116TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSEGROUP 3
PHASE 2COMPONENTS AND LEGAL FRAMEWORKS FOR COMBATING
TRANSNATIONAL ORGANIZED CRIME.
CRIMINALIZATION OF PARTICIPATION IN ORGANIZEDCRIMINAL GROUPS/CONSPIRACY; ANTI-MONEY
LAUNDERING SYSTEM; ASSET FORFEITURE SYSTEM (FORASSETS DERIVED FROM ORGANIZED CRIMES)
Chairman
Co-chairman
Rapporteur
Co-Rapporteur
Members

Visiting Expert
Advisors

Mr. Iddi Saidi King’wai
Mr. Sanjiv Kumar Upadhyay
Mr. Donald NgorNgor Awunah
Ms. Mitsuyo Inada
Mr. Zafar Iqbal Gondal
Mr. Takeshi Miyamoto
Mr. Tomoyuki Yokokawa
Mr. Franco Roberti
Prof. Keiichi Aizawa
Prof. Yuichiro Tachi
Prof. Akihiro Nosaka

I. INTRODUCTION
The monumental negative effects oftransnational organized crime on theeconomic, political and social spectrum ofnations cannot be over-emphasized.
Transnational organized crime undermines
the very foundations of world economies.
It tends to weaken and destroy
governmental machinery and institutions.
The sophistry in which members oforganized criminal groups perpetuate theirnefarious activities certainly has becomea great source of concern to governments
and law enforcement agencies all over theworld. The concerted efforts of various
countries within the ambit of the United
Nations to curtail the negative
consequences of transnational organizedcrime is indicative of the fact thattransnational organized crime poses great
danger to peace and tranquility of theworld.

(Tanzania)(India)(Nigeria)(Japan)(Pakistan)(Japan)(Japan)(Italy)(UNAFEI)(UNAFEI)(UNAFEI)The increasing bottlenecks in tackling
TOC both on domestic and international
levels can be attributed to the complex
nature of transnational organized criminalgroups. There is a dichotomy between theindividual criminal and the organizedcriminal group. The arrest, prosecution
and conviction of a member of any
organized criminal group does notnecessarily lead to the demise of the group.
Organized criminal group are stratified
into different levels. Every level requires
to play a particular role in the entire
criminal enterprise.
Consequently, criminalization ofparticipation in organized criminal groups,
developing anti-money laundering system
and articulating asset forfeiture systemthat enables law and enforcement agencies
worldwide to deprive criminals of theirproceeds becomes imperative.

251

RESOURCE MATERIAL SERIES No. 58
In this paper, however, attempt will bemade to analyze the components and legal
frameworks for combating transnationalorganized crime within context ofcriminalization of participation inorganized criminal group, anti-money
laundering system and asset forfeituresystem (for assets derived from organizedcrimes).
II. CRIMINALIZATION OF
PARTICIPATION IN ORGANIZEDCRIMINAL GROUPS/CONSPIRACY
A. Draft UN Convention Proposal
Previous efforts notwithstanding, thetenth United Nations Congress on thePrevention of Crime and the Treatment of
Offenders, Vienna, Austria, 10-17 April,2000 set in motion instrument “to alignnational laws in criminalizing acts
committed by organized criminal groups”.
The Ad Hoc Committee on the Elaborationof a Convention against Transnational
Organized Crime came out with a draft UN
Convention against TOC, in July, 2000.
The draft Convention proposes tocriminalize participation and conspiracy inregard to organized criminal groups.
Article 5 seeks to criminalize such activities
as agreeing to commit a serious crime,
participation in criminal activities oforganized criminal group, and organizing,
directing etc. the commission of serious
crimes.
B. Criminalization of Participation
Experience in various countries has
shown that the existing penal provisions
are not sufficient to deal with serious
crimes perpetrated by members oforganized criminal groups which came into
existence in such countries. Provisions
were therefore made in the penal laws to
include criminalization of participation bysuch criminal activities as organizing,
directing, facilitating, counselingcommission of serious crimes or taking part252

