G8 against Transnational Organized Crime

Amandine Scherrer

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317131045
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

The fight against money laundering, drug trafficking, illegal immigration, cyber crime, and the promotion of the enhancement of judicial and police cooperation in criminal matters have been at the core of the G8's actions in this field since the 1990s. This book sheds light on the nature, structure and modus operandi of the G8's specific expertise on transnational organized crime from a sociological approach in order to understand the elaboration, production and diffusion of international norms and standards. It provides a detailed analysis of an under-researched aspect of international politics: the intensification of expert-level exchanges on the international stage over the enhanced cooperation against transnational organized crime that has led to an impressive elaboration of best practices and soft law recommendations. Very few studies have focused on the experts who determine these: who they are, what their socio-professional background is, and the nature and impact of their collective work in the global fight against organized crime.

Chapter 1
When Drug Trafficking and Money Laundering Became Priorities on the G7’s Agenda

This chapter sets out to examine how issues related to international crime, initially drug trafficking and the money laundering associated with it, came to feature on the agenda of the G7/8.1 While significant international mobilization against these types of crimes took place from the end of the 1980s onwards, a number of questions arise with regard to the G7/8’s role within it, the main one being: why did the G7/8, a body often seen as devoted to macroeconomic matters, take up these issues? To find some answers and understand how its agenda has been expanded to include so-called “global security” matters, we need to look back at the history of the G7/8 from 1975 to date.

G7 Summits—Should They be Termed Economic?

In the literature on the G7/8, very few scholars have provided a well-documented account of its history, an exception being Nicholas Bayne (Bayne and Putnam 1987; Bayne 2000; Bayne 2004). The very factual approach he adopts is of clear interest and will be taken up in part in the following description of the main stages of the G7/8’s history since its creation in 1975.

Held in reaction to the 1973 oil crisis, the first meeting of the Seven in 1975 was presented as being “a searching and productive exchange of views on the world economic situation, on economic problems common to our countries, on their human, social and political implications, and on plans for resolving them” (Rambouillet Declaration, November 15–17, 1975).

The same Declaration described the purpose of the meeting in the following terms: “We intend to intensify our cooperation on all these problems in the framework of existing institutions as well as in all the relevant international organizations,” the problems in question being unemployment, inflation and matters relating to energy dependence. It was therefore an international consultation on the economic problems of the time in which there was recognition of a common basis for the choice of members of the group:

We came together because of shared beliefs and shared responsibilities. We are each responsible for the government of an open, democratic society, dedicated to individual liberty and social advancement. Our success will strengthen, indeed is essential to, democratic societies everywhere. We are each responsible for assuring the prosperity of a major industrial economy. The growth and stability of our economies will help the entire industrial world and developing countries to prosper.

Given the G7’s original calling (consultation with regard to common economic problems), the continual expansion of its agenda since 1975 is confusing for the observer. There is in fact a myth here which needs to be dispelled: the group was definitely not a body that discussed only economic issues.

As recounted by Nicholas Bayne, the first G7 agreement of a non-economic nature was reached in 1978 in Bonn, on the initiative of Helmut Schmidt, and concerned the issue of hostage-taking, this against a background in which numerous incidents of hostage-taking and aircraft hijacking, particularly by the Red Army Faction (RAF) in Germany, had taken place during the 1970s. The systematic (and official) inclusion of international political issues on summit agendas really began in 1979. In 1986, the Williamsburgh Summit issued a joint declaration on security for the first time. The end of bipolarity at the end of the 1980s had hastened the G7’s increasing focus on politics and security. The decision to invite Gorbachev to the London Summit in 1991 marked the point of no return as far as the changing nature of summits was concerned: if the idea was to stick to macroeconomic matters, then it made no sense to invite Russia to attend. The G7 (which officially became the G8 in 1998) thus began to put out an increasing number of specific declarations, first of all on terrorism and later on East/West relations and security (disarmament, arms control, proliferation and crisis management), and to take on the concerns raised (or deemed to be raised) by globalization.

