Rome, 28 February 2023 -
Honourable Deputy Minister of Economic & Financial Affairs, Dr Maurizio Leo
Commander General, Guardia di Finanza, Giuseppe Zafarana
Delegates from near and far,
It is a great pleasure for me to be here with you this morning to open the first Learning and Development Forum (or LDF) under the Singapore FATF Presidency.
As part of my FATF Presidency, I envisaged a nurturing culture within the FATF community and global network where best practices are readily shared, and communities of practices created.
Hence, I would like to express my sincere thanks to the leadership of the Guardia di Finanza and the Italian government for taking up the call at the inaugural FATF Interpol Roundtable Engagement (F.I.R.E.) and leaning forward to organise, with the FATF, the first LDF on asset recovery.
Your support in hosting and organising this important event is testament to your strong commitment and willingness to share of your rich experience, expertise and success.
We have more than 300 participants from across the globe today. This shows to me that collectively we want to learn, improve and make a difference in the fight against financial crime.
STATE OF ASSET RECOVERY
Recovering criminal assets is a fundamental criminal justice issue. One may even say that it is a raison d’etre for the FATF’s existence. As it addresses a core driver of criminal activity, it is essential to pursue criminal assets both domestically and also across borders.
Whether it is organised criminal groups such as the Mafia, on-line fraudsters, the corrupt or drug traffickers, money is what motivates and drives them. It not only enables them to live a lavish lifestyle, but also funds their continued criminal activity and capability building to the serious detriment of society.
Hundreds of billions, possibly trillions, of dollars are generated by criminal activity each year. These illicit assets are often moved through multiple jurisdictions across a range of actors to stymie law enforcement. And yet the current reality is that globally we are confiscating a very small percentage of these proceeds.
The mutual evaluations from FATF and the global network show that a large majority of countries have ineffective asset recovery systems.
We can and indeed we must do far better. It is critical that we act together, act decisively, and act now.
With the borderless way that criminals are working, countries will need to strengthen our responses not only for domestic cases, but more so for transnational cases. We need to effectively leverage off international co-operation and multilateral mechanisms.
It is thus very appropriate that we are here in Italy to discuss these issues.
Italy confiscates billions of euros each year and has a long track-record of taking strong action to combat serious and organised crime. The Guardia di Finanza is formidable and has a strong track record of success.
I am sure we will benefit from listening to Italian experts speak about the range of tools, mechanisms and practices they have successfully adopted.
FATF’S WORK ON ASSET RECOVERY
Let me move on to FATF’s work on asset recovery. Last year, the FATF Ministers made asset recovery a Strategic Priority for the FATF. It is a top priority of my Presidency, and coming from a strong law enforcement background, an area close to my heart.
It is a major concern that not enough national, regional and global emphasis has been placed on this building block.
For far too long, national authorities and law enforcement have not prioritised this area or have not committed sufficient attention and resources to it to enable success.
At the FATF, we have launched a number of initiatives in response to this challenge:
The Policy and Development Group (PDG) is working hard to revise and strengthen the FATF Standards on asset recovery. This is timely as the Standards have not been changed for more than 30 years.
This will ensure that countries prioritise asset recovery, that we have an international framework that is up to date, and that we address the current threats by setting out the range of legal measures needed to allow us to respond effectively.
There is no room for complacency, and we need to be ambitious in this exercise, while recognising the need to allow countries appropriate flexibility to achieve real substantive outcomes.
At the operational level, we are also working closely with INTERPOL, the Egmont group, the CARIN/ARIN Networks and others to enhance the ways in which countries exchange information in support of asset recovery.
On global initiatives, as I had mentioned earlier, INTERPOL Secretary General Jurgen Stock and I launched the first FIRE event in Singapore in September last year.
The event brought together asset recovery experts from many countries and institutions.
We agreed on 10 key takeaways from that conference, setting out a variety of ways in which we can enhance the effectiveness of our systems.
I am delighted to update that, in September 2023, we will get together again in Lyon for FIRE 2 to review the progress made, and chart further steps forward in our global efforts to advance asset recovery.
