Crime Enforcement Research Articles

The anti-money laundering act of 2020

Purpose The purpose of this article is to inform stakeholders about the Anti-Money Laundering Act of 2020 (AMLA), explain its impact on the U.S. anti-money laundering (AML) regime, and highlight critical updates for financial institutions. Design/methodology/approach The article provides an overview of the AMLA, and specifically addresses three key components: (1) the development of uniform beneficial ownership requirements and the creation of a beneficial ownership registry at the Financial Crimes Enforcement Network (FinCEN); (2) the expansion of FinCEN’s powers and the Bank Secrecy Act/AML program requirements; and (3) new subpoena powers with potential extraterritorial effect granted to the U.S. Secretary of the Treasury and the U.S. Attorney General for documents located at foreign banks that have a correspondent banking account in the U.S. The article also notes the purpose and goals of the AMLA. Findings The AMLA is the first major overhaul of the U.S. AML regime since the 2001 USA PATRIOT Act, and is designed to strengthen national security, protect the financial system, and simplify compliance obligations. The beneficial ownership reporting requirements represent an effort to combat illicit financial activity conducted by shell companies formed and registered in the U.S. Originality/value The article provides financial institutions with a brief overview of a lengthy new law that will impact their AML compliance obligations. Financial institutions should be on alert for forthcoming regulations.

The Development of Enforcement of CITES in Norway: Discretionary Omissions and Theoricides

The world is losing species at an alarming rate; the population sizes of wild mammals, birds, fish, amphibians and reptiles have dropped 68% since 1970. Much of this loss is caused by trade. This article discusses the development in the enforcement of CITES (Convention on the International Trade in Endangered Species) in Norway through a longitudinal, qualitative approach. It is based on data collection done in several stages and traces how crimes of wildlife trade are addressed by law enforcement agencies. It finds that there is lax enforcement of CITES crimes in Norway, which connect to what can be called anthropocentric, discretionary harms of omission in law enforcement. Taking a species justice approach and based on a discussion of possible changes and development in enforcement in Norway, this article argues that this crime is still insufficiently prioritized by enforcement agencies. Weak points identified at the early stages of this research, such as deficient recording of CITES crimes and discretionary lack of priority of investigation, were still existent. The most serious weakness is the policy of euthanizing confiscated animals, which is a considerable breach of species justice.

UJI KONTEKS TERHADAP PENERAPAN TEKNIK UNDERCOVER BUY DALAM PROSTITUSI ONLINE DALAM PEMBERANTASAN TINDAK PIDANA PROSTITUSI DI INDONESIA

The regulation of legal certainty for the undercover buy investigation mechanism in online prostitution crimes in this study is to emphasize the validity of the Undercover Buy investigation technique in criminal acts of prostitution through online media, the Undercover Buy research technique is only regulated in narcotics crime, how is the validity of Undercover Buy in law enforcement of the crime of prostitution in this online media. To analyze the existing problems, this study uses a statutory approach, a case approach and a conceptual approach, the results of the Undercover Buy analysis are regulated in the Criminal Procedure Code as a special form of investigation technique, law enforcement of prostitution crime through undercover buy in the future, the investigation is carried out with a series of actions taken by investigators in terms and according to ways regulated by law to seek and collect evidence about criminal acts of prostitution online and to find the suspect.

LAW ENFORCEMENT POLICIES IN CRIMINAL ACTS OF CORRUPTION IN INDONESIA

The law enforcement of corruption crimes that have been carried out so far only illustrates success in uncovering, arresting, detaining, prosecuting and convicted of the perpetrators who are found guilty. Still, it has not demonstrated success in eradicating corruption crimes widely. So that the success of such efforts creates a perception that Indonesia's corruption crimes are increasing, with this fact, what is illustrated is that Indonesia is a corrupt country. This is undoubtedly a contradiction with the expected goal of eradicating corruption crimes. The purpose of this article is to analyze corrupt law enforcement policies in Indonesia. This article concludes that amid national development efforts in various fields, the public's aspirations in eradicating corruption and any form are increasing because sin has caused enormous losses to the State, which could impact the emergence of crises in various fields. To overcome this, it is necessary to implement penal and non-penal policies to prevent criminal acts of corruption. Thus, the use of correctional and non-penal facilities must go hand in hand in overcoming corruption crimes

The Federal Corporate Transparency Act - Waiting for Answers

The federal Corporate Transparency Act, adopted on January 1, 2021 over President Trump's veto, is the product of two decades of proposed federal legislation to combat money-laundering and terrorist financing through anonymous business organizations. When rules are finalized, newly-formed and existing business entities will have to file reports with the Department of the Treasury's Financial Crimes Enforcement Network identifying control persons and beneficial owners of more than 25% of the entity. Unfortunately, and despite the very long gestation period for the Corporate Transparency Act, the act itself raises a large number of questions for which we are awaiting answers. Hopefully the answers will come in rulemaking which must be completed by December 31, 2021. This paper describes a number of the questions for which we are awaiting answers.