At the time of the very first summits, such political questions were only discussed on the sidelines and, what is more, did not involve all partners. At the London Summit in 1977 and the Bonn Summit in 1978, the Heads of State and Government of France, United Kingdom (UK), Germany and the United States met separately in order to discuss geopolitical issues of the time. The deterioration of the political climate between East and West following the Soviet Union’s deployment of SS20 missiles was giving increasing cause for concern (Bayne and Putnam 1987, 103). The idea of holding a G4 meeting (involving France, Germany, United Kingdom and the United States) outside of the G7 was proposed by Chancellor Schmidt and the invitation sent out by the French President, Valéry Giscard d’Estaing. The group thus met on January 5 and 6, 1979 in Guadeloupe. This “mini Summit” sought to resolve the sensitive issue of missiles in Europe. The four leaders present reached agreement on a “two-stage approach,” linking the stationing of US Pershing II missiles to progress in negotiations with the USSR on medium-range weapons. Other matters discussed included the economic rescue of Turkey and the problems posed by China, Iran and the Gulf region (Carter 1982, 234–6; Brzezinski 1983, 420). The meeting, which did not issue a communiqué, provoked a hostile reaction from the G7 partners who had been excluded from these discussions, leading them to push for summit agendas to be expanded to include political issues (Bayne and Putnam 1987, 104). At the 1979 Summit in Tokyo, the issue of refugees from Indo-China was addressed, indicating that from then on summits would also provide an opportunity to react to sudden crises or political events that were too important not to be mentioned. In Venice in 1980, the Soviet invasion of Afghanistan was discussed. In Ottawa in 1981, the Canadian Presidency took the initiative to further formalize this embracing of non-macroeconomic issues by drawing up a separate declaration on political issues. This broadening of the G7 agenda elicited a fairly favorable reaction from the media but was less popular with some of the Group’s leaders such as François Mitterrand, who did not want the Versailles Summit of 1982, which he was hosting, to adopt a separate political declaration. As a result, only a brief mention of Israel’s invasion of Lebanon was slipped into the general declaration.

For a while political and economic issues were not treated in the same way. To a certain extent, between 1979 and 1986, there were two parallel summits: one economic and one political, the former coordinated by sherpas (the Heads of State and Government’s personal representatives) and the latter by Foreign Ministries. From 1987, responsibility for economic discussions was further delegated to the Finance Ministers of the G7 while the Heads of State and Government spent more of their time at summits discussing non-macroeconomic issues. One of the reasons given for this change of direction was that the Heads of State and Government attending summits lacked the necessary economic expertise. It is true that the first few summits had been dominated by former Finance Ministers but by 1983 none of the founding fathers of the G7 remained in post and none of the new arrivals had served as Finance Minister. Jimmy Carter, and even more so his successor, Ronald Reagan, also pushed for economic issues to be further delegated to Finance Ministers. This was partly due to their lack of expertise in macroeconomic matters (Bayne 2005, 5). Moreover the G7 Finance Ministers later went on to develop their very own structure: in addition to their meetings prior to the summits of Heads of State and Government, they began to meet together several times a year, particularly alongside IMF meetings.

Lastly, the decision to invite Mikhail Gorbachev to the London Summit signified the transformation of summits which from then on addressed global issues (Penttila 2003, 42). In 1991, at the London summit, the G7 began to provide Russia with financial assistance in order to prevent chaos. Despite the errors made by the Russians in managing their economy (inflation of debt), it encouraged the IMF and the World Bank to grant the country new loans (Bayne 2000, 163). At the 1992 Munich Summit, the G7 promised to relieve Russia’s debt burden if it accepted and complied with the agreements it had concluded with the IMF and the World Bank. In addition to economic aid in the form of loans, intensive technical assistance was also promised. The aid provided by the G7 encouraged the Russians to repeatedly call for full membership. There were numerous splits within the group in this regard. France and Germany wanted requests for membership from their European partners to be considered while the United States and Japan were firmly opposed to Russia becoming a full member. In the end, the Seven opted for allowing Russia to gradually increase its participation at each successive summit (Kirton 1997, 265). However, it was generally accepted by the seven founder members that Russia would be excluded from economic debates. Russia’s growing involvement thus led to the formation of a P8 (Political 8) to deal not only with conventional security and political issues but also with a whole range of global or “new security” problems, such as transnational crime, drugs, terrorism and environmental protection.

It can thus be shown that from 1975 onwards, contrary to what is widely believed, issues other than those related to macroeconomics were never excluded from G7 discussions. However, the explanations put forward by certain scholars with regard to how “global issues,” such as drugs trafficking and money laundering, came to be included on the G7’s agenda, are somewhat flawed. The argument they most often use to explain the expansion of the G7’s agenda is, in fact, to say that it was adapting to the post-Cold War era which, with the removal of the East/West divide, saw the emergence of globalization, a globalization which brought to light global problems. The inclusion of such problems was thus put down to the fact that the G7 had decided to turn itself into a global security body (Kirton 1997, 268). There is, however, an alternative explanation that has more to do with the identity crisis the G7 went through during the 1990s.

