UNODC

UNITED NATIONS OFFICE ON DRUG AND CRIME

MSMUN 2023

Chair

Santiago Villegas

Emiliana Restrepo

Official language

English

Topic A

Regulation of Ibogaine as a treatment for opioid addiction

Topic B

Migration of money laundering by criminal groups through legal and profitable business

ventures
Table of contents

1. Welcoming letter

2. Committee’s Information

2.1 History

2.2 Objective

3. Topic A: Regulation of Ibogaine as a treatment for opioid addiction

3.1 Theoretical framework

3.1.1 Important Terminology

3.1.2 Introduction to the topic

3.1.3 History

3.2 Present situations

3.2.1 Problematic situations

3.3 Previous resolutions

3.3.1 Nationwide solutions

3.3.2 International solutions

3.4 Expectations for the debate

3.4.1 Types of solutions delegates should come up with and how should they

orient resolutions

4. Topic B: Migration of money laundering by criminal groups through legal and

profitable business ventures

4.1 Theoretical framework

 4.1.1 Important Terminology

4.1.2 Introduction to the topic

4.1.3 History

4.2 Present situations

4.2.1 Problematic situations

4.3 Previous resolutions

4.3.1 Nationwide solutions

4.3.2 International solutions

4.4 Expectations for the debate

4.4.1 Types of solutions delegates should come up with and how they should

orient resolutions

6. Useful questions for the delegate

7. QARMAS

8. References
1. Welcoming letter

Dear Delegates,

It is an honor for us, Santiago Villegas and Emiliana Restrepo to be presiding over the

United Nations Office on Drug and Crime (UNODC). With the highest esteem we welcome you

to this year’s simulation of the United Nations, and we expect this experience to be amazing and

fulfilling to you all.

Choosing to be delegates of the UNODC automatically makes you part of the change

that, as citizens of the world we are trying to inflict. Viable solutions towards organized crimes

and substance abuse has not been an easy task for society, nevertheless it makes us extremely

proud and excited to see your participation towards achieving it.

We deeply encourage you to give your absolute best, to find innovative solutions, to

answer challenging questions and to seek for a better future in relation with governments and

citizens. Deciding to participate in a UN model, doing the research it requires and putting in the

effort to contribute to worldwide communities is the first step that we as citizens of the world

must take. Remember that you can always make the impossible possible.

Sincerely your chair,

Santiago Villegas Emiliana Restrepo

+57 (310) 4409131 +57 (316) 5468751

2. Committee’s Information

2.1 History
The United Nations Office on Drugs and Crime (UNODC), established in 1997, is the United

Nations lead committee that seeks to deal with the complex issues of drug abuse and crime.

Having said this, it is the one responsible for carrying out the UN's main program against

terrorism. With the help of NGOs, charitable organizations, labor unions, and other civil

societies, the committee has been carrying out its global mandates. UNODC has 2,400 staff

members around the world and 115 national and regional offices, which are fundamental to work

closely with governments on issues that affect the state's stability. It is composed of 53 members

with one seat that rotates between the Asian and Latin American and Caribbean States every four

years. In addition to this, the committee has developed strong drug control and crime prevention

programs, and since 2002, the General Assembly has approved an expanded program of

activities for the Terrorism Prevention Branch.

2.2 Objective

As it was said before, the committee’s main objective is to combat drugs, as well as national and

international crime. In order to do so, three main functions are applied: research, persuasion, and

technical assistance; these in order to convince the governments of implementing the treaties

proposed by the committee, and providing them assistance to make sure they follow the

initiatives. It also supports member states in fulfilling the 2030 Agenda for Sustainable

Development, which resolves to achieve the global goals of gender equality, ending poverty and

hunger, and the preservation of the planet and natural resources. This is due to the relation

between sustainable development and the fight against terrorism, drugs, and corruption; all these
taking into account the negative effects of psychoactive substances in a person’s health, and the

consequences of the actions with the authorities. This is why it is important to create favorable

solutions for the international community, especially for those countries with varying income,

through partnerships and coherent policies in order for countries to progress and take a large step

forward.

3. Topic A: Regulation of Ibogaine as a treatment for opioid addiction

3.1 Theoretical framework

3.1.1 Important Terminology

a. Natural opioids: With the objective of reducing moderate pain, opioids are drugs

extracted from the Opium poppy plant or produced in a laboratory. They work by

blocking the opioid receptors located in several parts of the body: brain, spinal

cord, gastrointestinal tract, etc. from receiving pain signals (National Cancer

Institute, n.d.)

b. Ibogaine: Found in equatorial Africa, Ibogaine is a crystalline alkaloid

hallucinogen obtained from the Tabernanthe iboga plant. Knowledge about its

function is still very limited (Merriam Webster, n.d.)

c. Diversion: The transfer of opioids from the individual for whom they were

prescribed, to others, which is illegal (National Capital Poison Center, n.d.)

 d. Synthetic opioids: Synthetic opioids are substances that are synthesized in a

laboratory and that act on the same targets in the brain as natural opioids (e.g.,

morphine and codeine) to produce analgesic (pain relief) effects (Drug

Enforcement Administration, 2020).

e. Fentanyl: A synthetic opioid that is up to 50 times stronger than heroin and 100

times stronger than morphine (Centers for Disease Control and Prevention, 2022).

