International financial management: Impact of International criminality

Résumé du document

Annual gross product of identified criminal activities is approximately $1000 billion that is to say 20% of the world trade. Admitting that charges on this kind of business represents 50% of this gross product (suppliers, production, corruption, investment, management fee) means that the annual profit of criminal organization is around 500 billion US dollars. We can then understand the issues that international criminality represent. The extent of the phenomena requires the implication of economical agents and the role of developed countries' banks is indisputable. That way, we can observe that the limits between licit and illicit is not clearly defined, that there are grey areas through which illicit activities can happen.
This presentation will be divided into 3 main parts. First, we will study the main criminal organizations and their main activities. In the second part, we will focus on financial criminality and in the third part, we will see if there are some effective ways to stand against international criminality.

Extraits

[...] Terrorism: without any doubt the most well know kind of international criminality. Contrary to other activities, it doesn't bring any money but needs some. We will see later how terrorists get money. Financial criminality Financial criminality is a market, flourishing and structured where supply and demand meets. Big criminal organizations can only launder and recycle the money from their illegal businesses thanks to the complicity of business communities and political powers. Interweaving of legal and illegal economies All this money harvested thanks to illicit economy has to be recycled in “cleaned” money, and international organizations needs the help of international financial actors. [...]

[...] The main fact is that these organizations would control 70% of bank activities in the country, the main part of oil, gas, lumber and ore resources. These organizations draw between 10 and 20% of companies' revenues. The most well-known mafia is Solntsevo. Japanese mafia: It is really powerful because involved in political and business affairs in Japan. There is about 3000 Yakuzas' groups. There annual turnover is approximately 13 billion US These mafias are also realizing legal business out of Japan. Chinese Triads: This kind of mafia is really powerful. [...]

[...] It also increases social disparities and favorites organized criminality. Counterfeit: Its turnover exceeds 100 billion US Racket, extortion, abductions: widely practiced activity, especially by South Americans cartels (3000 hostages in Colombia). Weapons, drugs and cigarettes traffics: Annual profits from drug traffic (cannabis, cocaine, heroin) are about 300 and 500 billion US $ (excluding chemicals drugs), that is to say 8 to of global trade. Money laundering: this activity consists in transforming money from illegal economy into money. Human beings traffic: thousands of persons are moved each year by international organizations highly structured and specialized. [...]

[...] These organizations finance largely politic power against a which allows them to realize their operations without paying attention to the authorities. The fail of a 30 years' war against drug shows the efficiency of the formula. We can predict the same fate to the fight against money laundering or corruption. Fiscal paradises What is a fiscal paradise? According to the definition, it is defined as “countries with privileged fiscal policy”. In reality, there are several types of fiscal paradises and the possible variety of financial activities incites them to specialize. [...]

[...] Indeed, the lack of control on capital movements increased the number of fiscal paradises. Why to use a tax haven? They are mainly used for: Fiscal fraud Corruption Maritime complacency of global fleet is registered in fiscal paradises) Capital laundering: Money from illegal activities transits by fiscal paradises to be reinvested in licit economy. Tax haven meet several conditions encouraging money laundering: o Banking secrecy: hides the identity of an account owner o Anonymity of company's owner o The possibility to create easily trusts and shell companies o The possibility to request an appeal: which gives a real immunity warranty by increasing the delay of information accessibility Tax haven and offshore places spread all around the world allows people to organize the circulation of financial flows linked to illegal activities, while being protected from laws. [...]