Clearly, each country intends to combat L/C fraud in international transactions through its laws and enforcement of laws. Unfortunately, crime control, until now, has mainly remained at the national level. Generally, there are various problems when an international crime is concerned: territorial competence, investigation
246 Farrington, David P., n. 242 above, pp. 657-658. 247 Ibid, p. 658.
248 Pease, Ken, n. 242 above, p. 950.
249 Zedner, Lucia, ‘Victims’, in Maguire, Mike & Morgan, Rod & Reiner, Robert (Eds.) (2002), p. 419
and p. 435.
250 Pease, Ken, n. 242 above, p. 970. 251 Ibid, p. 972.
252 Farrington, David P., n. 242 above, p. 662. 253 Ibid, p. 663.
and prosecution of the crime254, extradition255, exchange of documents for trial,
recognition of foreign penal judgments256, and so forth.257 It is indeed a gloomy
phenomenon that international fraud goes through borders, while bureaucratic delays and obstacles obstruct cooperation between national authorities.
The increase of international crime258 has enhanced the willingness of States
to develop co-operation concerning criminal matters through various forms of as- sistance mechanisms. Such cooperation will enhance the probability or certainty of arrest and sanction of criminals, which is argued to be a great determinant in crime reduction259.
Bilateral or multilateral treaties have been a popular mutual assistance
mechanism.260 Some mutual legal assistance arrangements in criminal matters
254 For further discussion see Jiang, Lihua & Chen, Mingxin & Chen, Guozhen (2003), ‘Discussion
on Investigation of International Crime’, Journal of Shandong Public Security College, No.1 (Ser. No. 67), Jan., 39; Shen, Huizhang (200), ‘Discussion on Developing Cooperation of International Police Management in New Fields’, Journal of Xinjiang Police Officers’ Academy, No. 3 (Ser. No. 95), Jul., 17; Min, Jian (2005), ‘Study on Present Pattern of International Police Affairs Cooperation’, Journal of
Shanghai Public Security Academy, Vol. 15, No. 1, Feb., 93.
255 Extradition is the formal process whereby an offender is surrendered to the State in which an
offence was allegedly committed so as to stand trial or serve a sentence of imprisonment; the process of extradition is based on reciprocity, comity and respect for differences in other jurisdictions and intends to further international co-operation in criminal justice matters, see Bantekas, Ilias & Nash, Susan (2003), International Criminal Law, London & Sydney: Cavendish Publishing Limited, 2nd ed., p.
179; for further discussion on extradition, see pp. 179-204; extradition is considered as a significant measure to combat cross-border financial crime, but is restricted by the diversity of penalty under criminal law in different countries, see Sun, Dingjie (1999), pp. 25-27; about discussion on extradition system and procedure in China, see e.g. Xu, Wenjie & Zhu, Shaochun (2006), ‘Ananlysis on the Reform of Modern Extradition System from the Case of Yu Zhendong’, Journal of Shanghai Police College, Vol. 16, No. 2, April, 78.
256 For further discussion, see Cheng, Liangwen (2003), Researches on Criminal Judicial Assistance, Peking:
Law Press China, 1st ed., pp. 130-144; it is suggested that the procedure of recognition and enforcement
of foreign judgments should be added in the Criminal Procedure Act in China, see Huang, Feng (2007), ‘Adding Recognition and Enforcement of Foreign Judgments to the Criminal Procedure Act’, Modern
Law Science, Vol. 29, No. 2, Mar, 135.
257 Leigh, L. H. (1982), The Control of Commercial Fraud, London: Heinemann Educational Books Ltd,
1st ed., p. 279; see also Bequai, August (1978), White-collar Crime: A 20th–century Crisis, Lexington,
Massachusetts & Toronto: D. C. Heath and Company, Chapters 15-19; Cheng, Rongbin (1999), ‘Globalisation of Economy and Criminal Judicial Assistance’, China Law, No. 4, 138; Li, Ying (2005), ‘Economic Globalisation and the Countermeasure of International Crimes’, Journal of Political Science
and Law, Vol. 22, No. 6, Dec., 59; Cheng, Liangwen (2002), ‘Development on International Criminal
Judicial Assistance’, Journal of Public Security, No. 2 (General No. 88), 84.
258 For further discussion about the globalisation and cross-border crime and translational crime
control, see Loader, Ian & Sparks, Richard, ‘Contemporary Landscapes of Crime, Order and Control: Governance, Risk, and Globalization’, in Maguire, Mike & Morgan, Rod & Reiner, Robert (Eds.) (2002), pp. 95-101.
