Reply to Recommendation 1262 (1995) on drugs trafficking, drugs-related crime and money laundering

Doc. 7706
28 November 1996

COMMUNICATION FROM THE COMMITTEE OF MINISTERS
Reply to Recommendation 1262 (1995) on drugs trafficking, drugs-related crime and money laundering

(adopted by the Committee of Ministers on 14 November 1996 at the 577th meeting of the Ministers' Deputies)

The Committee of Ministers wishes to inform the Parliamentary Assembly that it fully shares the concerns expressed in its Recommendation 1262 (1995) on drugs trafficking, drugs-related crime and money laundering. In the light of the Opinion it had asked the European Committee on Crime Problems (CDPC) to give on the important issues raised in the Assembly Recommendation and of the comments by the Co-operation Group to combat drug abuse and the illicit trafficking in drugs (Pompidou Group), the Committee of Ministers is in a position to reply to Recommendation 1262 (1995) as follows:

Regarding paragraphs 9.i and ii of the Recommendation, the Committee of Ministers notes that in many member States such structures exist already and that this trend should be encouraged.

Regarding paragraph 9.iii of the Recommendation, the Committee of Ministers welcomes the work done in view of setting up Europol, but it does not consider it appropriate for the Council of Europe to persuade its member States to financially support an institution set up within the European Union.

Regarding paragraph 9.iv of the Recommendation, the Committee of Ministers would like to recall that the Council of Europe, though its competence is wide, has never dealt with the collection of police and customs data, at least not from an intelligence perspective. It has, however, addressed the question of police data as an issue of data protection (Recommendation N° R (87) 15) and also in connection with criminal statistics. As regards the latter, a Group of specialists on trends in crime and criminal justice was set up in 1993; it prepared a draft model European Sourcebook of Criminal Justice Statistics.

Regarding paragraph 9.v of the Recommendation, the Committee of Ministers wishes to point out that the European Convention on Extradition (ETS No. 24) applies to all offences punishable under the laws of the requesting Party and of the requested Party by deprivation of liberty or under a detention order for a period of at least one year or by a more severe penalty. In cases where the person to be extradited has already been convicted in the requesting Party, the penalty must have been at least a four months prison sentence. Apart from the offence of drug consumption, which is criminalised only in some States, other drug-related offences such as the production of and trafficking in drugs or money laundering of proceeds from drug trafficking are punished in the member States by the levels of penalties referred to in the European Convention on Extradition. Therefore, it seems that only the drug consumption offence, the criminalisation of which is, however, disputed, remains outside the scope of application of the Extradition Convention. As for other drug offences, there is little risk that an offender escapes extradition. In any event, the Committee of Ministers would like to point out that the reference to "haven" used by the Assembly gives the impression that extradition is the only means of combating crime and drugs trafficking whereas the Committee feels that an additional approach should be to urge States which have not granted extradition to pursue drug traffickers.

Regarding paragraph 9.vi of the Recommendation, the Committee of Ministers wishes to point out that Article 3, paragraph 4 of the 1988 UN Convention Against Illicit Drugs Trafficking explicitly provides for an obligation of Parties to make the commission of the offences established in accordance with paragraph 1 of this Article - drug offences, including money laundering - liable to sanctions which take into account the grave nature of these offences, such as imprisonment or other forms of deprivation of liberty, pecuniary sanctions and confiscation. Furthermore, Recommendation No. R (92) 17 of the Committee of Ministers to member States on consistency in sentencing aims at increasing consistency and coherence in sentencing whilst preserving judicial independence; the Recommendation contains a comprehensive set of rules and principles the observation of which enables member States to establish a common standard of sentencing. Among the principles regarding the penalty structure, it is recommended that "the range of available sentences for an offence should not be so wide as to afford little guidance to courts on its relative seriousness. States should therefore consider the grading of offences into degrees of seriousness, provided, however, that minimum penalties, where applicable, do not prevent the court from taking account of particular circumstances in the individual case" (principle B.2.).

