Fafo-report 380

Jonathan M. Winer

Illicit Finance and Global Conflict

ISBN 82-7422-363-2
2002 60 p

Web edition (pdf - 211K) * More publications on this subject

Economies of Conflict: Private Sector Activity in Armed Conflict

Programme for International Co-operation and Conflict Resolution

Global banking has provided services to a long list of money launderers, diamond and timber smugglers, terrorists and corrupt officials, and traffickers in people, guns and drugs. Bank staff may have been knowing or negligent but, in most cases, the institutions themselves did nothing illegal. The problem lies not in the institutions, but in a system of international regulation that failed to create legal norms or regulatory mechanisms to prevent abuse. Illicit Finance looks at the global challenges presented by illicit finance, its role in helping to sustain armed conflict, and efforts now underway to meet these challenges. The report was commissioned by PICCR as part of the Economies of Conflict research project, which examines the links between certain private sector activity and armed conflict.

Financial support for Economies of Conflict has been provided by the Government of Norway.

Contents

Executive Summary

1 Structural Consequences of the Globalization of Money

2 Impact of Globalization on Political Stability and Conflict
2.1 The Money Launderer’s Common Financial Infrastructure
2.2 International Money Laundering and Grand Corruption
2.3 The Financing of Terrorism and Armed Conflict
2.4 Conclusion: The Cross-Currents of Illicit Finance

3 Existing Initiatives
3.1 “Know Your Customer”
3.2 Naming and Shaming Jurisdictions
3.3 The OECD Harmful Tax Practices Initiative
3.4 The Wolfsberg Principles: A Private Sector Alternative

4 Implementing Global Standards for the Private Sector

Annex A: The FATF “Black List”

About the Author
About Fafo and PICCR