Why Business and Real Estate Lawyers Need to Worry About the 2021 National Defense Authorization Act

Colorado, specifically, and the United States, generally, allow free formation of for business and non-business purposes, with few and many times no obligation to disclose the underlying beneficial owners. This purportedly allows these to be used for money-laundering and terrorist financing operations. The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 is another step to change this, following international attention focused from the international Financial Action Task Force, almost twenty years of effort in Congress, and the geographical targeting orders issued by the Department of the Treasury’s Financial Crimes Enforcement Network. This paper discusses the Federal Corporate Transparency Act requiring that the Department of Treasury develop disclosure obligations for existing and newly-formed businesses in the United States. While the Corporate Transparency Act is not effective immediately but must wait for rule-making, it will change the method that business lawyers and real estate lawyers advice their clients when the rules are adopted and involves ethical implications for the lawyers who intentionally or inadvertently assume their client's obligation to make the reports required under the Corporate Transparency Act. While waiting for rulemaking, those who form are waiting for answers. - Do you want to risk being an applicant as defined in the Corporate Transparency Act and therefore possibly responsible for the entity's filing obligations at the potential risk of criminal and civil liability? - What fundamentally will be companies? We know that it includes corporations, LLCs, and similar entities - but what will be defined as a similar entity? - How will the reporting companies gather the necessary information? Should there be language in articles of incorporation, articles of organization, bylaws, operating agreements, partnership agreements, and buy-sell agreements (among others) requiring the control persons and owners provide the necessary information? This paper gives a detailed background on the history that went into the Corporate Transparency Act. This paper does not answer those questions, but raises and discusses those questions and a number of other questions, including the attorney's ethical obligations that arise from the Corporate Transparency Act.

The Enforcement of Criminal Laws of Hate Speech in Social Media

The objectives of this study are as follows: To determine the law enforcement of hate speech crimes in social media. To find out the factors that hinder criminal law enforcement of hate speech in social media. This is to determine the efforts to overcome the obstacles to the enforcement of the hate speech criminal law. This study uses an empirical juridical approach, with descriptive analytical research specifications. The results of this study are law enforcement against hate speech offenders on social media starting from the first stage, namely the police. hate speech perpetrators then the next step is to the prosecutor's office, and the last stage of the trial. Penalties in the form of imprisonment and fines for hate speech offenders are expected to provide a deterrent effect on hate speech criminals on social media. Inhibiting factors, namely, Public Awareness Factors, Security Factors, Law Enforcement Factors. Efforts to overcome obstacles, namely Act No. 11 of 2008 which was later revised to Act No. 19 of 2016, the formation of a special division by the police that specifically handles cyber crime cases, the holding of a cyberpatrol to monitor activities on social media, and the establishment of a cyber agency. national to minimize the spread of negative content on social media, as well as the existence of government services to make it easier for the public to report cyber crime cases.

Implementation of E-Commerce Crime Law Enforcement at the West Nusa Tenggara Regional Police

This study aims to analyze the implementation of e-commerce criminal law enforcement in the NTB police institution related to how the law enforcement of e-commerce crime in the NTB Regional Police agency and how the legal protection of e-commerce consumers in the NTB Regional Police agency. Through empirical legal research related to law enforcement of e-commerce crimes in the NTB Regional Police. Based on the statutory approach, conceptual approach, and sociological approach to law. The legal basis for law enforcement of the NTB police e-commerce crime is the Criminal Code and Law Number 19 of 2016 concerning Electronic Information and Transactions. Enforcement of criminal law against e-commerce in article 378 of the Criminal Code, the penalty is too light, so the police apparatus uses article 28 paragraph (1) and article 45A paragraph (1) of Law number 19 of 2016 concerning Electronic Information and Transactions. In e-commerce crime, the police have difficulties such as difficulty finding evidence, finding anonymous accounts and electronic identities. In addition, the NTB Police agency does not have the authority to intercept and block accounts used by e-commerce criminals. The NTB Regional Police's legal protection measures for consumers include conducting checks at internet cafes, collecting evidence related to crimes, tracking related crimes, confiscating electronic evidence, disclosing (blocking bank accounts) or detaining based on preliminary evidence or so-called evidence enough.

