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Slowly but steadily, Europe is emerging from an energy crisis that threatened to stymie the post-pandemic recovery and plunge its economy into recession once more. After Russia's weaponisation of energy supplies left European governments scrambling to secure alternative fossil fuels for the better part of 2022, the energy outlook today has defied the most pessimistic expectations: supplies are ensured, storages are adequately filled,[1] and energy prices are returning to pre-crisis levels. Consequently, the focus in Brussels has shifted from navigating the crisis to ensuring that the transition to renewables, as enshrined in the European Green Deal, does not jeopardise European energy security once more.
Yet the roadmap for doing so is complex. Drawing on the lessons learnt during the crisis, European energy security arguably rests on two pillars: secure supply chains and efficient energy use. Only the combination of the two can successfully emancipate Europe from energy dependency, and bolster the often-touted resilience of the European economy.Pillar one: Securing autonomous supplies
The International Energy Agency defines energy security as "the uninterrupted availability of energy sources at an affordable price".[2] It follows that the first milestone on the road to European energy security is the availability of an uninterrupted supply of energy. This requires both an independent generation capability and to satisfy the remaining demand through imports while remaining committed to a political vision that seeks, in the long run, to phase out the latter in favour of the former.
In May 2022, in response to Russia's invasion of Ukraine, the European Commission presented REPowerEU, its plan to wean the Union off its dependence on Russian fossil fuels by frontloading the roll-out of renewable power generation capacity. The plan targets a 42,5 per cent renewable energy share by 2030; the measures proposed to this end include investment worth 300 billion euro and proposals for fast-tracking the permitting processes for renewables.[3] Despite reservations on the EU's capacity to meet the 2030 target,[4] REPowerEU is undeniably a step in the right direction as regards energy security, since it will enable the Union to source a sizeable part of its energy requirements in house by the end of the decade.
Yet in its execution the Union must avoid re-creating conditions analogous to those that allowed Russia to engineer last year's energy crisis.[5] The roll-out and sustainment of green energy generation capacity requires access to a host of minerals and rare earth elements (REEs). Today, European REE demand relies on third-country imports, and, given Europe's absence from the upstream part of most REE value chains,[6] this will remain the case for the foreseeable future. Moreover, China has positioned itself as "the kingpin of clean energy supply chains" thanks to a provident industrial policy of targeted, state-backed investment and, since 2010, increasing export restrictions.[7] Given the centrality that REE imports will have in the green transition, the risk of replacing one strategic dependency (Russian fossil fuels) with another (Chinese REEs) is therefore a real one.
Against this backdrop, it is imperative for the Union to develop a strategy to initially navigate, but ultimately mitigate these dependencies. The Critical Raw Materials Act is a welcome start, in that it sets a maximum import quota of 65 per cent from a single third country for the Union's annual consumption of any strategic raw material. However, the 65 per cent ceiling should not be considered as an end goal; on the contrary, it should be continuously revised downward, leveraging the firepower of the Global Gateway to challenge China's quasi-monopolistic position in the REE value chains. Doing so requires protracted efforts to diversify the European supply chain, and ultimately engagement with China and the United States to create the conditions for open global supply chains. This outcome ought to be a target of the Union's international development policy in the years to come, as it will ensure a viable transition to autonomous energy generation and allow for its sustainment over time.
With this target in sight, policymakers must nonetheless take into account that, in a context where all 27 member states are net importers of energy,[8] the transition to pan-European self-sufficiency in energy generation will be no rapid feat. Consequently, member states will have to backfill through imports of oil and gas, which, along with nuclear generation capacity, are likely to account for a substantial part of European energy consumption for the foreseeable future. If energy security is to be sustained throughout the transition, it is then crucial for member states to maintain the hard-earned diversification in the sourcing of fossil fuel imports. EU-wide coordination on this aspect can lead to many low-hanging fruits – for example, consistently pursuing the joint purchasing of gas via the recently established EU energy platform[9] would allow the Union to leverage its market weight as a major consumer to drive down gas prices. Ultimately, however, real energy security can only be achieved by reducing the EU's energy dependency rate to a level that would allow for the rapid substitution of imports with domestic energy production, should any economic or geopolitical contingencies arise. This "de-risking" approach should underpin the political vision that guides all EU energy policy choices in the upcoming years.Pillar two: Reducing demand by ensuring energy efficiency
If energy security is to be achieved without jeopardising the 2050 climate targets, all these measures to ensure supply should be complemented by policies aiming to reduce demand for energy and raw materials by ensuring their efficient use. Doing so requires a multi-faceted effort across several policy areas, which builds on the lessons learnt in 2022. Fixes to the electricity market to reduce consumption at the margin,[10] by, for example, better linking wholesale and retail prices, should be the tip of the iceberg; in the long run, the Union requires a comprehensive industrial plan[11] that treats energy efficiency as a tenet of sustainable development. Recycling goals for raw materials should be constantly but realistically revised upwards, and investment both within and outside the EU in transition-enabling sectors, such as those identified in the Strategic Technologies for Europe Platform (STEP), should be geared to defined energy efficiency goals. Finally, the Union can do more to address the skill shortage that besets green industries today, by, for instance, better aligning its environmental policies with skill development strategies at the sectoral level. The American Inflation Reduction Act – which compels firms that wish to benefit from tax credits to allocate at least 15 per cent of the new labour hours required for the projects to newly-hired apprentices – offers interesting lessons in this respect.