3.1.2 Introduction to the topic

Ibogaine is not a recently discovered plant. For centuries, it has been used in religious

ceremonies and some people affirm that it allows for spiritual enlightenment. However, its use in

substance addiction is relatively new.

Around 1960, Ibogaine started to be noticed for its apparent ability to reduce cravings of

psychedelic substances such as: “alcohol, cocaine, methamphetamine, opiates, and nicotine”

(Corkey, 2018). This led to its usage as a detoxification method for addiction treatments. Due to

the lack of clinical trials related to the topic and specifically to Ibogaine in the medical field, this

plant is used to treat addiction mostly in non-medical settings like indigenous or religious places.

According to Frontiers, Ibogaine is effective in transitioning opioid-addict users into

sobriety (2018). The same source also states that just after the first dose of Ibogaine

administration, it helps users to reduce the cravings associated with opioids and also eliminates
the withdrawal symptoms that may be related with stopping the usage of these drugs. Frontiers

mentions the following regarding the previous affirmation: “Preclinical studies in animal models

of addiction have provided proof-of-concept evidence in support of these claims” (2018).

Ibogaine is mostly used in Africa. In this continent, more specifically in Cameroon,

Gabon and Zaire, two to three million people take large doses of Ibogaine to perform the Bwiti

initiation ritual. This is a powerful “rebirth” ceremony that members of the Bwiti group undergo

before reaching their teenage years.

One of its first appearances in the pharmaceutical industry was in France. It was sold

under the name Lambarene and it contained 200 milligrams per tablet of the root extract, which,

at the same time, contained 5 milligrams of Ibogaine. It is important to highlight that some other

sources like the Multidisciplinary Association for Psychedelic Studies mentions the drug

containing up to 8 milligrams of Ibogaine. It was described as a physical and mental stimulant.

At this time, Ibogaine was not approved as medicine for the treatment of opioid addiction in

most western countries. Even today, it is difficult to find a western country that approved the use

of this drug as a detoxifying method.

“Although 1000s of patients suffering from opioid use disorder have been treated with

ibogaine, clinical efficacy data from the published case series are hardly comparable, and

the reports vary widely with regard to the assessment of outcome measures” (Frontiers,

2018).
 The most common side effects associated with the use of Ibogaine is nausea, vomiting

and ataxia of gait (presence of abnormal, uncoordinated movements), however it is normally

well tolerated according to some case studies and testimonies. Most people that have used

Ibogaine report to have perceptual abnormalities from four to up to six hours after being

administered the drug. Nevertheless, there were no ocular or visual effects reported after the dose

has been eliminated by the body. No complaints associated with ocular pain, dry eye, eye

discomfort or eye redness were noticed. Frontiers also reports: “Clinical laboratory test results

were in the normal range for white blood cell count, neurotrophic levels, sodium and potassium

levels. Liver function (ALT, AST, ALP and GGT) was unchanged from baseline measures

following ibogaine administration” (2018).

“Ibogaine subjects undergoing opioid detoxification reported significantly decreased drug

craving [...]” (Frontiers, 2018).

In this study, performed by Frontiers, four main factors were examined (listed below) and all of

them showed a decrease, allowing performers of the study to conclude that Ibogaine does help

“detoxify the body” of those who have an opioid addiction.

● Emotionality: Negative mood state

● Purposefulness: Desire or intent to use drug now

● Compulsivity: Lack of confidence in ability to quit using drugs

● Expectancy: Expected positive benefits of drug use

(Frontiers, 2018)

All physiological properties of Ibogaine are not yet recognized and it is likely that they

will not be fully recognized any time soon. However, some research done Jhonathan Freelander

(PhD) tells the medical community that Ibogaine is also beneficial for reducing opioid addiction

as it binds mildly to opioid receptors but the metabolic rate of its metabolite Noribogaine makes

it difficult for the body to become dependent of it due to its fast elimination of the body. Lack of

research regarding this topic is found (n.d.).

Freelander also mentions that Ibogaine has an effect over the serotonergic system by

altering and increasing serotonin levels which also impacts the withdrawal symptoms by

reducing them and decreasing the possibility of a relapse during sobriety.

