Whenever governments issue new initiatives on tackling organised crime, prominence is given to the need to tackle criminal finances. In the UK there is progressive legislation designed to make it difficult or expensive to retain the proceeds of crime. Given that the essential purposes of organised crime relate to financial success, it seems axiomatic that the distinctive capabilities of organised crime which govern such success should be of major interest to law enforcement. A proper understanding by law enforcement of these capabilities and the competitive advantage they confer can enable cost effective disruption, providing opportunities to dismantle organised crime groups and obtain financial reward for the common good into the bargain. There is much evidence that government and law enforcement in the UK are willing to “talk the talk” in this area. The question of whether there is a readiness and ability to “walk the walk” is perhaps another matter. Organised crime is tooled up and able to deliver to its stakeholders efficient generation and transfer of criminal profits in ways that escape the attention of law enforcement, never mind its ability to do anything about it. As long as there is enough headline activity in the form of cash seizures and confiscations, the implications of any law enforcement shortcomings in this area might well be ignored. That suits a lot of serious criminals and does little for the long term security of our democratic institutions. What are the shortcomings? Quite simply, in the field of economic crime organised crime uses weapons law enforcement currently seems slow to deploy. “Understand the business” is a maxim of equity investment, and it is no less potent or necessary a maxim in the task of tackling organised crime. This paper seeks to set out how, in practical terms, law enforcement can go about tooling up in this field, so that tackling organised crime where it does not want to be tackled becomes a process in reality and not just a homily of rhetoric.
A “Square Go” in Scotland essentially means a fair fight with no interference. The standard is equality of arms; the same as is supposed to exist in every court room. In the field of economic crime, however, particularly where it involves organised crime, the “battle”, if it can be construed as such, between the forces of law and order and the forces of criminality does not at present display any such equality. Organised crime at its more sophisticated levels has no difficulty obtaining access to business and accounting professionals. In most jurisdictions world-wide, however, law enforcement either does not have any such access at all, or it does so in ways which are part-time or otherwise less than wholly committed.
Professional skills held by chartered accountants, finance professionals and business strategists are not traditionally mixed within the grist of law enforcement and this is an international phenomenon. I was recently paid a visit by a public prosecutor from Japan with much experience of dealing with the Yakuza and familiar with the sophistication of their financial and business methods. He had told me that in Japan, as far as he knew, there were no professionally qualified accountants working in law enforcement against organised crime. I asked him how many professionally qualified accountants he thought were working for the Yakuza. The look between us was enough; there was no need for an answer.
This apparent reluctance to incorporate professional finance, business and accounting skills can possibly be accounted for by two principal factors:
A cornerstone of the serious organised crime strategy currently deployed in Scotland is the mapping process. This identifies the known organised crime groups (OCGs) operating in Scotland according to intelligence and ranks them in accordance with their score on a matrix designed to measure harm. In this way the targets for the organisation are established. Using the toolkit of an advanced modern intelligence led police force a strategy is evolved to disrupt and dismantle those targets, so that at the very least their ability to continue to do that harm is severely hampered if not curtailed.
This foundation provides an opportunity to develop new ways of analysing targeted OCGs, in particular in terms of their business and economic capabilities. OCGs exist to deliver economic results. The factors that enable them to do this are capable of analysis in the same way as the distinctive capabilities and competitive advantage of legitimate businesses. If an accurate picture can be drawn that identifies the economic and business factors that contribute to an OCG being economically successful and enable it to engage in its criminal activities, insights can be obtained as to how these criminal activities can be most effectively disrupted.
This approach obviously encompasses assessing legitimate as well as illegitimate activities since the reality of organised crime business is that it often involves a dynamic amalgam of both. Given there is always a considerable investment of resource in setting up any major operation against an OCG target, a proper understanding of the business dynamics that underpin the criminal picture of an OCG can provide another dimension to established approaches to both intelligence gathering/analysis and operational deployment. This can be exploited to deliver improved options for both disruption and prosecution and add measurable value to the “return” on the related investment in terms of outcomes achieved. Within the context of UK legislation, this “return” may well, of course, encompass an actual economic return in terms of confiscation or civil recovery outcomes.
The threat from organised crime in the twenty-first century is of a kind that resists easy identification. Financial success enables and perpetuates organised crime. The core enabling activity remains that of money laundering. The response to the international threat posed by money laundering has been heavily biased towards prevention, in particular through the construction of rigorous suspicious activity reporting regimes. The prosecution of money laundering offences carries a responsibility to...