Regarding paragraph 9.vii the Committee of Ministers notes that a similar proposal was already examined by the Assembly in the 1960s, but met with strong opposition from member States. It should also be borne in mind that criminal law, more than other fields of law, is seen by States as a domain of national competence and therefore considered as a matter of sovereignty. In order to accommodate the great divergences with regard to daily practice in member States in the criminal field, any text of the kind proposed by the Assembly could not take the form of a traditional (national) Penal Code, including detailed provisions, but would rather have to contain guidelines or principles. On the other hand, in those criminal law fields which are covered by international treaties or are addressed by non-binding instruments, such as the recommendations of the Council of Europe, there is already more or less harmonised, sometimes even similar legislation in member States. Convergence is also enhanced by the case-law of the organs applying the European Convention on Human Rights.

Regarding paragraph 9.viii of the Recommendation, the Committee of Ministers recalls that Article 8 of the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS No. 141) provides that the Parties shall afford each other the widest possible measure of investigative assistance in the identification and tracing of instrumentalities, proceeds and other property liable to confiscation; the latter includes any measure providing and securing evidence as to the existence, location, movement, nature, legal status or value of that property. Authorisation for surveillance on the territory of another Party is a very sensitive issue, and the conditions for the use of cross-border investigations should preferably be laid down clearly by treaty, e.g. as concerns accountability of the foreign officer including the question of damage caused and jurisdiction over the investigated offence. As an example, the Schengen Treaty provides, under certain conditions, for the possibility of trans-border observation. A similar possibility is being studied in connection with the drafting of a second protocol to the European Convention on Mutual Assistance in Criminal Matters (ETS No. 30) which is under consideration by the Committee of Experts on the operation of European Conventions in the penal field (PC-OC).

Regarding paragraphs 9.ix, xi and xii of the Recommendation, the Committee of Ministers considers that these suggestions concern aspects of co-operation which might be dealt with more appropriately by other international organisations, such as Interpol, Europol and the World Customs Organisation (WCO). Since 1990 the Council of Europe has however established its own exchange and training activities, within the framework of the Themis and Demosthenes programmes for police officers of Central and Eastern Europe. Several multilateral meetings have been and are currently being organised for police officers of these countries, and several hundreds of individual study visits have been carried out. These exchanges aim primarily at enhancing mutual understanding and co-operation between the different police officers involved. Furthermore, the Co-operation Group to combat drug abuse and the illicit trafficking in drugs (Pompidou Group) regularly organises meetings between police and customs authorities to consider practical problems at airports and river ports.

Regarding paragraph 9.x of the Recommendation, the Committee of Ministers notes that at the Council of Europe Conference on Money Laundering in States in Transition, held in Strasbourg in November 1994, proposals were made to draft an additional protocol to Article 15 of the Money Laundering Convention (ETS No. 141) to deal with the issue of an international shared assets fund for the fight against money-laundering, which raises a number of technical and legal problems. In this respect, the Committee of Ministers recalls, with the Pompidou Group, that according to Article 5, paragraph 5, littera a) of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, "proceeds or property confiscated by a Party pursuant to paragraph 1 or paragraph 4 of this article shall be disposed of by that Party according to its domestic law and administrative procedures". It does not think it expedient to amend that provision.

Regarding paragraph 9.xiii of the Recommendation, the Committee of Ministers considers that this suggestion is both of a technical and a difficult legal nature. As to the technical aspects, they fall under the competence of other international organisations already mentioned, such as Interpol and Europol. However, the legal aspects of so-called profiling techniques are delicate, in particular in the light of the protection of the individual's right to privacy and their balance with the legitimate interests of detection and suppression of serious crime in a democratic society. Some member States have already adopted legislation in this area, and the Pompidou Group is regularly examining these questions.