3.1.3 History

Considered as a chronic and relapsing disorder, opioid addiction if left untreated causes

high morbidity and increases mortality rates. According to different sources, the opioid epidemic

has occurred in three main episodes or waves. In 1991, deaths involving opioids in direct and

indirect ways started to happen. At the same time, the prescription of opioid-based pain killers

began to rocket regarding treatment of pain. According to the National Capital Poison Center

(NCPC): “The increase in opioid prescriptions was influenced by reassurances given to

prescribers by pharmaceutical companies and medical societies claiming that the risk of

addiction to prescription opioids was very low” (n.d.)

The second wave was recorded around 2010 when there was an evident abuse of

opioid-based drugs and heroin which led to a rapid increase in deaths. Heroin abuse is considered

to be a direct consequence of the first opioid abuse wave. After the first wave, medical associated

personnel stopped prescribing opioid-based drugs with the same facility as before, making access

to these harder, which resulted in an increase of heroin abuse. People looked for heroin as

opioids became more scarce. Heroin does not only increase mortality rates, but, as it is normally

injected, it increases the risk of transmitting diseases such as: “HIV/AIDS, hepatitis B and C,

skin infections, bloodstream infections, and infections of the heart” (NCPC, n.d.)

Around 2013, the third wave started to look more evident. With the development of

synthetic opioids, like fentanyl, epidemiologists started to record an increased amount of deaths

related to this drug. However, the peak of deaths recorded in this wave was in 2016 with around

more than 20,000 deaths related to opioids, especially fentanyl. According to the NCPC, these

deaths are related directly with the illicitly manufactured fentanyl which is used to adulterate or

replace other abuse drugs, not related with the diverted medically fentanyl.

Efforts regarding an abuse in opioid prescription have been made, however, through

lobbying and different advocacy groups related with the pharmaceutical industry, all endeavors

have not reached their optimal level. Companies and medical associated personnel halt measures
to restrict opioid prescription by undermining the CDC guidelines and preventing prescribers and

pharmaceutical companies from being held accountable. According to the NCPC:

Researchers from two universities found that the opposition to the CDC guidelines was

significantly more common among organizations that received funding from opioid

manufacturers. An investigation by the US Senate Committee on Homeland Security and

Governmental Affairs detailed the financial ties that exist between opioid manufacturers,

advocacy groups, and medical professional societies. The report exposed patient

advocacy groups and professional societies spending millions of dollars to promote

messages and policies favoring the interests of the pharmaceutical industry (n.d.)

These are clear examples of how the pharmaceutical industry imposes difficulties in the

reduction of opioid abuse as they advocate for the increased prescription of these medications.

3.2 Present situations

3.2.1 Problematic situations

One initial problematic situation is the lack of research around the use of Ibogaine to treat

opioid addiction. But, not only that, there is lack of information regarding how to use Ibogaine,

its benefits and dangers, associated risks, fatalities caused by Ibogaine and background around

the plant.

This situation becomes problematic because from mere testimonies, more people that are

battling with addiction or closed-parties of an addict, want to try it out and hope to get its

detoxifying benefits. However, little information is truly available of whether Ibogaine is

responsible for stopping an abuse of psychotic substances. In addition, there is a ginormous lack

of information related to side effects and long term effects of Ibogaine use.
 Another problematic situation is the following: as Ibogaine is not approved in many

western countries, citizens of these nations need to travel to get their Ibogaine administered

somewhere else. This other location may not have the proper health facilities for the citizen and

this will now involve the international community in the problem. Local authorities may not

know what the accurate health information of the external citizen is or the person may not be in

reach of their residence and close relatives, which is why it is often not recommended to get any

medical procedures done in a country which is not your residence place.

The last problem that will be mentioned in this guide is that opioid associated mortality

continues to increase. Each year this epidemic becomes more isolated to the male gaze; in 2021

more than 70% of opioid related deaths were exclusive to the male gender. In 2021 the number

of deaths escalated to 80,441. These include prescription opioids (natural and semisynthetic

opioids) and illicit synthetic opioids (National Institute on Drug Abuse, 2023).

3.3 Previous resolutions

3.3.1 Nationwide solutions

As the United States is considered to be the epicenter of opioid abuse, the nationwide

solutions will be focused in this country.

Opioids were originally established to reduce pain before they began being abused. So,

the Center for Disease Control and Prevention (CDC) of the United States, issued comprehensive
guidelines in order to reduce associated risks and maximize the benefits of these drugs in their

task of pain moderation. These guidelines were very clear in the fact that the first step for pain

treatment will always be preferred if it is non-opioid based. Nevertheless, they issued that this

does not include chronic pain associated with: “cancer treatment, palliative care, and end-of-life

care” (NCPC, n.d.). The NCPC also followed with: “Opioid medications should only be added

after careful assessment of pain control and followed by regular evaluations of their continued

need” (n.d.)

