By G. Herbert

This review provides a summary of the evidence on Illicit Financial Flows (IFFs) between China and developing countries in Africa and Asia. Specifically, it looks at the evidence on how IFFs to and from China impact on developing countries, as well as on the drivers of IFFs and of how flows are facilitated. The review draws upon a combination of academic and grey literature sources, though it is not exhaustive and only draws upon English language sources. IFFs involving China have attracted particular attention, due to estimates suggesting it is responsible for the largest IFFs by value globally. However, little has been published to date specifically on IFFs between China and developing countries. This paper attempts to help address this gap. Section 2 provides some background information on the debates and uncertainties around IFFs, including conceptual issues, difficulties in measuring these flows, and their potential impacts, as well as attempts to quantify China’s overall IFFs. Section 3 focuses on trade-related IFFs between China and developing countries in Asia and Africa. Discrepancies indicative of potential IFFs are identified using trade data from 2018 and an attempt is made to determine the scale of the revenue consequences of trade is-invoicing for China’s developing country partners. Section 4 considers IFFs-related to corrupt business practices, focusing largely on Chinese investment in Africa. Section 5 moves on to consider IFFs that relate to the trade in illegal products, including illegal narcotics, human trafficking, the illegal arms trade, the illegal wildlife trade, the illegal organ trade, and the trade-in counterfeit products. Finally, Section 6 discusses enabling environment factors relevant to IFFs between China and developing countries.

K4D Helpdesk Report.

Brighton, UK: Institute of Development Studies. 2020. 37p.

By INTERPOL

With the increase in Internet coverage, online trade of illicit goods is likely increasing on the African continent. In recent years, cyber-enabled crimes have increased on the African continent. This has been a result of a combination of factors, including, the improvement of Internet coverage, the wide availability of cyber-tools and the growing flexibility of cybercriminals. As a consequence, online crime nowadays represents a bigger security issue for law enforcement in African member countries than ever before. In this framework, INTERPOL, under the European Union funded ENACT Project, examines through this assessment the issue of cyber and cyber-enabled crimes in Africa in order to help drive a more strategic law enforcement response.

Lyon, France: INTERPOL, 2020. 79p.

By INTERPOL

The development of mobile money services in Africa offer criminals a substantial opportunity to utilize these services to target victims in a variety of crimes as well as to further enable other forms of criminality. This rapid service development combined with criminal opportunities represents a security issue of interest to all member countries in Africa and poses a significant challenge to law enforcement agencies in member countries. As a result, INTERPOL, under the European Union funded ENACT Project, has assessed this issue in order to help drive a more strategic law enforcement response. Criminals and criminal organizations will most probably continue to utilize mobile money services following the recent increase in their popularity and the prominent role such services now play in society across Africa. This prominent role in society has enabled criminals to exploit weaknesses in regulations and identification systems, further enabled by a lack of experience and resources in law enforcement. Crime types have been identified that exploit mobile money services across Africa. These primarily include various types of fraud that target the distinct stages of deployment for mobile money services. Whilst acquisitive crimes significantly impact the lives of victims, criminals have also identified further opportunities to exploit mobile money services to assist other criminal activities. These ‘mobile money enabled crimes’ include illicit commodities purchases, terrorism financing and firearm enabled crime. Such significant crimes pose a threat to stability and security across Africa if not addressed by member countries. The threat from criminality facilitated by mobile money services in Africa is substantial, yet there is sometimes limited capacity amongst law enforcement to manage this complex issue, especially concerning the technical expertise required to utilise relevant evidence in the criminal justice system. As mobile money services develop interoperability across Africa, stronger partnerships amongst all law enforcement agencies, greater awareness of the overall issue at a regional level and identification of best practice responses from such agencies will be required. INTERPOL is in a position to support member countries through coordinated, intelligence led support to law enforcement using a range of police databases and operational support techniques.

Lyon, France: INTERPOL, 2020. 63p.

By Laure de Batza and Evžen Kočendab

We provide the first quantitative synthesis of the literature on how financial markets react to the disclosure of financial crimes committed by listed firms. While consensus expects negative stock price returns, the exact size of the effect is far from clear. We surveyed 111 studies published over three decades, from which we collected 480 estimates from event studies. Then, we perform a thorough meta-analysis based on the most recent available techniques. We show that the negative abnormal returns found in the literature seem to be exaggerated by more than three times. Hence, the “punishment” effect, including a reputational penalty, suffers from a serious publication bias. After controlling for this bias, negative abnormal returns suggest the existence of an informational effect. We also document that accounting frauds, crimes committed in common-law countries such as the United States, and allegations are particularly severely sanctioned by financial markets, while the information channels and types of procedures do not influence market reactions.

Munich : Munich Society for the Promotion of Economic Research - CESifo, 2023. 82p.

