates to general levels of
education. Without going into detail, New Zealand can be described as a country with a high degree ofgeneral literacy where there is an emphasis upon learning up to tertiary level. Education is compulsory to
the end of secondary school and, whilst most students attend State funded schools, there are a number ofother choices for parents and students and many opportunities for community education and advanced
education thereafter.
With a tradition born of a colonial past, which emphasised things such as self-help and an egalitarian
approach, New Zealanders can be said to dislike either excesses or abuses of power, which in the context
of a small society they are able to remonstrate, when necessary. To describe the New Zealand community
in a sentence, the elements of a relatively small but reasonably well-educated and egalitarian minded
community emerges, which dislikes unfairness and which will not tolerate corruption in the way adverted
to by the New Zealand State Services Commissioner above. All of these things have a bearing in keeping
the amount and degree of corruption at low levels.
A. Constituent Elements Available to Combat Corruption
As indicated above in the definition of corruption, many corrupt actions will be illegal in the sense of
breach of the criminal law. The New Zealand Police have responsibility for enforcement of the criminal
law and principally the Crimes Act, the Summary Offences Act and Misuse of Drugs Act available foruse in prosecutions before the Courts.
In addition, for specific matters of fraud of a more serious complex and multiple kind, there wasestablished in New Zealand in 1990 a specific Serious Fraud Office, which was set up to facilitate thedetection, investigation and expeditious prosecution of serious and/or fraud offenders. This office
involves the resources of multi-disciplinary teams of investigators, forensic accountants and prosecutors.
The inception of the New Zealand Serious Fraud Office some ten years ago reflected a trend around theworld to establish similar agencies in the face of increasing difficulty for law enforcement agencies using
traditional methods to come to grips with serious or complex fraud offending. In the decade to this year,
over 100 prosecutions have been taken with a record of successful prosecution; it is said, of more than90%. International fraud is now becoming a focus of interest for the Serious Fraud Office with a growing
need for it to use modern technology in detection.99

New Zealand Official Year Book 2000 p. 502.

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As was said in commencing, New Zealand was the first English-speaking country in 1962 to adopt bylegislation the previously Scandinavian notion of Ombudsman methodology. This envisages theindependent investigation of citizens complaints about an act of maladministration by a Government
department or agency. The Ombudsman is furnished with sufficient powers to inquire and obtain suchinformation as may be necessary to form a view of the matter under complaint and to make a
recommendation for redress, where that is appropriate. The New Zealand Ombudsman office has
functioned now for nearly 40 years with there being now two Ombudsmen undertaking some 6000 cases
per year, brought to them by ordinary individuals. The ready availability of a complaint mechanism isthus something to which New Zealand citizens have relatively easy recourse. The work of the New
Zealand Ombudsmen, though conducted according to an individual New Zealand statute, broadly accords
with the internationally accepted definition of Ombudsman, also mentioned at the outset.
All investigations undertaken by Ombudsmen are conducted in private. When an Ombudsman
believes a complaint can be sustained, this opinion is reported to the Government department ororganisation concerned along with any recommendation for action. A copy of this report may also bemade available to the responsible Minister. At the local government level, over which, in New Zealand,
the same Ombudsmen have jurisdiction, the Ombudsman reports the finding to the organisation and may
provide a copy of that to the Mayor. Ombudsmen have no authority to investigate complaints against
private companies and individuals or decisions of Judges. The foregoing enables Ombudsmen to becomeaware of evidence of corruption or corrupt activity and to take action with the relevant organisation.
As has also been described, at the beginning of the 1980s, following the report of a Government
appointed Committee comprising senior civil servants, New Zealand passed an Official Information Act
in 1982 and became a freedom of information country. This is based on the principle that information
shall be made available unless there is a good reason for withholding it. The purposes of the Act are toincrease the availability of official information to the people and provide for proper access by bodies
corporate to official information relating to them but at the same time, where it is in the public interest, toprotect official information from disclosure and to preserve such things as individual privacy. The
Official Information Act, by and large, covers all Government departments, statutory bodies and State
Owned Enterprises, with the exception of the Courts. Ombudsmen can review a decision by aGovernment organisation to refuse supply of information, and the formal recommendation of an
Ombudsman, after such review, is binding unless overridden in very limited circumstances. The Official
Information legislation also contains provisions enabling citizens to be advised of reasons for decisions.
The provision of information or the absence of it can frequently identify something wrong (which may beevidence of corruption) and which will become apparent to an Ombudsman who can then do something
about it.
In short, the Ombudsmen, whether acting in their jurisdiction on complaints about maladministration,or in their jurisdiction to make available, where appropriate, official information, play a role in ensuring
the transparency and accountability of Government. It follows that the Ombudsmen can in the course ofthis work become aware of evidence of corruption and can be in a position to recommend action
regarding it.
Statutory measures against corruption have continued to be added to the law in New Zealand. The
New Zealand Parliament in April 2000 passed legislation which came into effect on 1 January 2001. Thislegislation, called the Protected Disclosures Act, enables employees who observe serious wrongdoing inor by an organisation to disclose that to what are called appropriate authorities such as the Ombudsmen,
the State Services Commissioner, the Commissioner of Police, the Auditor-General, the Director of the
Serious Fraud Office and others. In circumstances where that is done, the notifying person will be
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protected from civil, criminal or disciplinary proceedings, or retaliatory action which might be taken byan erstwhile employer. New Zealand thus joined those countries which have what is termed
whistleblower legislation.
One of the functions of the State Service Commission, which superintends the Public Service and its
staff, is to promote appropriate values and standards of behaviour for the Public Service. That
organisation publishes a specific Public Service Code of Conduct, which comprises three principles, thesebeing first that employees should fulfil their lawful obligations to Government with professionalism andintegrity , secondly that employees should perform their official duties honestly, faithfully andefficiently, respecting the rights of the public and their colleagues , and thirdly employees should notbring their employer into disrepute through their private activities .
More recently, in 2000, the New Zealand Government appointed a State Sector Standards Board
comprised of a group of senior people from commerce and Government and the Trade Unions, to draft astatement of Government expectations of the State sector and the priorities that departments and agencies
are to observe in responding to citizens.
In a small country there is the opportunity for a considerable amount of cross-fertilisation of ideas andconcepts. There is available, when one talks of means to avoid corruption, the following, connected with
Ombudsman methodology. It will be recalled from above, that the Ombudsman concept enables
independent investigation of complaints of maladministration. That model, after having been applied fora great many years in the public sector, has come to be taken up in two New Zealand industries. First, theBanking Ombudsman scheme began in July 1992. It arbitrates unresolved disputes about banking
services in an independent and impartial manner and such help is available free to the complainant. The
Banking Ombudsman is, in the instance of that industry, furnished with power to award compensation tocover direct losses of up to $100,000, inconvenience of up to $2,000 and some costs. There is a reporting
mechanism to a Banking Ombudsman Commission, which comprises representatives of the banks andconsumer organisations. Episodes of corruption, if any, are able to be complained of through this means.
In 1995 there was also commenced in New Zealand an office of Insurance and Savings Ombudsman, thisbeing an independent body to help consumers resolve their complaints against participating insurance andsavings companies. Again, this is a free service to consumers operating independently of the insurance
and savings industry and funded by levies upon companies involved in the scheme. The Insurance andSavings Ombudsman s jurisdiction extends to investigation of personal and domestic insurance, where
less than $100,000 is involved and the person is able to approach the Ombudsman after having taken it up
with the insurance company in question.
One can therefore see the mirroring or modelling in the private sector of something which has provento be successful in the public sector. Parliamentary Ombudsman methodology has proved successful for
New Zealand citizens and for the public sector. The shift to the private sector and the adoption of manyof the methods employed by the Parliamentary Ombudsman - inquisitorial approach, informal resolution
and use of alternative dispute resolution means - assist this in being successful. It is to be noted that there
is a distinction with industry Ombudsmen having the power to make binding orders in certain
circumstances, whereas Parliamentary Ombudsmen are restricted to recommendations which goes back to
the original Scandinavian conception of Ombudsman.