3.3.2 International solutions

The United Nation Office on Drug and Crime has an ongoing strategy called: Opioid

strategy. This strategy is based in five main pillars:

1. Early warning and trend analysis

This pillar focuses on: “Generating evidence in support of effective policy decisions and

operational responses” (UNODC, n.d.) In other words, this means that UNODC in its first pillar

wants to produce facts to back up the effectiveness of political decisions and operational actions

which they plan on maintaining.

2. Rational prescribing and access to opioids for medical and scientific use

This pillar focuses on: “Promoting inter-agency cooperation in addressing the non-medical use of

opioids” (UNODC, n.d.) Paraphrasing this idea, what the Opioid Strategy wants to address is

fostering trans or mutual cooperation to tackle the use of opioids for purposes other than

medicine (illicit usage).

 3. Prevention and treatment programmes

The focus of this pillar is: “Strengthening and supporting prevention and treatment programmes

related to opioids” (UNODC, n.d.) Meaning that it desires to enhance and assist programs for

opioid prevention and treatment internationally.

4. International law enforcement operations to disrupt trafficking

The pillar states: “Enhancing operational activities to prevent the diversion and trafficking of

synthetic opioids” (UNODC, n.d.) In other words, this strategy wants to strengthen

organizational measures aimed at preventing the diversion and misuse of synthetic opioids. This

may be one of the most fundamental pillars as it is essential to prevent rather than just tackle the

current situation. Prevention will help the problem of not occuring once again.

5. Strengthening national and international counter narcotic capacity

This pillar focuses on: “Raising awareness, sharing best practices and promoting international

cooperation” (UNODC, n.d.). Which also means that the international community should

increase understanding, begin exchanging best practices, and encourage global cooperation. For

the committee this is one of the most relevant pillars as it focuses on benefits for the entire globe

and promotes the United Nations as an organization allowing all countries to benefit from this

problem or this difficult current situation.

3.4 Expectations for the debate

3.4.1 Types of solutions delegates should come up with and how should they

orient resolutions
 For this debate, the chair recommends delegates to focus on research, investigation and

regulation. It is important for governments to understand the problem and to understand what

they hold at hand before going ahead with any official resolutions or legislation. Nevertheless,

the chair emphasizes that it hopes that delegates have enough preparation to elaborate a solution

that includes short-term, medium-term and long-term characteristics and solutions for the

international community.

This is a topic that may not directly affect several countries present in the committee,

however, we as presidents, encourage all delegates to participate in the same way as similar

situations with other psychedelic substances may be useful for the debate.

Lastly, the chair recommends delegates to focus on the regulation around Ibogaine as a

treatment or detoxification method in opioid addiction rather than focusing on reducing the

opioid epidemic by itself or focusing on other substances that may also cause addiction for

citizens.

4. Topic B: Migration of money laundering by criminal groups through legal and

profitable business ventures

4.1 Theoretical framework

4.1.1 Important Terminology

Money laundering: Money1 laundering is the process through which criminals attempt to

disguise the illegal origins of their proceeds2 in order to be able to use them for their own

pleasure (United Nations Office on Drugs and Crime, n.d, para. 1).

Beneficiary: “A beneficiary is the person or entity that you legally designate to receive the

benefits from your financial products,” (Securian Financial, n.d, para. 4). In the context of

money laundering, the beneficiary is the person who’s getting the proceeds of the illegal

activities.

Structuring: The process through which individuals or a group conduct one or more

transactions, at one or more financial institutions, for the purpose of evading governmental

requirements to report the money which is coming in (Courtney J. Linn, 2010). This can be done

by multiple people, sometimes known as “Smurfs”.

The 3 stages of Money Laundering:

1. Placement: The first stage of money laundering, where criminals attempt to introduce

their dirty (illegal) proceeds (e.g. cash) into the financial system. Criminals may deposit

the cash into a bank account, buy assets such as real estate, or use it to purchase

expensive items such as jewelry or art. The goal of this stage is to make the money

appear legitimate and remove them from the source of the crime (Financial Crime

Academy, n.d).

1
In this committee, the word money will be considered as part of the parliamentary language given the topic at
hand. Therefore delegates will have permission to use it openly during debates.
2
“The amount of money received from a particular event or activity or when something is sold,” (Cambridge
Dictionary, 2023, para. 1).
 2. Layering: The second stage of money laundering. It involves creating complex layers of

financial transactions to conceal the true origin of the money, thus disguising the illegal

origins of the criminal’s money. This stage often involves transferring the money between

various accounts from different banks, buying and selling assets, and using offshore

accounts or shell companies to create a complicated web of transactions. The purpose of

all of this is to make it impossible for authorities to trace the illegal money back to its

original source. (Financial Crime Academy, n.d).