Strategies to foster energy efficiency at the industrial level should not spare ambition: the crisis has shown industry to be more prone to substitution of energy sources than it would admit itself.[12] Financing these efforts while maintaining a level playing field will prove difficult, as the sustainable finance strategy and the European Investment Bank can only go that far before distortive state aid will need to kick it. Yet if the Union wants to attain energy security and meet the Paris climate commitments enshrined in its own legislation, it will need to double down on demand reduction first of all.An ambitious but realistic approach
Achieving European energy security in the era of decarbonisation will revolve around two pillars: pursuing an autonomous energy generation capacity, backstopped by imports, and fostering the efficient use of resources. To reach these targets, an ambitious but realistic approach to policymaking is required. Ambitious, in that member states should not hesitate to make use of the economic firepower and R&D capacity at their disposal to steer private industry towards well-defined but demanding sustainability targets. Realistic, in that it will have to take into account that the pool of resources that enable the transition is finite, and thus that both China and the United States will have agency in shaping Europe's ability to access the critical raw materials and related processing capacities that underpin the transition. A targeted, priority-based approach to investment should therefore be pursued; particular emphasis must be put on contingency planning, both at the European and member state level. Ultimately, pursuing ambitious energy generation and efficiency goals with a realistic approach is the shortest path to attain European energy security today, and thereby ensure that Europe doesn't repeat tomorrow the mistakes of yesterday.Tommaso Luisari is a young professional currently working as a consultant in Brussels after graduating from Bocconi University in April 2023.
This is a winning article (3rd place) submitted to the 2023 edition of the IAI Prize contest.[1] European Commission DG Energy, EU Reaches 90% Gas Storage Target Ahead of Winter, 18 August 2023, https://energy.ec.europa.eu/node/5508_en.[2] International Energy Agency (IEA) website: Emergency Response and Energy Security, last updated 3 August 2023, https://www.iea.org/about/emergency-response-and-energy-security.[3] See the 2023 Flagship Technical Support Project "Accelerating Permitting for Renewable Energy" in the European Commission DG Reform website: https://reform-support.ec.europa.eu/node/437_en.[4] IEA, "Is the European Union on Track to Meet Its REPowerEU Goals?", in Renewables 2022. Analysis and Forecasts to 2027, Paris, IEA, 2022 (revised version January 2023), p. 117-128, https://www.iea.org/reports/is-the-european-union-on-track-to-meet-its-repowereu-goals. The IEA concludes that "in none of [our forecasts] are [the increase] levels consistent with the [targets in the] REPowerEU plan".[5] Jillian Ambrose, "Russia Is Orchestrating Europe's Gas Crisis, Says Energy Agency Boss", in The Guardian, 12 January 2022, https://www.theguardian.com/p/kadjk. For more details on how Russia engineered Europe's gas crisis, see Dmitri Alperovitch with Sergey Vakulenko, "How Russia Engineered the Perfect Gas Crisis" (podcast), in Geopolitics Decanted, episode 17 (29 July 2022), https://podcast.silverado.org/episodes/analysis-of-the-war-in-ukraine-july-28-2022-IzPM5ON9.[6] Jane Nakano, "The Geopolitics of Critical Minerals Supply Chains", in CSIS Reports, March 2021, p. 15, https://www.csis.org/node/60182.[7] IEA, The Role of Critical Minerals in Clean Energy Transitions, Paris, IEA, May 2021 (revised version March 2022), p. 162, https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions; Ibid., p. 4-6.[8] Eurostat, "Energy Imports and Dependency", in Shedding Light on Energy in the EU – 2023 Interactive Edition, March 2023, https://ec.europa.eu/eurostat/web/interactive-publications/energy-2023#energy-imports-dependency.[9] See the EU Energy Platform webpage for more details: https://energy.ec.europa.eu/node/5060_en.[10] Michael Pollitt et al., Recommendations for a Future-Proof Electricity Market Design, Brussels, Centre on Regulation in Europe, December 2022, https://cerre.eu/?p=10904.[11] Pier Paolo Raimondi, "Walking out of the Woods: EU Industrial Policy between the Energy Crisis and Decarbonisation", in IAI Commentaries, No. 22|64 (December 2022), https://www.iai.it/en/node/16355.[12] Benjamin Moll, Moritz Schularick and Georg Zachmann, "Not Even a Recession: The Great German Gas Debate in Retrospect", in ECONtribute Policy Briefs, No. 48 (May 2023), http://hdl.handle.net/10419/273549.

