Friday, March 21, 2014

The Bar scene from Star Wars, or the Last Chance Saloon? A review of the 57th Session of the U.N. Commission on Narcotic Drugs!

For the second year running, I have been a delegate at the UN CND held in Vienna. I have a feeling it will be my last!

The whole event possess a surreal quality, starting with the “out-of-worldly” buildings which comprise the UN complex based in the Vienna International Centre, a few stops on the U-Bahn from the centre of this most beautiful of old Eastern European cities.

The UN complex, which includes the building in which the CND is held, resembles nothing so much as some demented architect’s futuristic vision of what a global-administrative agency should look like, but situated in a galaxy many light years away from here, hence the Star Wars connection! It is ugly beyond belief and rears up over the individual, dwarfing him by its sheer grotesque size, but to soften this overbearing image, there are no hard edges or sharp corners. 

Everything is rounded off, windows, in disciplined ranks are oval ended, the whole edifice is a study in curves and elipses, and painted in sickly pinks, oranges and beiges. It looks like a model made by a child from sticky Plasticene.

One is already having one’s mind programmed before gaining admission to the event – this is the UN, and you are being reminded of their almost unlimited power, but in ever such a user-friendly and politically-correct manner.

The delegates to the event represent a major cross section of just about every agency, NGO, lobby group, think tank and fellow traveller whose interests coincide with the issue of the legal or illegal status of narcotic drugs, their cultivation, possession, usage and dissemination.

There are some very exotic delegates, tattoos and body piercings abound, people will introduce themselves proudly with such words as, ‘Hi, I am a medicinal Cannabis user and a Ketamine injector” or whatever narcotic is their choice of achieving personal gratification. One gentleman, it turns out, is a registered user of Heroin and receives it on prescription, so I am advised. He is a highly intellectual debater and a powerful argument for demonstrating that under proper supervision, even the hardest drugs can maintain the user in a balanced equilibrium. The man who says he uses Ketamine ( I had always thought of it as a horse anaesthetic), is a well-balanced and gentle exponent of drug counselling and has spent many years as a drug mentor and guide, advising and supporting young people in managing their drug issues.

One woman talked quietly to me about her lifestyle choices involving Cannabis and Ecstasy, as well as occasional forays into other drugs, and she counselled me seriously on the many dangers inherent in my own personal choice of red wine which even taken in moderate quantities ‘...can do very bad things to you...’ 

Virtually every country in the world which grows, produces, exports, imports or uses these narcotics is represented, and every point of view is capable of being heard.

The UN and its mind-boggling bureaucracy is represented everywhere, from the gun-toting guards who stand around at every doorway and corridor, to its wholly unfriendly, surly coffee-bar staff, who run their posts with machine-like order.

They do not open for service before 9.00, despite the fact that a vast queue of thirsty coffee addicts is lined up at the counter. (Ironic how no-one at a drug conference appears to equate caffeine addiction with any of the other habit forming commodities being discussed)! Requests for service to the staff behind the counter are met with a mumbled refusal, and only when the clock passes the appointed hour do the staff then busy themselves cashing up the tills, bustling about, and eventually serving, but in a most inefficient manner. Don’t ask for change for the free-standing machines which dispense drinks at half the counter price, it will be refused. 

One should never overlook the message being sent by these time serving ladies, who are exactly the same ones whom I experienced last year! This is how the UN works, it has rules, it has a bureaucracy, it has apparatchiks, and nothing will or must be done to change anything that is written into the status quo. It is as if when you come to work in this building your brain is automatically taken over by a UN control mechanism which puts you on an auto-pilot mode which fits their design.

Having negotiated the almost incomprehensible agenda, and decided which of the many main events and side programmes are of greater or lesser interest, it is always worth reviewing the stalls and exhibitions. Until I attended last year, I had no idea just how much of the world’s rain forests are destroyed to meet the insatiable demand for paper on which to publish the outpourings of the groups who inhabit this strange world of drug discussion. A few examples will serve to explain my wonder!

“Sentencing policies for drug offences: Best practices in the UK”. Organised by a group calling itself the Academic Council on the UN System. Considering that some of our worst drug addictions are to be found inside our prison system, and the chances of leaving prison addicted to hard drugs, even if a prisoner was not so addicted upon entry, is so high, I hoped to hear a paper which talked of alternative means of sentencing drug-offenders which avoided custodial sentences. I may have missed it, but I am not sure if the issue was raised at all.

Or how about “Drug Trafficking and Consumption in West Africa” Organised by Cape Verde, Benin, et al.

Other papers dealt with ‘Violence against women who use drugs’,’ Protecting youth with drug policy’, ‘ Evidence-based tools and resources’, I could go on and on.

