International White Collar Crime: Cases and Materials

590 Pages·2010·3.62 MB·english

by  Bruce Zagaris

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international white collar crime
Contemporarytransnationalcriminalstakeadvantageofglobalization,tradelib-
eralization,andemergingnewtechnologiestocommitadiverserangeofcrimes
andtomovemoney,goods,services,andpeopleinstantaneouslyforpurposesof
pure economic gain, politicalviolence, or both. This book capturesthe impor-
tance of transnational business crime and international relations by examining
theriseofinternationaleconomiccrimeandrecentstrategiesintheUnitedStates
andabroadtocombatit.
The book is organized into three main sections. The first part discusses sub-
stantivecrimes,particularlytax,money laundering and counterterrorismfinan-
cial enforcement, transnational corruption, transnational organized crime, and
export control and economic sanctions. The second part discusses procedural
aspects of international white collar crime, namely extraterritorial jurisdiction,
evidencegathering,extradition,andinternationalprisonertransfer.Thethirdpart
discussesthe role of international organizations, including the United Nations,
theWorldBankGroup,INTERPOL,andeconomicintegrationgroups.
Bruce Zagaris is a partner with the law firm of Berliner, Corcoran & Rowe,
Washington, D.C. His practice includes criminal trial and appellate work. He
hashandledevidencegatheringandextraditioncasesonboththeinterstateand
international levels and cases involving prisoner transfer applications. He has
consulted extensively for governments and international organizations. He has
beenanadjunctprofessoroflawatseveralU.S.lawschools.Since1985,Zagaris
has been the editor of the International Law Enforcement Reporter, which he
founded.Hehasauthoredandeditedseveralbooksandhundredsofarticleson
internationallaw.

International White
Collar Crime
cases and materials
Bruce Zagaris
Berliner,Corcoran&Rowe,LLP,Washington,D.C.
CAMBRIDGE UNIVERSITY PRESS
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Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521194686
© Bruce Zagaris 2010
This publication is in copyright. Subject to statutory exception and to the
provision of relevant collective licensing agreements, no reproduction of any part
may take place without the written permission of Cambridge University Press.
First published in print format 2010
ISBN-13 978-0-511-74962-9 eBook (NetLibrary)
ISBN-13 978-0-521-19468-6 Hardback
ISBN-13 978-0-521-12299-3 Paperback
Cambridge University Press has no responsibility for the persistence or accuracy
of urls for external or third-party internet websites referred to in this publication,
and does not guarantee that any content on such websites is, or will remain,
accurate or appropriate.
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .page1
2 Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3 MoneyLaunderingandCounterterrorismFinancialEnforcement . . . . . . . . . . 56
4 TransnationalCorruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
5 TransnationalOrganizedCrime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
6 ExportControlandEconomicSanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
7 ExtraterritorialJurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218
8 InternationalEvidenceGathering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .256
9 ExtraditionandAlternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301
10 InternationalPrisonerTransfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .365
11 TheUnitedNations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
12 TheWorldBankGroup. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .428
13 INTERPOL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .468
14 EconomicIntegrationandBusinessCrimes . . . . . . . . . . . . . . . . . . . . . . . . . 515
563
Index
v

