Interpol’s New Focus And "Red Flags": Advice For Wealth Advisors

It's not only financial regulators and national governments that are preoccupied with the growing phenomenon of financial and cybercrime. Given the international nature of money-laundering, terror financing, financial scams, investment fraud and identity fraud to name but a few, the problem is now a priority too for INTERPOL, according to recent comments by its president Major General Ahmed Al Raisi who is based in the UAE.

This is hardly surprising on one level but it may cause some to reappraise the risk and potential reach of the agency, which is all too often associated with looking out for high stakes fugitives and corrupt officials, rather than private bankers, wealth managers and their HNW clients.  

So what is INTERPOL’s remit, how does it operate and is the new focus any reason for concern?

INTERPOL is in effect the world's largest international police organisation, dedicated to combatting crime through global cooperation. One of the ways in which it does this is through its red notice system, which alerts law enforcement agencies across the world to locate and provisionally arrest a person pending extradition or similar legal action. INTERPOL itself does not have the authority to arrest individuals. Rather, it serves as a facilitator of information sharing among law enforcement agencies. When a red notice is issued, it alerts other countries that the individual in question is wanted for arrest in the issuing country, and authorities who see the alert may choose to take action accordingly.

Despite being a system designed to target criminals, unfortunately it is well known that the red notice system can be open to abuse. High-profile individuals may find themselves on INTERPOL's radar, for example, due to their association with individuals or regimes that are deemed controversial, or even through their involvement in a commercial dispute. In some cases, HNW individuals may be targeted by individuals or organisations seeking to extort money or gain leverage in a business deal. Problematically, red notices are sometimes issued on the basis of incomplete or inaccurate information.

The consequences of a red notice can be severe, particularly if the red notice is published on INTERPOL's website and made available to the general public. Those who are the subject of a red notice may find themselves facing travel restrictions, asset freezes, and potential extradition to the country that issued the notice, not to mention reputational damage, which can have a lasting impact on their business and personal lives.

A common concern about the INTERPOL red notice system is its lack of transparency. There are 70,000 red notices on INTERPOL's database, however only around 10 per cent of these in fact are published on INTERPOL's website. The rest are accessible only by the authorities.

Furthermore, while the vast majority of red notices are issued for legitimate purposes, there is a significant minority that should never have been published in the first place. It is possible to challenge a red notice on the grounds that it does not comply with INTERPOL’s rules. However, grounds for removal are case-specific. In some cases, INTERPOL may refuse to remove a red notice, even if there are valid grounds for doing so. INTERPOL deletes or refuses to issue an average of approximately 1,200 notices per year.

Another area of concern with INTERPOL’s red notice system is the issue of abuse. This has attracted significant attention in recent years, with some calling for reforms to ensure that the system is not used as a tool of repression. The agency has taken some steps already to address this but concerns nevertheless remain.

In particular, some question the influence that certain countries are seen to exert over INTERPOL. Russia and China, for example, have been accused of using INTERPOL to target political dissidents and other individuals who are critical of their governments. In the Gulf region, where it is common to use post-dated cheques as a form of security in business transactions, there has been criticism of the overuse of red notices for bounced cheques. This conduct is not considered a crime in most other countries, but is usually treated as a civil matter. The ease with which a red notice can be obtained in such circumstances can be used by business adversaries as a tactic to harm their competitors or settle personal scores, even if there is no basis for the accusation. Worryingly Russia and China have historically been the largest issuers of INTERPOL red notices, with the UAE coming high on the list.

In conclusion, while valid concerns persist about INTERPOL's red notice system, it remains an important tool in the fight against international crime. INTERPOL’s new priority of improving the policing of financial and cybercrime is therefore to be welcomed. However international private bankers, wealth managers and high net worth individuals should be aware of the potential risks associated with red notices and should be vigilant about their activities and seek legal advice when conducting business in foreign countries.

This article was first published on Wealth Briefing.

For further information on the issues raised in this blog post please contact Rebecca Niblock or a member of our criminal litigation team.

ABOUT THE AUTHOR

Rebecca Niblock is a partner in our criminal litigation team. She has significant experience in both domestic criminal litigation and extradition, having acted for defendants in a wide range of criminal matters from serious fraud, money laundering and corruption, to sexual offences and offences involving violence or drugs. Rebecca specialises in cases involving cross-jurisdictional elements. She has successfully defended a large number of persons requested by other states, both inside and outside the EU in extradition proceedings at all levels from the magistrates’ court to the Supreme Court. She also has experience in advising in sanctions cases, and in providing advice to those subject to Interpol red notices and mutual legal assistance requests.