3. Integration: The third and final stage of money laundering. This is where the “dirty”

money is finally "clean" enough to be brought back into the legitimate economy. After

this reintroduction, it can be used by the beneficiary to purchase legitimate assets, such as

real estate or stocks, or luxury goods such as high-end properties, artwork, jewelry, and

high-end vehicles (Financial Crime Academy, n.d).

Trade-based money laundering (TBML): “Trade based money laundering (TBML) is the

process of moving illegal funds through the international trade system to legitimize them. TBML

practices can include the falsification of price, quantity, and quality of the imported or exported

goods,” (Comply Advantage, 2023, para. 2).

Front companies: “A front company is considered to be a fully functioning company with the

characteristics of a legitimate business, serving to disguise and obscure illicit financial activity,”

(AML-CFT, 2020, para. 1).

Shell Company: “A shell corporation is a corporation without active business operations or

significant assets. These types of corporations are not all necessarily illegal, but they are

sometimes used illegitimately, such as to disguise business ownership from law enforcement or

the public,” (Kenton, 2022, para. 1).

Know Your Customer (KYC): “KYC (Know Your Customer) is today a significant element in

the fight against financial crime and money laundering, and customer identification is the most

critical aspect as it is the first step to better perform in the other stages of the process,” (Thales

Group, n.d, para. 1).

AML: Anti-Money Laundering. A term frequently used to describe financial regulations aimed

at preventing Money-Laundering, hence the prefix “anti,” (Kenton, 2022).

CTF: Abbreviation for Counter-Terrorist Financing or Combating the Financing of Terrorism. A

term used to describe regulations and efforts which seek to stop the illegal funding of terrorist

groups. (Dow Jones, n.d)

CDD: Abbreviation for Customer Due Diligence. In the context of Money Laundering, it refers

to a bank’s duty to constantly assess the risk any given client has of laundering money and to

further closely monitor those clients which they determine to pose a higher risk to be laundering

money (Kenton, 2022).

Invoice: “A list of goods sent or services provided, with a statement of the sum due for these; a

bill,” (Oxford’s English dictionaries, 2023). In the context of the topic, an invoice is a more

sophisticated and large type of bill (factura in Spanish) which companies use. They are important

because they, “ensure (companies) get paid by their clients. Invoices serve as legally enforceable

agreements between a business and its clients, as they provide documentation of services

rendered and payment owed. Invoices also help businesses track their sales and manage their

finances,” (FreshBooks, 2019).

4.1.2 Introduction to the topic

Money laundering is a complex and ever-evolving phenomenon that poses a significant

challenge to law enforcement and financial regulators worldwide, as it is what allows criminal

organizations of all kinds to not only survive, but thrive and expand. As law enforcement

agencies and regulators become better at catching and preventing money laundering, criminals

likewise improve and adapt their strategies to avoid being caught and carry on with their illegal

activities. One such technique that has gone largely unnoticed from regulators and law

enforcement agencies is Trade-based Money Laundering (TBML)3. (Financial Action Task

Force/Groupe d'action financière, 2006).

As previously defined, TBML is the process through which criminals use legitimate trade

transactions to move money across borders and disguise the proceeds of illicit activities. In doing

so, they’re attempting to exploit the complexity of international trade to hide the illegal origin of

their heir funds. This type of money laundering can take many forms, including over-invoicing

3
From this point forward, in order to not repeat the phrase a lot of times, Trade-Based Money Laundering will be
referred as TBML, which is its official abbreviation.
or under-invoicing of goods, false trade descriptions, and the use of shell companies or offshore

accounts. It can be challenging to detect and investigate, as it often involves large volumes of

transactions across multiple jurisdictions. Criminals also use TBML to fund other unlawful

activities, such as drug trafficking, terrorism financing, or human trafficking. (Financial Action

Task Force/Groupe d'action financière, 2006).

It is therefore of the utmost importance for regulators at a national and international level

to catch up to criminal organizations and effectively counter combat TBML and reduce its

effectiveness, as doing so will prevent further crime. The following section of the guide will

directly cover some case studies which can help delegates’ better understand how TBML is

exactly conducted.

1.1.1.1. Case Studies

TBML is an umbrella term which refers to 4 general types of schemes which criminals

utilise to launder their money. The section below will explain each type- It is of the utmost

importance for delegates to read this section of the guide carefully, as understanding the

following 4 schemes will guide delegates in understanding the topic and allow them to best

debate the topics at hand.