1
Introduction
I. Introduction page1
2
II. EnvironmentGivingRisetoInternationalEconomicCrimes
6
III. TheScopeofInternationalWhiteCollarCrime
7
A. SubstantiveWhiteCollarCrimes
7
B. ProceduralAspectsofWhiteCollarCrimes
7
C. TheRoleofInternationalOrganizations
8
D. TheRoleofNongovernmentalOrganizations
8
E. ConstructingInternationalEnforcementRegimes
9
F. TheRoleofInternationalEnforcementNetworks
14
IV. AdditionalReading
14
A. U.S.WhiteCollarCrime
15
B. InternationalWhiteCollarCrime
I. Introduction
ThisbookdiscussestheriseofinternationaleconomiccrimeandrecentU.S.andinter-
national strategies to combat such crime. It is organized into three main sections. The
firstdiscussessubstantivecrimes,particularlytax,moneylaunderingandcounterterror-
ismfinancialenforcement,transnationalcorruption,transnationalorganizedcrime,and
export control and economic sanctions. The second part discusses procedural aspects
of international white collar crime, namely extraterritorial jurisdiction, evidence gath-
ering, extradition, and international prisoner transfer. The third part discusses the role
of international organizations, including the United Nations, the World Bank Group,
INTERPOL,andeconomicintegrationgroups.
1
Althoughthereisnorecognizedcategoryof“businesscrimes”orwhitecollarcrimes,
thisbookincludes withinsubstantivewhitecollarcrimesthosementionedearlier.The
term“whitecollarcrime”wascoinedbyEdwinSutherlandinaspeechtotheAmerican
Sociological Society in 1939. Subsequently, he stated that it “may be defined approxi-
mately as a crime committed by a person of respectability and high social status in the
2
courseofhisoccupation.” Thereafter,avarietyofdefinitionshavebeenappliedtowhite
3
collarcrime.
1 EllenS.Podgor&RogerS.Clark,UnderstandingInternationalCriminalLaw37(2ded.2008).
2 EllenS.Podgor,GlobalizationandtheFederalProsecutionofWhiteCollarCrime,34Am.Crim.L.Rev.
325,327(2007),citingEdwinH.Sutherland,WhiteCollarCrime:TheUncutVersion7(1983).
3
Podgor,id.,citingDavidT.Johnson&RichardA.Leo,TheYaleWhite-CollarCrimeProject:AReview
andCritique,18Law&Soc.Inquiry63(1993)(reviewingvariousdefinitionsofwhitecollarcrime);Jerold
H.Israel,EllenS.Podgor,&PaulD.Borman,WhiteCollarCrime:LawandPractice1–11(1996)
(same).
1
2 InternationalWhiteCollarCrime
II. EnvironmentGivingRisetoInternationalEconomicCrimes
Contemporary transnational criminals take advantage of globalization, trade liberaliza-
tion,andemergingnewtechnologiestocommitadiverserangeofcrimesandtomove
money,goods,services,andpeopleinstantaneouslyforpurposesofpureeconomicgain,
4
political violence, or both. A key component facilitating international white collar or
economic crime is trade liberalization, especially free trade agreements (FTAs). The
problem is that the leadership of trade liberalization or FTAs and the politics do not
allow negotiators to provide for comprehensive enforcement mechanisms. The politics
ofFTAsmakeratificationdifficult,especiallyifcostlyregulatoryorenforcementmech-
anismsareaddedsincesurelytheyareperceivedpoliticallyasunderservingsovereignty.
Instead,suchcomprehensiveenforcementmechanismsarecompletelyomitted,orelse
onlyisolatedsubjectsaretreated.
For instance, in the North American Free Trade Agreement (NAFTA) there is a
large section on intellectual property (IP) enforcement and only several provisions on
customs cooperation and enforcement. Customs enforcement is a subject that FTAs
normally cover. However, the extensive coverage of IP enforcement reflects the strong
influence in the United States of intellectual property groups. As a result of failing
to include comprehensive enforcement provisions in FTAs, individual criminals and
criminal organizations are able to take advantage of FTAs to conduct their criminal
activities.FTAmembersusuallybecameawareofthegrowthofcriminalproblemsaris-
ing out of FTAs several years after they are implemented. They then try to develop ad
hocenforcementagreementsandarrangements.However,theseagreementsandarrange-
ments usually have a narrower scope than the FTAs, usually lack institutional support,
and sometimes overlap. As a result, the international enforcement architecture arising
outofFTAscannotsustainenforcementneeds.
Transnational criminal groups and criminals live and operate in a borderless world.
Increasingly,transnationalcriminalsarediversifyingtheircrimes,instrumentalities,mar-
kets, and networks. Their intelligence networks and the coincidence of economic and
politicalpowerenablethemtoquicklytransferpartsoftheiroperationsandenterprises
to the territories that they can dominate (e.g., “gray areas” in which governments do
5
not effectively control their territory – Afghanistan and parts of Pakistan and Yemen)
6
or to operate surreptitiously (e.g., with sleeper cells). Although national governments
havedeterminedthattransnationalorganizedcrimeandterrorismarenationalsecurity
7
threatsandhaveimplementedvariousinitiativestocombatthosethreats, theyarecon-
tinuouslyandactivelyseekingmoresignificantpoliticalandlegalinitiativestoestablish
4
SomeofthisintroductionisadoptedfromBruceZagaris,U.S.InternationalCooperationagainstTransna-
tional Organized Crime, 44 Wayne L. Rev. 1402–1405. 1–402–5 (1998). For additional background on
globalizationandinternationalwhitecollarcrime,seeHerve´ Boullanger,LaCriminalite´ Economique
enEurope(EconomicCrimeinEurope)35–46(2002).
5
Foradiscussionofthegrayareaphenomena,wherebyterroristsandcriminalsuseportionsofcountries
wherethegovernmentdoesnoteffectivelycontrolitsterritorytohideandoperatetheirenterprises,see
GrayAreaPhenomena:ConfrontingtheNewWorldDisorder(MaxG.Manwaringed.,1993).
6 See,e.g.,PeterA.Lupsha,TransnationalOrganizedCrimeversustheNation-State,2Transnat’lOrg.
Crime21–48(1996).
7
SeeInterviewwiththeHon.RichardA.Clarke,SpecialAssistanttothePresidentandSeniorDirector,Global
IssuesandMultinationalAffairs,NationalSecurityCouncil,Nov.30,1995,1TrendsinOrg.Crime5–9
(1996).