Illicit Conflict Economies: Enhancing the Role of Law Enforcement and Financial Machinery

Abstract

The role of economic factors in contributing to the initiation, prolongation or resolution of violent conflict has attracted increasing attention, as societies affected by resource conflicts are seen to pay an enormous price in terms of abuses committed against civilian populations, environmental degradation, destruction of traditional forms of social organization and lost developmental opportunities. The present paper sets out legislative and other tools that might be brought to bear in attempts to stem the flow of financial resources to belligerent groups and oppressive regimes. After briefly describing illicit conflict financing and the evolving international response to it, it sketches out a range of potentially-useful mechanisms based on international norms. These include counter-terrorism tools, and in particular the use of listing-procedures to bring counter-terrorist financing machinery to bear, as well as anti-money laundering mechanisms, including suspicious transaction reporting and ‘know your customer’ rules. Because the anti-money laundering system is based on the assumption that a ‘predicate offense’ has been committed, a summary discussion follows of how companies and business actors suspected of such underlying crimes might be prosecuted directly: the most relevant crimes being targeted sanctions imposed by the UN Security Council, organized crime and corruption offenses pursuant to the relevant UN conventions, and international atrocity crimes (war crimes, genocide, crimes against humanity). The paper concludes with remarks on possible policy measures and action on the part of multilateral for and national governments in order to build upon the strengths of the system, to address its failings and to improve its future performance with respect to illicit conflict-financing.