By Karen Allen and Isel van Zyl

This paper explores the links between digital vigilantism and organised crime in South Africa and Kenya.

Social media platforms have become powerful tools to amplify and share narratives. Like many evolving technologies, platforms such as Twitter or Facebook may be used for social good or for ill. Digital vigilantism (whereby social media platforms are used for organised shaming, hounding or doxing of a target deemed by the online community to have transgressed norms) may have real-world consequences. In extreme cases this may result in acts of ‘terrorism’ or other forms of unlawful killing. Yet while digital vigilantism may appropriate traditional law enforcement mechanisms, in some cases it may also try to hold law enforcement to account.

ENACT-Africa, 2020. 16p.

By EUROPOL

Cybercrime, in its various forms, represents an increasing threat to the EU. Cyber-attacks, online child sexual exploitation, and online frauds are highly complex crimes and manifest in diverse typologies. Meanwhile the perpetrators behind these crimes are becoming increasingly agile, exploiting new situations created by geopolitical and technological changes. The Internet Organised Crime Assessment (IOCTA) is Europol’s assessment of the cybercrime landscape and how it has changed over the last 24 months. Accompanying this report will be a series of spotlight reports released later this year, each of which examines a specific crime area relating to cybercrime.

Luxembourg: Publications Office of the European Union, 2023 14p.

By Juraj Sikra

I have explored how to improve cybercrime reporting in Scotland by conducting a systematic literature review. Due to the lack of data on Scotland, I have frequently extrapolated from both the UK and the West. The research questions were: 1. What is known about cybercrime in the UK to date? 2. What is known about cybercrime victims in the UK to date? 3. What is known about cybercrime reporting to date? The answers were retrieved by combining Boolean variables with keywords into Scopus, Web of Science and ProQuest. This resulted in the analysis of 100 peer-reviewed articles. This analysis revealed a common trend, a novel taxonomy, and an original conclusion. The common trend is that of responsibilisation, which is the shifting of responsibility for policing cybercrime from the government onto the citizens and private sector, which will inevitably responsibilise consumers. The novel taxonomy is for classifying cybercrime reporting systems according to three pillars, which I referred to as Human-ToHuman (H2H), Human-To-Machine (H2M) and Machine-To-Machine (M2M). The original conclusion is that to improve cybercrime reporting in Scotland, the process needs to be treated also as a social one rather than a purely mathematical one.

Glasgow: University of Strathclyde, 2022. 60p.

By Paul Michael Gilmour

Purpose – Money laundering poses significant challenges for policymakers and law-enforcement authorities. The money-laundering phenomenon is often acknowledged as a type of “serious and organised crime” yet has traditionally been described as a complicated three-stage process, involving the “placement, layering and integration” of criminal proceeds. This article aims to reexamine the money-laundering concept within the realm of organised crime and critique its legal underpinnings. Design/methodology/approach – This paper explores how criminal actors collude in organised money laundering schemes to circumvent laws and frustrate the efforts of officials, while advancing the regulatory-spatial paradigms of which organised money launderers operate. In doing so, it reframes the debate towards the “who” and “where” of money laundering. Findings – This paper argues that authorities’ efforts to combat money laundering relies on rigid legal definitions and flawed ideals that fail to address the money-laundering problem. Originality/value – There has been little scholarly debate that questions the fundamental approach to conceptualising money laundering. This paper proposes a new approach to combating money laundering that better incorporates the actors involved in money laundering and the spaces in which it occurs.

Journal of Financial Crime , 2022

By Michael Levi

Money laundering has ascended the enforcement and criminological agenda in the course of this century, and has been accompanied by an increased focus on legal professionals as ‘enablers’ of crime. This article explores the dynamics of this enforcement, media and political agenda, and how the legal profession has responded in the UK and elsewhere, within the context of ignoring the difficulties of judging the effectiveness of anti money laundering. It concludes that legal responses are a function of their lobbying power, the determination of governments to clamp down on the toxic impacts of legal structures, and different legal cultures. However, it remains unclear what the effects on the levels and organization of serious crimes for gain are of controls on the professions.

Trends in Organized Crime volume 24, pages96–110 (2021)

By the Federal Bureau of Investigation (FBI)