Zambia faces its toughest economic challenges in at least a decade. The economy has come under strain in 2015 as external headwinds and domestic pressures have intensified. The main domestic risks are threefold. Firstly, that the power crisis will worsen. Secondly, a deterioration of confidence in the economy, leading to further weakening of the currency and increased levels of inflation. Lastly, a bad harvest that serves to increase food prices and reduce rural and agricultural incomes, with the greatest impact falling on the poorest households. Commodity-exporting countries' policy makers face increasing challenges across the globe. Zambia is no exception and must grapple with multiple challenges as the economy slows down. Strengthening the fiscal position and restoring fiscal buffers are necessary to increase confidence in the economy, reduce the need for costly borrowing, and build resilience against further exogenous shocks. Economic progress since 2000, driven by mining production and services, has substantially increased the demand for electricity in Zambia. Key to note is that an increase in tariffs to cost-reflective levels is necessary but not sufficient to increase private investment in electricity generation in Zambia. The new generation capacity and emergency measures for 2016 will help in mitigating the impact of the power crisis in the coming year, but global experience shows there is no substitute for effective planning. Particular efforts are needed to improve sector planning and the procurement processes for large power projects.

It speaks volumes that the death of Henry Kissinger, announced on Wednesday, drew major news obituaries that rivaled those of late American presidents' in length and depth. The news was met with equal parts of vitriol and paeans across social media, the former reflected in words like "war criminal" and "monster," the latter, "genius" and "master."His intellectually-driven, hard-nosed statecraft and strategy has long been embraced by realists who appreciate Kissinger's rejection of ideological doctrine in favor of interest-driven realpolitik. They credit him with détente and managing the Soviet threat in the Cold War. His critics say his approach was responsible for government-led massacres in developing nations and Washington's scorched earth policies in Indochina. Humanity suffered while the "great game" was played, no matter how well, from the Nixon White House and in later presidencies (12 total) for which Kissinger advised.But was his impact on U.S. foreign policy ultimately positive or negative? We asked a wide range of historians, former diplomats, journalists and scholars to pick one and defend it.Andrew Bacevich, George Beebe, Tom Blanton, Michael Desch, Anton Fedyashin, Chas Freeman, John Allen Gay, David Hendrickson, Robert Hunter, Anatol Lieven, Stephen Miles, Tim Shorrock, Monica Duffy Toft, Stephen WaltAndrew Bacevich, historian and co-founder of the Quincy InstituteI met Kissinger just once, at a small gathering in New York back in the 1990s. When the event adjourned, he walked over to where I was sitting and spoke to me. "Did you serve in the military?" "Yes," I said. "In Vietnam?" "Yes." His tone filled with sadness, he said: "We really wanted to win that one."I did not reply but as he walked away, I thought: What an accomplished liar.George Beebe, Director of Grand Strategy, Quincy InstituteHenry Kissinger's impact on American foreign policy, although controversial, was on balance overwhelmingly positive. As he entered office in 1968, America was overextended abroad and beset by domestic political conflict. An increasingly powerful Soviet Union threatened to achieve superiority over America's nuclear and conventional arsenals. The United States needed to extract itself from Vietnam and focus on domestic healing, yet any retreat into isolationism would allow Moscow a free hand to intimidate Western Europe and spread communism through the post-colonial world. Kissinger's answer to this problem, conceived in partnership with President Nixon, was a masterwork of diplomatic realism. Seeing an opportunity to exploit tensions between Moscow and Beijing, he orchestrated a surprise opening to Maoist China that reshaped the international order, counterbalancing Soviet power and complicating the Kremlin's strategic challenge. In parallel, the United States pursued détente with Moscow, producing a landmark set of trade, arms control, human rights, and confidence-building arrangements that helped to constrain the arms race and make the Cold War more manageable and predictable.By comparison to 1968, the scale of the problems we face today seems more daunting. The Cold War architecture of arms control and security arrangements is in tatters. Our middle class is more distrustful and disaffected, our international reputation more damaged, and our ability to manage the challenges of a peer Chinese rival more limited. A statesman with Kissinger's strategic acumen and diplomatic skill is very much needed. Tom Blanton, Director, National Security Archive, George Washington UniversityThe declassified legacy of Henry Kissinger undermines the triumphant narrative he labored so hard to build, even for his successes. The opening to China, for example, turns out to be Mao's idea with Nixon's receptiveness, initially dissed by Kissinger. His shuttle diplomacy in the Middle East did reduce violence but it took Anwar Sadat and then Jimmy Carter to make the peace that Kissinger failed to accomplish. The 1973 Vietnam settlement was actually available in 1969, but Kissinger mistakenly believed he could do better by going through Moscow or Beijing. Meanwhile, Kissinger's callousness about the human cost runs through all the documents. Millions of Bangladeshis murdered by Pakistan's genocide while Kissinger stifled dissent in the State Department. A million Vietnamese and 20,000 Americans who died for Kissinger's "decent interval." Some 30,000 Argentines disappeared by the junta with Kissinger's green light. Thousands of Chileans killed by Pinochet while Kissinger joked about human rights. Untold numbers of Cambodians dead under Kissinger's secret bombing.Adding insult to all these injuries, Kissinger