259 Hedderman, Carol & Hough, Mike, ‘Chapter 4 Diversion from Prosecution at Court and Effective
Sentencing’, in Perry, Amanda E. & McDougall, Cynthia & Farrington, David P. (Eds.) (2006), Reducing
Crime: The Effectiveness of Criminal Justice Interventions, West Sussex: John Wiley & Sons Ltd, p. 54; see
also Vold, George B. & Bernard, Thomas J. & Snipes, Jeffrey B. (2002), p. 208.
260 Bantekas, Ilias & Nash, Susan (2003), p. 227; for further discussion on the content and range of
legal assistance, see Cheng, Rongbin, ‘Strengthening Mutual Legal Assistance to Prevent and Control Financial Crimes’, in Chen, Guangzhong & Predontaine, Dianiel (Eds.) (1999), pp. 709-712; until 30 May 2005, with regard to criminal judicial assistance, China has concluded bilateral treaties with 26 countries, and with regard extradition, with 19 countries, see Table on Dates of Signing and Effective Dates of Bilateral Judicial Assistance Treaties, Ministry of Foreign Affairs of P.R.C., available at www. fmprc.gove.cn/eng/wjb/zzig/tyfls/tyfl/2631/t39537.htm, accessed 15 Sep., 2009.
are developed to some extent, based on bilateral agreement between States.261
The EU region seems to have a good record concerning legal assistance over criminal matters. The European Judicial Network was established in 1998; in this Network, there are representatives of national judicial and prosecution authori- ties who are designated by their governments as contact points for the exchange of information, working on international judicial cooperation.262. Eurojust con-
sists of prosecutors and judges from each Member State and they are respon- sible for assisting national authorities in investing and prosecuting serious cross-border criminal cases.263 It coordinates the activities of national authorities
taking care of a particular case and facilitates collection of evidence under the EU and other international mutual legal assistance agreements.264 Similarly, the
European Police Agency (Europol) facilitates the cooperation of police within
Member States of the EU.265 Furthermore, the Convention on Mutual Assistance
in Criminal Matters in 2000 represents the instrument covering policing rules and further develops mutual legal assistance in Europe.266 Finally, to enhance
European criminal investigations, prosecutions, extradition procedures and judicial cooperation, the framework decision on the European Arrest Warrant (EAW) took effect in 2004.267
However, mutual legal assistance in the EU in the real world is not without problems, and it was criticised as being time consuming and inefficient, because the mutual relations of the various European criminal agencies, bodies, and in- stitutions are governed only by soft law.268 Thus, establishing stronger horizontal 261 For discussion about the development and issues of criminal judicial assistance between the UK
and other States, see Bantekas, Ilias & Nash, Susan (2003), pp. 240-242; between China and other States, see Cheng, Liangwen (2003), pp. 145-248; see also Ma, Jinbao (2002), Research on Cross-border
Crime, Peking: People Press, pp. 399-405; about the issue in China, see Ji, Minli (2005), ‘Exploration on
Legal Problems of Punishing Fleeing Criminals: From the Perspective of International Criminal Legal Assistance’, Journal of Chinese People’s Public Security University, No. 6 (Sum 118), 102.
262 European Commission, Judicial Network, ‘The ECJ: Organised EU Judiciary against Organised
Crime’, available at http://ec.europa.eu/justice_home/fsj/criminal/network/fsj_criminal_network_ en.htm, accessed 10 Dec., 2009.
263 European Commission, Freedom, Security and Justice, Eurojust, ‘Eurojust Coordinating Cross-
border Prosecutions at EU Level’, available at http://ec.europa.eu/justice_home/fsj/criminal/eurojust/ fsj_criminal_eurojust_en.htm, accessed 10 Dec., 2009; for detailed discussion on Eurojust and Europol, see Fletcher, Maria & Lööf, Robin & Gilmore, Bill (2008), EU Criminal Law and Justice, Northampton, MA: Edward Elgar, pp. 65-80.
264 Kennedy, Anthony (2007), ‘Winning the Information Wars: Collecting, Sharing and Analysing
Information in Asset Recovery Investigations’, J.F.C., 14 (4), 372-404.
265 It was established under the third Pillar by the 1995 Europol Convention and became operational
in 1999; for further discussion on police cooperation in criminal matters, see Fletcher, Maria & Lööf, Robin & Gilmore, Bill (2008), pp. 87-100.
266 The Convention on Mutual Assistance in Criminal Matters between the Member States of the
European Union, 2000/C 197/01, 12 July 2000, Official Journal of the European Communities; see also European Commission, Freedom, Security and Justice, ‘Mutual Legal Assistance in Criminal Matters Introduced at European Union Level’, available at http://ec.europa.eu/justice_home/fsj/criminal/ assistance/fsj_criminal_assistance_en.htm, accessed 10 Dec., 2009.