in the criminal and certain other activitiesof the organized criminal group as a specificcriminal offence.
One of such countries is Italy which
incorporated these provisions in its laws.
In a wider perspective, the Italian law
characterizes participation in an organizedcriminal group into four types, namely;(i)
association for purposes ofcommitting offences (simple
organized crime or conspiracy article 416 penal code),(ii) association for the purposes ofterrorism or subversion(subversive organized crime article 270 - bis penal code),(iii) Mafia - type association (Mafia type organized crime - article 416
bis penal code); and(iv) association for the purposes ofillicit trafficking of narcotic or
psychotropic substances - (Article
74 of Presidential Decree No. 309/
1990).
The difference between membership ofMafia-type organization and the otherthree associations is that while the latter
only require the creation of a stableorganization for the purposes of committing
indeterminate number of offences,membership of Mafia-type organization
additionally require the organizations tohave acquired genuine capacity for
intimidation in their area. The membersof the organizations must also exploit thispower to coerce third party with whom theorganizations enter into relations andoblige them to enter into a conspiracy ofsilence (Mafia method).
In China, the Criminal Law wasamended in 1997. Article 294 stipulates
that anyone who organizes, leads andactively joins any organization having
characteristics of underworld society which
by violation, menace or other methods

116TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
c o m m i t s c r i m e s o r g a n i z a t i o n a l l y,domineers in locality, makes hostileattacks, forces and harms masses cruelly,
and infringes gravely upon economic andsocial order, will be punishable withimprisonment of 3 to 10 years.
In Japan, however, law regarding
participation in an organized criminalgroup has not found favour with theauthorities as it may not be compatible
with the constitutional provision of freedomof association. To this end, if a common
provision were to be introduced regarding
definition of organized criminal group, it
may perhaps pose a great difficult toinclude certain organization while keeping
others out of its purview. There has been
noticeable strong feeling among certain
sections of the Japanese society against
introducing an omnibus legislation
criminalizing participation in an
organization. In view of such obvious
technical issues and perceived opposition,it has become a herculean task to arrive ata definite conclusion for crimmalization ofparticipation in organized criminal groups
in Japan.
In India, the existing laws were foundsufficient to deal with organized crime, butwith the organized groups forming a Mafia
type of organization, sometimes operatingfrom foreign countries, the laws have beenfound wanting in many respects. The
offence of criminal conspiracy which could
cover all the conspiring members could nolonger cover the top echelons of theorganized criminal groups who sometimes
were not taking part in day-to-day criminal
conspiracies to commit offences. However,they were running the criminal empire
from a distant position and were the
kingpins of all criminal activities of thegroup. With such inadequacies in view, thestate Government of Maharashtra enacted
Maharashtra Control of Organized Crime
Act in 1999. A central Act is howeverneeded to deal with this problem in otherparts of India, and therefore, theGovernment is already engaged in making
a draft legislation to be introduced in the
Parliament.
C. Conspiracy
Article 5(1)(a)(i) of the draft UN
Convention proposes that agreeing with
one or more persons to commit a serious
crime should be a penal offence. A similar
provision already exists in many countries
like Fiji, India, Indonesia, Laos, Malaysia,
Nigeria, Pakistan, Papua New Guinea,
Philippines, Tanzania, Thailand andUganda where conspiracy is a distinct
offence. The offence of conspiracy generally
states that when two or more persons agree
to do, or cause to be done an illegal act, theact is designated as a criminal conspiracy.
In Japan, the penal code, Chapter XI,
Articles 60 - 65 deal extensively withcomplicity among co-principals, instigators,
and accessories. However, a mere
agreement to commit a crime is not an
offence except in some cases likeinsurrection. The United States Code
( A n n o t a t e d ) Ti t l e 1 8 , C h a p t e r 1 9
categorizes conspiracy into three sections.
Section 371 deals with conspiracy tocommit offence or to defraud United States;
section 372 deals with conspiracy to impede
or injure officer; and section 373,
solicitation to commit a crime of violence.
D. Recommendation
From the foregoing, undoubtedly, many
countries do not criminalize participationin organized criminal group or the laws are
not all embracing. In some countries, thescope of the offence of conspiracy is limited.
There may be necessity in some countries
like Japan (for groups such as Boryokudan)
to expand the concepts of complicity orconspiracy to agreeing with others tocommit serious offences. There is apparent
need in accordance with draft UN