RESPONSES NEEDED FROM COUNTRIES
So what are the responses needed from countries? It is up to us collectively make the changes that are so sorely needed.
It must start with having asset recovery as a key priority in national crime fighting strategies – something which is currently not the case in the vast majority of countries. This needs to change quickly.
How do we create this mindset and culture that embraces asset recovery as a fundamental game-changer?
This needs to start from the top. But as importantly, the asset recovery mindset needs to be shared by all operational experts.
Clear policies on asset recovery, not just the pursuit of the predicate offence, must be in place. In countries that are more effective, there is often a culture of ‘following the money’ no matter where the monies are held. Asset recovery is used as a tool to disrupt the operations of serious crime and to successfully return proceeds to victims.
Take for example cyber-enabled fraud where a strong focus on asset recovery and international co-operation is particularly pertinent. It is not just critical that law enforcement pursue the fraudsters and syndicates, who frequently operate across borders, we must take timely steps to identify, freeze and recover the criminal proceeds and restitute the victims. These actions will not just thwart the criminal, but also help mitigate the hardships on victims.
Another key element is to ensure that the legislative framework gives law enforcement and prosecutors a wide range of powers, tools and mechanisms to quickly freeze, seize and confiscate assets.
To be clear, there is no silver bullet. Countries need a suite of measures that allow them to target criminal assets from all angles.
At the same time, I urge countries to approach this with an open mind. The reality is that most, if not all of us, must take steps to review and enhance our domestic legislation to enable us to be more effective in enhancing asset recovery.
Another important component of an effective system is strong domestic co-ordination within government agencies and also with the relevant private sector entities. Too often we can become siloed in our approach.
We can only derive high benefit from enhanced or new asset recovery legislation and measures if the right structures and systems are put in place that will facilitate its effective use. This includes the need to have timely access to funds flow information and the ability to rapidly exchange information across borders.
Finally, I am a strong believer that our strategy and direction will be more effective if it is informed by an evidence-based approach, driven by active measuring of whether success is being achieved.
In too many countries, there are no goals, objectives, or performance indicators measuring these results. This means that ineffective systems stay that way for decades. Countries need a clear ‘tone from the top’ and at all levels that makes it clear that law enforcement must consistently prioritise asset recovery. What gets measured gets delivered!
International organisations can support this by incorporating asset recovery as a major priority and helping to drive capability and capacity building in this area, especially for countries that are at early stages of implementation. At the international level, there is a critical need to create or adapt co-operative and multilateral mechanisms that will enable more rapid and effective co-operation.
Afterall, how often do we find that mutual legal mechanisms result in delays, and challenges to trace and identify criminal assets in a timely way?
At this LDF today, I urge you to learn from our Italian friends and share of your own experience.
Having spoken to many experts, I know that trust is a critical factor underlying the effectiveness of cross border co-operation. I believe this Forum will give us all an opportunity to further build the trust and connections between colleagues from different countries with common shared objectives.
We are going to spend 2 days discussing these issues in detail. We will look at the investigative tools available and consider the options for laws, tools and other measures that will enable us to fight back against organised crime and unrecovered criminal assets.
These are not just issues for law enforcement. At the national level, we need close coordination and alignment across the government, strong political and policy level support, adequate tools and resourcing, and a legislative and institutional framework that empowers effective operational action.
To conclude, we need to build high momentum, galvanise support, including at the political level.
Deputy Minister Maurizio Leo’s presence here today shows his commitment and support for this work. We need to be proactive, and to tackle these issues holistically. We can’t afford to simply react to what happens – we need to take the lead and proactively target international criminal syndicates, including professional money launderers.
Many of you are prosecutors, law enforcement or work in FIUs, and I see also a number of policy makers. You are at the coalface of the issues we are facing.
The LDF provides an excellent opportunity for you to discuss the challenges you face with experts from other countries and identify how we can collectively take forward leaning steps and make a real difference.
Collectively we have the knowledge to identify and implement solutions.
By working collaboratively, we can be more formidable, more capable, and more effective – and make sure that crime doesn’t pay.