“Coming together is a beginning, keeping together is progress, working together is success” Henry Ford
For almost 30 years I have fulfilled a variety of functions for the Israeli public sector, for Israel Defense Forces as well as for the Israeli Customs and VAT Administration. I will not specify the exact list of functions I fulfilled as this is not the aim of the present article; however, I will express my personal perspective and ideas that are related to the importance of exchange of information between countries that will facilitate, for example, bringing criminals to justice, fighting against money laundering, fighting and minimizing terror globally, minimizing or eliminating counterfeiting and so much more.
I have served Intelligence and investigations units during several years and initiated as an active partner the identification of important fraud and smuggling crimes. I represented my Administration to the EU, the W.C.O., as well as in global international and highly specialized assemblies. I emphasized the importance of cooperation of exchange of information between countries that is related to global crimes such as goods and drug smuggling, human trafficking, money laundering, commercial frauds, pharmaceutical items and vehicle smuggling and more.
While I was participating in meetings, I had a very concrete idea concerning the mind frame of the people who managed the Intelligence and investigation units, as well as the Customs Administration and the Israeli Army. Thus, I was able to set up a classical structure of an intelligence unit divided into departments of collection of information and evaluation. Consequently, we strengthened the cooperation between the Israeli Intelligence and cooperation forums and set up task forces for cooperation.
Over the years, a shift from treatment of local affairs to international ones was noticeable. At the same time, organized crime groups were active in different countries simultaneously and their illegal actions were enhanced and facilitated due to the weakness of the enforcement capacity, and lack of information exchange between countries.
The conclusion was that without an active and effective cooperation between intelligence and investigation units, law enforcement will be impossible.
The importance of information exchange between countries has been discussed since the 1990′s in different meetings and forums as one of the central matters.
The W.C.O. expressed its comprehension regarding the importance of international information exchange. Therefore, the W.C.O. has been looking for ways and means that would enable the exchange of information. The W.C.O. developed a program named Customs Enforcement Network (C.E.N.) which enables countries to provide, search and share information regarding seizures, and has been used, so far, by many different countries.
I clearly remember the seizure of the counterfeit “Colgate” toothpaste container, which became possible thanks to C.E.N. The Israeli Customs used the information provided by C.E.N. and searched for details such as port of origin, weight, supplier, and more, and tracked two containers that arrived to Israel with similar profile, which was identical to one that has been seized in Europe previously.
Much to my regret, most of the countries were satisfied with the seizures only, i.e. with a basic cooperation. Most of the time, the investigation was not effective, since the criminals were not identified, thus not brought to justice, and the global distribution of possibly toxic goods continued to risk the lives of many people around the world.
I regret that some countries chose to be highly secretive not to disclose any information at all or provide very basic and technical details only. Moreover, in a large number of countries, the local law prohibits information transmission, even though a cooperation agreement does exist. Such information may be transmitted for intelligence sake only, and not for investigation purposes.
Ironically, national information transmission between enforcement authorities is banned. For example, information exchange between the police and Customs Administration or between Counter Money Laundering Units and Customs Administration is banned. Therefore, organized crime groups are able to commit crimes more easily. Another example can be demonstrated by looking at the report of the “9/11 Commission” that followed the terror attack on the US on September 11, 2001.
In Israel, we concluded that in order to fight efficiently against crime organizations we need to create a new association that will centralize all the information from all the authorities, including the police, customs administration, Intelligence and more. More information task forces were set up against several targets. As from the first steps of their actions, the law which prohibits the local exchange and transmission of information was clearly an obstacle. However, we understand that we must ask ourselves what is the main objective, what strategy do we need to use and how can we amend the existing legislation in order to exchange information efficiently, thus limit or even eliminate criminal activity both locally and internationally.
Over the years a slow but stable change has been observed regarding the cooperation between Israel and other countries, initially on a bilateral basis and then on a multilateral such as the European Union.