253

RESOURCE MATERIAL SERIES No. 58
Convention to criminalize participation inorganized criminal group, both in theactivities of the group as well as in agreeing
to commit serious crime. If such provision
is not incorporated, it may be possible for
an offender accused of participation in an
organized criminal group to find refuge ina country where there is no such law andin that event, his extradition may not be
possible as the requirement of dual
criminality will not be fulfilled. The draft
convention is all encompassing, gives
guidelines and the concrete basis on whichstates can enact comprehensive domestic
laws for criminalization of participation inorganized criminal group. Once the draft
convention becomes applicable it would
provide a bold legal framework in
combating organized crime. Whileratifying the convention, States may dowell to provide a concise definition of theorganized criminal group and make acriminal offence of participation in an
organized criminal group, at the same time,ensuring that both the types of conduct arepunishable, i.e. participation (as in Italy)
and conspiracy (as in common law
countries).
III. ANTI MONEY-LAUNDERINGSYSTEMS
Money laundering has a direct linkage
to crimes that are organized in character,scope and content. According to thedefinition adopted by the international
criminal police organization (ICPO/INTERPOL), “money laundering denotes
any act or attempted act to conceal or
disguise the identity of illegally obtained
proceeds so that they appear to haveoriginated from legitimate sources”.
Money laundering typifies a deliberate,complicated and sophisticated process bywhich the proceeds of crime are
camouflaged, disguised or made to appear
as if they were earned by legitimate means.

254

Money laundering can be categorized intoa three-stage process. Firstly, severing any
direct link between the money and thepredicate crime generating it, secondly,
obscuring the money trail to foil pursuit,and thirdly, re-investing the crime proceeds
in furtherance to commit more crimes.
The major thrust of Vienna Declaration
on Crime and Justice: Meeting the
Challengers of the Twenty-first Century
and the Naples Political Declaration and
Global Action Plan against Transnational
Crime was to initiate procedure to develop
legal framework for Anti money-launderingsystem. The draft UN Convention against
transnational organized crime, Articles 6
and 7 aptly provide for criminalization of
the laundering of proceeds of crime andmeasures to combat money-launderingrespectively. Considering the draft UN
Convention as an index to articulatecomprehensive legal framework for
combating money laundering, indeed,
many countries run short of the draft
Convention expectations .
Japan has legislation against money
laundering though reported cases of money
laundering are relatively low. In 1992, Law
Concerning Special Provisions for the
Narcotics and Psychotropic Control Law
etc. and other Matters for the Preventionof Activities Involving Controlled
Substances through International
Cooperation, commonly known as“Narcotics Special Provision Law”, wasenacted. Under this special law there areprovisions against concealment of crime
proceeds, receipt of crime proceeds andpresumption of illicit proceeds.
In the same direction, in 1999, Law for
Punishment of Organized Crimes, Controlof Crime Proceeds and other matters,commonly known as “Organized Crime
Punishment Law”, was enacted. This law
is designed to enable Japan to effectively

116TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
cope with transnational organized crime.
Chapter V, Articles 54 - 58 of this law
provide for report of suspicioustransactions.
In Italy, the legal instruments to deal
with money laundering are embodied in
Article 648 bis and 648 ter of the Penal
Code, let alone Article 12 quinquies of
Decree-Law n.306/1992 (fraudulent
transfer of valuables). Article 648 bis
stipulates, “Except in cases of participationin the (predicate) offence, any person
substituting or transferring money, goods
or assets obtained by means of intentional
criminal offences, or any person seeking toconceal the fact that the said money, goods
or assets or the proceeds of such offences
shall be liable to imprisonment of 4 - 12
years and to a fine of Lit 2 to Lit 30 million”.
Article 648 ter punish, with the same
penalty, the use of money, goods or assetsof unlawful origin for economic or financial
activities, In accordance with EU
directives, Italy enacted Law N0.197/91
and made subsequent modifications
regulating the mechanism of the report ofsuspicious transactions to Italian
Exchange Bureau.
Suspicious
Transactions Service was also establishedin Italy’s National Anti-Mafia Bureau. Thissystem, of banks and other financial
institutions reporting suspicioustransactions is an essential ingredient tocontrol and detect laundered money.
Pakistan enacted The Control of
Narcotic Substances Act in 1997. This Act
has substantial provisions to deal withillegal proceeds derived from drugtrafficking. The National Accountability
Bureau Ordinance 1999, coupled withother administrative regulations, has acomprehensive scheme against illegal
proceeds derived from other crimes. In
neighbouring India, law on money
laundering is in a draft stage.

