Culture, Collaboration, Circumvention: What we learnt at Offshore Alert London 2023
By Rebecca Lindley
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Last week we attended Offshore Alert London, a leading event for investigators and intelligence-gatherers in the UK. For the 300 attendees, the event offered an opportunity to learn about all things financial crime prevention, asset recovery and investigations. If you couldn’t make it, here are some of our key takeaways from this year’s event.
Culture is the key to ensuring that anti-financial crime measures are enforced
Whether in financial institutions or government departments, the need for a positive culture that drives effective anti-financial crime processes was emphasised throughout the event.
The panel on ‘Credit Suisse: Failure of a Scandal-Plagued Bank’ drove this home, detailing the widespread cultural failings in the bank, which some consider to be behind numerous AFC transgressions before its 2023 collapse and takeover by UBS. The panellists described a culture of ‘don’t ask a question you don’t want to know the answer to’, meaning that employees were not encouraged to flag possible risk to seniors. This outlook wasn’t only seen at Credit Suisse: strict criminal laws in Switzerland forbid individuals for possessing or sharing banking data, exacerbating the culture of secrecy within financial institutions.
On the other hand, the ‘Offshore Finance: Intelligence Update’ panel told a positive story around the benefits of existing collaboration initiatives. In particular, the panel emphasised the need to prioritise education and techniques such as OSINT to create a positive, financial crime prevention-focused culture within FIs.
Collaboration can be instrumental in financial crime prevention
Financial crime is all about networks – a money laundering or fraud scheme can involve hundreds of companies, individuals and addresses from around the globe. Yet only parts of these networks may be visible to those investigating them. Collaboration between the public and private sector or law enforcement agencies from different jurisdictions can help organisations to gain a fuller view of those involved, and identify a pattern or network that was previously hard to spot. Again, this topic was highlighted in the ‘Offshore Finance: Intelligence Update’ panel, where the Quad-Island FIUs discussed how comparing their data and sharing best practices helps them to identify and stop financial crime effectively.
The increasingly creative methods used by fraudsters were raised as a particular example of where effective collaboration can make a difference. Where a significant case of fraud involving another jurisdiction is identified, funds can only be recovered if action is taken quickly. Here, open lines of communication with the relevant parties in-country can ensure that the funds are identified and frozen within hours, improving the chances of returning them to the defrauded party.
Circumvention is undermining sanctions regimes
It’s not surprising that sanctions – and avoiding them – continued to be a focus at Offshore Alert. The difference between circumvention and evasion was a crucial point of discussion during the talk ‘Are Sanctioned Russians Gaming The System?’. It’s well known that Russians who believe they’re at risk of being sanctioned are developing more and more sophisticated techniques to avoid this. Circumvention, as opposed to evasion, is viewed a ‘technically’ legal means of escaping sanctions and is typically characterised by restructuring or reassigning assets rather than obscuring their ownership. Yet in several cases, the line between these two types of sanctions avoidance can seem blurry.
For example, the tendency towards ‘cosmetic restructuring’ was discussed, whereby the owner of a major corporation transfers their shares and stands down from their position ‘officially’ before they are sanctioned. In reality, however, the person continues to exercise significant control, perhaps even continuing to sit in their office. This discussion underlined the disconnect between technical compliance with sanctions measures and real adherence that would make them effective. To truly understand who is controlling an asset, a more holistic understanding of the situation, is needed, including data from OSINT and human sources.
Investigators need new tactics to fight evolving criminality
Much of Offshore Alert London was spent discussing the ways in which criminals are developing new techniques to avoid discovery. At times, the sheer volume of new tactics available to criminals – from AI to create deepfakes and disinformation, to cryptocurrency to facilitate money laundering – can seem discouraging. However, the event was also aimed at equipping investigations and intelligence professionals with the knowledge and tools they need to fight these criminals. By working together to establish a culture of strong communication and prioritising effectiveness, investigators are well-positioned to fight future crimes.
Solutions like Videris that help investigators make use of Open Source Intelligence will play a crucial role in ensuring investigator effectiveness as their tactics develop. Book a demo to find out how today.