cashed in over the past 45 years through sustained influence peddling and self-promotion, paying no price for repeated bad judgments like opposing the Reagan-Gorbachev arms cuts, and supporting the 2003 Iraq invasion. A dark legacy indeed.Michael Desch, Professor of International Relations at the University of Notre Dame Almost all of the obituaries for Henry Kissinger characterize him as the quintessential realist, harkening back to a bygone era of European great power politics in which statesmen played the 19th century version of the board game Risk otherwise known as the balance of power. Kissinger seemed straight out of central casting for this role with his deep, sonorous voice and perpetual Mittel-Europa accent. All that was missing was a monocle and a Pickelhaube. But in reality, Kissinger was at best an occasional realist. His best scholarly book — "A World Restored: Metternich, Castlereagh and the Problems of Peace 1812-22" — came out in 1957 and was more of a work of history than an articulation of a larger realpolitik theory of global politics in which power is used, and more importantly not used, to advance a country's national interest.And while his (and Richard Nixon's) opening to the People's Republic of China in 1972 remains a masterstroke of balance of power politics in action, at the drop of an egg-roll dividing the heretofore seemingly monolithic Communist Bloc, he was more often an inconstant realist.At times Kissinger embraced a crude might-makes-right approach (think of the Athenians bullying of the Melians in Book V of Thucydides) epitomized by the escalation to deescalate the war in Vietnam by invading Cambodia and the meddling in the fractious politics of Third World countries like Chile, seemingly to no other end than that's what great powers do. More recently, he's worked to remain the indispensable statesman through an embarrassingly obsequious pattern of making himself indispensable to nearly every subsequent president, whether or not they were really interested in sitting at the knee of the master realpolitiker. His hedged endorsement of George W. Bush's disastrous Iraq war is exhibit A on this score.Kissinger kept himself in the limelight for much of his career but not as a consistent voice of realism in foreign policy.Anton Fedyashin, associate professor of history, American UniversityIn his long and distinguished career, Henry Kissinger made many decisions that history may judge harshly, but oversimplifying and exaggerating complex geopolitical issues was not one of them. With their instinctive aversion to the trap of conceptual binarism, Kissinger and Nixon applied their flexible realism to China and the USSR in 1972. Abandoning the assumption that all communists were evil forced Beijing and Moscow to outbid each other for U.S. favors. Treating the USSR as a post-revolutionary state that put national interests above ideology, Nixon and Kissinger decided to bring the Soviets into the American-managed world order while letting them keep their hegemony in Eastern Europe.In Kissinger's realist version of containment, statesmanship was judged by the management of ambiguities, not absolutes. As Kissinger put it in an interview with The Economist earlier this year, "The genius of the Westphalian system and the reason it spread across the world was that its provisions were procedural, not substantive." Kissinger's realist wisdom would serve American leaders well as they navigate the rough waters of transitioning to a multipolar world order. The era of great power balancing is back, and non-binarist realism can help Washington manage hegemonic decline rather than catalyzing it.Ambassador Chas Freeman, visiting scholar at Brown University's Watson Institute for International and Public AffairsKissinger embodied a global and strategic view and because it was global, it often offended specialists in regional affairs. Because it was strategic, he often made tactical sacrifices for strategic gain. And the tactical sacrifices that he made were often rather ugly at the regional or local level. The classic example of that is the refusal to intervene in the war in Bangladesh. Obviously, he had nothing but contempt for ideological foreign policy. This has led ideologues, of which we have an abundance, to see him as an enemy, and you're seeing this now with some of the coverage after his passing.Kissinger's achievement of detente at a crucial point in the Cold War will be remembered for its brilliance, as will his significant scholarship. His statecraft and scholarship were inseparable. He was a very good negotiator and probably had more experience negotiating great power relations than any secretary of state since early in the Republic. He was moderately successful in the short term. He was not successful in the long term because his interlocutors correctly perceived that he was manipulative. If one wishes to keep relationships open to future transactions, one must not cheat on current transactions. But this problem is not uncommon. It's very typical in American politics. For example, Jim Baker was famously uninterested in nurturing relationships. He was interested in immediate results in his dealings with foreign governments. He left a lot of anger and dissatisfaction in his wake. Kissinger less so, but the same for different reasons, reflecting his personality, his character, and the character of the president he served.John Allen Gay, Executive Director, John Quincy Adams SocietyKissinger's legacy in the Third World commands the most attention and criticism. He has been made the face of the tremendous toll the Cold War took on the wretched of the earth. Yet his work on great power relations deserves more regard. The opening to China he engineered with President Richard Nixon was a masterstroke to exploit division in the Communist world. Granted, the Sino-Soviet split had happened long before, and the opening was more a Nixon idea, but Kissinger set the table. And Kissinger was also a central figure in détente with the Soviet Union.Both policies were deeply unpopular with the forerunners to the neoconservative movement, but reflected the Continental realist mindset that Kissinger, along with thinkers