fRESOLUTION - LAUTENBERG

The Economic and Financial Committee

Financial Crisis and Increase in Money Laundering to conceal organised crime post Cold War

Authors: Netherlands, UK

Co-Authors: Kuwait, Australia

Signatories: Australia, Turkey, Japan, New Zealand, Norway, Cyprus, Jamaica, Democratic Republic of
Congo, Iran, Argentina, Uganda, Saudi Arabia, Luxembourg, Indonesia, Cuba, Libya, Mexico, Pakistan,
Ireland, Djibouti, South Africa, Spain, Cyprus, Iceland, Egypt, Zambia, Iraq

Aware of the grave economic situation,

Recalling the Forty Recommendations put forward by The Financial Action Task Force,

Recognizes the difficulty of adequately facing the problems of money laundering and Organized Crime in a
region where instability is prevalent in the form of corruption, poverty and organized crime,

Further Recognises the efforts of the interim President of The FATF and his constructive criticism as criticism
is the backbone of a democracy

Draws the attention of the committee to the fact that it is the lesser economically developed countries which
suffer the worst in excessive and hyperinflation periods,

Expresses its appreciation towards The Financial Action Task Force claiming the responsibility to take action
against the Cartel de Sinaloa,

Emphasizing the need to take into consideration the recommendations of the Financial Action Task Force,

Further expresses its condolences to the late Mr. Alexis Lautenberg and is saddened by his loss due to
unfortunate circumstances,

Fully believing that the Financial Action Task Force has the potential to be a driver of change and aid the
International Effort in tackling organised crime,

Expresses its deep appreciation towards the directive authored by The Netherlands and The United Kingdom,
co-authored by, Kuwait and Turkey with respect to their efforts in order to prevent the death of Mr. Lautenberg,

Alarmed by the increase in money laundering and economic crimes in nations,

Deeply concerned by the overheating of macro-economies/boom-bust cycles,

1. Requests all nations to implement the ‘Forty Recommendations’ suggested by the Financial Action Task
Force wherein:
a. The following amendments are made:
i. Customer due diligence for non-financial businesses and professions shall be in order at
all circumstances under the government,
ii. Financial institutions are not permitted to keep accounts under names other than the
name registered officially by the institution,
 iii. Banks adopt a new ‘Know Your Customer’ policy by thoroughly identifying every
customer wherein,
1. Customer identity remains confidential within government authorities
a. This identification process shall require proof including but not limited to,
i. Proof of Nationality,
1. This may be done by a valid passport,
ii. Proof of National Origin,
1. This may be done by a valid and authentic Birth
Certificate,
a. The authenticity of a Birth Certificate shall include
factors but not be limited to,
i. Validation from the corresponding Hospital
regarding,
A. A physical verification from the hospital by
a valid stamp,
B. A proof recorded in their virtual database,
iii. Address proof,
1. This shall be done by,
a. Valid Address on a valid Passport,
b. Valid address in the records of the Electoral
Registration,
iv. Identity proof inclusive of a photograph,
1. A valid photograph wherein,
a. The picture must be clicked,
i. In a well-lit background,
ii. Focussing on the facial features,
iii. Within the last 5 years,
b. No digital effects have been applied,
2. Customers who have completed this process shall only be illegible to transfer
sums of money wherein,
a. Banks also have the aforementioned identity of the receiver of these funds
being transferred,
iv. Financial institutions confidentiality is overwritten by the Financial Action Task Force or
the corresponding Financial Investigation Unit of individual countries;