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V. CONCLUSION
The foregoing has been a brief survey of measures available to combat corruption from the standpointof a small country in the Asia-Pacific region. It is from the standpoint of a country which has registered ahigh placing in the well-known Transparency International Corruption Percentage Index for a number ofyears. That assessment, conducted each year, is not an assessment of the corruption level in any country
but an assessment of the level at which corruption is perceived by people working for multi-national firms
and institutions as impacting on the commercial and social life in that country. It can be said that New
Zealand is fortunate in having very low levels of corruption and that, with the measures described above,
such is likely to continue in the future. To quote a recent New Zealand representative for Transparency
International (an international non-governmental organisation with a specific interest in public sector
corruption and its eradication), Dr Peter Perry of the University of Canterbury in Christchurch New
Zealand, Corruption is an ever-present threat, globally increasing and better tackled before rather thanafter the event . All commentators , he said, agree that good governance is the best preventative .
In ending I wish to draw together the two streams - of the Ombudsman role affecting
maladministration and the Ombudsman role affecting freedom of information, in order to address some
general remarks about the future of the office.
A question often posed to Ombudsmen worldwide is whether the ordinary community sufficiently
understands the redress offered by the service. This is no area for complacency. In New Zealand, thelegislation has been in force for more than 40 years, and the jurisdiction has been extended to cover local
government, state owned enterprises and schools. The daily workload of the two Ombudsmen sees
several hundred cases open at any given time and some thousands dealt with each year. And yet there
needs to be continuing publicity given to the work of the office. This can be in the media, through thecountry s ethno-minorities, in school publications and by receiving public airing in Parliament and its
Select Committees. The New Zealand office continues to handle more complaints annually. In 1965 theannual total was 743; in 1975, 1163; in 1985, 1994, in 1995, 4707 and in 2003 no fewer than 5121 cases
were under investigation in the course of the year to June 2003.
Publicity is vital. The notion of the office being one of last resort for the community must bepreserved. It also seems appropriate to ensure that the office is reactive to complaints by individuals andis not engaged in what might be termed artificial solicitation of complaint. It is generally agreed that low
key but regular publicity and dissertation regarding its services meets the matter best.
It might be thought that the Ombudsman office, by having grown incrementally for over 40 years, allover the world, would have an assured position in the framework of every modern state, and that nothing
has emerged which might replace it. Developments of the last decade would suggest this to be so. The
installation of an Ombudsman (entitled the Public Protector) in South Africa is a good example, but so
too are new States in Africa and Eastern Europe. But there is no room for complacency regarding
ongoing growth though, because whilst the office has certainly grown through two generations (taking
1960 as a baseline), government administrations of the early 21st century can be of a far different size andstyle and may exert a much different influence on the citizenry. In New Zealand, widespread economic
reform and restructuring of government enterprise have reduced the numbers in the civil service. Many
people are now working under contract and for shorter periods. Successive Governments have adopted afunder/provider split with many of the providing functions being delivered by the private sector rather
than by government departments. In these terms, it could be argued that the need for an Ombudsman
service in New Zealand has lessened. But yet, the number of complaints referred to our office continue toincrease each year.
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Is recourse to the Ombudsman a worthwhile asset to the ordinary citizen? The question is intriguing
because the term redress usually connotes the ability to obtain some kind of order or sanction against adepartment or organisation. That ability to bring down sanctions is one reserved to judicial tribunals.
The Ombudsmen have, at least in New Zealand, never been granted such powers and neither have any
ever been sought. Professor Larry Hill, in his book The Model Ombudsman commented poignantly
that ... one of the institutions most interesting puzzles is its apparent effectiveness, despite minimal
coercive capabilities . The recent Netherlands Ombudsman, Marten Oosting is on record as saying thatthe major power available to an Ombudsman is in the mobilisation of shame .
The emphasis has rather always been on the Ombudsmens ability to persuade the parties to some kindof resolution. It can certainly be said, from a New Zealand standpoint, that Ombudsman
recommendations have developed an enviable record of being adopted, even if not in the short term, thencertainly in the medium and longer terms.
New Zealand barrister and writer, Dr Graham Taylor (who co-incidentally worked as legal counsel to
the Ombudsmen in the 1980s), in a paper published in Judicial Review of Administrative Action in the
1980s described administrative review in New Zealand as being available by three broad means: first in
the courts, secondly under the Official Information Act and thirdly by referral to the Ombudsmen . If thejurisdiction of the third of these is to remain meaningful, there must be regular review and reappraisal of
the role. The Ombudsmen must be able to operate in an independent fashion; they must be encouraged to
be flexible in resolving items, particularly where dispute has occurred; and they must retain credibility
both with the public and with those organisations subject to coverage. One of the keys to maintaining
credibility for the Ombudsmen office is that the incumbent should never be seen to become an advocate
for either complainant or organisation. The Ombudsman should be seen to undertake a separate anddistinct review. If there is a role for advocacy, it should be restricted to the Ombudsman advocating theparticular recommendation in a particular case following an independent review.
Let me end with four quotations, the first from Bridled Power one of the co-authors of which is aformer New Zealand Prime Minister, Sir Geoffrey Palmer:The introduction of Ombudsmen has had a healthy effect on decision-making in the
New Zealand Government. They provide the check of independent scrutiny with fullaccess to the relevant information and the possibility of publicity about erroneous
Government decisions that affect individuals.
The second quotation is from Hon Mrs Anson Chan who, in 1997 was appointed to be Head of the
Civil Service in the Special Administrative Region of Hong Kong - where the office has been retained,
following the return of Hong Kong from British Colonial status to being part of China.
An Ombudsman has a difficult job. [He] has to maintain [his] independence andimpartiality, not an easy task as many issues become more and more politicised. And agood Ombudsman should always try to strengthen the relationship between the public
and the government. It is only too easy to find fault in a way that will adversely affectthe credibility of the government and demoralise staff. It is all the more difficult tomake constructive criticisms that will enable civil servants to understand how they cando their jobs better, thereby improving the standard of service to the community, and at
the same time enhance the public understanding of why a government takes thedecision it does. An Ombudsman needs courage, intelligence, determination andsensitivity to do [his] work successfully.
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The third quotation is from Justice Kantharia, recently deceased Ombudsman of the State ofMaharashtra, India, writing for an Ombudsman meeting in the mid 1990 s.
The basic foundation of the institution of Ombudsman is to ensure that citizens should
not be the victims of actions of the bureaucracy or other functionaries. The central
feature of the institution is that the investigation and association of administrative
conduct would confirm the basis for proposals as to future conduct of the bureaucrats.
The purpose of investigation is not only the redress of individual complaint, butprevention of future ones. Thus an Ombudsman is able to make suggestions for
improving performance and better service to the citizens in the light of experience
gained while investigating into public grievances. The institution has to be quite alert
to prevent maladministration. To put it precisely, the institution of Ombudsman is a
device by which the state provides free service of an independent investigator for
looking into citizens complaints and submits its own decisions and suggestions for
remedial action.
The final quotation is from New Zealand s first Ombudsman, Sir Guy Powles, who declared upontaking office.
The Ombudsman is Parliaments person - put there for the protection of the individual,
and if you protect the individual, you protect society. I am not looking for any
scapegoats or embarking on any witch hunts. I shall look for reason, justice, sympathy
and honour, and if I don t find them, then I shall report accordingly.