A Crisis of Identity for the G7 in the Post-Cold War Era

In the early 1990s, the G7 in fact underwent several crises which shook it to its foundations and called its raison d’être into question. These included its inadequacies in the realm of macroeconomic management, the question of its place on the international stage in the era of globalization, and its lack of legitimacy which was incurring increasing criticism. As far as macroeconomics—the Group’s original mission—was concerned, some observers have pointed out that, although at their outset G7 Summits constituted the most well-known, if not the most important, component of international economic coordination mechanisms, the Group soon failed in that area. During the 1990s, as the need and desire for economic coordination (which was from then on the responsibility of the G7 Finance Ministers) declined, the G7 Summits lost their authority. As examples of this, the same observers cite the G7’s failure to conclude the Uruguay Round negotiations in 1990 as well as persistent splits over how much aid to give to the post-Soviet countries in 1991 and over Yugoslavia in 1992 (Ikenberry 1993). Given its apparent inability to reinvent itself following the upheaval caused by the fall of the USSR, the G7 was increasingly seen as “a forum without a purpose” (Smyser 1993, 23).

This “crisis” was said to stem from the difficulty the G7 had in adapting to the post-Cold War world. In the 1980s, scholars such as Putnam and Bayne pointed out that the G7 was under US leadership and its success therefore depended mainly on the good will and involvement of the US leaders of the time (Bayne and Putnam, 273). Even though US hegemony declined during the 1990s, other scholars such as Bergsten and Henning talk about a false new consensus within the group which went on to pose a challenge to its cohesion, a situation which was exacerbated by the growing globalization which would from then on render governments incapable of controlling the market (Bergsten and Henning 1996). Even though they admit that, through the meetings of its ministers and the governors of central banks, the G7 managed to act as a fire brigade, particularly when responding to international monetary crises, Bergsten and Henning claim that the G7 never managed to establish systemic arrangements that were capable of preventing global economic problems. Its effectiveness therefore severely declined during the 1990s, partly because of traditional differences between members on key issues, giving rise to a “consensus for inaction” (Bergsten and Henning 1996, 5). The G7’s place in the international financial system in the post-Cold War era was also called into question insofar as the existence of different regional groupings, the introduction of the euro and the expansion of the World Trade Organization (WTO) were all new developments that rendered the usefulness of having a coordinating body made up of those seven countries in particular obsolete (Hodges 1999).

The strongest and most frequent criticisms made of the G7 concerned not only its inequity but also its lack of legitimacy as a macroeconomic coordinator. Its summits in fact increasingly came to resemble meetings of a “world board of management,” a club de riches to which very few countries had access but which laid down rules for those outside of it. Over and above its alleged crises and inconsistencies, criticism was directed also at its ideology. Many scholars stressed the excluding nature of the G7, noting that it tended to operate largely in secret, reaching consensus on the direction institutions should take and thereby promoting its own system of beliefs that it sought to extend to the rest of the world. These criticisms were mainly based on its economic ideology.

Based on his examination of the financial issues addressed by the G7, Andrew Baker explains, for example, that the G7 acted as a powerful pressure group that was able to exert enormous influence within multilateral institutions (Baker 2000, 179). “Ginger group,” the term he uses to describe the G7, can be understood as meaning both a catalyzing group and a pressure group. In this respect he points out that the G7 sought mainly to promote, strengthen and extend the international financial system so that it reflected these fundamental open market principles and sound monetary policies. Thus, in his view, the G7 sought to protect and promote its own belief system, thereby ensuring that the international economic system reflected it as much as possible. It is this desire to universalize the G7 discourse which has been widely criticized by scholars such as Alison Bailin and Stephen Gill. The “group hegemony model” upheld by Alison Bailin stresses the concentration of powers within the G7 and the group identity linked to an economic liberalism that was supported by a preparatory process and an effective system of interaction (Bailin 2005). The G7, in representing the particular interests of its members, was thus said to have widened the gap between North and South both pragmatically and ideologically. The main argument put forward in this model is that the G7 became the new hegemon, using its economic power to construct a neoliberal order, complete with decision-making procedures and rules that favored it. The hegemon incorporated certain countries into this system by providing them with import markets, investment and other incentives, thus allowing it to hold on to its privileged position by supplying enough capital or other forms of dependence such as technology so that rich and poor could be incorporated into the same system without changing the method of distribution. The hegemonic group thereby maintained the world order and preserved an institutional stability that contributed to the inequity of the system, acting in a way that benefited the rich and kept the poor countries of the South in the “lower class.” As a global stabilizer, it perpetuated an unequal system. Similarly, the critique of the “neo-liberal hegemonic consensus model” upheld by Stephen Gill (Gill 1999) sees that model as giving precedence to the causal importance of the ideas shared by the G7 finance ministers and leaders and which determined how the club acted as a body. Gill claims that these leaders and their allies deliberately created far-reaching values that bolstered their own position and destroyed the values shared by others. Though in this sense effective, the G7 found itself being increasingly challenged by the processes of globalization and liberalization that had resulted in a global concentration of wealth and power, as well as by the predominance of a neoliberal vision. The G7 was thus described as a “nexus;” in other words, it symbolized the constellation of social and political forces that regulated, policed and protected neoliberal discipline in the world order.

