Risky business: the use of INTERPOL by states in politically motivated cases against company executives

August 2019 | EXPERT BRIEFING | BOARDROOM INTELLIGENCE

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The idea of an International Criminal Police Organisation (INTERPOL) began life in 1914, with a discussion between lawyers and police from 24 countries. Officially established in 1923 and headquartered in France, INTERPOL now has 194 member countries. The organisation has been designed to enable police at each National Central Bureau (NCB) to share and access data on individuals, including those accused of serious criminal offences.

According to Article 2 of its Constitution, INTERPOL’s aims are: (i) “To ensure and promote the widest possible mutual assistance between all criminal police authorities within the limits of the laws existing in the different countries and in the spirit of the ‘Universal Declaration of Human Rights’”; and (ii) “To establish and develop all institutions likely to contribute effectively to the prevention and suppression of ordinary law crimes”.

Powers and the risk of abuse

In order to achieve its aims, INTERPOL has certain powers at its disposal. It controls several databases against which member countries can check information on people, ranging from passports and vehicles, stolen works of art, travel documents and missing persons, as well as aiding in the identification and tracking of illicit arms and the disruption of their supply. It can also provide specialised teams to assist member countries with law enforcement, and it can publish Notices on its systems – international requests for cooperation or alerts allowing police in member countries to share critical crime-related information.

The issuance of a Red Notice, or the retention of data on INTERPOL’s systems in the form of a diffusion – a process by which member countries may request cooperation from each other, circulated directly by the requesting state’s NCB – can have serious consequences for individuals and for the businesses they operate or are employed by; accordingly, the system must operate with a high degree of integrity in order for it to be reliable. Otherwise, there is a heightened risk of abuse where member states that seek the issue of these Notices do not act in good faith.

Although Article 3 of INTERPOL’s Constitution states that, “[i]t is strictly forbidden for the Organization to undertake any intervention or activities of a political, military, religious or racial character”, serious questions over the integrity of the system have been raised, owing to the fact that certain member states use the Notice system for political purposes. In this context, ‘political’ encompasses circumstances where baseless investigations are commenced or spurious criminal charges against founders, directors and employees of national and multinational organisations are laid, in order to achieve an unlawful or improper aim, with both predictable and unpredictable results.

Ultimately, INTERPOL operates outside of any judicial process or scrutiny. Decisions of its General Secretariat on whether to allow the existence of data on its system are made behind closed doors and it is immune from suit in any domestic tribunal. This means that data held on its system can have far-reaching consequences where an individual is subject to abusive and unlawful action by the authorities of a state acting in pursuit of improper purposes.

It should also be borne in mind that Red Notices are not the only form of information that INTERPOL may hold or share with member countries. There are different coloured Notices for warnings and intelligence, additional information and modus operandi, among other things. These must comply with INTERPOL’s Constitution and its Rules on the Processing of Data. There is also provision for diffusions. Diffusions do not have to meet the same criteria as those required for a Red Notice, and given their nature as a bilateral or multilateral form of messaging between member states, they may have a wider-reaching effect, especially as they are easier to place on the system, without the same level of scrutiny that is required to be applied to the placing of a Red Notice.

Questions over the integrity of INTERPOL and its processes were brought to the fore in 2018 when the organisation’s presidency was up for grabs, and there was some well-founded speculation that the Russian nominee, Alexander Prokopchuk, would accede to the position. Prior to the election of the South Korean nominee, Kim Jong-yang, there had been calls for the UK to ‘rethink’ its involvement in INTERPOL, should Mr Prokopchuk take the role, as Russia’s abuses of the Notice system have been widespread and egregious over a number of years.

A changing landscape

It is not only Russia that abuses the system, however. Many countries where the rule of law is lacking are also culpable, and it is clear that in an increasingly globalised world, where business is becoming ever more sophisticated and borders apparently more permeable, companies and individuals may be at risk of malign state intervention for political purposes.

