The Operation of Interpol in Politically Motivated Business Crime Cases
THE OPERATION OF INTERPOL IN POLITICALLY MOTIVATED BUSINESS CRIME CASES
How INTERPOL helps fight crime
INTERPOL was initially conceived during the first International Criminal Police Congress of 1914, which brought officials from 24 countries together to discuss cooperation in law enforcement. The plan was to build an organization which allowed national police to share and access information internationally, including about individuals accused of serious crimes. As INTERPOL now has 194 countries as its members, it has reach into virtually every country in the world. This capacity has a growing importance as globalization continues and police forces increasingly need to be able to make interventions beyond their own country's borders.
In terms of the prosecution of crime and the punishment of offenders, among INTERPOL's most significant tools are 'red notices' and 'diffusions'. A red notice is a request, issued by INTERPOL, to law enforcement bodies worldwide to locate and provisionally arrest a person pending extradition or surrender. India is currently pursuing hundreds of suspected or convicted criminals by means of INTERPOL red notices. A diffusion is similar to a red notice, but can be issued more speedily, without the same formalities. Unlike red notices, diffusions are circulated by the National Crime Bureaus of individual countries directly to other INTERPOL member states, without first being scrutinized by INTERPOL.
Red notices and diffusions help countries to identify and apprehend potential fugitives. A visit to the red notice page of Interpol's website quickly gives an impression of the range of offenses alleged. The difficulty is that INTERPOL's system is susceptible to abuse. For a number of years, members of INTERPOL and civil society organizations have raised concerns about the functioning, transparency and funding of the organization. These problems affect even the most senior levels of INTERPOL's leadership. Although Russia is notorious for its abuse of INTERPOL's systems, the Russian candidate was prevented from becoming president of the organization in October 2018 only as a result of last-minute lobbying by the UK and others amongst the 'Five Eyes' group of intelligence sharing nations.
Problems with red notice and diffusion systems
INTERPOL's website reveals that there are 7,700 public red notices in circulation. However, this is just the tip of the iceberg, because not all red notices are public. According to its own figures, INTERPOL issued over 11,000 new red notices in 2020 alone. In total, there are an estimated 65,000 red notices in existence. INTERPOL is required to review each request for a red notice before publication, in order to ensure that it complies with the organization's rules. However, with a staff of only two or three dozen dedicated to the task, INTERPOL does not have the resources to carry out a meaningful review and often appears to accept a request for a red notice at face value.
In addition to the requests for new red notices, it is understood that around 50,000 diffusion requests are made a year. Even though diffusions, like red notices, must comply with INTERPOL's Rules, they are not vetted at all before they are circulated. This means they enter into circulation without any independent oversight whatsoever.
This lack of proper scrutiny of both red notices and diffusions leaves the system susceptible to abuse. Although Article 3 of INTERPOL's Constitution states that, "it is strictly forbidden for the Organization to undertake any intervention or activities of a political character", some countries flagrantly attempt to use the red notice system to persecute political opponents. Turkey attempted to issue 60,000 red notices against political opponents after the failed 2016 coup. Increasingly, INTERPOL Red Notices and Diffusions are also being abused in another way: in order to apply pressure in disputes arising out of a commercial context.
Interpol and commercial disputes
Where a business comes into conflict with local political interests and politicians wield influence over prosecutors, a criminal investigation may be opened. Alternatively, a commercial rival may pull political strings in order to get ahead of a competitor, and that may result in allegations of financial crime. The prospect of being pursued by these criminal law means, with the collusion of politicians, has become one of the perils of doing business in some high-risk jurisdictions. Where an investigation has been opened, a red notice or diffusion will often soon follow, as a means of forcing international businesspeople to come to the negotiating table and to make a deal. Businesses affected include oil companies, financial service providers, real estate developers, but also the whole spectrum of other businesses.
One of the most well-known examples of this is William Browder, the founder of Hermitage Capital Management Ltd. The Russian State used red notices as part of an overall strategy to strip Hermitage of its assets and intimidate its founder. Russia now increasingly uses diffusions for the same purpose, because they are not scrutinized, but it is by no means unique in abusing INTERPOL's systems in this way. Red notices and diffusions are used in similar ways by many countries in which the rule of law is weak. For example, red notices have a reputation of being used effectively as a means of private debt collection by certain Middle Eastern countries.
Not every country will treat a red notice as a valid arrest warrant. However, even if this consequence does not automatically follow, the practical effect of a red notice or diffusion is far-reaching. An individual cannot travel freely, without the risk of arrest and extradition to the requesting country. The existence of the INTERPOL alert will also cause reputational damage and may well lead to the closure of bank accounts and the withdrawal of finance facilities. Due diligence service providers will access information published by INTERPOL or reported in the press. This information will then feature in risk and compliance reports. As well as the toll this takes on an individual, these occurrences are likely to have significant deleterious effects on any business.
Ways to address the problems
Various member countries and organizations are now looking at what can be done to improve INTERPOL's capacity to resist this kind of abuse. Within INTERPOL, there is a body known as Commission for the Control of Interpol's Files (CCF). The role of this part of the organization is to ensure that all data processed by INTERPOL complies with its rules. A recent welcome development is the appointment to the CCF of Teresa McHenry, who brings valuable experience from her senior role as head of the Human Rights and Special Prosecutions section of the US Department of Justice. In the UK, in June this year, the House of Commons Foreign Affairs Committee published a report that made recommendations for the reform of INTERPOL. Such change takes time. In the meantime, there are steps an individual businessperson may take, in his or her own defense.
Those who are victims of fraudulent red notices or diffusions may write to the CCF to make representations. This can be done pre-emptively, before the red notice is actually published, or once publication has occurred. Skilled representations will dramatically increase the likelihood that a notice or diffusion will be removed and an individual will be able to return to business as usual.
Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature.