1. 1. Cybercrime & Money Laundering: Confiscation of Criminal Assets: Legal and Practical Challenges Muthupandi Ganesan Barrister-at-Law April 2015
2. 2. Odd one out?!
3. 3. Current trend in cyber crime? Cyber crime Crime-as-a- Service Malware Denial of Service Anonymisation Dark Net / Launders
4. 4. Electronic currency Types & variations Electronic Currency Centralised Web Money Perfect Money Decentraised Bitcoin Voucher Pay safe card
5. 5. Features of electronic currency Lack of legal status Easily convert ible Instant / Multiple Jurisdicti ons Anony mous
6. 6. Electronic Money Laundering
7. 7. TOR Network 2011 Oct 2013 Bitcoins only 4000 Vendors 150,000 Buyers
8. 8. Silk Road 173,991 Bitcoins seized 1,229,465 Transactions Commissions: 614,305 Bitcoins ($79.8 million) Sales: 9,519,664 Bitcoins ($1.2 billion)
9. 9. Cyber crime legislation 1989 Council of Europe - Expert Report on Computer-Related Crime 2001 Council of Europe Convention on Cybercrime 2011 Directive 2011/92/EU on combating the sexual abuse and sexual exploitation of children and child pornography 2013 Directive 2013/40/EU on attacks against information systems.
10. 10. International Instruments UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988 Council of Europe Convention on Laundering, Search, seizure and confiscation of proceeds of crime (1991) OECD convention on combating bribery of foreign public officials in International business transactions (1997) UN Convention against Transnational Organised Crime (2000) (Article 12 14) African Union Convention on Preventing and Combating Corruption and the Inter- American Convention Against Corruption (2003) UN Convention against Corruption (2005) (Art 31)
11. 11. The EU Internal Security Strategy in Action (2010) Confiscation is a strategic priority in the EU's fight against organised crime. Five steps towards a more secure Europe OBJECTIVE 1: Disrupt international crime networks Action 3: Confiscate criminal assets To combat the financial incentive of criminal networks Member States must do all they can to seize, freeze, manage and confiscate criminal assets, and ensure that they do not return to criminal hands.
12. 12. To this end the Commission will propose legislation in 2011 to strengthen the EU legal framework on confiscation, in particular to allow more third-party confiscation and extended confiscation and to facilitate mutual recognition of non-conviction-based confiscation orders between Member States. Member States must by 2014 establish Asset Recovery Offices equipped with the necessary resources, powers and training, and the ability to exchange information. The Commission will develop common indicators by 2013, against which Member States should evaluate the performance of these offices. Moreover, Member States should also by 2014 make the necessary institutional arrangements, for example by creating asset management offices, to ensure that frozen assets do not loose their value before they are eventually confiscated. In parallel, the Commission will in 2013 provide best practice guidance on how to prevent criminal groups from reacquiring confiscated assets. The EU Internal Security Strategy in Action (2010)
13. 13. Development of EU Actions & Decisions JOINT ACTION 98/699/JHA 3/12/98 Money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime. FD 2001/500/JHA 26/1/2001 Money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime. FD 2003/577/JHA 22/7/2003 The execution in the European Union of orders freezing property or evidence FD 2005/214/JHA 24/2/2005 Application of the principle of mutual recognition to financial penalties 2006/783/JHA 6/10/2006 Application of the principle of mutual recognition to confiscation orders FD 2007/845/JHA 6/12/2007 Cooperation between Asset Recovery Offices of the Member States in the field of tracing and identification of proceeds from, or other property related to, crime. FD 2005/212/JHA 24/2/2005 Confiscation of Crime-Related Proceeds, Instrumentalities and Property Directive/2014/42/EU: on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union
14. 14. Cyber crime legislation: Problems Basic / Universal Standards Protection v Rights Law Enforcement & Jurisdiction International Co-operation
15. 15. Complexity International Treaties / Obligations Practical Problems Capacity & Training Attribution & detection Legal Problems Lack of mutual legislation & treatment Lack of co-operation
16. 16. Intelligence Freezing Multi Agency Secure Systems MAA - Intelligence MLA Evidence Intelligence Formal FIU to FIU ML & CFT Information Europol Hold Secretariat CARIN EGMONT AROs MAA or MLA International co-operation Methods
17. 17. How Do I get It ? Who Do I contact ? Assets / Income /Expenditure Overseas MLA, CARIN, EGMONT, ARO ? What Information Do They Need ? Intl Co Operation Unit Interpol?