1. Over- and under-invoicing of goods and services:

As is stated in its name, this scheme involves misrepresenting the price of a good or

service in the trade between exporter and importer in order to successfully transfer additional and

hidden value between the two parties. In the instances that a good/service is invoiced below its

fair market price, the importer receives value from the exporter, as it will be able to sell the

good/service on the open market for a huge profit. In other instances when the good/service is
invoiced above its fair market price, the exporter receives value from the importer, as they are

able to sell their goods/services at a higher price than they would’ve gotten on the open market

(Financial Action Task Force/Groupe d'action financière, 2006).

Figure 1: Case study on Over-and Under-Invoicing of Goods

Neither of the transactions explained in Figure 1 would have taken place unless the

exporter and importer were colluding4. It is thus important to note that this type of TBML only

takes place between two collaborating parties. This is because if Company A were to ship

widgets that are worth $2 each, but sell them for $1 each to Company B, it would lose $1 million

a shipment. This would only take place if both companies had some sort of hidden agreement. It

4
“cooperate in a secret or unlawful way in order to deceive or gain an advantage over others,” (Oxford’s English
dictionaries, 2023).
is thus important to note that this type of TBML only takes place between two collaborating

parties. (Financial Action Task Force/Groupe d'action financière, 2006).

Furthermore, in real life TBML cases, Company A and Company B can be and are

controlled by the same parent organization. In such cases the parent organization sets up a

foreign affiliate5 (Company A) in a jurisdiction6 with less rigorous money laundering controls

and then proceeds to sell the widgets to the affiliate at a “fair market” price. The affiliate receives

a legitimate commercial invoice and can then resell these received widgets at a significantly

higher or lower price to a final purchaser (Company B). In this way, the parent company, which

is where the money that needs to be laundered comes from, is able shift the location of its over-

or under invoiced goods to a jurisdiction where such trading discrepancies have less risk of being

detected by the country they wish to launder the money in (Financial Action Task Force/Groupe

d'action financière, 2006).

2. Multiple invoicing of goods and services:

The second type of the four general schemes used by launderers to execute TBML is the

Miñtiple invoicing of goods and services. This involves issuing various invoices for the same

international trade transaction, which means that a good/service is paid for multiple times (e.g

two different companies pay for the same batch of bananas). By doing this, the launderer is able

to legally justify multiple payments for the exact same shipment of goods/ delivery of services.

(Financial Action Task Force/Groupe d'action financière, 2006).

5
“officially attach or connect (a subsidiary group or a person) to an organization, “ (Oxford’s English dictionaries,
2023).
6
“the official power to make legal decisions and judgements,” (Oxford’s English dictionaries, 2023).
 Launderers often execute this type of TBML through various different financial

institutions7 to make these additional payments and therefore increase the level of complexity

surrounding the transactions, making it harder for law enforcement agencies to detect the

laundering. Even in the case that law enforcement is able to detect that there are multiple

payments for the same batch of goods/services, launders have many answers which are

legitimate and can help them avoid suspicion, such as a situation where the payment terms had to

be amended8 or payment of late fees. Another strength of this type of TBML is that there is no

need for the exporter and/or importer to manipulate the price of the goods/service on the

commercial invoice, further helping launderers stay under the radar. (Financial Action Task

Force/Groupe d'action financière, 2006).

3. Over- and under-shipments of goods and services

Money launderers can also manipulate trade via overstating or understating the quantity

of goods being shipped or services being provided. In extreme cases, exporters do not ship any

goods or provide any services at all, but just collude with importers to ensure that all shipping

and customs documents associated with this "phantom shipment” or “phantom service” are

processed as legitimate by the regulatory system. Banks and other financial institutions can

unknowingly play a role in the provision of trade financing for these phantom shipments, which

makes them appear all the more legitimate (Financial Action Task Force/Groupe d'action

financière, 2006).

7
“The major categories of financial institutions are central banks, retail and commercial banks, internet banks, credit
unions, savings and loan (S&L) associations, investment banks and companies, brokerage firms, insurance
companies, and mortgage companies.” (Horton, 2021, para. 7).
8
“make minor changes to (a text, piece of legislation, etc.) in order to make it fairer or more accurate, or to reflect
changing circumstances,” (Oxford’s English dictionaries, 2023).
 Figure 2: Case Study of Over-and Under.Shipment of Goods

4. Falsely described goods and services

Money launderers can manipulate the quality or type of a good or service. For example,

an exporter may ship a cheap good but sell it to the importer as a much more expensive item, or

vice versa, as the exporter can ship/provide an expensive good/service but invoice it as

inexpensive. This can generate value on the side of the exporter and value on the side of the

importer on the latter. Ultimately, a discrepancy is created between what appears on the shipping

and customs documents and what is actually shipped/provided. This is especially hard to detect

when it’s a falsified description of a service that’s being provided, as assessing the fair market

value of said services is much harder and thus catching discrepancies proves to be more

complicated (Financial Action Task Force/Groupe d'action financière, 2006).