In 2021, America experienced an unprecedented increase in cyber attacks and malicious cyber activity. These cyber attacks compromised businesses in an extensive array of business sectors as well as the American public. As the cyber threat evolves and becomes increasingly intertwined with traditional foreign intelligence threats and emerging technologies, the FBI continues to leverage our unique authorities and partnerships to impose risks and consequences on our nation’s cyber adversaries. The FBI’s Internet Crime Complaint Center (IC3) provides the American public with a direct outlet to report cyber crimes to the FBI. We analyze and investigate the reporting to track the trends and threats from cyber criminals and then share this data with our intelligence and law enforcement partners. The FBI, alongside our partners, recognizes how crucial information sharing of cyber activities is to prepare our partners to combat the cyber threat, through a whole-of-government approach. Critical to that approach is public reporting to IC3 - enabling us to fill in the missing pieces with this valuable information during the investigatory process. Not only does this reporting help to prevent additional crimes, it allows us to develop key insights on the ever-evolving trends and threats we face from malign cyber actors. In 2021, IC3 continued to receive a record number of complaints from the American public: 847,376 reported complaints, which was a 7% increase from 2020, with potential losses exceeding $6.9 billion. Among the 2021 complaints received, ransomware, business e-mail compromise (BEC) schemes, and the criminal use of cryptocurrency are among the top incidents reported. In 2021, BEC schemes resulted in 19,954 complaints with an adjusted loss of nearly $2.4 billion.

Washington, DC: FBI, 2022. 33p.

Austin F. Cullen, Commissioner, et al.

This Commission was established in the wake of significant public concern about money laundering in British Columbia. The public was rightfully disturbed by the prospect of criminals laundering their cash and parking their illicit proceeds in this province. I was given a broad mandate to inquire into and report on money laundering in British Columbia, including: • the extent, growth, evolution, and methods of money laundering in various sectors of the economy; • the acts or omissions of responsible regulatory agencies and individuals that contributed to money laundering in the province; • the effectiveness of the anti–money laundering efforts by these agencies and individuals; and • barriers to effective law enforcement.

Vancouver: Province of British Columbia 2022. 1831p.

By Zach Y. Brown & Eduardo Montero & Carlos Schmidt-Padilla & Maria Micaela Sviatschi

How does gang competition affect extortion? Using detailed data on individual extortion payments to gangs and sales from a leading wholesale distributor of consumer goods and pharmaceuticals in El Salvador, we document evidence on the determinants of extortion payments and the effects of extortion on firms and consumers. We exploit a 2016 nonaggression pact between gangs to examine how collusion affects extortion in areas where gangs previously competed. While the pact led to a large reduction in competition and violence, we find that it increased the amount paid in extortion by approximately 20%. Much of this increase was passed through to retailers and consumers: retailers experienced an increase in delivery fees, leading to an increase in consumer prices. In particular, we find an increase in prices for pharmaceutical drugs and a corresponding increase in hospital visits for chronic illnesses. The results point to an unintended consequence of policies that reduce competition between criminal organizations.

Cambridge, MA: National Bureau of Economic Research, 2023. 67p.

By Marie Ouellet, David Décary-Hétu, and Andréanne Bergeron

Criminal capital theory suggests more experienced offenders receive higher returns from crime. Offenders who accrue skills over their criminal career are better able to minimize detection, increase profits, and navigate illegal markets. Yet shifts in the offending landscape to technologically-dependent crimes have led some to suggest that the skills necessary to be successful in conventional crimes no longer apply, meaning ‘traditional’ criminals may be left behind. The recent turn of drug vendors to online markets provides an opportunity to investigate whether ‘street smarts’ translate to success in technologically-dependent crimes. This study surveys 51 drug vendors on online drug markets to compare individuals who began their drug-selling career in physical drug markets with vendors whose onset began on digital platforms. The focus is on their criminal earnings while comparing the scope and management of their networks. The results inform potential spillover effects from offline drug-selling into online marketplaces.

GLOBAL CRIME. 2022, VOL. 23, NO. 1, 65p

By Julia Yansura

Proceeds from extortion in Guatemala, Honduras and El Salvador amount to more than US$1.1 billion annually according to a new study by Global Financial Integrity (GFI). The report, which examined data for individuals and businesses, also reveals that an estimated 330,000 people in the Northern Triangle region of Central America fall victim to extortion each year. Extortion against individuals is estimated at US$40 million – $57 million a year in Guatemala, US$190 million – $245 million a year in El Salvador, and $30 million – $50 million a year in Honduras. Data on extortion paid by businesses is not comparable across countries due to significant gaps in data availability. The report, titled Extortion in the Northern Triangle of Central America: Following the Money, assesses the value of this activity and seeks to better understand how the proceeds of extortion are used and laundered. It also considers whether anti-money laundering and counter-terrorism financing (AML/CFT) strategies are being effectively utilized to combat extortion.

Washington, DC: Global Financial Integrity, 2022. 39p.

By Marisol Cruz Cain, Gretta L. Goodwin

Cybercrime, such as hacking and ransomware attacks, is increasing in the United States—leading to billions of dollars in losses and threatening public safety. Several federal agencies work to detect, investigate, and prosecute cybercrimes. Agencies vary in how they collect data on these crimes, and there is no official definition of cybercrime. As a result, this data may not be consistent or complete. In 2022, Congress required the Department of Justice to develop definitions and categories for cybercrimes in its national crime reporting system—which should help law enforcement agencies comprehensively track and monitor these crimes.

