Cost effectiveness – a two edged sword!

Citation

Rider, B. (2009), "Cost effectiveness – a two edged sword!", Journal of Money Laundering Control, Vol. 12 No. 4. https://doi.org/10.1108/jmlc.2009.31012daa.001

Cost effectiveness – a two edged sword!

Article Type: Editorial From: Journal of Money Laundering Control, Volume 12, Issue 4

At a recent gathering of experts on combating international-organised crime at the Foreign Office's not so secret conference centre – Wilton Park, there was some sensitivity about examining the claims recently made by senior officials of the Serious Organised Crime Agency (SOCA) that, if organised crime is not quite on the run in Britain, it is seriously nervous. SOCA has made much of the significant increase in the price of certain street drugs indicating, at least arguably, that law enforcement interdiction is having a significant impact on supply. Of course, there are those in law enforcement circles who strongly argue that over a period, the prices for most illicit substances have dramatically diminished indicating quite the reverse. While price is a reasonable indica of supply there are other factors which weigh even more significantly in the short term, particularly where the market itself is under financial pressure for extraneous reasons.

Despite the coyness of SOCA spokesmen to be drawn into debate in the panelled rooms of Wilton Park let alone in less friendly environments, SOCA has had successes and it is true that as some are rather more in the murky realm of disruption rather than traditional law enforcement, perhaps the true value of the agency is not widely appreciated. Having said this, some of those who had the privilege of listening to one of SOCA's chiefs – Ex-spy Paul Evans – Head of the Disruption (i.e. intervention) People, at the ICC's recent annual financial crime lecture might be forgiven for wondering why anyone would not have full confidence in SOCA's ability to wipe serious criminality from our streets – if not perhaps wholly from our institutions. The Home Affairs Committee of the House of Commons were perhaps less impressed by the evidence of the outgoing SOCA Chairman – Sir Stephen Lander – an even more senior Ex-spy and its Director General – who was at least a policeman when it was revealed that SOCA has seized only £1 from organised crime for every £15 in its budget. Indeed, on this basis the abolished Asset Recovery Agency (ARA) looks like a good investment! It must also be remembered that much of the criminal property referred to by SOCA under restraint is only just that – under restraint. It has not been subject to a final order – indeed, the very fact that finally did for ARA and put a question mark against the “successes” of the Northern Ireland Office.

What perhaps SOCA needs to get over rather more clearly and perhaps cogently when it is given the opportunity to put the record straight, is that seizure and particularly confiscation of assets are only part of the story. No agency any where in the world, including those in the USA, has a markedly better record in interdicting criminal property through pure financial investigation. Much of the vast sums that are seized in the USA are taken not as a result of highly specialised financial investigation but are physically seized on or near arrest. While focussing on the proceeds of crime or monies associated with the enterprise of crime can play a major role in disrupting criminal organisations, seizure is only one measure of effectiveness. Given the legal, regulatory and risk burdens imposed on all those who in the course of their business or profession mind or assist in the minding of other people's wealth, it is vitally important that SOCA, when it has the opportunity, justifies this aspect of its work and explains that the true measure of success is not the £78 million that it has in some form of other interdicted. With out this explanation it will become increasingly difficult to justify and sustain the considerable burden on the financial sector in particular. The problem is that SOCA is not good at getting this message over. Indeed, as an organisation it is extremely cautious as to who within the organisation is allowed to represent it and in what circumstances. In the result in certain quarters, there is an increasing issue as to credibility. In many respects, SOCA has acquired, with justification, a better profile overseas particularly in Europe than it has within the UK. This may well prove to be a political liability and even a miscalculation. It would be sad if the good work and investment that SOCA has made were not considered sufficient to allow it to continue at least with its current budget!

Barry Rider