If the importance of international information exchange would have been acknowledged, can you imagine the impact on the people all around the world? For example, it is possible that less people would have been victimized by criminals. It is possible that the authorities would have been able to bring to justice the criminals behind organized crimes, human trafficking, drug smuggling and so much more.
I would like to share two examples from my personal experience that further demonstrate the importance of international information exchange. A first one is about an excellent cooperation which led to the arrest of a very important crime organization in the field of cigarettes’ smuggling, and a second example of a lack of cooperation, with the bad consequences we can imagine.
Samyon Beniarshvili was an Israeli citizen who was the leader of an organized global crime organization that specialized in cigarette smuggling of containers from the suppliers in China to Europe under the cover of electronic and kitchen tools importation. The goods were stocked in warehouses in the Netherlands and Belgium and transported to customers throughout Europe. Samyon Beniarshvili established an Israeli company using the profits, and managed a double bookkeeping: one for the electronic and kitchen tools sold to mainly East Europe countries (invoices were seized in Europe) and the second, issued in Israel, with false invoices that were given to the same customers, but with much higher values. This Modus Operandi allowed Samyon to transfer the funds to Israel and pay the suppliers that were located in China and make significant monetary profits. Samyon Beniarshvili was condemned, arrested and brought to justice thanks to information exchange between local and international authorities, using various methods of information gathering including wiretapping, in addition to coordination in the legislation level between the different countries including Belgium and Israel. Samyon Beniarshvili was charged with money laundering and other serious offences and all his goods were seized.
In the second example, the criminal took advantage of European legislation, conducted operation scams related to VAT (called “carousel”) and committed money laundering crime in Israel. The leader of the international organized crime has established a company in Israel and some companies in Europe. He was selling mobile phones in European countries and transferred the money to Israel. The goods were transferred several times throughout the continents by buffers. The missing trader owed VAT funds that disappeared regularly which caused loss threads. The profit trader, who apparently bought the goods legally in Europe, received huge VAT refunds for exports. However, VAT has not been paid- neither for import nor for the selling.
The lack of cooperation regarding information exchange between the countries in the above mentioned example restricted us, the investigators, and therefore the fraud is still being conducted.
My main professional experience is in the customs and taxation fields. A certain degree of cooperation does exist between the police via Interpol and Europol but only within key and important files. However, a necessary continuous information exchange almost doesn’t exist unless it is on a personal relations’ basis.
Nevertheless, countries had to face reality and deal with global phenomena: terrorism. In order to fight terrorism international information exchange regarding bank data and financial activities is crucial. Nowadays, the trend has shifted towards the area of tax evasions. USA has established F.A.T.C.A. (Foreign Account Tax Compliance Act) which became law in March 2010. F.A.T.C.A. targets tax non-compliance by US taxpayers with foreign accounts, thus banks all over the world have to transfer relevant information. This is a revolution.
Currently, we witness a global trend of enhancement of cooperation between countries in the fight against the phenomena of tax evasion, which encourages other countries to join this move. No one could imagine this would have been possible just ten years ago.
This article tries to convey a warning sign and to invite all countries to understand the importance of uniting in the fight against international crime organizations, or individual crimes such as tax evasions. Countries need to make efforts to amend existing legislation to fight against black capitals and to “close loopholes” of tax programs. Are countries really beginning to understand the importance of exchange of information in order to fight crime, money laundering, counterfeiting, tax evasion, terrorism and so much more? Isn’t it time for change? Shouldn’t all countries join efforts, unite, and show real determination, unity and cooperation? No more declarations. We have to act now and show criminal organization that their operational environment has changed, and that their activity will be uncovered. As soon as these declarations become reality the criminals will be brought to justice much sooner, less victims will suffer, and the criminals will be punished more seriously and not be able to easily get away.
Former Director General, Israeli Customs and Tax Administration
Presently Consultant for states and organizations in Customs Capacity Building