The Effectiveness of White‐Collar Crime Enforcement: Evidence from the War on Terror

ABSTRACTThis paper analyzes the impact of changes in regulatory priorities and resource allocation on criminal enforcement of white‐collar criminal activities. Using the 9/11 terrorist attacks as a shock to the FBI's priorities and allocation of investigative resources, as well as variation in the Muslim population in the United States, I examine whether prioritization of counterterrorism investigations after 9/11 is associated with weaker enforcement of laws targeting white‐collar crime. I then use a difference‐in‐differences estimation to study the magnitude of any increase in white‐collar crime resulting from reduced oversight. I find a significantly greater reduction in white‐collar criminal cases referred by FBI field offices that shifted more of their investigative focus away from white‐collar crime to counterterrorism. Further, geographic areas in the jurisdictions of FBI field offices with greater shifts in attention from white‐collar crime to counterterrorism experienced greater increases in wire fraud, illegal insider‐trading activities, and fraud within financial institutions.

The Effectiveness of White-Collar Crime Enforcement: Evidence from the War on Terror

This paper analyzes the impact of changes in regulatory priorities and resource allocation on criminal enforcement of white‐collar criminal activities. Using the 9/11 terrorist attacks as a shock to the FBI's priorities and allocation of investigative resources, as well as variation in the Muslim population in the United States, I examine whether prioritization of counterterrorism investigations after 9/11 is associated with weaker enforcement of laws targeting white‐collar crime. I then use a difference‐in‐differences estimation to study the magnitude of any increase in white‐collar crime resulting from reduced oversight. I find a significantly greater reduction in white‐collar criminal cases referred by FBI field offices that shifted more of their investigative focus away from white‐collar crime to counterterrorism. Further, geographic areas in the jurisdictions of FBI field offices with greater shifts in attention from white‐collar crime to counterterrorism experienced greater increases in wire fraud, illegal insider‐trading activities, and fraud within financial institutions.

Countering money laundering and terrorist financing: A case for bitcoin regulation

Bitcoin was created in 2008 to serve as an alternative payment mechanism for both the under-banked and un-banked, or those in regions where the formal financial system suffers from broad corruption and efficient regulation. However, criminals and terrorists quickly exploited Bitcoin's unique properties, namely its peer-to-peer nature and pseudo-anonymity, to facilitate extensive terrorist financing and money laundering schemes. Government reactions to safeguard national security interests have been extremely varied, ranging from outright bans to passive tolerance. This inconsistency stems from how to effectively classify Bitcoin. On one side are those who argue Bitcoin is a currency, and on the other are those who claim it is a type of asset. In the US alone, these discrepancies have led to a bureaucratic turf war between different regulatory bodies, namely the Financial Crimes Enforcement Network, the Commodity Futures Trading Association, the Securities and Exchange Commission, and the Internal Revenue Service. This study seeks to move beyond the existing legal frameworks, arguing that Bitcoin should be classified as a technology and regulation should rest with private sector technology companies.

A Safe Harbor for Ransomware Payments: Protecting Stakeholders, Hardening Targets, and Defending National Security

The United States is under ransomware siege. Victims range from small municipalities to non-profits to multi-national corporations and governments. The law is struggling to respond. Few entities, crippled by a ransomware attack, can refuse to pay. Not paying the ransom may result in significant harm, including financial ruin or even loss of life. Paying a ransom, however, is likely to generate attacks on other targets. Paying may not even lead to recovery of the data as promised. By definition, paying ransoms transfers value to criminals, and that is against many laws. But more than simple illegality is at issue. While ransomware hackers may be lone criminals or infamous cyber-gangs, they may also be hostile foreign countries, or non-state actors such as terrorist groups. Ransomware and other digital threats have the potential to compromise U.S. critical infrastructure. Strategically significant economic transactions have long been prohibited or highly regulated. In the wake of the September 11th attacks, the discovery and prevention of terrorist financing became a key pillar of U.S. security architecture. Under this regime, paying a ransom, thereby aiding the “enemy,” may trigger liability. Regulators have threatened enforcement of sanctions and anti-money laundering laws not only against ransomware victims who pay, but also against third-party service providers who facilitate payment. Both the Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) have issued advisories emphasizing their strict policies against paying prohibited persons or transmitting funds without required procedures. How to steer between the Scylla of legal liability and the Charybdis of a cyberattack? Sometimes ransoms should be paid as the lesser evil. Confronted with the potential damages of a ransomware attack, people may rightly choose to pay. On the other hand, society cannot allow itself to be held hostage. Those who endanger individual lives, enterprises, and core social functions must be resisted. That is, the status quo, in which many enterprises simply pay off cybercriminals, thereby incentivizing more cyberattacks, is unsustainable. This article argues that the threat of legal liability for ransomware payments, with no positive incentive for potential victims, is unlikely to spur adoption of sound security measures or even to stop payments, and may be counterproductive if it leads victims to conceal attacks. Instead, this article suggests the creation of a safe harbor for ransomware payment that (i) enables the victim and those who assist the victim to pay when necessary (protecting stakeholders), but that also (ii) deters attacks (hardening targets) and (iii) facilitates interdiction of attacks that do occur (defending national security).