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SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERSCORRUPTION CONTROL:MORE THAN JUST STRUCTURES, SYSTEMS AND PROCESSES ALONE

Chua Cher Yak *I. BACKGROUND
Post independent Singapore has transformed itself from a corruption-infested city-state to one that has
been consistently rated by independent survey agencies to be amongst the least corrupt countries in theworld. We have been placed amongst the five least corrupt countries in the world by Transparency
International in the last two years (not mentioning even third in 1995). The Political and Economic Risk
Consultancy (PERC) on the other hand, has placed us, since the inception of the survey in 1996, as thecleanest in Asia.
It may sound immodest but I must hasten to say that this is certainly not due to some fortuitous
circumstances, or some quirks or accidents in history. The Government was determined, through sheer
political will, to reverse the trend of the colonial and the immediate post colonial days. It has madecorruption control very much part of its national agenda, viewing corruption control as inextricably tied togood governance. Corruption control ensures our survival as a nation and as a people. Consequently,
corruption which was probably once a way of life, gradually gave way to a counter culture that abhors
corruption, nepotism and cronyism.

II. RATIONALE & GUIDING PRINCIPLES
Enough has been said publicly by government leaders about the need to maintain a corruption-freeSingapore. I will, however, recount some of the more significant ones.
First, the mood for a strong anti-corruption policy and the resolve to curb corruption was struck by
the government as early as 1960 in Parliament when it declared that:

The Government is deeply conscious that a Government cannot survive, no matter how good its aims
and intentions are, if corruption exists in its ranks and its public service on which it depends toprovide the efficient and effective administrative machinery to translate its policies into action...
Therefore, this Government is determined to take all possible steps to see that all necessary legislative
and administrative measures are taken to reduce the opportunities of corruption, to make its detection
easier and to deter and punish severely those who are susceptible to it and who engage in it
shamelessly.

* Director, Corrupt Practices Investigation Bureau, Singapore.

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Second, the strong anti-corruption refrain was heard again and again including this one, made in 1979
by the then Prime Minister, Mr. Lee Kuan Yew, when he explained the need for a corruption-freeSingapore in the following way:
The moment key leaders are less than incorruptible, less than stern in demanding high standards,
from that moment the structure of administrative integrity will weaken, and eventually crumble.
Singapore can survive only if Ministers and senior officers are incorruptible and efficient... Only
when we uphold the integrity of the administration can the economy work in a way which enables
Singaporeans to clearly see the nexus between hard work and high rewards.
Only then will people, foreigners and Singaporeans, invest in Singapore; only then will Singaporeans
work to improve themselves and their children through better education and further training, insteadof hoping for windfalls through powerful friends and relatives or through greasing contacts in theright places.
Third, corruption control is not viewed simply as just a moral issue. Senior Minister Lee Kuan Yew
explained as recently as 1999 that Singapore s tough stand against corruption was not a matter of virtue,
but of necessity . This is consistent with an earlier statement he made. As Prime Minister, he said:
Staying clean and dismissing the venal is one of the six guiding principles of the PAP Government.

