International enforcement law trends for 2010 and beyond: can the cops keep up with the criminals?

• Author: Zagaris, Bruce

1. INTRODUCTION (1)

   During the last decade a major public policy issue in the United States--and indeed the world--has concerned the appropriate strategy and means to prevent and punish international crime. In the 1970s and 1980s, the United States led the effort in counter-drug policy. An instrumental part of the strategy is the anti-money laundering and asset forfeiture laws enacted in the mid 1980s. This policy was exported to the international community and became enshrined in the 1988 Vienna Convention against the trafficking of narcotics and psychotropic substances. (2) During the Clinton Administration, the focus of this policy expanded to combating transnational organized crime (TOC), including the use of economics sanctions against TOC, which became embodied in the U.N. Palermo Convention. (3) The policy focus under George W. Bush was counter-terrorism and the use of the "war" paradigm. Similarly in 1977, the United States enacted the Foreign Corrupt Practices Act (FCPA) and has led the crusade against transnational corruption. These policies are embedded in about five international anti-bribery conventions. Currently, under the Obama Administration, the United States has prioritized making strategic revisions in U.S. international criminal policy.

   This article discusses developments in the United States and international policy with respect to international white collar crime, as well as the interaction between international criminal law, especially counter-terrorism, and international human rights law. One question is whether the U.S. government and lawyers will play a leadership role in international enforcement policy and law.

2. THE RISE, AND CHALLENGE OF, INTERNATIONAL WHITE COLLAR CRIME

   The modern economy, globalization, and new technologies facilitate the spread of transnational crime, especially economic crime. The fact that new types of substantive international crimes emerge every decade, such as cybercrimes and money laundering, is a recent phenomenon. Just as importantly, the procedural aspects of international criminal law continue to grow. (4) For instance, the interplay of free trade and economic integration is a double-edged sword. On the one hand, to the extent free trade agreements (FTAs) and economic integration do not confront criminal cooperation and justice, they facilitate the growth of transnational crime. On the other hand, to the extent FTAs and economic integration do confront these issues within the agreement, as is the case with the pacts governing economic cooperation within the European Union, they become a laboratory for cutting-edge international criminal cooperation and criminal justice developments.

   Another essential and dynamic component of international criminal law is the evolving framework of institutions. The dramatic growth of broad criminal justice agendas within traditional international institutions like the Organization of Economic Cooperation and Development (OECD) and multilateral development banks led by the World Bank Group continues to make criminal law a growth sector. Concomitantly, the international community is increasingly establishing informal groups, such as the G8, G20, Financial Action Task Force, and the Egmont Group, to deal with various international criminal groups. (5) Just as important has been the rise of national institutions throughout the world, such as counter-drug enforcement agencies, financial intelligence units, and asset forfeiture agencies. (6)

   1. Environment Giving Rise to International Economic Crimes

      Contemporary transnational criminals take advantage of globalization, trade liberalization, and emerging new technologies to commit a diverse range of crimes, and to move money, goods, services, and people for purposes of pure economic gain or political violence. (7) A key component facilitating international white collar crime is trade liberalization, especially FTAs. The problem is that the lack of foresight, leadership, and favorable politics prevents trade negotiators from providing for comprehensive enforcement mechanisms. These comprehensive enforcement mechanisms are consequently completely omitted or treated as isolated subjects.

      For instance, in the North American Free Trade Agreement (NAFTA), there is a section on intellectual property enforcement and a handful of provisions on customs cooperation and enforcement. (8) Customs enforcement is a subject that FTAs normally cover. However, the coverage of intellectual property (IP) enforcement reflects the strong influence in the United States of IP groups. As a result of failing to include comprehensive enforcement provisions in FTAs, criminals, including individuals and organizations, are able to take advantage of FTAs to conduct their criminal activities. FTA members usually became aware of the growth of criminal problems arising out of FTAs several years later. (9) They then try to develop ad hoc enforcement agreements and arrangements. These agreements and arrangements usually have a narrower scope than the FTAs, usually lack institutional support, and sometimes overlap. (10) As a result, the international enforcement architecture arising out of FTAs cannot sustain enforcement needs.

      Transnational criminal groups and criminals live and operate in a borderless world. Increasingly, transnational criminals are diversifying their crimes, instrumentalities, markets, and networks. Their intelligence networks and the coincidence of economic and political power enable them to quickly adapt and operate in "gray areas" where governments do not effectively control their territories, such as Afghanistan and parts of Pakistan and Yemen. (11) Transnational criminals can also operate surreptitiously through the use of sleeper cells. (12) While national governments have determined that transnational organized crime and terrorism are national security threats and have implemented various initiatives to combat them, (13) they are continuously and actively seeking more significant political and legal initiatives to establish effective international enforcement regimes. Some policymakers believe that effectively combating new transnational crimes requires significant transformations in national legal systems. (14) In fact, the international community and individual countries such as the United States have enacted a substantial amount of new legislation and developed initiatives to combat new transnational crimes, in areas such as cybercrime, intellectual property, international tax, terrorism, and organized crime. (15)

      Cybercrime exemplifies the difficulty of trying to keep pace with the tremendous changes in technology that have enabled criminals to perpetrate diverse crimes, such as financial fraud, identity theft, pornography, hate crimes, and a vast range of other offenses. The international community is struggling to develop an enforcement regime that can use the new technology to assist in the identification, investigation, and prosecution of cybercriminals. In this regard, the proposed Council of Europe Convention Against Cybercrime provides a strong potential mechanism. (16)

      Intellectual property and counterfeiting crimes have also grown tremendously in recent decades. Criminals counterfeit everything from software to cosmetics and clothing, including nearly every product that is sold internationally. The international community and governments have tried a combination of international trade law, such as Trade in Related Intellectual Property Services (TRIPS) and NAFTA, to criminalize violations of transnational intellectual property. (17) For instance, the U.S. trade associations such as the International Intellectual Property Association and the Motion Picture Association of America have pressured the U.S. government to bring an action against Mexico because of the alleged lack of criminal action by the Mexican Government against persons who intentionally violate intellectual property law. (18) Indeed, these same U.S. trade associations succeeded in persuading the NAFTA signatories to include provisions requiring criminal prosecution and civil action against violators of intellectual property law--the only part of NAFTA that allows for criminal sanctions. (19)

      Money laundering is an example of the type of crime that governments and the international community have only criminalized since the mid-1980s. Through international conventions, such as the 1988 U.N. Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, the international community has extended the use of a new anti-money laundering enforcement regime to the entire world. (20) Signatories are required to criminalize laundering offenses and initiate asset forfeiture and confiscation as remedies. These conventions require a broad range of international enforcement cooperation, including evidence gathering and extradition, and also suggest a range of more customized bilateral cooperation agreements. (21) Institutionally, the new crime of money laundering has spawned the establishment of financial investigative (or intelligence) units (FIUs) around the world and the Egmont Group, an association of FlUs that meets regularly to facilitate cooperation among FIUs and develops uniform approaches to core issues. Anti-money laundering has also given rise to new organizations and groups, such as the Financial Action Task Force on Anti-Money Laundering (FATF). Growing out of the G8 meetings, FATF has developed cutting edge requirements on legal, financial, and external relations with respect to anti-money laundering. (22) Unfortunately, the erosion of bank and financial privacy has been among the many legal transformations brought about by anti-money laundering laws. (23)

      In the aftermath of September 11, 2001, the emphasis of the U.S. government and the international...