Figure 3: Case Study of Falsely described goods and services

4.1.3 History

Money Laundering is a crime that’s almost as old as organized society itself, as it’s

intrinsically linked with one of the most dominant aspects of human nature: greed. One of the

first recorded instances of it taking place dates back to the times of the Shang and Zhou dynasties

in China in the later and earlies 1000s B.C. According to historian Sterling Seagrave (1995),

wealthy merchants started to launder their profits because regional governments had banned

many forms of commercial trading, and thus their income was considered illegal. The merchants

were thus forced to come up with ingenious ways to keep their wealth safe from the government.

They started to use techniques like converting their profits into easy to move assets or by moving
their cash outside the jurisdiction of their rulers to invest it in their business. These are

techniques which are still used to this day (Financial Crime Academy, n.d).

As society evolved and its financial systems grew more sophisticated, so did money

laundering. However, the term itself which we now use to refer to the practice of disguising the

illegal origins of money comes from the era of Al Capone, perhaps the most famous gangster and

mafioso in all of US history. The term started to be used due to the fact that he set up

laundromats9 all across the city of Chicago (where he operated from) in order to disguise the fact

that his money was coming from the illegal sale of alcohol, and thus he was quite literally

“laundering money,” (KYC Chain, 2019).

It wasn’t until the 80s when the war against Drugs and against the Mafia intensified that

money laundering started to be thought of as a crime. In 1986, it became a federal crime in the

United States to launder money, and many other countries followed by making it illegal too.

Additionally, a further step was taken when in 1988, the United Nations implemented the Vienna

Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. Although the

convention was mainly written to combat drug trafficking, it explicitly stated that laundering the

proceeds of drug money was illegal, which made it the first time the international community

came together and agreed on a definition about what money laundering was (KYC Chain, 2019).

One year after the Vienna Convention, the Financial Action Task Force (FATF) was

created at the G7 summit. The purpose of the FATF was to analyze money laundering trends and

9
“an establishment with coin-operated washing machines and dryers for public use; a launderette,” (Oxford’s
English dictionaries, 2023).
evaluate actions that governments, both national and international, had taken to prevent it and

their respective efficiency (KYC Chain, 2019).

4.2 Present situations

4.2.1 Problematic situations

According to a study conducted by a high-level panel from the United Nations, Global

Money Laundering moves approximately $1.6 trillion dollars annually, or 2.7% of the Global

GDP in 2020 (United Nations Department of Economic and Social Affairs, 2020). Such statistics

highlight the impact global Money Laundering has around the world.

The aforementioned statistics only become all the more problematic when one takes into

consideration that the majority of the money being laundered is being used to fund violent and

illicit activities by criminal groups around the world. These range from small street gangs to drug

cartels and belligerent groups around the world.

4.3 Previous resolutions

4.3.1 Nationwide solutions

Money laundering is a crime that is present on all of the nations of earth one way or

another, forcing each nation to therefore come up with solutions to tackle the problem. Below are

listed some examples, both recent and past, about nation-wide solutions implemented to mitigate

the issue.

a. The Economic Crime (Transparency and Enforcement) Act 2022 - United Kingdom
 After the Criminal Finances Act of 2017, the United Kingdom had drastically improved

its ability to clamp down on Money Laundering, as the laws introduced in the act would help,

“stamp out anonymously-owned companies and to impose tougher anti money laundering

regulations on the agencies that create them,” (Bowers, Mukami, and Haddou, 2022, para. 4).

However, the laws had left out an obscure type of British company known as English Limited

Partnerships (ELPs), as they did not require the ELPs to disclose who was their real or

significant owner to the authorities. This meant that if someone owned an ELP, he/she could use

it to legally receive the proceeds of the money they had laundered, and authorities would not

know.

The Economic Crime (Transparency and Enforcement) Act 2022 sought to change this by

implementing through three key changes:

1. “The UK company registry, Companies House, will be required to operate a “Register of

Overseas Entities” that will include beneficial ownership information for foreign entities

that are registered proprietors (i.e., appear as such on the title register of the property) of

certain interests in land in the UK.1

2. The Unexplained Wealth Order (UWO) regime, first implemented by the Criminal

Finances Act 2017, will be expanded to provide intelligence and enforcement agencies

with additional avenues to obtaining information about property ownership.

3. The UK sanctions regime will be amended to make it easier for the Office of Financial

Sanctions Implementation to impose monetary penalties for breaches of sanctions

regulations,” (Anderson, Norman, Robertson, & Williamson, 2022, para. 2).