Washington DC: U.S. Government Accountability Office, 2023. 40p.

By Anthony Morgan and Isabella Voce

This paper draws on data from a large national survey conducted in 2021 to examine the prevalence of data breaches among Australian computer users and the relationship between data breaches and other forms of cybercrime victimisation. Almost one in 10 respondents (9.3%) said they were notified their information was exposed in a data breach in the 12 months prior to the survey. Nearly one-third of these respondents (28.0%) had also been a victim of identity crime in the same period. Respondents who had been notified of a data breach were 34 percent more likely than other respondents to have been a victim of identity crime in the 12 months prior to the survey. They were also more likely to have been a victim of online scams or fraud and ransomware. Measures to protect individuals whose information has been exposed in a data breach from other potentially related cybercrimes are essential and should be prioritised when data breaches occur.

Statistical Bulletin no. 40. Canberra: Australian Institute of Criminology. 2022. 16p.

By Merran McAlister, Emily Faulconbridge, Isabella Voce and Samantha Bricknell

This study presents findings from the Australian Cybercrime Survey related to identity crime and misuse. Thirty-one percent of respondents experienced identity crime in their lifetime and 20 percent in the past 12 months. Almost half of identity crime victims reported that suspicious transactions appeared in their bank statements or accounts. The type of personal information most commonly misused was names, followed by credit or debit card information. While one quarter of respondents did not know how their information was obtained, 16 percent believed it to be due to the hacking of a computer or device. Twenty-nine percent of past 12 month victims experienced a financial loss. The median amount initially lost was $300. Nineteen percent of victims had money reimbursed, the median amount being $250.

Statistical Bulletin 42. Canberra: Australian Institute of Criminology, 2023. 18p.

By Isabella Voce and Anthony Morgan

This is the first report in the Cybercrime in Australia series, which aims to provide a clearer picture of the extent of cybercrime victimisation, help-seeking and harms among Australian computer users. It is based on a survey of 13,887 computer users conducted in early 2023. In the 12 months prior to the survey, 27 percent of respondents had been a victim of online abuse and harassment, 22 percent had been a victim of malware, 20 percent had been a victim of identity crime and misuse, and eight percent had been a victim of fraud and scams. Overall, 47 percent of respondents experienced at least one cybercrime in the 12 months prior to the survey—and nearly half of all victims reported experiencing more than one type of cybercrime. Thirty-four percent of respondents had experienced a data breach. Cybercrime victimisation was not evenly distributed, with certain sections of the community more likely to have been a victim, and certain online activities associated with a higher likelihood of victimisation.

Most cybercrime victimisation went unreported to police or to ReportCyber, meaning official statistics significantly underestimate the size of the problem. Satisfaction with the outcomes of these reports was mixed, and relatively few reports resulted in an offender being apprehended. Rates of help-seeking varied and were influenced by the perceived seriousness of cybercrime and knowledge of how and where to report it.

The financial losses experienced by victims were wide ranging. Some victims reported losing large sums of money, but most victims reported relatively small financial losses. This report measures, for the first time, the harms experienced by individual victims and small businesses that extend beyond these financial costs. Twenty-five percent of respondents were negatively impacted by cybercrime in the 12 months prior to the survey, while 22 percent of respondents who owned or operated a small to medium business said their business was negatively impacted by cybercrime.

Statistical Bulletin, 43. Canberra: Australian Institute of Criminology, 2023. 113p.

By Roos Geurts, Niels Raaijmakers, Marc J. M. H. Delsing, Toine Spapens, Jacqueline Wientjes, Dick Willems and Ron H. J. Scholte

Following the EU Victim Directive, Dutch police officers are obliged to assess a victim’s vulnerability to repeat victimization. This study explored the utility of unstructured police information for the prediction of repeat victimization, as well as its incremental value over and above structured police information. Police records over a period of 6 years were retrieved for a sample of 116,680 victims. Unstructured information was transformed into numeric features using count-vector and TF/IDF methods. Classification models were built using decision tree and random forest models. AUC values indicate that a combination of structured and unstructured police information could be used to correctly classify a majority of repeat and non-repeat victims.

Crime & DelinquencyVolume 69, Issue 9 Aug 2023 Pages 1567-1784

by Richard Chelin

Synthetic drugs have created a public-health crisis and changed drug market dynamics in the country. Synthetic drugs, more specifically, new psychoactive substances (NPSs), were first detected in Mauritius in 2013 and since then have had a significant negative impact, overtaking heroin as the most popular drug among young people. The government has developed various policies to address the issue, the most recent being the National Drug Control Masterplan, which promotes collaboration among law enforcement agencies. However, the success of the strategy will depend on its effective implementation.

ENACT-Africa, 2020. 20p.