III. SIGNIFICANCE OF POLITICAL WILL IN CORRUPTION CONTROL
What of this? How does this explain what works and what does not? How much does all the political
will translate into success? I shall attempt to explain how political will, in my personal opinion, is almost
everything, in this long and arduous road to relative success.
Political will provides the foundation for all anti-corruption efforts. It forms that all important substructure, upon which, all the super-structures of anti-corruption work rest. It provides the soil and thenutrient which allows the seeds of anti-corruption work to germinate and grow; first into a strong sapling,
then into a sturdy tree.
But genuine political will has to be more than some pious rhetoric, some empty sloganeering. Words
must match deeds. There has to be a sincerity of purpose and the all important display of personal
example. Recognising this, political leaders have unflinchingly submitted themselves to scrutiny anddemonstrated much verve and vigour fighting corruption. Knowing that if they were to live in glasshouses they cannot throw stones, they set personal examples and established the much needed moral
authority to stamp out corruption. It is simply a question of honest men and honest deeds. Honest deeds,
surely, are the ultimate expression of the political will for corruption-control.
Fired by a consuming political will, the government then set out to remove all obstacles that are in
their way. Weak laws were strengthened when they could have easily been exploited by the ruling elite
for their corrupt ends. They mobilised the public, the entire civil service and all apparatus of the state,including the judiciary, to fight corruption. Nobody works at cross-purposes. All efforts are harmonised.
There is unity of action as much as there is unity of purpose. Everyone is galvanised by like-mindedness,
almost as if they were swept by some royal or imperial edict.

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SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERS
Spurred by a grand political purpose, the Government re-created and re-fashioned the Corrupt
Practices Investigation Bureau out of the ashes of an ineffectual anti-corruption agency left behind by thecolonial masters, to help it fight corruption. We became but one of the many instruments in thegovernment s arsenal to fight corruption. CPIB, as reconstituted, however, could just be a still-born idea
if not for the fact that political will and blessings allowed it to flourish. A revamped CPIB was neverborn out of a need to fight a corrupt government. We were re-created by an incorrupt government to fightcorruption. We did not start as a civil movement fighting against a corrupt government. If we had, wewould not have gone far. Unlike many agencies which grew out of a need to fight a corrupt
establishment, we never have to work antagonistically against the Government and the entire public
service. Certainly civil movements or NGOs played no significant role in the successful fight against
corruption in Singapore. The presence of any such movement will, in fact, be seen as an affront to, andan indictment of the effectiveness of CPIB. After all, NGO is just a euphemism for lobby groups orpressure groups, established by those disenchanted or dissatisfied with the state of corruption.
Driven by an intense political will, there was an almost obsessive desire to succeed in the anticorruption effort. The Government signalled this by taking complete control and ownership of the entireanti-corruption movement. It made CPIB report directly to the Prime Minister so as to block any undue
interference from any quarters and to ensure that CPIB favours no one particular department or agency.
Under the wings of the Prime Minister s Office, CPIB was able to truly operate without fear or favour. In
fact, by 1992, CPIB s independence of action was more or less guaranteed constitutionally. With such
independence of action, CPIB took action against Ministers and many top civil servants.

IV. A SIMPLE FORMULA?
So is there a simple formula in corruption control? An ancient Chinese official once said that
corruption is the product of bad men and bad laws. If this be so, the formula must then be a frightfully
simple one: have good men and have good laws. Let there be good men in government. Let them beblessed with the necessary political will. They will then have sufficient motivation, as standard bearers ofanti-corruption, to enact good laws which are a sufficient deterrent against the wayward. If the badstrayed from the straight and narrow, they could be straightened and recycled through good laws so thatthey may become good again.
A. Framework: Temple of Corruption Control
Contemporary mankind is, however, more used to formatting solutions according to systems andframeworks. For this, I have constructed a framework which I shall call the Temple of Corruption
Control . This consists of four pillars resting on the foundation provided by Political Will . These fourpillars are: Effective Anti-Corruption Agency , Effective Laws , Effective Adjudication andEffective Administration and Other Best Practices . Of course, the temple is shrouded by a halo,significantly known as Good Governance . These constitute the National Integrity System. Having dealt
with Political Will as an important foundation, I shall now elaborate on each of these four pillars.

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Temple of Corruption Control

B. Effective Anti-Corruption Agency
It will, of course, be difficult for me to make judgement on how effective CPIB is, as an anticorruption agency. But, let me say that we have always endeavoured to be a crack investigative agency,
committed fully to our mission of combat(ting) corruption through swift and sure action . We hope tofulfil this sacred mission through three broad strategic objectives:(i) To continuously improve operational effectiveness;(ii) To be proactive through superb intelligence craft; and(iii) To support operations through learning and innovation and associated human resource
programmes.
We would like to think that we have through swift and sure action heightened the perceived risks of
involvement in corrupt activities. We also hope that through our strong action, we have rendered
corruption a high risk, low return business.
Our aspirations and what we stand for, is best captured by the following features in our logo:-(i) A cascade of squares symbolises the pervasive effects of our anti-corruption efforts, besides
being a stylised version of the letter I in CPIB . Significantly, a square is both an icon and ametaphor for fairness;(ii) The dot in the letter i doubles as an eye and a globe. As an eye, it proclaims our watchful andvigilant stance while the globe symbolises our aspiration as an effective agency on a global scale.
What statistics have we to back this up? The following facts and figures are pertinent.
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SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERS(i) Clearance Trend
The Clearance Trend for the past five years shows that it has crept up significantly from 77.3%
in 1998 to 97.9% in 2002.

Clearance Rate (%)

100
98.0

97.9

2001

2002

93.8

90
89.6

80
77.3

70

1998

1999

2000

(ii) Cycle TimeThe Cycle-Time which shows an improving trend over the last five years, such that at the endof 2002:
59% of cases were cleared within 30 days or less
79.3% of cases were cleared within 45 days or less
88.9% of cases were cleared within 60 days or less
93.2% of cases were cleared within 75 days or less
96.7% of cases were cleared within 90 days or less
100
90

93.1
87.2

90.7

80
78.1

＜＝30
＜＝45
＜＝60
＜＝75
＜＝90

71.8

96.7
93.2

85.3

80.4

70

96.0

86.3

88.9

80.0

79.3

70.3

60
59.1

59.0
55.1

50

53.2

40.5

40

1999

2000

2001

2002

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RESOURCE MATERIAL SERIES No. 65(iii) Prosecution Rate
The Prosecution Rate shows that between 187 and 251 persons were charged in court in thelast three years, and between 74 and 125 were disciplined for the same period. Expressed as apercentage of the cases completed, the prosecution rate for the past three years is between 73.4%
and 87.3%.
Year
2000
2001
2002

