26th Parliamentary Intelligence-Security Forum – Illicit Finance
Mr. John Cassara, having a background in international law enforcement for around 30 years, highlighted the aspect of China as a transnational criminal and money laundering threat. He mentioned a book he authored, titled “China’s Specified Unlawful Activities: CCP Inc – Transnational Crime and Money Laundering,” where he explored 12 major categories of transnational crime, in 11 of which China led the world. These categories included narcotics trafficking, human trafficking, wildlife trafficking, illegal fishing, counterfeit intellectual property rights violations, and more.
Mr. Cassara specifically focused on illicit finance and trade-based money laundering. He discussed trade fraud as a widespread form of Chinese and global money laundering, involving invoice fraud, misrepresentation of goods’ contents or values, and its role as a specified unlawful activity or a money laundering methodology. With China being the largest trading nation, Mr. Cassara acknowledged the challenge of obtaining reliable data and enforcing measures against trade fraud. Capital flight from China was also emphasized, with an estimated $4 trillion leaving the country from 2006 to 2016. Mr. Cassara discussed the creative means employed, including capital controls and restrictions, and the use of trade-based money laundering to move money out of the country.
Mr. Cassara touched on China’s involvement in global black-market exchanges, mentioning the use of Chinese apps such as WeChat Pay for illicit transactions. He discussed the evolution of Colombian Black Market Peso Exchange and its global spread, pointing out the challenges faced in combating these increasingly sophisticated money laundering schemes.
Additionally, Mr. Cassara highlighted China’s participation in underground financial systems, such as “fei-chien” or flying money, which utilizes trade-based money laundering for remittances and, at times, the transfer of proceeds of crime.