2. Further recommending certain structural changes to the Financial Action Task Force by:
a. The expansion of the task force to include new members,
b. Retaining the existing secretariat structure wherein members of the Organization for Economic
Cooperation and Development would govern the body,
c. Elections do take place for the new president of The FATF until which,
i. The Interim President, Mr Tom Sherman from Australia keeps his authority,
d. Using both incentivisation such as the promotion of investment in a country’s economy as well
as the threat of punitive measures such as the potential blacklisting of member states to persuade
countries to cooperate in its investigations,
e. Encouraging the FATF to form an advisory panel that aids the governments of the nation’s
struggling with Organised Crime with transnational investigations and cooperation to tackle the
same,
3. Requesting Member Nations to adopt the below sustainable framework to maintain a rapid inflow of
capital whilst maintaining a sustainable economic policy wherein:

a. Identifying the Gross National Index and Gross Domestic Product as the main indicator of
economic growth,
b. Understanding and involving the use of expansionary demand-side fiscal policies such as but not
limited to,
i. Increasing government spending to run a budget deficit,
ii. Decreasing personal income tax or business taxes to increase disposable,
c. Supplementing subclause A by using contractionary fiscal policy at times when overheating
causes unsustainable growth of aggregate demand by incorporating the following measures such
as but not limited to,
i. Decreasing government spending to reduce disposable income,
ii. Increasing tax rates,
iii. A combination of the above methods to either run a budget surplus or reduce the budget
deficit,
d. Nations can opt to use a combination of these policies by identifying a mean value of Gross
Domestic Product during a previous transition from recession to inflation and modelling the
predicted rate of Gross Domestic Product growth through the following ways including but not
limited to,
i. Using a fiscal multiplier such as the Keynesian multiplier to compare real Gross
Domestic Product to the nominal Gross Domestic Product of the nation to determine the
stage the nation is at on the business cycle,
ii. providing Member Nations with a quantitative, factual judgement of what policies (either
expansionary or contractionary policies they can introduce to prevent overheating);

4. Endorses central banks to introduce a new economic school known as the ‘Devanshium’ policy
regarding interest rates in banks wherein,
a. Central Banks reduce their nominal interest rates to negative figures on excess bank reserves
wherein when the central bank tightens:
b. The amount interest rates are reduced by shall be at a maximum of 5.9% bearing in mind,
i. The quantity of reduction varies according to individual fiscal policies and national
economies,
ii. The interest rate is subject to change according to change,
iii. The amount interest rates are reduced by shall include factors but not be limited to such
as,
1. The previous interest rate,
2. The magnitude of ‘tightening’ of the Central Bank,
3. The fluctuation of the stock market and its prices,
c. Countries shall temporarily implement this policy until they stimulate economic growth and the
Central bank loosens,
d. This new policy shall be implemented by nations individually and not on an international stand,
e. Essentially, depositors would have to pay the negative interest rate in order to keep their money
with the bank;
5. Seeks to reduce dependence on foreign capital for the growth of domestic economies by means
including but not limited to:
a. Building financial and banking systems within a country to encourage lending to domestic
entities,
b. Strengthening and building the credibility of Central Banks to allow for the above,
c. Mandating the maintenance of certain reserves and cash levels for domestic companies in the
event of a lack of foreign capital availability (or capital flight),
d. Improving microfinance capabilities within a nation to allow for lending in Lesser
Economically Developed Countries;
e. further, encourages the use of efficient Macroprudential Policies And Capital Flow Management
System

6. Recommends to counter the unchecked rise of organised crime in the newly formed states through
means including but not limited to:
a. The creation of newly formed political entities such as Financial Intelligence Units (FIU) within
the nations affected to investigate and tackle criminal organisations where such bodies have yet
not been created,
b. Ensuring the apolitical judicial system by promoting measures such as banning the appointment
of retired judges to a government office,
c. Subjecting governmental departments to random and thorough audits, and holding individuals
found to be guilty accountable,
d. Increasing scrutiny on large international transactions and encouraging the freezing of the assets
of entities that are dubious or do not show legitimate business act;

7. Endorses the implementation of the following frameworks:

a. ‘The Accord’, wherein Trade Unions agree to refrain from demanding wage increases in
exchange for long term tax concessions thereby reducing short term supply costs and boosting
production,
b. The economic policy advocated by Professor Jeffery. D. Sachs is henceforth known as ‘Shock
Policy’,
c. These frameworks do not suggest the large scale shift in change of the individual
macroeconomic policy of a nation;