Total No. of Persons
Charged in Court
242
187
251

Total No. of Persons sent for
Disciplinary Action
125
94
74

It is also important to mention that we subscribe fully to the principle of continuous improvement.
Our yearly targets are reviewed. Fresh targets and benchmarks are set annually in a bid to raise the bar.
C. Effective Laws
Effective laws are enforcement-friendly laws that give us the necessary teeth and the cutting edge.
Enforcement-friendly laws are particularly necessary in corruption control. This is because corrupt
practices, by their very nature, make evidence collection and the eventual conviction in a court of law
difficult. Corrupt practices are consensual in nature, with both the giver and the taker motivated bymutual interests. Often, a happy situation exists. There is a satisfied giver and a satisfied taker. Bonded
by such mutual interests, one, naturally, will not squeal against the other.
The distinctive features of our law that gives us the much needed cutting edge are:(i)

gratification is so broadly defined that it covers a whole multitude of sins as it embraces, interalia, favour or advantage of any description whatsoever .
(ii) a presumption that any gratification received by a public officer from a person who has or seek tohave dealings with him or the department, is deemed to have been received corruptly, shifting theburden of proving otherwise to the defence (and a very significant shift at that);(iii) an acceptor of a gratification can be guilty even if he does not have the power, right oropportunity to return the favour;(iv) the accomplice-rule which views the evidence of an accomplice as unworthy of credit unlesscorroborated, is removed;(v) wealth disproportionate to income is admitted as corroborative evidence of corruption in a trial;(vi) the Public Prosecutor can order any other public officers or persons who can assist in theinvestigation of a public officer, to furnish sworn statements, specifying property belonging tohim, his spouse and children, including money and property transferred out of Singapore;(vii) every person under investigation is legally obliged to give information;(viii) the Public Prosecutor can obtain information from the Comptroller of Income Tax on anyone
under investigation;(ix) extra territorial jurisdiction can be exercised against Singapore citizens committing corruption
offences outside Singapore;(x) punishment is sufficiently deterrent. A single charge attracts a maximum fine of $100,000 or an
imprisonment term not exceeding five years or both. For offences involving Government
contracts or those involving bribery of a Member of Parliament, the maximum jail term isextended to seven years, although the maximum fine remains at $100,000. A penalty equal tothe amount of bribe taken shall also be imposed. The Corruption, Drug Trafficking and other
Serious Crimes (Confiscation of Benefits) Act can be invoked to confiscate any benefits derived
from corruption from anyone convicted of the crime.
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D. Effective Adjudication
Sure detection, and strict enforcement of laws, no matter how effective, must however, becomplemented by effective adjudication. Detection, prosecution and subsequent conviction in a court oflaw exert a powerful specific deterrence directly on the person indicted for the offence. This also has ageneral deterrence on the like-minded. To borrow an old Chinese saying, this amounts to killing one tofrighten a hundred . Or, as they also sometimes put it, it is killing the chicken to teach the monkey . It
is prevention through sure detection and conviction in a court of law. In the words of the Chief Justice:
The Government recognizes that deterrence remains the cornerstone of our penal philosophy. Oursentencing policies must continue to reflect the importance of public order and discipline. The
criminal justice system must bear down on the recidivist. The framework for benchmark sentence
should be consistently reviewed and refined, in the light of evolving criminal trends. (Subordinate
Courts Workplan Seminar, 2003).
Yet nothing is more poignant than what Senior Minister Lee Kuan Yew said when he was Prime
Minister, in Parliament in 1987:
The strongest deterrent is in a public opinion which censures and condemns corrupt persons; in otherwords, in attitudes which make corruption so unacceptable that the stigma of corruption cannot be
washed away by serving a prison term.
Consistently over the last five years, we have very good conviction numbers to back this penal
philosophy. The average is above 95%, with the figure peaking at 99.1% in 2002. This is not possible if
the prosecution office and the judiciary do not see themselves as having a part to play in dispensing
justice to ensure overall crime control, including corruption control. How well has our Judiciary played
this role? At least well enough to be rated as No. 1 in the world by World Bank since 1997. The prelude
to this were some extensive judicial reforms undertaken from 1992 to 1999, during which more than
1,000 justice-related initiatives were implemented. In a paper presented to the 10th UN Congress on thePrevention of Crime and the Treatment of Offenders in 2000, Lau Wing Yum, a judge and a registrar of
courts, said: This (the reforms) greatly enhanced access to justice and advanced public trust andconfidence in the justice system and in the rule of law ... in turn prevents the breeding of corruption
within the court system, as the justice processes become more transparent and visible to public scrutiny
and as the Judiciary makes itself accountable to the public for the use of its resources.
In the same paper, Lau also mentioned that the Courts observed the Ten Commandments in order tokeep the Judiciary corruption free. The Ten Commandments are:
1. Transparency in the selection and promotion of judges based on merit, competency in legal
knowledge and experience, besides publicly gazetting all promotions and appointments.
2. Adequate remuneration to judges and court staff, according to salary scales prescribed by the Judges
Remuneration Act.
3. An independent yet accountable Judiciary. The Courts are free of any external interference in the
judicial decision making process. At the same time, the Judiciary is subject to external audits toensure accountability in the courts use of public resources.
4. A coherent system of case management which eliminates backlogs and shortens waiting time,rendering the Judiciary almost invulnerable to mismanagement of cases.
5. A Justices Scorecard for the Judiciary and the Judges which rigorously tracks performancemeasured through time-based, volume-based and disposal-based indicators.
6. Consistent and objective criteria in the administration of justice, including the establishment of a235

