(Presentation by Jeanne M. Flemming, Director, Financial Transactions and Reports Analysis Centre of Canada, to the International Symposium on Economic Crime, Cambridge, England, September 7, 2011)
“The world continues to turn, and organized crime continues to mutate. In its 2010 report on organized crime, the Criminal Intelligence Service of Canada noted the changing nature of organized crime in Canada. Traditionally, organized crime was understood as a hierarchical structure comprised of culturally homogeneous groups, citing the examples of Italian, Russian or Albanian mafia. The new reality they describe is one where many organized crime groups are loosely structured, competitive networks with fluid linkages between members and associates, with a diverse range of leadership structures. I can confirm that we are seeing increasing evidence of these fluid structures in our own cases.”
“What is more, organized crime once involved cash-based crimes almost exclusively. As a response, anti-money laundering regimes were developed to combat the illegal profits from the illicit narcotics trade and the organized criminal networks that rose to global prominence three or four decades ago. The infusion of that criminal cash into the financial system was a grave risk that demanded a response. It gave rise to the creation of financial intelligence units, like the one that I head. It also brought regulatory controls and compliance obligations that will be familiar to those of you who work in banking, insurance and securities. In essence, what we have now is a system that was built to address that particular risk. The rules, like the crimes they were meant to address, were largely focused on cash transactions.”
“The question that it begs is: how well does such a system address other risks? In practical terms, can a system of rules intended to keep drug money out of the financial system be effective in addressing the risks posed by offences such as fraud and corruption or any number of other profit motivated crimes loosely grouped under the rubric of “white-collar crime?”