like Hans J. Morgenthau, brought into the American foreign policy discourse. The opening to China and détente were, in fact, linked. As Kissinger pointed out, the opening to China challenged the Soviet Union to prevent the opening from growing; contrary to the advice of Sovietologists, this did not prompt new Soviet aggression, but made the Soviets more pliable. As Kissinger wrote in his 1994 book "Diplomacy" — "To the extent both China and the Soviet Union calculated that they either needed American goodwill or feared an American move toward its adversary, both had an incentive to improve their relations with Washington. […] America's bargaining position would be strongest when America was closer to bot communist giants than either was to the other." And so it was. Today's practitioners of great-power politics would do well to borrow more from this happier part of Kissinger's legacy. They have instead helped drive China, Russia, Iran, and North Korea together, and have no answer to this emerging alignment beyond lectures and sanctions. The19th century European statesmen Kissinger admired would have seen the failure of such a policy. David Hendrickson, author, "Republic in Peril: American Empire and the Liberal Tradition"The great oddity of Nixon and Kissinger's record in foreign policy is that they gave up as unprofitable and dangerous the pursuit of ideological antagonism with the Great Powers (the Soviet Union and China), but then pursued the Cold War crusade with a vengeance against small powers. Kissinger's diplomatic career reminds me of the charge that Hauterive (a favorite of Napoleon's) brought against the confusions of the ancien regime, that it applied "the terms sound policy, system of equilibrium, maintenance or restoration of the balance of power . . . to what, in fact was only an abuse of power, or the exercise of arbitrary will."Parts of Kissinger's record, like the bombing of Cambodia, are indefensible, but there are good parts too: had Henry the K been in charge of our Russia policy over the last decade, we could have avoided the conflagration in Ukraine. He was sounder on China and Taiwan than 90 percent of the howling commentariat. He was, in addition, a serious scholar who wrote some good books about the construction of world order (A World Restored, Diplomacy). Young people should take his thought seriously, not consign him to the ninth circle.Robert Hunter, former U.S. Ambassador to NATOLike all outstanding teachers, Henry Kissinger was also a showman — and he could be fun. He used his accent and self-deprecating humor as weapons for his policies and getting them taken seriously. Journalists might at times scorn what he was doing and how he did it, but they were still charmed and tended so often to give him the benefit of the doubt — as well as the credit, even when not deserved. Everyone recalls his roles in promoting détente with the Soviet Union and, even more, the opening to China, with Richard Nixon following in his wake. In fact, both policies sprang from Nixon's mind. But when the dust settled, Kissinger was the Last Man Standing."Henry," we could call him who never worked for him (!), made intelligent and literate speeches on foreign policy that everyone could understand, bringing it into the limelight. A man of great ego, he still recruited and inspired talented acolytes at the State Department and White House — matched only by Brent Scowcroft and Zbig Brzezinski. He had other policy positives in the Middle East ("shuttle diplomacy") but major negatives in Chile, in prolonging the Vietnam War, and bombing Cambodia.Take him altogether, a true Man of History.Anatol Lieven, Director of the Eurasia Program at the Quincy InstituteThe problem about any just assessment of Henry Kissinger is that the good and bad parts of his record are organically linked. His Realism led him to an awareness of the vital interests of other countries, a willingness to compromise, and a prudence in the exercise of U.S. power that all too many American policymakers have altogether lacked and that the United States today desperately needs. This Realist acceptance of the world as it is however also contributed to a cynical disregard for basic moral norms — notably in Cambodia and Bangladesh — that have forever tarnished his and America's name.When in office, reconciliation with China and the pursuit of Middle East peace took real moral courage on Kissinger's part, given the forces arrayed against these policies in the United States. But in his last decades, though he initially criticized NATO expansion and called for the preservation of relations with Russia and China, he never did so with the intellectual and moral force of a George Kennan.Perhaps in the end the best comment on Kissinger comes from an epithet by his fellow German Jewish thinker on international affairs Hans Morgenthau: "It is a dangerous thing to be a Machiavelli. It is a disastrous thing to be a Machiavelli without Virtu" — an Italian term embracing courage, moral steadfastness and basic principle.Stephen Miles, President, Win Without WarNearly as many words have been spilled marking the end of Henry Kissinger's life as the lives he's responsible for ending, but let me add a few more. It would be easy to simply say that the devastating impact of Kissinger on U.S. foreign policy was clearly and wholly negative. As Spencer Ackerman noted in his essential obituary, few Americans, if any, have ever been as responsible for the death of so many of their fellow human beings. But Kissinger's true impact was not just in being a war criminal but in setting a new standard for doing so with impunity. Earlier this year, he was feted with a party for his 100th birthday attended not just by crusty old Cold Warriors remembering 'the good ole days,' but also by a veritable who's who of today's elite from billionaire CEOs and cabinet members to fashion megastars and NFL team owners. Sure, he may have been responsible for a coup here or a genocide there, but shouldn't we all just look past that and recognize his influence, power, and intellect? Does it really matter what he used those talents for?And in the end, that's the benefit of Kissinger's horrific life and decidedly