One extremely valuable presentation was made by the Portuguese during which they talked openly of the successes they had made in reducing narcotics harm through the use of a focused decriminalised drug use policy. But for every sensible and well-balanced presentation, there were others like the Drug Policy Futures Group who have set their hearts and minds against the entire campaign for decriminalisation and are determined to work against the well-intentioned agendas of those disparate groups who see decriminalisation as representing, ultimately, the only real policy which will have any meaningful effect against the influence of organised crime in the global drug markets.

Perhaps unsurprisingly, I could not discover any willingness to discuss the issue of the criminal laundering of the enormous proceeds of criminal drug trafficking, and as far as I could ascertain, there were no banks or financial institutions present, and willing, to discuss their attempts and methods to limit the amount of drug money entering their systems.

It is the major issue of the criminal money which is generated by the international drug trade which is the real elephant in the room at conferences such as these, but no-one it seems wants to discuss it. I tried to engineer a discussion with a delegate from Mexico, a representative of the Mexican drug control agency, but he just laughed in my face.

"...My deluded friend" he said, "...Everybody in this business knows that all the drug money from the narco- trafficantes finds its way to the City of London. Look at the HSBC bank, how they moved all those millions of dollars for the cartels in my country. Why your country did not prosecute them is clear to us, Great Britain does not care where the money comes from, as long as it comes to Great Britain, and no British Bank will be punished for bringing in the drug money. You people did it to China in the 19th century, and now you do it with the rest of the world. .."

What is clear to this overworked law enforcement agent from a country which is truly suffering from the corrupting effects of Cartel Heroin is that the UK has absolutely no agenda to promote or support any agenda for legalisation, because it would mean a strangling of the supply of illegally-generated drug profits, but then, the UK is not alone in having no intention of lifting the yoke of prohibition!

Regardless of the fact that the UNDOC, in the form of their President Raymond Yans, will discuss UN prohibitionist policies in terms of health, welfare and national benefits, he continues to talk down the likelihood and possibilities of legalisation in other countries of certain initial drug issues. This is in the face of the evidence now before the Conference from Uruguay, Washington State, and Colorado, where a degree of legalisation has now been achieved.
Listening to Mr Yans, I get the overwhelming impression that he is nothing so like the small Dutch boy, sticking his fingers in the dyke to prevent the leaks from leading to the entire edifice crumbling.

And this, or so it seems to me, is the essential conundrum behind this major annual jamboree. It seems to exist for the benefit of a very large number of people who belong to exotic-sounding organisations, and whose ambition is to continue pouring out learned papers and discussion documents on such issues as harm reduction, health management, youth protection, and who enjoy travelling to attractive venues to discuss their vested interests.

These people are dependent, for their cushy lifestyles, their expenses, and maybe their jobs, on the likelihood of drugs remaining prohibited for the foreseeable future. They have a vested interest in ensuring that the drug laws are not amended, or at least not too much, so as to threaten their functions. If these drugs were decriminalised and prohibition ended, bureaucrats and apparatchiks like Raymond Yans  would be out of a job.

The organisation I represent, "Law Enforcement Against Prohibition", a global body of former law enforcers who have long since seen and realised the inherent dishonesty and futility of the so-called ‘war on drugs’ had put forward a discussion document for consideration and wider dissemination on a proposal to amend the United Nations Drug Treaties, essentially eliminating the criminalisation-oriented drug policy paradigm, replacing it with a health-harm reduction and human rights oriented policy.

You might think it odd that thousands of ex-police officers in a number of countries might see eye to eye on the logic and pure sense of such a policy, but it was there in black and white, on the table in the Meetings.

The effect of such a policy if accepted and enacted would begin to curtail the activities of many of the exotic delegates all clustering around the bar of wider discussion (hence the bar scene from Star Wars image), and it would begin to usher in a wider policy of decriminalisation.

This is the first time, as far as I am aware, that such an important enactment has been proposed, as it cuts, like a hot knife through butter, through the bullshit being talked at so many of the meetings. (One group was talking about decriminalising cannabis use for adults, while maintaining in the same legislation, criminal penalties for children caught using the stuff !!!)

I was very hopeful that our campaign would catch the imagination of delegates, and in one way, it did! We were almost routinely attacked by many of the major NGOs who were present. We were accused of failing to ‘discuss and debate’ our proposals with all the other groups, a process that would have been never ending and would have been subject to so many proposed amendments, that in the end, the poor bleeding rump that was left would not have had enough life in it to limp over the starting line of the amendment process.

At the same time, we attracted a lot of informed attention from a number of interested parties, and particularly delegates from a number of South American countries. (Now those boys and girls know the human cost of the war on drugs, I had a long and detailed discussion with a police colleague from Colombia, and I realised we were not even starting to scratch the surface when we talk about social harms from organised crime)!