In the wake of an upsurge of drugtrafficking and other related offences in
Nigeria, the government promulgatedMoney Laundering Decree 1995, Section 14of which provides :”A person who:(a) converts or transfers resources orproperty derived directly or indirectlyfrom illicit trafficking in narcotic
drugs or psychotropic substances, withthe aim of either concealing or
disguising the illicit origin of theresources or property; or aiding any
person involved in the illicit traffic ofnarcotic drugs or psychotropic
substances to evade the legal
consequences of his action or;(b) collaborates in concealing or
disguising the genuine nature, origin,location, disposition, movement orownership of the resources, property...
(c) is guilty of an offence...”Added to the promulgation of money
laundering decree, there wasestablishment of Money Laundering
Surveillance Unit in Central Bank ofNigeria.
In an effort to stem money laundering,Brazil in 1998 enacted law for combating
money laundering. This law was followedby the establishment of Council of
Financial Activities (COAF), a Council thatis responsible for identifying illicit
activities related to money laundering.
In China, Article 191 of the Criminal
Law deals with money laundering which
stipulates that whoever knowing clearly
that illegally gotten wealth and its profits
are coming from drug crimes, or organizedcrimes, smuggling, in order to hide andconceal its origin and nature by various
methods will be sentenced up to 5 years
imprisonment and deprived of all ill-gotten
wealth and its profits.

255

RESOURCE MATERIAL SERIES No. 58
Thailand enacted the Money Laundering
Control Act in 1999 as the existing laws
were not able to cope with the problems.
Therefore, Money Laundering Control
Board was established to deal with themoney laundering problems, andTransaction Committee was set up to
examine and audit transactions andproperties related to criminal or predicate
offences. The law requires financial
institutions to report the excessive cash
deposits, the over valued properties andsuspicious transactions as stipulated by
Ministerial Regulations.
While Tanzania and Uganda have notdeveloped any substantive anti money
laundering legal frameworks, they haveformed National Anti Money laundering
Committees in line with principles of theEast and Southern Africa Anti Money
Laundering Group (EASAALMLG). In
Philippines, there is no specific legislation
criminalizing money laundering and theanti money laundering regulations havebeen found wanting especially in respectof such basic features as customer
identification, record keeping and excessivebank secrecy provisions.
In its annual report for 1999-2000, FATF
estimated that revenue generated fromnarcotics trafficking in the USA alone
ranged from US$ 40 billion to US$ 100
billion. However, under United Statesmoney laundering laws, it is a crime toknowingly conduct a financial transaction
with the proceeds of certain specified
unlawful activity set forth in the statutewith either the intent to promote or toconceal the specified unlawful activity.
A. Recommendations
Money laundering is an integral part oforganized crime. Evidently, there are still
yawning gaps in legal frameworks of many
countries to effectively tackle this problem.
The draft UN Convention seeks to include

256

in the predicate offences, offences describedin Article 6 (criminalisation of money
laundering), Article 8 (criminalization ofcorruption), Article 23 (criminalization of
obstruction of justice) and a comprehensive
range of offences associated with organizedcriminal groups. There are certain
countries whose bank secrecy laws makeit attractive to deposit money without easy
identification while there are others whose
procedures do not effectively deter openingof fictitious bank accounts. There are anumber of countries whose company laws
make it easy to register offshore companies
on payment of a small fee with the resultthat there is no proper auditing of financial
accounts. Such facilities tend to promotemoney laundering. In this respect, thedraft UN convention recommends
adequate record keeping and reporting of
suspicious transactions which may requirea basic change in the policy regardingbanks, non-banking financial companies,and company registration and accounts.
Furthermore, a Financial Intelligence Unit
is proposed to be established in member
countries to collect, analyze anddisseminate information about potential
money laundering.
As long as the difference between the
countries with strict anti money launderingsystems and with the lax ones remains, it
is not possible to have an effective global
anti money laundering programme. In
other words, the difference in the rules ofthe strict and lax countries contribute to
the transnational criminal organizations to
exploit the diversities to frustrateinternational efforts against money
laundering. It therefore becomes
imperative for all member countries toincorporate the draft UN Convention into
their domestic laws. In addition to suchincorporation, it may be necessary for all
member countries to adopt a more strict
attitude against money laundering.

116TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
IV. ASSET FORFEITURE SYSTEM
The overriding objective of members oforganized criminal groups is to acquire
enormous economic power and amass
wealth in area of property acquisition andhuge bank accounts. Organized criminalgroups have consistently developed newtechniques to conceal substantial crime
proceeds from the jurisdiction where such
illicit wealth was generated. Assetforfeiture system is a veritable tool for law
enforcement and judicial criminal process
to deprive criminals of illegally acquired
proceeds, and plough back such proceeds
to the community for the greater good of
the society.
The draft United Nations Convention
against Transnational Organized Crime,
Article 12, provides legal framework to
weaken financial empire of transnationalorganized groups. This article deals withconfiscation and seizure. Article 13 lays
down the framework for international
cooperation for purposes of confiscation.
Article 14 enumerates the methodology andprocedure for disposal of confiscatedproceeds of crime or property. The central
idea of Articles 12-14 is generally to maketransnational organized crime unattractive
and unproductive.
The legal provisions regarding asset
forfeiture system differ from country tocountry. In countries like Nigeria,
Tanzania and Uganda, there are no
discernible laws relating to asset forfeiture.
However, in Nigeria, Advance Fee Fraud
and other related offences Decree and the
Money Laundering Decree have provisions
that allow for seizure and confiscation ofproceeds of crime but with limited scope.
Similarly, in Malaysia, Dangerous Drugs(forfeiture of property) Act was enacted in1988 for forfeiture of assets.

In Indonesia, Part Four (Articles 38-46)of the Code of Criminal Procedure provides
for confiscation of proceeds of crime. Suchgoods (proceeds of crime) in confiscation
because of a civil case or bankruptcy canalso be confiscated in the interest of theinvestigation, prosecution and trial of acriminal case. In Laos, Aricle 32 of Penal
Code provides for seizure and confiscationof properties. Seizure of properties may
be sentenced only in case of serious cases
mentioned in the Penal Code.
The legal framework for asset forfeiture,
confiscation, attachment or seizure in India
is contained in Criminal law Amendment
Ordinance (1944), sections 111 and 112 ofCustoms Act (1964), Smugglers andForeign Exchange Manipulators (forfeitureof property) Act (1976), chapter V-A(sections 68A-68Y) of Narcotic Drugs andPsychotropic substances Act (1985) andsections 102 and 452 of Criminal Procedure
Code.
While Brazil does not have an asset
forfeiture system specific to the cases oforganized crime, Pakistan Criminal
Procedure Code provides for seizure bypolice and forfeiture by court of illegal
proceeds of crimes. Sections 516A and 517
fully empower the courts to dispose ofproperty used or resulting from a crime.
Similarly, Custom Act, 1969 provides forseizure and confiscation of illegal goods.
The Narcotics Control Substances Act,
1997 and NAB Ordinance, 1999 fulfill therequirements of UN Convention 1988 and
UN Convention on TOC.
In China, Section 8, Article 59 of the
Criminal Law provides for confiscation ofproceeds of crime partially or totally. If
proceeds are to be totally confiscated,
provision should be made leaving enoughamount for meeting the daily expenditure
to sustain the family life. In Thailand,
there is provision for forfeiture under the257