not-untimely death. By never making amends for the harm he did and never being held accountable for the horrors he caused, he made clear just how truly broken and flawed U.S. foreign policy is. Perhaps now that he has finally left the stage, we can begin to change that. Tim Shorrock, Washington-based journalistKissinger nearly destroyed three Asian countries by causing the deaths of thousands in U.S. bombing raids, covertly intervened to subvert democracy in Chile, and encouraged an Indonesian dictator to invade newly independent East Timor and inflict a genocide upon its people. These were criminal acts that should have made him a pariah. Instead, he is lauded as a visionary by our ruling elite. And it was mostly accomplished through lies and deceit, in the name of corporate profit.I'll never forget in 1972 watching Kissinger declare "peace is at hand" in Vietnam. After years of protesting this immoral war, I truly thought that Vietnam's suffering, and my own countrymen's, was finally over; they had won and we had lost. But my hope was shattered that Christmas, when Kissinger and Nixon ordered B-52s to carpet-bomb Hanoi in an arrogant act of defiance and malice. Afterwards, a shaky peace agreement was signed that could have sparked an honorable U.S. withdrawal. But it took 3 more years of bloodshed before the United States was forced out.Kissinger broke my trust in America as a just nation and overseas sparked a deep hatred of U.S. foreign policy. Few statesmen have caused such harm.Monica Duffy Toft, Professor of International Politics and Director, Center for Strategic Studies, Fletcher School, Tufts UniversityI have a pair of midcentury teak chairs once belonging to the late eminent scholar Samuel P. Huntington in my office. Sam was a colleague and friend of Henry Kissinger's, and a mentor to me. Sam and I sat in these chairs discussing world politics and the everyday challenges of running a scholarly institute. When a new set of chairs arrived, Sam insisted I take the old ones, but not before emphasizing their significance — reminders of the hours he and Kissinger spent in deep debate and casual banter. These chairs have history.Henry Kissinger was, and shall remain, a controversial figure. His gifts were two. First, across decades of U.S. foreign policy challenges, he remained consistent in his conception of power, and how U.S. power should be used to enhance the security of the United States. Second, he was gifted at assembling, mentoring, and deploying cross-cutting networks of influential people. Like many of my colleagues who study international politics, there are policies — his support of Salvador Allende's ouster in Chile, for example — I find odious. I am also uncomfortable with Kissinger's elitism: his preferred policies favored those with wealth and political power at the expense of those without.But what I admire about Kissinger's U.S. foreign policy legacy and, by extension, international politics, was his profound grasp of the importance of historical context: a thing as important to sound U.S foreign policy today as it is rare; and of which I am pleasantly reminded every time I sit in one of Sam's chairs.Stephen Walt, Quincy Institute board member, professor of international affairs at the Harvard Kennedy SchoolHenry Kissinger was the most prominent U.S. statesman of his era, and that era lasted a very long time. His main achievements were not trivial: a long-overdue opening to China, some high-wire "shuttle diplomacy" after the 1973 October War, and several useful arms control treaties during the period of détente. But he was also guilty of some monumental misjudgments, including prolonging the Vietnam War to no good purpose and expanding it into Cambodia at a frightful human cost. His diplomatic acrobatics in the Middle East were impressive, but they were only necessary because he had missed the signs that Egypt was readying for war in 1973 in order to break a diplomatic deadlock that he had helped orchestrate. His indifference to human rights and civilian suffering sacrificed thousands of lives and made a mockery of U.S. pretensions to moral superiority.Kissinger owed his enduring influence not to a superior track record as a pundit or sage but to his own energy, unquenchable ambition, unparalleled networking skills, and the elite's reluctance to hold its members accountable. After all, this is a man who downplayed the risks of China's rise (while earning fat consulting fees there), backed the disastrous invasion of Iraq in 2003, opposed the 2015 nuclear deal with Iran, and dismissed warnings that open-ended NATO enlargement would make Europe less rather than more secure. Kissinger also perfected the art of transmuting government service into a lucrative consulting career, setting a troubling precedent for others. Debates about his legacy will no doubt continue, but one suspects that the reverence that his acolytes exhibit today will gradually fade now that he is no longer here to sustain it.Dear RS readers: It has been an extraordinary year and our editing team has been working overtime to make sure that we are covering the current conflicts with quality, fresh analysis that doesn't cleave to the mainstream orthodoxy or take official Washington and the commentariat at face value. Our staff reporters, experts, and outside writers offer top-notch, independent work, daily. Please consider making a tax-exempt, year-end contribution to Responsible Statecraft so that we can continue this quality coverage — which you will find nowhere else — into 2024. Happy Holidays!

This paper focuses on the impact of disasters on public expenditures, and how this impact might be valued. The impact may involve changes in the composition of spending, concurrently and over time. It may also involve changes in the level of spending and the profile of this over time. In the latter case, the associated financing must also be taken into account. The changes of interest are those that would take place under a given sovereign disaster risk financing and insurance strategy, as opposed to what would take place otherwise. The paper concludes with some suggestions toward an operational framework for addressing these questions.