Strengthening Policies for Economic and Ecological Sustainability through the Enforcement of Environmental Crimes in Third World

This study is motivated to analyze by departing from evidence that the lack of monitoring and evaluation can increase violations and environmental crime. Specifically, this study seeks to analyze the strengthening of environmental policies by highlighting the drivers of environmental crime, and the public policies that need to be formed to reduce environmental crime. By describing from various previous literature, this study found that environmental crime has been transnational with actors from many countries involved. This not only shows the level and geographical extent of crime which is increasingly widespread, but also requires the existence of a legal interface in handling environmental crime. However, an increase in the adequacy and capability of resources in dealing with environmental crimes provided to environmental crime action agencies needs to be strengthened. This is in line with the consideration that limited resources and lack of political impetus result in ineffectiveness in the prevention and handling of environmental crime. Public policies regarding the environmental economy must also actively pressure companies to comply with various environmental regulations and green behavior.

Ehi’s Predictions for the Anti-Money Laundering Sector in 2021

The year 2020 witnessed the introduction of new rules and regulations by the United Kingdom for virtual asset service providers, and for the first time, a Bitcoin “Mixer” was Penalized by the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) for Violating Anti-Money Laundering Laws. The anti-money laundering landscape also witnessed a shift from documentation based procedures to electronic evidence. This was as a result of the COVID-19 pandemic. The year 2021 will likely continue from where the year 2020 stopped with more regulations and enforcement actions.This paper provides an in-depth review and analysis of the topics that are likely to trend on the anti-money laundering space in 2021. This paper predicts that countries around the world will introduce more rules and regulations for virtual asset service providers along with the adoption of an appropriate mix of on-site and off-site supervision of dealers in precious metals, precious stones or jewels, including the introduction of corporate transparency and register reforms. This paper also predicts that financial institutions will enhance their anti-money laundering systems and controls to accommodate application programming interfaces during the customer onboarding process, and upgrade their anti-money laundering surveillance monitoring systems to a new system that can detect highly suspicious transaction patterns including possible layering schemes, transactions not commensurate with the business’s purpose, and commingling of funds between two independent check cashing entities. This paper concludes that the combined power of robotic process automation, machine learning technology and human intelligence will help to deter and detect money laundering.

Dirty Money: How Banks Influence Financial Crime

On September 21st, 2020, a consortium of international journalists leaked nearly 2,500 suspicious activity reports (SAR) obtained from the U.S. Financial Crimes Enforcement Network, exposing nearly $2 trillion of money laundering activity. The event raises important questions regarding what role banks play in facilitating financial crime and the effectiveness of SAR reporting. In this study, we examine the incentives that banks face to report money laundering activity via SAR reports, and the implications of a bank’s reporting strategy for criminal activity. We first analyze banks' SAR reporting decisions using a stylized model, which predicts that banks facing depressed revenues from their routine business lines and more profit-seeking pressure adopt more lax reporting policies. These reporting policies help to attract criminals, thus increasing the underlying amount of suspicious activities that banks need to examine and report. Empirically, we test the relation between risk-taking incentives and SAR volume at the county level. We find that counties in which banks face higher competition and lower profitability generate higher volumes of SAR activity. To provide further support for the underlying mechanism, we incorporate a maximum likelihood estimation that uncovers a highly elastic demand from criminal customers with respect to banks' reporting stringency. We establish causality using shale gas expansion in unrelated states. Consistent with risk-taking incentives influencing SARs, we find that banks experiencing higher (lower) shale growth generate fewer (more) SAR reports. Overall, our results provide important insights regarding the role of banks in influencing financial crime, and suggest that a bank’s reporting policy has indirect implications for local criminal activity.