RESOURCE MATERIAL SERIES No. 65

centralised sentencing court, standardised composition fees and fines and the application of tariffs
in sentencing, etc.
7. Clear ethical markers and guidelines for the Judges, comprising the Judges Oath of Office, Judicial
Ethics Reference Committee Report, Code of Judiciary Ethics and the Government s Instruction
Manual.
8. A common vision for the Judiciary and Leadership by Example by the Chief Justice provides unityof vision and purpose. This checks any likely corrupt tendencies arising from uncertainties anduncoordinated action.
9. Transparency in the justice process as all court proceedings are open, public hearings. Decisions are
documented and subject to public scrutiny. Both the prosecution and the defence can appeal
against any decision made by the Courts.
10. Learn from forward-looking institutions, through the forging of strategic partnership with forward
looking, progressive judiciaries and justice-related institutions.
E. Strategic Intent
Whatever the framework may be, the strategic intent is that corruption control should form part of thebroader framework of good governance. It is an important enabler , which, at least in Singapore,
resulted in two spin-offs; which in turn, set off a virtuous cycle.
1. It helps the Government to create national wealth. This concomitantly, enables it to pay public
officials fairly attractive wages. Decent wages were, thus, only possible because it was corruption
control that helped create the initial abundance and prosperity. Yet, are high wages a strategy incorruption control? High wages satisfies needs but does it curb greed? The Government s views on
this are best captured by Bob Crew of the South China Post in Aug 1973, when he said:by giving people their self respect and enough money in their pockets - by restoring to them, if
you like, their dignity and its corresponding integrity of purpose, they are more likely to regard
corruption as beneath them and less likely to abandon their public and private consciences; lesslikely to sell their souls to the devil.
If one s wallet is as big as ones conscience then, in the view of many a worldly-wise cynic, one s
conscience is better able to succeed.
2. It helps to bring about efficient administration, an obvious outcome of good governance, perhaps.
The inter-relationship between efficiency and corruption control is again succinctly summed up by
Bob Crew of the South China Post when he said in the same previously cited article, the following:
Singapores approach to the problem of corruption is, we are told, simply one of efficiency inadministration.
The theory is that the administration is so tight, so efficiently run and controlled, that there is noroom for corruption which thrives much better in an inefficient administration in which there areplenty of loopholes for it to flourish unnoticed and unchecked, where there is scope forhoodwinking and beating the system.
Singapore takes the view that if a Government can institute and operate an efficient system, thenit can as easily achieve an efficient anti-corruption sector as it can achieve efficient business,
industrial, political and military sectors.

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SIXTH INTERNATIONAL TRAINING COURSE ON CORRUPTION CONTROLVISITING EXPERTS PAPERS
Additionally an efficient administration can only be run by people who are turned on by and,good at, efficiency; people who are thereby content rather than discontent, fulfilled rather thanfrustrated, dedicated rather than disloyal, satisfied rather than dissatisfied, incorrupt rather thancorrupt.
Imbuing in public officers a desire for service orientedness definitely has far reaching consequences.
Since service excellence and the need to comply with standard operating procedures are incompatible
with corrupt practices, any quality related movement will militate against corruption, and hence have preemptive potential. And in this, the stark question is, what if CPIB itself, of all agencies,
underperforms?
Singapore has a head start of some forty odd years in corruption control. But success came as early asin the 60 s and the 70 s, during which two turning points caused a fundamental shift in the national
psyche. These were:
1. the conviction in 1975 of Wee Toon Boon, a Minister then, and the subsequent investigation of otherpolitical leaders, had tremendous symbolic significance for the public. The public saw forthemselves the Government s sincerity and resolve to fight corruption. They probably reasoned that
if the Gods at Mount Olympus are not spared of the due processes of the law, what chance would
lesser mortals like them have; and2. the public, so used to a previous situation in which corruption was rife, appreciated immensely, a
new public service in the 60 s and the 70 s that was free of all encumbrances brought upon bycorruption. This whetted their appetite for further corruption control. Demands when met resulted
in even higher expectations. This touched off yet another virtuous cycle.

V. CONCLUSION
The moral of my story, the bottom-line, is that it is far easier to have a good, clean government
administering a good, clean system than it is for a good anti-corruption agency to clean up a corrupt
government and a crooked system. In the latter case, the result is almost predictable; the anti-corruption
agency is likely to come off second best. Clearly, most governments will possess enough fire power tooverwhelm even the most intense, well-meaning anti-corruption agency. They can make or mar theefforts of any anti-corruption agency. So, we in CPIB can only be as effective as the government wants
us to be. CPIB has the structures, systems and processes that were allowed to work, given the right
operating environment created by a strong political will. Unless the will to succeed is forged, much of
any anti- corruption programme will remain a passive declaration of intention. They will be nothing
more than some idle talk. There is, therefore, always the need to walk the talk. Clearly, mere systems,
structures and processes, do not necessarily provide the template for success. The magic is in thesincerity of purpose; genuine efforts, not the less than honest labour.
CPIB has to a large extent, executed the Government s will. Propelled by a strong political will, CPIB
helped create a strong anti-corruption ethos and the accompanying odium attached to corruption. This,
however, does not mean that we have completely eradicated corruption. No society ever will, given thefact that mankind is fallible, not infallible. By nature man is acquisitive, almost covetous. While themajority in Singapore falls in line, there is always the offending few who will find it necessary to satiate
either their greed or their needs.

237

REPORT OF THE GENERAL DISCUSSION
Chairperson:
Co Chairperson:
Rapporteur:
Co Rapporteur:
Members:

Ms Deana Perez
Mr Roberto Javier Moreno
Ms Yara Esquivel Soto
Mr Mwape Dancewell Bowa
Mr Mohammad Mohiuddin
Mr George Svanidze
Mr Ramji Lal Koli
Mr Purbatua Hutabarat
Mr Zulqarnain Bin Hassan
Mr Kedar Prasad Chalise
Mr Daniel Isaac Centeno Espinoza
Mr Jim Wala Tamate
Ms Wassa Chaimanee
Mr Shin Hashimoto
Mr Yosuke Kodama
Ms Mihoko Tanabe
Ms Chadarat Anakkaorn
Mr Piset Nakhaphan
Mr Salem Oustas
Ms Sirirat Vasuvat

Visiting Experts:

Judge Anand Satyanand
Mr. Chua Cher Yak

Advisers:

Director Kunihiko Sakai
Deputy Director Tomoko Akane
Professor Toru Miura
Professor Yasuhiro Tanabe
Professor Keisuke Senta(Philippines)(Panama)(Costa Rica)(Zambia)(Bangladesh)(Georgia)(India)(Indonesia)(Malaysia)(Nepal)(Nicaragua)(Papua New Guinea)(Thailand)(Japan)(Japan)(Japan)(Thailand)(Thailand)(Thailand)(Thailand)(UNAFEI)(UNAFEI)(UNAFEI)(UNAFEI)(UNAFEI)

I. INTRODUCTION
The participants of the Sixth International Training Course on Corruption Control started the general
discussion after having heard lectures from visiting experts, ad hoc lecturers and UNAFEI professors aswell as individual presentations from each participant. They had before them various materials
concerning corruption, including the text of the United Nations Convention against Corruption, which
was adopted by the General Assembly on October 31st, 2003. The discussion of the participants focusedon how to implement the provisions of this Convention, so that their countries could become parties tothis instrument.

