President, Ministers, Excellencies, Ladies and Gentlemen
The human suffering and costs of societies due to organized crime are enormous. To counter criminal networks, we need to be smarter and cooperate more effectively at the international level. The report presented by Executive Director Costa gives important new insight to the size of the proceeds of transnational organized crimes. UNODC has earlier estimated the annual market value of cocaine and heroin only in Europe to 54 billion USD. That is one fourth of my government’s budget. And that is only one sort of crime in one part of the world.
The Global Financial Integrity Institute estimates illicit capital flows out of all developing countries to be as large as one trillion USD per year, ten times international aid going to the same countries. Proceeds of organized crime have been indicated to be 35 percent of this amount.
Lessons learned from Norway have been that measures to increase transparency and to identify illicit financial flows have contributed substantially in our fight against organized crime. But we need a global approach.
Increased transparency is probably the most powerful tool to reduce the hiding and laundering of the proceeds of crime. Part of the effort to increase transparency should be to require every financial service provider to know whose money they are handling. That means the owner, not the first or second layer of a disguised entity controlling an account. This is reflected in OECD financial action task force recommendations, but much needs to be done in the implementation of these recommendations and many member states are not all states are members of the OECD.
White-collar criminals are profiting from crime, but those few who are taken are faced with relatively mild sentences. To counter these criminals, we need more knowledge about the global criminal groups, from the opium producer in Afghanistan to the heroin market in Russia, Norway or any market. But we also need to know a lot more about the criminal groups transfer and launder their proceeds. They should not be allowed to take advantage of weaknesses in the global financial structures.
We therefore welcome UNODCs increased focus on proceeds of crime. The report presented this morning by Executive Director Costa gives important and valuable estimates on the amount of the enormous cash flow related to international organised crime. Norway is eager to build further on this good work with more in depth analysis. Where does the money originate, how are they transferred and how can their ownership and origin be hidden? What are the instruments used to hide the money – more specifically which features of the international financial institutional setup represent the most important weaknesses with regard to crack down on the international organised crime.
Norway has decided to fund and cooperate with UNODC on a study which includes those aspects and is eager to cooperate with other countries. The work will draw on the unique expertise of the UNODC in the area of drugs, crime and money laundering. The study should include the experience of all interested member states. It should also include lessons learned within the financial sector and the Financial Action Task Force of the OECD, where many of us are represented. The study should address the crimes under the UNODCs mandate, meaning proceeds from drugs, transnational organized crime and corruption.
A discussion within the UN and the Financial Action Task Force will mutually reinforce each other, but the UN will not replace the expertise of Financial Action Task Force. Their different scope, purpose and membership, are the most obvious differences. UNODC has a unique role with regard to provide technical assistance to its many member states in their implementation of the conventions.
The adoption of the UN Convention against transnational organized crime was a breakthrough in our joint efforts, but we need to implement it and develop it further. We count on your cooperation in this regard.
Identifying how the proceeds of crimes are integrated into the financial system and transparency will be an important step to bring this work further.