All of these critics emphasize the G7’s incoherence, the ambiguities of this partially secret and confidential body and, above all, its inability to redefine its role and nature in the post-Cold War era. It therefore faced a crisis of legitimacy on two fronts: one in relation to its effectiveness and the other in relation to its representativeness. It is worth pointing out here that this atypical institution that was the G7 was being almost constantly called into question. While the 1975 meeting had been widely welcomed by both the participants and the media, the routinization of such meetings did not systematically receive the same response. However, none of the Heads of State and Government, who have obviously changed over time between 1975 and the present day, ever suggested that such summits should no longer be held. For example, despite being very sceptical about them, François Mitterrand never turned down an invitation to attend or refused to greet his partners, which he did with great pomp at Versailles in 1982 and Paris in 1989. Bill Clinton, who sometimes appeared similarly sceptical, said in 1993 that summits were crucial for allowing views to be exchanged and reaching consensus on the major challenges facing the world. Nicholas Bayne and Robert Putnam also talk about the “magnetic power” of summits (Bayne and Putnam 1987, 183) and it is true that, despite disagreements with regard to both their form and content, the holding of such meetings was never really questioned. Is it in fact here in this tension (between the proliferation of justified criticism of the G7 and its desire to preserve the existence of a closed and prestigious club) that we find the most heuristically useful element for understanding why it came to take on “global issues?” Should this move on the part of the G7 at the end of the 1980s therefore be understood both as an adaptation made in the face of a largely macroeconomic agenda that, against a background of interdependency and globalization, was no longer justified and as a strategy for legitimizing itself in the eyes of the world by showing that it knew what to do and how to react in the face of the public fears engendered by such globalization?

Drugs and Money Laundering: Mobilizing Issues

While a year earlier, in 1988, the United Nations had drawn up the International Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances, it was in 1989, at the Paris Summit, that the Seven first addressed the question of international crime by discussing issues related to drugs trafficking and money laundering.

In its final declaration, the G7 said, “[T]he drug problem has reached devastating proportions. We stress the urgent need for decisive action, both on a national and an international basis” (Paris Summit Communiqué, 1989).

The link between drugs trafficking and money laundering was explicit in the communiqué: “We urge all countries, especially those where drug production, trading and consumption are large, to join our efforts to counter drug production, to reduce demand, and to carry forward the fight against drug trafficking itself and the laundering of its proceeds.”

By taking up the issue of drugs and money laundering the year after the United Nations did, the G7 sought to explicitly take advantage of the added value the topic had acquired on the international stage. In the same declaration, the G7 countries said they wanted to

strengthen the role of the United Nations in the war against drugs through an increase in its resources and through reinforced effectiveness of its operation […]; strengthen the efficiency of the cooperative and mutual assistance on these issues, the first steps being a prompt adhesion to, ratification and implementation of the Vienna Convention on illicit traffic in narcotic drugs and psychotropic substances.

The establishment of an international group devoted to the issue of money laundering reinforced this argument. It was in fact at this same Paris Summit that the G7 set up the Financial Action Task Force (FATF), whose mission was to draft 40 recommendations to serve as a universal framework in the fight against money laundering. One of the participants at the Paris Summit, the then director of the French Office Centrale pour la Répression du Trafic Illicite de Stupéfiants (Central Office for Suppression of Drug Trafficking), declared that “even though the internationalization of the fight against money laundering had undeniably come about in response to US wishes, the French Government felt justified in stepping up the fight against drugs trafficking” (quoted in Favarel-Garrigues 2003b, 147). The French Presidency of the G7 thus welcomed a US proposal to set up a “group of experts,” the official mandate of which was

to assess the results of cooperation already undertaken in order to prevent the utilization of the banking system and financial institutions for the purpose of money laundering, and to consider additional preventive efforts in this field, including the adaptation of the legal and regulatory systems so as to enhance multilateral judicial assistance. (Paris Summit Communiqué, 1989.)

The declaration issued at the Houston Summit the following year allowed the Seven to reaffirm their support for the United Nations Convention and to endorse the FATF report. The Seven also decided that

As agreed at the May meeting of Task Force Finance Ministers, the FATF should be reconvened for a second year, chaired by France, to assess and facilitate the implementation of these recommendations, and to complement them w...