These changes were fast-tracked to target the money of Russian oligarchs following the outbreak

of the war in Ukraine in February of 2022, as London in particular had become a center for

wealthy Russian oligarchs back in the early 2000s.

b. Money Laundering Control Act (1986) - The United States of America

In the 1980s, the United States had a surge in organized crime, as the Italian Mafia was at

its peak, regularly committing crimes such as drug trafficking, extortion, labor racketeering, and

many other illicit activities. These all generated significant amounts of cash for them which they

needed to launder to make appear legitimate. At the time, there was no federal law that explicitly

made money laundering a crime, and thus law enforcement agencies struggled to prosecute

money launderers, making it hard for them to go after the mafia. Therefore congress was forced

to act, leading to The Money Laundering Control Act of 1986 was introduced to address this

problem. The act had 4 main points:

- It established money laundering as a federal crime

- It prohibited structuring transactions to evade CTR10 filings

- Introduced civil and criminal punishments for violating the BSA11

- It helped direct banks to establish and maintain procedures to ensure and monitor

compliance with the reporting and recordkeeping requirements of the BSA

It was with the help of this Act that Federal Agents were finally able to take down the mafia.

10
“A currency transaction report (CTR) is a bank form used in the United States to help prevent money laundering.
This form must be filled out by a bank representative whenever a customer attempts a currency transaction of more
than $10,000,” (Hayes, 2021, para. 1).
11
Bank Secrecy Act of 1970.
 4.3.2 International solutions

Following WW2, the Global Economy became increasingly interconnected, and trade

between nations flourished. This was especially true of nations that formed free-trade

agreements. All of this has inevitably linked countries together, therefore necessitating the need

of global actors to cooperate amongst each other to combat money laundering. Below are listed

examples of solutions that the international community has come up with:

a. Financial Action Task Force

“Created by the G-7 in 1989 in response to a growing concern about money laundering,

the FATF's mission is to monitor members' progress in implementing necessary measures, review

money laundering and terrorist financing techniques and counter-measures, and promote the

adoption and implementation of appropriate measures globally.” (U.S Department of Treasury,

n.d, para.1). The FATF also gives additional guidance and recommendations to countries around

the world regarding their AML and CTF initiatives. It has helped create a global standard on

fighting Money Laundering.

b. United Nations Convention Against Transnational Organized Crime (2000)

Adopted by the General Assembly on November 15 of 2000, the United Nations

Convention Against Transnational Organized Crime was a huge step in the global fight against

organized crime. The states that signed it not only acknowledged the importance of combating

international organized crime, but also the importance of global cooperation in combating it.

Furthermore, states that ratify the convention have committed to take measures to combat it such

as the creation of domestic criminal offenses for crimes such as participation in an organized
criminal group, money laundering, corruption and obstruction of justice (United Nations Office

on Drugs and Crime, n.d).

4.4 Expectations for the debate

4.4.1 Types of solutions delegates should come up with and how should they

orient resolutions

The chair expects delegates to focus on combating Money Laundering through the lens of

reducing TBML by creating solutions that create a Global Standard for the international

community to follow. It is not the expectation of the chair for delegates to go into the legal

details of Money Laundering itself and seek to tackle these issues as if they were lawyers, but

rather to lay down the foundation for international cooperation in combating the issue.

6. Useful questions for the delegate

Before delving into the useful questions, it is important to note for delegates that these are

the questions that guide them in understanding their delegation’s position regarding the topic,

while QARMAS are the questions that guide them in finding possible solutions.

Topic A

1. Has your country suffered any effects of the international opioid crisis?

2. Does your country support, directly or indirectly, countries who suffer from

addiction epidemics?

3. What is the most complicated problem your country suffers related to

psychoactive substances?

4. Is your country considered liberal or conservative regarding

 Topic B

1. What is your country's position regarding Money Laundering? Does it recognize it as a

big or a minor problem?

2. What legislation does your country have to combat Money Laundering?

3. How big of a problem is organized crime in your delegation?

7. QARMAS

Before listing the QARMAS, it is important to mention that all delegates must include the

answers as part of their portfolio.

Topic A

1. Is your country agriculturally able to grow Ibogaine?

2. Is your country willing to develop policies to legalize psychoactive substances?

3. Who in your delegation is in charge of monitoring substance abuse cases? What is their

main objective?

Topic B

1. Is your country part of an international organization that combats Money Laundering? If

so, what organization? What is their level of involvement?

2. Is your country a signatory and a ratifying country on an international convention/treaty

which fights against Money Laundering? If so, what convention?

3. What type of legislation is present in your country to combat money laundering?

4. Has there been any big scandal of money laundering involving your country?

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