Regarding paragraph 9.xiv of the Recommendation, the Committee of Ministers notes that the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime (ETS No. 141) has so far received 25 signatures and was ratified by 8 member States. The Committee of Ministers welcomes the initiative of the Assembly and has invited those member States which have not yet done so to ratify the Convention as soon as possible.

Regarding paragraph 9.xv of the Recommendation, the Committee of Ministers would like to point out that the Financial Action Task Force (FATF) and Interpol are already monitoring money laundering techniques.

Regarding paragraph 9.xvi of the Recommendation, the Committee of Ministers agrees that international mutual assistance is essential but suggests that, in their mutual relations, member States use the European Convention on Mutual Assistance in Criminal Matters (ETS No. 30) and its Additional Protocol (ETS No. 99) and conclude bilateral or multilateral agreements where they are necessary to facilitate the application of this Convention, in accordance with its Article 26, paragraph 3.

Regarding paragraph 9.xvii of the Recommendation, the Committee of Ministers would like to make reference to Article 2 of the above-mentioned Money Laundering Convention which provides for an obligation to enact legislation enabling the confiscation of instrumentalities and proceeds from all kinds of criminal offences. Compared with other international instruments, notably the 1988 UN Convention, this Convention considerably enlarges the scope of the possible offences from which proceeds were gained and which may subsequently be confiscated. Though Article 2 of the Convention contains the possibility of making a reservation which would allow Parties to restrict co-operation under the Convention to certain specified offences or categories of offences, the current trend worldwide seems to justify the unlimited European approach: today "drug money" is only one of the sources of the profits of criminality; other, often organised, types of criminality, such as trafficking in stolen or counterfeit goods, arms, young women and children, human organs, endangered species, equally generate huge profits. By ratifying the Convention, countries would ensure that illicit gains from all these offences could be confiscated.

Regarding paragraph 9.xviii of the Recommendation, the Committee of Ministers supports the Assembly's suggestion. It considers it necessary to improve the supervision of non-banking financial institutions. It confirms that these institutions are increasingly used by criminals to launder money, trying to avoid detection due to the lack of strict banking supervision rules. The role of these institutions in money laundering is currently one of the major concerns of the FATF; countries should benefit from the common policy as it is reflected in the 40 Recommendations of the FATF.

Regarding paragraph 9.xix of the Recommendation, the Committee of Ministers endorses the proposal of the Assembly and draws attention to the possibility, under the 1988 UN Convention, to have recourse to the technique of controlled delivery. While not explicitly mentioned by the Money Laundering Convention, it is clear from the text of Article 4, paragraph 2 concerning "special investigative techniques facilitating the identification and the tracing of proceeds and the gathering of evidence related thereto", that it may include controlled delivery techniques.

Regarding paragraph 9.xx of the Recommendation, the Committee of Ministers recalls that Recommendation No. R (80) 10 of the Committee of Ministers to member States on safekeeping of funds of criminal origin already requested governments to ensure that their banks carry out identity checks when inter-bank transfers involving sums of a certain magnitude were made, bearing in mind the possibility of transactions in several parts. This principle of "know your customer" established by the Recommendation has been further developed by other international instruments, e.g. the 1990 EC Directive on prevention of the use of the financial system for the purpose of money laundering and the 40 Recommendations of the FATF. The latter institution is co-operating with the SWIFT, and also with other institutions that carry out electronic funds transfer (EFT) with a view to ensuring application of identification measures and avoiding the use of EFT for the laundering of money.

Regarding paragraph 9.xxi of the Recommendation, the Committee of Ministers endorses the suggestion of the Assembly and refers back to its observations on paragraph 9.ix and xi. It also points out that special training courses are being carried out by the Pompidou Group in Central and Eastern Europe, notably in the field of demand reduction.

Regarding paragraph 9.xxii of the Recommendation, the Committee of Ministers welcomes the Assembly's initiative and has thus invited the member States which have not yet done so to ratify the Agreement on illicit traffic by sea, implementing Article 17 of the United Nations Convention against illicit traffic in narcotic drugs and psychotropic substances (ETS No. 156).