For more than a decade, Africa has enjoyed a mineral boom. is the growth mostly happening in isolated places, sectors and periods? The approach adopted in this study is two-pronged. First, through case studies, including the results of fieldwork, mining's impacts are examined in a country-specific context for each of three countries, Ghana, Mali, and Tanzania; and second, a statistical analysis is used to test whether the indicators of welfare improve with proximity to a mine.

This report on observance of standards and codes in accounting and auditing (ROSC A & A) provides an assessment of accounting, financial reporting, and auditing requirements and practices within the enterprise and financial sectors of Serbia and sets forth areas of consideration with a view to improving the country's institutional environment for corporate financial reporting. To assess Serbia's compliance with standards and codes, this report uses international benchmarks of good practice, including international financial reporting standards (IFRS), international standards on auditing (ISA), the statements of membership obligations (SMO) of the international federation of accountants (IFAC), and - because Serbia is seeking accession to the European Union (EU) - relevant provisions of the EU acquis communautaire (the acquis) governing financial reporting. The assessment focuses on the strengths and weaknesses of the A and A environment that influence the quality of corporate financial reporting, and includes a review of both statutory requirements and actual practice. It updates an earlier assessment published in 2005. ROSC A and A assess accounting and auditing practices in participating countries.

The overall objective of the study is to identify potential causes to the rapid increase in regional government surpluses. It will be shown that regional government surpluses have rapidly increased because of a confluence of three factors: (i) higher than expected revenue, (ii) lower than expected expenditure, and (iii) limited investments in financial assets. The study will identify potential causes for each factor by analyzing differences in actual and budgeted amounts of revenue. This report was presented to representatives of the Ministry of Finance and Decentralization Support Facility (DSF) in a meeting held on 30 May 2008. Comments and corrections of the attendants are reflected in this version of the report.

This paper presents new data on the micro structure of the export sector for 45 countries and studies how exporter behavior varies with country size and stage of development. Larger countries and more developed countries have more exporters, larger exporters, and a greater share of exports controlled by the top 5 percent. The extensive margin (more firms) plays a greater role than the intensive margin (average size) in supporting exports of larger countries. In contrast, the intensive margin is relatively more important in explaining the exports of richer countries. Exporter entry and exit rates are higher and entrant survival is lower at an early stage of development. The paper discusses the results in light of trade theories with heterogeneous firms and the empirical literature on resource allocation, firm size, and development. An implication from the findings is that developing countries export less because the top of the firm-size distribution is truncated.

This Country Partnership Framework (CPF) presents the World Bank Group (WBG) program for Côte d'Ivoire (CIV) during the period FY16-FY19. The CPF comes at an opportune moment to accelerate and scale up the WBG engagement. The program will take advantage of CIV's current climate of renewed stability to modernize the economy and eliminate long-standing disparities aggravated by a decade of multifaceted crisis, during which the World Bank Group had to suspend its operation four times. In 2009, a transitional Government resulting from the Ouagadougou Political Agreement (OPA) provided an appropriate platform to reengage. The transitional Government prepared the country's first Poverty Reduction Strategy Paper (PRSP) covering 2009-2015. The WBG Country Partnership Strategy (CPS) for FY10-14, which supported the PRSP's goals, was prepared in this context. Political unrest following the 2010 Presidential Elections then rendered implementation of the 2009 PRSP difficult. During the past four years, CIV has made an impressive transition from crisis to relative stability, and from fragility and low equilibrium, through stabilization, to aspiring emerging economy status. Although some of the root causes of the conflict remain, there are high expectations that those will be tackled if the current transformation is maintained and the reconciliation agenda is intensified. The Government expects to accelerate implementation of measures designed to improve social cohesion, develop human capital, build a resilient economy, support territorial development and promote regional synergies towards integration. The CPF will also support the achievement of the WBG's twin goals of reducing extreme poverty and boosting shared prosperity, which is also in line with Côte d'Ivoire's plans.

This is a first for Indonesia: Program Keluarga Harapan (PKH) is the only household-targeted social assistance initiative to have designed randomized impact evaluation into the initial allocation of the program. This brings three major benefits for policymakers: 1) the evidence available for evaluating the impacts of the PKH program on household welfare is extensive and sound; 2) the program design and the impact analysis design have generated additional excitement, both nationally and internationally, about the program, its goals and social assistance initiatives in general; and 3) the results and underlying data will be made publicly available, which has already spurred interest in additional evaluations that will stock the shelves of social assistance policy research libraries. PKH's success in delivering real benefits to the very poor and in changing behaviors deserves further support and encouragement. PKH's initial weaknesses in implementation and delivery deserve continuing attention and thoughtful solutions for greater effectiveness. The Government of Indonesia (GOI) plans on expanding the PKH program to as many as three million households; while it is doing so, it should continue to refine implementation, coordinate and collaborate with affiliated service providers in health, education, and local government services, and continue developing a corps of organized, enthusiastic, and skilled facilitators who can assist very poor households in achieving healthier behaviors.