So, how will things develop?

It’s very hard to say. Our amendment cuts through an enormous volume of red tape and bureaucracy and possesses some very desirable outcomes, if properly enacted. It enables member states to operate their own policies within the overall ambit of the UN, thus enabling them to create a Uruguayan-style outcome if they so wish. It also envisages through its flexibility, a Portuguese-style model format which many European states might find more to their taste.

We shall see. I do not expect any great speed to be generated in enacting our amendment, but it is there on the table, if the UN authorities want to bend down and pick it up!

This is the last-chance saloon for so many countries, if they are not to see and experience an entire organised crime makeover in the style of that experienced by Mexico, Colombia, Bolivia and other narco-states. There is a lot of good-will out there to bring forward and enact a sensible drug policy. We in the UK must start to examine our pathetic response to the conundrum, and begin to take steps towards developing an evidence-led debate, with information and medical facts supplied by people like Professor David Nutt. I don’t want to hear any more diatribes from Melanie Phillips or Peter Hitchens on this topic.

At the same time, we have to start really enforcing our anti-money laundering laws and Regulations and make them mean something, if we are not to be seen as merely pious hypocrites in the eyes of the rest of the world, to whom we are so willing to preach on their shortcomings. Our attitude towards openly accepting every narco-state's profits is doing us huge harm in the eyes and ears of those countries who know the reality of what dealing with 'Perfidious Albion' really means!

Finally, the papers this morning were all over Russell Brand and his personal contribution to the discussion in Vienna.

I find myself (again not unusually) in a small minority in my view of Mr Brand. It's not that what he says is wrong, it's that he is saying it! After all, this is the man who had an ill-advised obscene public discussion with Jonathan Ross, the tv presenter, and verbally defiled the grand-daughter of Andrew Sachs, a charming and harmless man who has given pleasure to countless number of people. This is the nature of the man, and he can be adjudged by his actions. Seductive though his message sounds, if we want to be taken seriously by international policy makers and law givers, the kind of people we really need to impress and influence, in order to see our side of the argument, then it is my personal view that Mr Brand, despite his high-flown rhetoric and his clever arguments, will not be the sort of person who will bring home the case for reform in the longer term. He is a celebrity, a creature of the night and the flashlight. He can put on an argument with the same ease he puts on a designer jacket, but, like the flashlight on the camera, which he seeks out in his lifestyle, he flares brightly, but fleetingly, and whether he will be there when the hard yards have to be put in to bring home the case for the reformers, I seriously doubt.

Time will tell, and I may well be proven horribly wrong, but for me, the jury is still out on Mr Brand!

Saturday, March 15, 2014

Financial Conduct Authority fails, yet again, to impose the rule of law on the banks!

Two firms are facing enforcement action from the Financial Conduct Authority for anti-money laundering failures, while the regulator is reported  to be considering similar action against three others.

Sharon Campbell, the FCA’s head of financial crime and intelligence, declined, predictably, to name the firms facing enforcement but stressed the issues were not new. The regulator, it is reported, is especially concerned with firms’ handling of high-risk customers such as politically exposed persons (PEPs).

“The thing that surprises me, when it boils down to it, the things we are finding are not new issues…the management of high-risk PEPs is not a new thing,” she told delegates at City & Financial’s financial crime conference on 4th March.

The FCA, previously the Financial Services Authority, has fined a total of nine banks in the past five years for AML failings, and much of the recent focus has been on firms’ handling of PEPs. In 2011 the regulator launched a scathing report on similar failings in this area.

The FCA is also concerned about the quality of AML compliance across the board and is worried firms are ‘de-risking’ their client bases to avoid proper compliance.

Campbell said she had found the failings “depressing” and said in one of the settled cases, a firm had an unemployed housewife as a client whose account had more than £1 million flowing through it over a period of time. “These are basic, simple principles,” she said. “The level of anti-money laundering compliance is a matter of concern.”

The regulator was worried the drive for profits was overriding the need to properly check high-risk clients. “Some firms are not willing to make tough decisions if profits are at stake,” she said, adding that some problems were serious and persistent.

Over the past year or so, many firms, as a result of the big fines imposed in the United States for serious AML failings, have started to quietly drop clients perceived as risky. This has become an issue in the UK and the FCA is concerned, Campbell said.

 “If firms are taking that ‘de-risking’ strategy because of competition [issues] we will have something to say on it,” she said.

Delegates were told the FCA had a range of available options aside from enforcement. Last year it made six ‘early interventions’ in banks where it discovered serious weaknesses. The banks were told to remedy problems immediately. Campbell questioned why the FCA had to go in and find the problems, however. “We are not a consultancy,” she said.

