The study of money laundering and predicate crime contained in this report was funded by a grant from the United States Department of State and was prepared in consultation with the United States Department of Justice, Resident Legal Advisor Office.
At present most jurisdictions devote major law enforcement efforts on money-laundering and its predicate crimes and Serbia appears to be no exception. In order to direct those efforts efficiently and achieve commensurate effects it is important to know the targeted criminal and law enforcement landscape. This means gaining an insight on the dimensions of the threat, what are the most frequent and disturbing crimes-for-profits and which activities are deployed by the responsible law enforcement actors to counter these law-breakers. The purpose of this research is to address these questions for Serbia in the period 2000-2005.
When trying to give a quantitative description of these aspects, and considering that the focus is on crime for profit, the key indicator (moral values apart) must be of course financial. Thus, when trying to gauge the seriousness of ongoing crime for profit or money laundering, emphasis is placed on the size of crime proceeds and on the amount of money that is laundered. Similarly, the various types of crime or schemes for money laundering will be weighed primarily in monetary terms, and their importance ranked accordingly. In short, the financial calculator should be the key unit of measure. Other indicators, such as the number of offences or cases, are also taken in consideration, especially in those instances where information of financial nature is lacking.
This report should actually be read as a quest of the unrecorded wealth and incomes of Serbia. Not all these moneys stem necessarily from criminal activities and not all crimemoney will be laundered. Because of the lack of data and because the authors wanted to avoid definitional debates, they have been very parsimonious with the qualification ‘laundering’. Instead, in chapter 2, they first give an account of how they tried to penetrate the various information gaps to find out what is officially known about damage and income from crime. In addition in chapter 3 a comparison was made between what is known about the household income and spending. If the household spends systematically beyond its means there are reasons to speculate about how they make up for the deficit when they are not depleting its savings.
In chapter 4 the researchers continued the reconnaissance by mapping the money flows into and out of Serbia to find out whether these flows balanced. The background philosophy is that large volumes of unrecorded financial assets must leave some trace and/or yield some imbalance. Being parsimonious with interpretations, the analysis brought some unanswerable questions to the surface, with Cyprus as the big financial question mark.
Chapter 5 elaborates what is known about economic and fiscal crime. The reader will again face many methodological annotations, due to the inconsistency of the database formats of the various law enforcement agencies that deal with economic, fiscal crime and corruption. According to the official figures, detection of economic and fiscal crime rates is improving but still pretty low, which reflects itself in the low number of prosecutions for such crimes. From the perspective of proceeds abusing the official position appears to be the most rewarding offence.
In chapter 6 the reports sketches the institution and regulation which are put into place to counter money-laundering. Recently the anti-laundering legislation has been updated. Many enterprises have been included in the list of institutions obliged to report to the Administration for the Prevention of Money Laundering, with the exception of the Privatisation Agency. All this has resulted in an avalanche of reports of which less than 1 % is qualified as suspicious. The number of money laundering prosecutions is about ten, while there are no known convictions (yet).
Chapter 7 records the opinion of the focal groups from the authorities and private industry convened to capture qualitative impressions and opinions on the issues raised in the preceding chapters. The authorities’ representatives and those of the private industry differ in the trust they have in the transparency and efficiency of the Serbian society.
The report concludes with recommendations to improve various aspects of the anti-laundering regime. The recommendations concern aspects of human skills and organisation as well as of necessary improvement in the data management in law enforcement matters in general and in the anti laundering system.