Cryptocurrency Regulation: Countering Money Laundering and Terrorist Financing

Bitcoin was created in 2008 to serve as an alternative payment mechanism for both the under-banked and un-banked, or those in regions where the formal financial system suffers from broad corruption and efficient regulation. However, criminals and terrorists quickly exploited Bitcoin’s unique properties, namely its peer-to-peer nature and pseudo-anonymity, to facilitate extensive terrorist financing and money laundering schemes. Government reactions to safeguard national security interests have been extremely varied, ranging from outright bans to passive tolerance. This inconsistency stems from how to effectively classify Bitcoin. On one side are those who argue Bitcoin is a currency, and on the other are those who claim it is a type of asset. In the US alone, these discrepancies have led to a bureaucratic turf war between different regulatory bodies, namely the Financial Crimes Enforcement Network, the Commodity Futures Trading Association, the Securities and Exchange Commission, and the Internal Revenue Service. This study seeks to move beyond the existing legal frameworks, arguing that Bitcoin should be classified as a technology and regulation should rest with private sector technology companies.

Comment Letter on Fincen's Advance Notice of Proposed Rulemaking on Anti-Money Laundering Program Effectiveness

We submitted these comments in response to the Financial Crimes Enforcement Network's advance notice of proposed rulemaking on the definition of an effective and reasonably anti-money laundering program applicable broadly to financial institutions. Our comments highlight industry-specific obligations of brokers and dealers in securities to have reasonably designed anti-money-laundering programs. We argue that in undertaking future rulemaking, FinCEN should account for industry-specific statutory requirements, and how these bear on regulators’ experiences implementing AML program obligations analogous to those the advance notice of proposed rulemaking contemplates. Regulators’ experience enforcing compliance with FINRA's informal guidance under the Securities Exchange Act of 1934, for instance, raises questions about whether FinCEN’s proposals to elaborate on AML obligations through periodic guidance would impose obligations enforceable at all. In particular, FinCEN should carefully consider whether essential enforcement regimes will require additional rulemaking because simply issuing official guidance may not create fully enforceable obligations in all regulatory frameworks. For self-regulatory organizations overseen by the SEC, guidance alone may not suffice to create an enforceable obligation. In instances where the SEC reviews SRO enforcement actions, it considers whether conduct violated the SRO's “rules,” meaning rules approved by the SEC. As explained in greater detail below, official guidance may not meet this standard, creating doubt, enforcement challenges, and likely inhibiting FinCEN’s compliance objectives.

As Forças-Tarefas do Ministério Público Federal: o discurso político punitivo anticorrupção na instituição de garantias

No presente trabalho investigou-se de que modo o discurso punitivo anticorrupção, que ensejou a formação de forças-tarefa do Ministério Público Federal, tem o potencial de comprometer a função normativa constitucional do Ministério Público como instituição de garantia. A hipótese original é a de que as forças-tarefas ensejam um conflito entre os esforços para persecução da corrupção e os direitos fundamentais estabelecidos pela Constituição. Por conta disso, apresentam potencial de instrumentalização política, comprometendo a vocação constitucional do Ministério Público. A investigação será normativa e crítica. A metodologia será a da abordagem teórica, numa perspectiva hipotético dedutiva e terá fontes bibliográficas, mas também documentais produzidas pelo próprio Ministério Público Federal.

Persistence or Partisanship: Exploring the Relationship between Presidential Administrations and Criminal Enforcement by the US Environmental Protection Agency, 1983–2019

AbstractConventional analysis suggests that enforcement actions meted out by the US Environmental Protection Agency vary greatly across Democratic and Republican presidential administrations. Yet research fails to look beyond civil actions to explore how the agency engages in the criminal enforcement of environmental crimes over time or whether and how those outcomes change across partisan administrations. We explore these questions by using content analysis to build a comprehensive dataset of 2,588 criminal enforcement prosecutions, 1983–2019. The results do not suggest that outcomes under Democratic presidents are always substantially more punitive or under Republicans significantly reduced. Outcomes over time better reflect the growing sophistication and institutionalization of the enforcement process, declining budgetary realities, and the agency's organizational commitment to deter serious environmental crimes.

Penegakan Hukum Terhadap Pertambangan Emas Tanpa Izin oleh Kepolisian Sektor Kecamatan Singingi

Unlicensde gold mining still occurs very often in Singingi District, leading to negative impacts on the environment. This research was conducted to determine the law enforcement against unlicensed gold mining (PETI) by the Singingi District Police and the obstacles. This is an empirical juridical or sociological legal research carried out by identifying the law and how the effectiveness of the law applies. The results conclude that the efforts made in the context of law enforcement of the PETI crime are preventive and repressive efforts. However, these law enforcement efforts have obstacles that cause ineffective PETI law enforcement by the Singingi District Police, namely the lack of supporting facilities and infrastructure, lack of coordination, both between the government and the community, and the lack of enforcement of existing indigenous law