II. POLITICAL WILLIn addition to legal and technical questions related to the implementation of the Convention, the groupemphasized the necessity for political will on the part of government leaders, law makers and top
officials, to actually fight corruption and become an effective party to this Convention. It is essential forthis purpose to raise public and political awareness, and the existence itself of the UN Convention can beused for this campaign.
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SIXTH SPECIAL TRAINING COURSE ON CORRUPTION CONTROLREPORT OF THE GENERAL DISCUSSION
The participants agreed that political will is the main ingredient necessary when dealing withcorruption. It has been established that their legislation include several provisions to deal with this illness,but depicting them on paper is not enough. The political will has to be manifested with actions in orderfor it to be brought down from Legal Heaven into reality. However, political will is not present in mostof our government s underlying behaviour. It can easily be inferred from almost all the individual
presentations of this Course, mentioning that it is necessary to obtain congressional approval in order tolift immunity for some politicians, or when anti-corruption institutions are forced to work withinsufficient tools, technology and financial support.

III. CRIMINALIZATION AND LAW ENFORCEMENT
The participants reviewed the provisions in the Convention related to the criminalization of certain
conduct related to corruption. All countries have enacted laws against embezzlement, misappropriation orother diversions of property by public officials. Thus, the main issue seemed to be the criminalization ofbribery of foreign public officials and officials of public international organizations. Many participants
stated that their countries have to revise their domestic legislation to meet the requirements of Article 16of the Convention. The criminalization of bribery of domestic officials does not pose any serious
problems, since all countries have provisions to criminalize this conduct. However, some countries haveto revise their laws because a simple offering of a bribe is not enough to constitute a crime. Many
countries also need to revise their laws to criminalize the conduct of the obstruction of justice as required
by Article 25. Although most countries include intimidation of witnesses as a criminal offence in theirlegislation, they lack provisions for paragraph (a) of this article on the influence to the witnesses. The
main issue brought up by this article is the action of the briber in influencing the witness more than thereaction of the latter, because failure to testify by the witness has consequences but bribery of a witness toinfluence him/her goes unpunished. Although all countries have a law to punish money laundering, themeeting noted that in order to fulfil the obligations under the convention, there is a need to expand thescope of predicate offences. Most countries manifested that their legislation includes the laundering ofproceeds of corruption crimes in some way or another. However, it is yet to be seen if their legislation
covers all the offences established by this Convention.
While some articles were established as mandatory by the Convention, others were left to thediscretion of the State Parties. To illustrate, paragraph two of Article 16, merely suggests thecriminalization of solicitation or acceptance of bribery by a foreign public official, etc. However, theparticipants agreed on the advantages of making this provision mandatory. Regarding this matter,international mutual assistance becomes essential, because investigators have to gather evidence outside
their own jurisdictions.

IV. PREVENTIVE MEASURES
Preventive measures are even more necessary than repressive actions. The latter become redundant
once the problem is treated from the root. The participants concluded that preventive measures and anti
corruption policies are best conducted by an independent body. To complement such a body, there is aneed for the legislation of free access to information to be enacted in all jurisdictions, in order to arm andempower all sectors of society in matters of transparency and good governance.
Out of several measures included in the Convention, the participants emphasized educational
strategies targeting the youth, such as the inclusion of an ethics programme in school curricula and values
formation in order to reshape the countries consciousness. For example, the Zambian Community
Relations Department conducts annual youth festivals, where, among others, the youth are encouraged to239

RESOURCE MATERIAL SERIES No. 65

participate in essay competitions and theatre performances on the theme of corruption. Also, in Thailand,
the NCCC publishes and distributes children s story books which depict honesty and integrity as noble
values.
Awareness campaigns for the general public are instrumental. The public should be conscious of theevils of corruption, as well as their capacity to carry on the necessary actions to prevent, report andsuppress it. A strong and educated media is essential for these purposes. Providing the press withreasonable access to governmental offices and documentation is a helpful tool for the civil society in thefight against corruption. It helps in maintaining constant public scrutiny over public officials, therefore
making it more difficult to commit wrongdoing.
Involvement of Non-Governmental Organizations should be promoted, as it gives private citizens oneof the last resorts against corrupt public officials belonging to government institutions perceived by themas insensitive to their concerns. Finally, the control of campaign contributions during election periods was
discussed. The participants agreed that even if most of their countries have the legislation requiring thedisclosure of the origin of such contributions, there is no real criminal sanction, or at least administrative
sanction, for concealing or altering this information.

V. ASSET RECOVERYThe participants noted that most jurisdictions have legislative provisions for asset recovery, however,in practice, these provisions have proven ineffective. Different procedures to obtain banking information
are common to all the countries, but there are subsequent difficulties and delays to secure the documents
needed for investigation.
The main problem revolves around the implementation or enforcement of the law, particularly whenassets are deposited in foreign jurisdictions. Therefore, the participants believe once more thatinternational mutual legal assistance should be encouraged. The participants also expressed concern withthe fact that confiscated assets from corruption offences can seldom be returned to their origin, andpossibly utilized by law enforcement institutions to continue with their efforts. On the other hand, mostlegislation obliges governments to maintain all income in one single account managed by the treasury,emphasizing the difficulty of the recovery. The only real mechanism established in most of theirlegislation for the recovery of proceeds of crime, is the interposal of civil actions, which has proven to beineffective, as these assets are easily distracted.
Furthermore, the recovery of property acquired with proceeds of corruption offences in otherjurisdictions is quite difficult when there are no international treaties that bind foreign governments tocooperate. The participants agreed that the UN Convention provides the basis to recover such property ina swifter manner.