267 Sievers, Julia, ‘Too Different to Trust? First Experiences with the Application of the European Arrest
Warrant’, in Guild, Elspeth & Geyer, Florian (2008), Security Versus Justice? Police and Judicial Cooperation
in the European Union, Cronwall: Ashgate Publishing Limited, pp. 108-109; for further discussion on
EAW and judicial cooperation in criminal matters, see Fletcher, Maria & Lööf, Robin & Gilmore, Bill (2008), pp. 103-141.
268 Vlastník, Jiří, ‘Eurojust – A Cornerstone of the Federal Criminal Jusitice System in the EU’, in Guild,
and vertical inter-institutional links is said to be an important task in the near future.269
The development of mutual legal assistance does not seem to be promising at the international level. It is acknowledged that there is no international police competence. The establishment of the International Criminal Police Commission (ICPC) (also known as Interpol)270 to some extent facilitates co-operation between
national law enforcement bodies, but it was criticised for its inefficiency on the exchange of information and doubt was placed on its ability to tackle the increas- ing level of organised crime.271 The UN has developed a Model Treaty on Mutual
Legal Assistance, which has a simple framework and guides States in develop- ing their bilateral or multilateral agreements.272 Nevertheless, no international
agreement or convention concerning legal assistance in criminal matters has been agreed upon. L/C fraud in international trade has caused the victims huge losses every year, but the fraudsters could be safe enough with large amounts of fraudu- lent money by just making themselves disappear. It is indeed depressing that the limitations of jurisdiction seem to favour criminals.
Thus it is necessary for some organisations, such as the UN, to actively consid- er the issue of concluding international agreements to make prosecution efficient, reduce juridical barriers in different countries and facilitate cooperation between
nations.273 According to economic analysis, criminals would normally compare
their illegal gains from criminal activities with their estimated costs, including the possibility of detection and being caught, and expected punishment.274 Thus,
the increasing possibilities of being caught resulting from cooperative efforts on jurisdiction of crime between nations would to some extent deter criminals from engaging in such fraudulent activities in L/C in international trade.
It was further recommended that the international cooperation should go be- yond the negotiation of treaties and conventions, and should be developed at different levels: the governments should establish routes for reciprocal assistance; law enforcement agencies, security departments of the banking and financial in- dustries, forensic accounting firms, and law firms should develop their networks to combat fraud.275
In spite of the serious difficulties in combating international L/C fraud in national criminal law enforcement, some organisations in the area of interna- tional trade have made their own efforts to combat commercial crimes. Currently,
269 Ibid.
270 It is an intergovernmental, but non-political, independent policing organisation; and it is
independent from other international bodies, such as the UN or the Council of Europe, official website: http://www.interpol.int/.
271 Bantekas, Ilias & Nash, Susan (2003), pp. 269-270.
272 UN Model Treaty on Mutual Assistance in Criminal Matters, A/RES/45/117, 68th Plenary Meeting,
14 December 1990, available at http://www.un.org/documents/ga/res/45/a45r117.htm, accessed 18 July, 2010.
273 Zhang, Hengli (2001), ‘Theory of International Fraud Control’, Politics and Law, Vol. 1, 28, p. 29. 274 Sjögren, Hans & Skogh, Göran (2004), New Perspectives on Economic Crime, Cheltenham: Edward
Elgar, p. 4; study on economic analysis of crime, see e.g. Hellman, Daryl A. & Alper, Neil O.(2000),
Economics of Crime: Theory and Practice, Boston: Pearson Custom Publishing, 5th ed.
275 Yang, Vincent C., ‘International Cooperation in Combating Fraud: Beyond the Treaties and
Commercial Crime Services (CCS), the anti-crime arm of the ICC, set its purpose as combating different kinds of commercial crimes; being a membership organ- isation, it provides services to commercial parties and banks.276 It can provide a
member with the necessary information and resources to discover and prevent fraud, carry out investigations where there is evidence or suspicion of fraud, and help victims of fraud to recover their losses.277 Therefore, where suspicion of fraud
in L/C transactions occurs, a bank can always send suspicious documents to the CCS to check their authenticity. It can be seen that the increased possibility of authentication of sender, transmission, and of the contents of transmitted data (e.g. checking Lloyd’s Directory concerning the registry of a named vessel and its location on a certain date) provides a significant instrument to combat fraud.278
The Commercial Crime Bureau operates a database which offers useful informa- tion from different sources all over the world.
In addition, Fraudnet, initiated by CCS, was established in 2004. Fraudnet spe- cifically purports to operate a leading network of law firms specialising in white collar crime, and one of its important tasks is to provide effective and straightfor- ward solutions to victims in fraud cases.279 Thus, it can be seen that the ICC has
actively made efforts on dealing with fraud in international trade.