Drug law enforcement and financial investigation strategies

Michael Levi
IDPC Modernising Drug Law Enforcement Report 5
September 2013

MDLE-5-drug-law-enforcement-financial-investigation-strategiesSince the 1980s, there has been a major push in rhetoric and institution-building, emphasizing the centrality of attacking the financial lifeblood of drug trafficking networks and organised economic crimes. Much progress has been made in legislation and the creation of financial intelligence units. However, there are volumes of commentary and legal analysis, but almost nowhere in the world is there any systematic analysis of law enforcement or criminal justice inputs or outputs, let alone of outcomes in terms of reduced crimes of any kind or reduced harms arising from the ‘organised’ nature of crime.

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Much depends on how plausible it isthat the sources of funds can be represented as being licit when saving or investing: but a global, well-advertised set of financial intermediaries exist upon whom to experiment, and expectations of being reported following failed attempts may be quite low. Judging from the continued involvement of major banks in negligently or actively facilitating a variety of suspected illicit activities, and the relative impunity of institutions that are ‘too big to be prosecuted’, normal risk perceptions of relevant parts of financial institutions are not nearly high enough to deter all serious noncompliance to AML regulation, though without increasing perceived and/or actual detection risks and reducing elapsed time to action, raising sanctions alone may not work.

This report makes no claim to be offering a certain route to success, but is offering an overview of some better and some false steps that have been undertaken in the field of drug law enforcement and financial investigation strategies.


With this in mind, a number of recommendations can be made, which apply more readily to developed economies:

• Consideration needs to be given to the more routine mainstreaming of financial investigation and confiscation, and to its impact at different levels of criminal organisation, including local and regional networks – but this requires a sea change in supervisory attitudes and, in some countries, prosecutor and judicial training; and independent monitoring needs to be built into such developments to avoid goal displacement

• The term ‘money laundering’ may conjure up too complex and vague an image to fit the reality, and ‘crime money management’ may be a productive alternative term

• Many criminals ‘offend to spend’ and this needs to be factored into the realism of the large guesstimates of national and global money laundering and savings from crime as measures of what financial measures against drug dealing/trafficking are capable of achieving

• More focus should be given to understanding the evolution of patterns of laundering, how financial investigations are deployed, and the appropriate making and enforcement use of suspicious activity reports

• Financial investigation and proceeds confiscation/recovery can impact upon public reassurance and safety; on the behaviour of financial intermediaries, and on both the behaviour and criminal capacity of drug offenders – these goals need to be separated out

• The money laundering risk assessments and the focus on effectiveness in the FATF Methodology 2013 should be used to reappraise financial investigation strategies and concrete practices, in the context of drugs trafficking, economic crimes, and the increasing trend towards poly-crime activities of crime networks.