Sharon Campbell's observations possess all the predictably dreary and complacent attitudes expressed by British financial regulatory agencies. She talks about 'a range of available options aside from enforcement'!

What options?

One of these days, Sharon Campbell and her bosses are going to wake up to the realisation that they are a law-enforcement authority, whether they like it or not!

They are not a kindergarten, or a bunch of social workers, their job is to apply and enforce the law as it pertains to the administration of financial services.

The trouble is that too often and for far too long, those charged with the administration of these laws, whether it was in the old days of the Securities and Investments Board, or its successor, the unlamented Financial Services Authority, or now its doppelganger, the Financial Conduct Authority, no-one inside these agencies has ever wanted to grasp the nettle of taking on board the responsibility for prosecuting those financial practitioners who willfully flout the law!

Howard Davies, former Chair of the FSA was described as having no appetite for prosecution, because, as it was described to me by an FSA staffer, '...he didn't want his reputation to suffer in the same way as that of Barbara Mills or George Staple..."

If the head of the regulatory body refuses to accept the powers that Parliament had prescribed for him, perhaps we should not be surprised if that policy became enshrined in the culture of the agency and its successors in title.

But just because one senior Mandarin Administrator didn't have the bottle to take up the challenge, doesn't mean that the FCA should renounce its responsibilities.

Sharon Campbell doesn't have any right to be depressed by the findings of her review, and she is right when she states,“...these are basic, simple principles..,” she said. “The level of anti-money laundering compliance is a matter of concern.”

So what are you and Tracy McDermott going to do about this wilful and deliberate refusal to obey the law. These firms are sticking two fingers up at you and you are doing nothing about it.

It is futile expecting banks and financial companies to worry about the arcane minutiae of the Money Laundering Regulations, all the time you succeed in giving them the impression that you don't care about this egregious activity.
You can preach to these bastards all you like and they will still ignore you.

These wilful failures to implement meaningful responses to the Anti Money Laundering Regulations possess penal sanctions, and these have now got to be imposed, with rigour.

This is a battle you people can win, if you really want to, but it's no good just  hoping, you must take the fight to the enemy.

Any firm that has been under a compliance review and has still failed to take the necessary steps to implement the procedures and processes necessary to meet the legal requirements, should be summoned to court, and convicted.

And the buck should stop at the office of the Chief Executive. He or she should be told, by you, in no uncertain terms, where the failings were perceived to be, and what those failings were, and what steps you expected to be taken to rectify the matter, and a future date for a new inspection should be made.

Then if the processes were not  completed, criminal proceedings should follow.

I am not expecting these men to go to prison in the first instance, although their wilful refusal to take the necessary degree of responsibility for preventing and forestalling money laundering is a serious matter, but any fines will be levied on them personally and will not fall upon the institution. The errant director will also now have a criminal record, which will directly impact his ability to be construed as a fit and proper person.

I guarantee you, Ms Campbell, that after the second such conviction, you will observe a gadarene-like rush for directors to be observed to be putting their houses in order.

You have no excuses any more. You must name and shame the institutions you have presently sanctioned, so that we all know which banks are refusing to accept their responsibilities under the law and are flouting your authority.

Such knowledge would have a big impact upon the investing public, it would have a direct impact on me, because I would be using that information to write to the Chairman of the bank, if my bank was among those named, and demanding that he do something to bring the bank into line!

Fining banks is a waste of time, why do you want to punish the shareholders?

On Thursday13th March, Thompson Reuters plc held a webinar which attracted over 1,000 interested practitioners from all over the world. The discussion focused on 'The Key Priorities for Customer Identification and Monitoring in 2014'.

It was very obvious that the basic client identification procedures and the need to monitor transactions is still an issue which the financial services world is still managing to ignore, despite all the rules and regulations applied for their enforcement.

This country is facing a tsunami of dirty money flooding into the City, particularly from Russia and the Ukraine. These two countries are among some of the most corrupt criminal states in the world, and their oligarchs are men who in so many cases have become wealthy beyond the dreams of avarice, by criminally looting the assets of the former Communist state.

George Osborne, David Cameron, and their London mayor mate, Bo-Jo may welcome this influx of dirty money, as far as I can tell, the Tories are very relaxed about the sources of criminal cash being deposited in the City, but it does no exonerate banks from ensuring the full implementation of the regulations demanding full due diligence on the sources and provenance of the funds being deposited, and the nature and quality of any PEPs seeking client status.

So, time to dig out the handcuffs, Sharon, and start arresting some of these banksters who seem to believe that they can continue to commit criminal offences without your agency having the guts to do something about it!