RESOURCE MATERIAL SERIES No. 58
Money Laundering Control Act, 1999.
The Japanese asset forfeiture system fororganized crime is embedded in Organized
Crime Punishment Law, 1999. In this law,
the system of securance of confiscation andsecurance of collection of equivalent value
is provided, which is helpful for asset
forfeiture system. There is also provision
for asset forfeiture in drug related offencesin Narcotics Special Provision Law, 1992.
In this law, there is presumption of illicit
proceed relation to property obtained by theparties during engagement in drug related
offences, if the value is deemed
unreasonably large and such property orequivalent thereof is liable to be
confiscated.
The United States has two forfeituresystems in operation, the civil and thecriminal forfeiture system. The basic
distinction between criminal and civil
forfeiture is that criminal forfeiture islimited to a convicted defendant’s personal
interest in property subject to forfeiture,
whereas civil forfeiture focuses on theproperty itself. A criminal, upon conviction,
may be ordered to forfeit all profits orproceeds derived from criminal activity or
any property, real or personal, involved in
the offence, or property traceable to theoffence such as property acquired withproceeds of criminal activity.
In Hong Kong, Section 8 of theConfiscation Order permits the High court
or District court where a person has been
convicted of a specified offence defined
under this ordinance including bothschedule 1 and 2 offence, to make aconfiscation order in relation to the person’s
proceeds of that specified offence.
The Italian Penal Code, Article 416 bisco.7, prescribes that “In the event ofconviction, articles which were used orintended to be used to commit the offence

258

and the proceeds thereof shall be forfeited”.
Furthermore, Law No. 356 of 1992 provides
for compulsory forfeiture of properties
owned by convicts on charges of Mafia
crimes, which turn out disproportionate incomparison with the legal income of theowner; and Law No. 646 of 1982 provides
for compulsory forfeiture of goods of
persons suspected to belong to Mafia typeorganization which are disproportionate to
the legal income. According to the Italianjurisprudence, there is a sharing of theburden of proof in respect of the assets
which, being disproportionate incomparison with the legal income, areliable to be confiscated. In such cases, theprosecution has to first prove that theassets are effectively owned directly or
indirectly by the suspect (who usually use
figureheads or strawmen), and then thatthe assets are disproportionate to theincome of the suspect. The suspect
thereafter must prove the lawful origin of
the assets.
A. Recommendations
The draft UN Convention proposes thatthe offender has to demonstrate the lawful
origin of the alleged proceeds of crime orother properties liable to confiscation if
permissible as per the domestic laws.
However, there is no provision like the
Italian one whereby disproportionate
assets could be forfeited. It therefore may
be desirable to incorporate such provisions
if permissible as per the domestic laws ofvarious countries.
There is need for international
cooperation in freezing, seizure, forfeitureand confiscation of proceeds of crime.
When the proceeds of crime are derived in
one country but moved to other countries
with different laws, difficulties are facedby the authorities in securing them for the
purpose of judicial and other proceedings.
Letters of request are usually sent to theforeign authorities to make the proceeds

116TH INTERNATIONAL TRAINING COURSEREPORTS OF THE COURSE
of crime available. In cases where thesuspect is convicted, the trial judge may
have to order confiscation to return theproceeds of crime to the victim. In thisrespect, it is necessary that bilateral or
multilateral agreements should be enteredinto by various countries to facilitate easytransfer of such proceeds to the requesting
country. However, in certain situations, it
may become expedient to share assets on
case-to-case basis, especially in offenceswhere there is no rightful owner of theproceeds, such as proceeds out of drugtrafficking from one country to another.
There should be provision in the mutual
assistance agreements in this regard.

this UN sponsored global action against
them. The international community will
have to mobilize far more effective
countermeasures to fight the battle against
transnational organized criminal groups.
The success, however, will greatly hinge
upon the overall capacity of various nations
to remain united, rising above minor
differences that might crop up while
initiating and executing requests for legal
assistance. Given the world wide support
extended to the UN efforts so far, nations
can hope to provide their citizens a more
safe and secure world in the twenty first
century.

In order to accomplish the objective of
the Tenth United Nations Congress on thePrevention of Crime and the Treatment of
Offenders, the asset forfeiture systems ofsignatory countries have to be morecomprehensive.
V. CONCLUSION
In conclusion, against the backdrop of
globalization of crime, the most appropriate
measure to check the negative trend oftransnational organized crime with its
attendant characteristics is for nations toborrow a leaf from the draft UN Convention
against organized crime by criminalizing
participation in organized criminal groups,
criminalization of the laundering of theproceeds of crime and ensuring thatproceeds of crime are forfeited on domestic
and international levels. The Convention
provides a framework which can be utilized
by the member countries to enact or amend
their own laws keeping sanctity of
constitutional, legal and social structure inmind. Such laws will work as a common
thread running through diverse legal
systems paving way for smoothinternational cooperation. It may, however,be naive to expect that transnational
criminal organizations will surrender to259