18. 18. Camden Asset recovery Inter- Agency Network (CARIN) Members Observers Associates
19. 19. Informal network Not electronically linked Not for intelligence Practitioners only No legal basis Camden Asset recovery Inter-Agency Network (CARIN)
20. 20. Functioning of CARIN English The Presidency The Secretariat AGM Steering Group
21. 21. Members Albania, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Israel, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Monaco, Montenegro, The Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, United Kingdom, United States of America
22. 22. Organisations Europol, Egmont Group, Eurojust, International Criminal Court (ICC), International Monetary Fund (IMF), Interpol, OLAF, United Nations Office on Drugs and Crime (UNODC), World Bank
23. 23. Asset Recovery Inter-Agency Network of Southern Africa Botswana Mauritius Namibia South Africa Tanzania Zambia Zimbabwe Red de la Recuperacion de Activos de GAFISUD Argentina Bolivia Brazil Chile Colombia Costa Rica Ecuador Mexico Panama Paraguay Uruguay Asset Recovery Inter-Agency Network of Asia Pacific Australia Brunei China Japan Malaysia New Zealand Paupa New Guinea Sri lanka South Korea Taiwan Thailand Pacific island nations
24. 24. Supplied Within 30 Days FIU to FIU Strict Confidentiality re Use & Dissemination Limited Intelligence Available (STR, Criminal Convictions, Govt Databases) Only To Be Used For Original Requesting Purpose MLA Required If To Be Used as Evidence
25. 25. Egmont Charter (2013), Egmont Principles for Information Exchange and Operational Guidance for FIUs The goal of the Egmont Group is to provide a forum for FIUs around the world to improve cooperation in the fight against money laundering and the financing of terrorism and to foster the implementation of domestic programs in this field. This support includes: Expanding and systematizing international cooperation in the reciprocal exchange of information; Increasing the effectiveness of FIUs by offering training and promoting personnel exchanges to improve the expertise and capabilities of personnel employed by FIUs; Fostering better and secure communication among FIUs through the application of technology, such as the Egmont Secure Web (ESW); Fostering increased coordination and support among the operational divisions of member FIUs; Promoting the operational autonomy of FIUs; and Promoting the establishment of FIUs in conjunction with jurisdictions with an AML/CFT program in place, or in areas with a program in the early stages of development.
26. 26. Asset Recovery Offices Provides Central Point of Contact Trace & Identify Proceeds of Crime Manage Assets (Not all do) Freeze & Seize on Request ARO Council Framework Decision 2007/845/JHA Council Framework Decision 2006/960/JHA (The Swedish Initiative)
27. 27. Time Limits At most eight hours to urgent requests for information and intelligence regarding offences referred to in Article 2(2) of Framework Decision 2002/584/JHA for serious cases. In that case the requested law enforcement authority shall immediately inform the requesting law enforcement authority of this postponement and shall provide the requested information or intelligence as soon as possible, but not later than within three days. Member States shall ensure that for non-urgent cases, requests for information and intelligence should be responded to within one week Request not available on a database and non urgent / non serious within two weeks.
28. 28. Practical problems with ARO (European Commission Report 2011) Lack of ARO Personnel Lack of access to relevant database / bank accounts Lack of centralised land registry database Lack of secure exchange of information Only some of the ARO are national contact points Only a few of the AROs are involved in the management of frozen assets. Lack of specialist training for financial investigators
29. 29. EUROPOL to play a greater role with the Europol Criminal Assets Bureau. EUROPOL Secure Information Exchange Network Application (SIENA system ) SIENA is already operational, providing a technical solution for the exchange of law enforcement information, within a sound legal basis using the highest security standards; SIENA could represent a costeffective solution, as it builds upon an existing network; therefore financial support for the creation of a new network is not required Solutions: EU Asset Recovery Centre
30. 30. Evaluation: Speedy International Co-operation Law Enforcement Cyber criminals
31. 31. Questions? Muthupandi Ganesan Barrister-at-Law Marsans Solicitors and Advocates 1st Floor, 277 281 Oxford Street, London, W1C 2DL, England, UK E-mail: mg@marsans.co.uk Tel: (+) 44 207 499 0620 April 2015