VI. OTHER ISSUES
Other issues discussed by the participants included the need for the establishment of a merit based
civil service system, in which public officials would be selected and promoted according to their skills,
knowledge and experience, rather than their political connections. This new system is required to provide
public servants with an adequate work environment, in order to avoid the attraction of bribes. Measures
such as the increase of salaries for public officials and security of tenure that prevent their removal after
new elections are held are imperative to achieve this. It was noted that although this has financial
implications on the national treasury of each country, governments should consider making this issue apriority, in light of the important role that public workers play in the delivery of social services, as well as
attending to the high economic cost that corrupt officials represent year after year.
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SIXTH SPECIAL TRAINING COURSE ON CORRUPTION CONTROLREPORT OF THE GENERAL DISCUSSION
The participants also manifested concern in regard to the issue of immunity and concurred that eachcountry s law should be revised to limit the extent of the immunity granted to politicians, so that it does
not hinder the investigation and subsequent prosecution of these people.
The importance of human resource development through training activities in the general field ofcorruption was also considered by the participants and it is recommended that governments invest in this.
It was underscored that certain provisions in the convention had financial implications, such as the callfor a witness protection programme. However, this poses an enormous difficulty for most of theircountries, due to their small populations and the lack of financial resources to provide the required
protection and benefits for witnesses. Thus, international cooperation, as stipulated in paragraph 3 ofarticle 32 of the Convention, particularly in the area of witness relocation, is essential to achieve this.
But international cooperation should go beyond this matter. Chapter VI of the Convention deals withinternational technological and training assistance. This subject was introduced when discussing the lackof technology and modern surveillance equipment in most of their countries, which contributes to the rateof failure of detection and investigation of these offences. It has become clear that white collar criminality
is transcending the borders, and this means that law enforcement agencies must transcend these borders
themselves, through international cooperation.

VII. RECOMMENDATIONSAt the end of the discussion, the participants agreed to adopt the following recommendations:
1. Countries should seriously consider signing and ratifying the UN Convention Against Corruption
without any reservations.
2. Countries should implement in full the mandatory provisions of the Convention by enacting necessary
legislation and taking other measures.
3. For that purpose, countries should examine their domestic legislation and their practices in corruption
counter fields vis-a-vis every provision of the Convention.
4. Subject to the basic principles of their domestic legal systems, countries are encouraged to implement
the optional provisions of the Convention.
5. Countries are also encouraged to adopt, as appropriate, more strict or severe measures than those
provided by the Convention for preventing and combating corruption, in accordance with article 65 of
the Convention.
6. Countries should enhance international cooperation, including extradition, mutual legal assistance andlaw enforcement cooperation, to effectively cope with corruption.
7. United Nations and other organizations, as well as countries, should play an active role in facilitating
the signing and ratification of the Convention through technical assistance and technical cooperation.

241

APPENDIXCOMMEMORATIVE PHOTOGRAPHS
・ 125th International Training Course・ Sixth International Training Course on Corruption Control in Criminal Justice

UNAFEIThe 125th International Training Course

Left to Right:
Above:Mr Kwok (Hong Kong), Prof. Miura, Prof. Yokochi
4th Row:
Mr Koyama (Staff), Mr Dai (Staff), Mr Saito (Chef), Mr Tada (Staff), Mr Nakayama (Staff), Mr
Miyakawa (Staff), Mr Inoue (Staff), Ms Masaki (Staff), Ms Tsubouchi (Staff), Ms Yanagisawa(Staff)
3rd Row:
Ms Nagaoka (Staff), Ms Yamashita (Staff), Ms Miyagawa (Staff), Mr Mugasa (Tanzania), Mr
Nishikata (Ministry of Justice), Mr Sawada (Japan), Mr Watanabe (Japan), Mr El Miggbbir (Egypt),
Mr Fujisawa (Japan), Mr Suzuki (Japan), Mr Vilavath (Laos), Mr Furusaki (Japan), Ms Yamamoto(JICA)
2nd Row:
Mr Jiwal (India), Mr Siinmaa (Estonia), Mr Hirata (Japan), Mr Nakauchi (Japan), Mr Krirkkiat(Thailand), Mr Kume (Japan), Mr Kanosue (Japan), Mr Dorji (Bhutan), Mr Kazmi (Pakistan), Mr
Bartolome (Philippines), Mr Sibounzom (Laos), Mr Asra (Indonesia), Mr Hussain (Maldives), Mr
Jalalludin (Malaysia), Ms Muto (Japan), Ms Diah (Indonesia)
1st Row:
Mr Cornell (L.A.), Mr Ezura (Staff), Prof. Shinkai, Prof. Senta, Prof. Tanabe, Mr Oberg(Sweden), Ms Somerville (Australia), Ms Samuel (U.S.A.), Mr Nilsson (EU), Director Sakai, Mr
Prempooti (Thailand), Mr Laborde (UN), Dr. Smith (Australia) Dep. Director Akane, Prof. Takasu,
Prof. Someda, Prof. Teramura, Mr Fukushima (Staff)

The Sixth International Training Course on Corruption Control in
Criminal JusticeLeft to Right:
Above:
Prof. Someda, Prof. Teramura, Prof. Yokochi, Prof. Shinkai
4th Row:
Mr Nakayama (Staff), Mr Dai (Staff), Mr Saito (Chef), Mr Tada (Staff), Mr Miyakawa (Staff), Mr
Inoue (Staff), Ms Yanagisawa (Staff), Ms Yamashita (Staff), Ms Masaki (Staff), Ms Tsubouchi (Staff),
Mr Koyama (Staff)
3rd Row:
Ms Miyagawa (Staff), Mr Tamate (Papua New Guinea), Mr Zulqarnain (Malaysia), Mr Hashimoto(Japan), Mr Bowa (Zambia), Mr Kodama (Japan), Mr Piset (Thailand), Ms Tanabe (Japan), Mr Salem(Thailand), Mr Moreno (Panama), Ms Nagaoka (Staff), Ms Taniguchi (JICA), Ms Ymamoto (JICA)
2nd Row:
Mr Centeno (Nicaragua), Mr Hutabarat (Indonesia), Mr Chalise (Nepal), Mr Koli (India), Mr
Mohiuddin (Bangladesh), Ms Perez (Philippines), Ms Chadarat (Thailand), Ms Wassa (Thailand), Ms
Sirirat (Thailand), Ms Rakotoarisoa (Madagascar), Ms Esquivel (Costa Rica), Mr Svanidze (Georgia)
1st Row:
Mr Fukushima (Staff), Prof. Takasu, Prof. Senta, Dep. Director Akane, Judge Satyanand (New
Zealand), Director Sakai, Mr Chua (Singapore), Prof. Miura, Prof. Tanabe, Mr Ezura (Staff), Mr
Cornell (L.A.)