8. Strongly requests all Member Nations to invest in infrastructure to combat the menace of money
laundering by attacking every stage of the process to collapse the problem from its roots by means
including but not limited to:
a. Targeting money laundering at each of its three stages through the following measures,
i. At the placement stage by identifying any corrupt bank officials through government
vetting procedures,
ii. At the layering stage by allowing government intervention into the construction of shell
companies,
iii. At the integration stage by investing in technology that would provide an accurate audit
trail and deduce the spread of black money into the legitimate financial system,
 b. Identifying possible chokepoints to intercept the flow of black money through the following
measures,
i. Hiring expert economists to understand possible sources of leakages and injections,
ii. Calling for an expert panel consisting of leading figures in the banking sector, the
financial cabinet, and leading investors to understand the existing sources of money
laundering;

9. Suggests member nations to implement a new plan named ‘LAUNDER’ (Limiting and Ulstering
Decadency of economic regeneration) wherein:
a. The aims of which shall be,
i. To prevent the deterioration of economic regeneration post-conflict by,
ii. To ensure long-lasting stable economic growth through macroprudential and fiscal
policies,
b. Encouraging member nations to form financial intelligence units to fill gaps between the
financial sector by,
1. The IMF should provide tailored gradual advice strengthening balance sheet
analysis, surveillance of micro and macro-financial linkages,
2. further, encourages the use of efficient Macroprudential Policies And Capital
Flow Management System
c. Multilateral surveillance analysis of cross-border spillovers arising from monetary and financial
sector policies in systemic countries, as well as from the use of Macroprudential Policies And
Capital Flow Management System in a broad variety of countries;

10. Encourages nations to address Money laundering due to capital accumulation the following measures
must be implemented:
a. Nations must allow Detection of money-laundering operations through legislative provisions
allowing for the centralization of information by authorities charged with reporting suspicions
and implementation of specialized investigative measures like access to computer systems and
commercial and banking information,
b. Formation of Financial Intelligence units to fill the gap between the financial sectors and
authorities responsible for legal procedures to allow this information to circulate while
honouring confidentiality requirements;

11. Urges member nations to introduce new policies to curb corruption in governments as well as making
licences to produce drugs very difficult wherein:
a. implementation of sudden, sporadic, in-depth checks of all high ranking government officials in
the fields of trade, narcotic prevention and border control,
i. These checks will include thorough scrutiny of these officials’ bank statements and
account wherein,
ii. They will search predominantly for large influxes of money which can be further
investigated to be seen if they are bribes,
iii. Large influxes are defined as any transaction over $100,000,
iv. These investigations shall also set the purpose of a precedent;
12. Suggests influxes of FDI be less sporadic in order to prevent currency depreciation as well as boom and
bust cycles wherein:
a. This can be done with the help of the World Bank,
i. which will allow developing countries to store excess FDI in an account without interest
to prevent Boom and Bust cycles in their economy,
b. Starting new and large scale infrastructure projects in the essence of industrial projects such as
roads, highways, dams, etc;

13. Suggesting the use of automatic stabilizers in the economy which are fiscal policies that reduce the
effect of short-term volatility and fluctuations in the price level, achieving important goals for economic
restructuring in the aftermath of the Cold War by reducing both economic disparity and unemployment,
without having to explicitly focus on addressing price volatility, via the following methods:
a. Introducing progressive taxation to a higher degree in the economy to manipulate the level of
aggregate demand in the economy in addition to reducing the economic disparity that is a prime
reason for driving individuals toward economic crimes like money laundering, and acts as a
two-pronged method in the following way:
i. Compensating for the rise in income as the economy experiences inflation during the
boom, and to receive greater tax revenues than they normally would,
ii. a lowered aggregate demand leading to a reduction in prices to get back to the
equilibrium level of demand, taking away from the effect of inflation
iii. Government measures should be taken to account for the fall in income such as a
reduction in defence spending
iv. Reducing unemployment as more individuals consume with the higher aggregate demand
v. Increasing the level of disposable income to further stimulate aggregate demand;

14. Resolves to remain actively seized in the matter.