In an unstable political and economic climate, it is easy to peg these hazards as low down the priority list, but in circumstances where increasingly authoritarian regimes are coming to power in various corners of the world, executives and risk managers would be wise to turn their minds to the potential perils that come with operating in high-risk jurisdictions.

It is no secret that the Russian state is acquisitive, and that bad actors will seek to use their political power and connections to falsely accuse, reputationally ruin and strip assets from targeted persons. One of the most well-known examples of this is the case of William Browder and Hermitage Capital Management Ltd.

There are a number of other examples, however, including the corporate raid of Yukos and the targeting of Mikhail Khodorkovsky by Russia, and the use of Red Notices as a means of private debt collection by Middle Eastern countries. The pursuit through INTERPOL of those alleged to have been involved with the attempted 2016 coup in Turkey has been notorious.

Further cases illustrate different, more subtle means of manipulation of the system, where, for instance, individual politicians’ personal interests are in conflict with that of a particular business. If that politician should wield any influence over police or prosecutors, he may prevail upon them to commence a criminal investigation into persons involved with a company. This might be done simply to make doing business difficult, or to steer it in a particular direction, or it may be held as a threat over the company, potentially as a tactic in litigation or arbitration proceedings. Often, these cases emanate from a private civil dispute, with high-value commercial interests at stake.

Affected companies are frequently involved in the energy and extractive industries; they are attractive as the object of corporate raids by the state. Additionally, it is often more difficult to prove political motivation where the allegation is related to financial crime, particularly if those who pursue the individual are well connected and protected by the political administration.

For this reason, businesses need to be alert to the dangers of abuses of INTERPOL’s systems prior to any issues arising.

Real consequences for business

The obvious consequences of the placement of a Red Notice on INTERPOL’s systems are that the wanted person, who might be integral to the business, cannot travel, due to the risk of arrest and extradition to the requesting country. These are serious risks to personal liberty and freedom of movement, and can have a debilitating effect on an individual. This also means, of course, that business development and deals may not be capable of being done, if they depend upon a personal presence.

Other, less frequently considered consequences also accrue, particularly where a Red Notice is published on INTERPOL’s online ‘Wanted’ list. Notably, due diligence platforms used by financial institutions and other service providers to conduct know your customer (KYC) checks on new and existing clients obtain information from INTERPOL, meaning that decisions about onboarding and the continued provision of services can be affected. Banks and other financial institutions are increasingly risk averse and will suspend and freeze business and personal accounts in a ‘shoot first, ask questions later’ fashion. The inability of a business to access funds or banking services in their entirety is not a minor consideration. This is aside from the significant reputational risk that may result for the individual and their business, from the existence of this data on INTERPOL’s systems, whether published or otherwise.

Conclusion

Fundamentally, businesses operating across borders, or nationally within riskier jurisdictions, must be aware of the potential for misuse and abuse of INTERPOL’s systems for political ends. There have been recent, limited, reforms of the system, however there is a need for continued vigilance, particularly regarding certain member countries. Further reform is essential.

In the meantime, should an individual find themselves the target of such abuse, there are steps which can be taken. Where there is a real possibility of a politically motivated Red Notice being requested, pre-emptive representations may be made, in order to prevent such a Notice being allowed in the first instance. Where a Notice or other data is already on the system, its existence may be challenged, which must be done with INTERPOL directly. Any such representations must be well-considered and well-supported in order to be effective. This is an important consideration when INTERPOL is naturally inclined to take at face value the information provided and assertions made by its member states, particularly if they are a party that provides significant financial support to the organisation.

Jasvinder Nakhwal is a partner and Kerri McGuigan is an associate at Peters & Peters Solicitors LLP. Ms Nakhwal can be contacted on +44 (0)20 7822 7753 or by email: jnakhwal@petersandpeters.com. Ms McGuigan can be contacted on +44 (0)20 7822 7725 or by email: kmcguigan@petersandpeters.com.

Jasvinder Nakhwal and Kerri McGuigan

Peters & Peters Solicitors LLP