La presente tesi non è solo l'esito di una ricerca su un precetto giuridico controverso, ma è anche la narrazione di un processo personale di scoperta, che a partire dallo studio di una specifica norma ha fatto emergere la complessità delle interazioni nell'ambito delle politiche in materia penale, economica, e finanziaria. Partendo da un approccio microsociologico focalizzato sull'analisi di una determinata norma penale, il reato di riciclaggio,1 la ricerca ha dovuto confrontarsi con temi di interesse macrosociologico, al fine di inserire l'analisi della legge all'interno di un contesto più ampio di politiche nazionali, europee e internazionali, di attori e di governance transnazionale. Per mantenere la scientificità dell'elaborato ho omesso di esprimere opinioni personali sui temi, talvolta di carattere fortemente politico, e ho cercato, invece, di presentare aspetti critici e discussioni aperte fornendo una visione completa e imparziale delle contrastanti argomentazioni in modo da lasciare il lettore libero di trarre le proprie conclusioni. Il riciclaggio di denaro sporco è il processo tramite cui a proventi di reati viene data un'apparenza di essere stati guadagnati in modo illecito. È un reato tipico della cosiddetta 'zona grigia', poiché avviene al confine tra la sfera della legalità e quella dell'illegalità. Nel momento in cui profitti realizzati illecitamente si mescolano ai flussi di denaro lecito è molto difficile discernere ciò che ha un'origine legale da ciò che è stato guadagnato illegalmente. Il reato di riciclaggio di denaro sporco è stato introdotto proprio per affrontare questa difficoltà ed impedire che le strutture legittime dell'economia e della finanza globale venissero abusate da trasgressori al fine di ripulire i proventi di reato. Infatti i flussi di denaro sporco utilizzano spesso gli stessi canali usati per le transazioni lecite; la loro riuscita dipende dalla cooperazione di professionisti quali avvocati commerciali, agenti finanziari, commercialisti, la cui reputazione è raramente sospetta. Data questa promiscuità spesso la gravità del fenomeno è sottovalutata dal pubblico che non ha gli strumenti per riconoscerne la pericolosità, anche a causa dell'assenza di vittime dirette. Dall'altra parte le stime sulla quantità di proventi di reato riciclati a livello mondiale (che oscillano tra il 2,5 % e il 5,5 % del PIL globale) richiamano l'attenzione su quella che Dalla Chiesa definisce la mitologia del volume dell'economia criminale,2 e una parte della letteratura descrive il riciclaggio come il lato oscuro della globalizzazione,3 e come uno dei maggiori problemi dell'era moderna.4 Con questa ricerca ho voluto mettere in discussione l'efficacia del reato di riciclaggio nel far fronte al fenomeno dell'infiltrazione dei flussi di denaro sporco nell'economia lecita. Sebbene la pratica di nascondere i proventi di reato in modo da evitare la persecuzione giudiziaria risalga probabilmente a molto tempo addietro, il concetto giuridico di riciclaggio è relativamente recente ed è stato introdotto nei codici penali nella maggior parte del mondo a partire dalla fine degli anni 80.5 Nel frattempo un gran numero di autori si è scagliato contro la scarsa efficacia delle legislazione anti-riciclaggio6, nonostante le innumerevoli novità introdotte e i cospicui ammendamenti che hanno in larga parte espanso il campo di applicazione della normativa. La decisione di scegliere il contesto tedesco come caso di studio deriva dal fatto che il paese è considerato avere un rischio particolarmente alto di riciclaggio di denaro sporco. Secondo il rapporto emesso dal 2010 dal GAFI (Groupe d'Action Financière), dal FMI (Fondo Monetario Internazionale) e dall'OCSE (Organizzazione per la Cooperazione e lo Sviluppo economico)7 ci sono alcuni fattori che rendono la Germania propensa ad essere usata al fine di riciclaggio di denaro sporco: il volume del sistema economico-finanziario, la locazione strategica al centro dell'Unione Europea con forti legami internazionali, l'uso diffuso di denaro contante,8 l'apertura delle frontiere, la vastità del settore informale, l'importante ruolo a livello di economia globale, e il coinvolgimento nei flussi di denaro transfrontalieri. Anche i media, a partire soprattutto dalla pubblicazione del citato rapporto, hanno attirato l'attenzione del pubblico sul fenomeno, descrivendo la Germania come "paradiso" o "Eldorado" per i riciclatori. Alcuni recenti scandali hanno visto coinvolte prominenti banche tedesche, come la Deutsche Bank, la Commerybank e l'Hyopovereinsbank, contro cui procure straniere hanno sollevato l'accusa di riciclaggio di denaro sporco.9 La legislazione in atto, ed in particolare l'articolo 261 del codice penale tedesco, non sembra essere sufficientemente efficace per contrastare il fenomeno, nonostante gli abbondanti emendamenti e il continuo processo di aggiornamento e di espansione del campo di applicazione della norma. Al fine di spiegare questa per lo meno apparente incapacità della norma di fare fronte al fenomeno del riciclaggio, ho costruito l'ipotesi di ricerca sulla base delle teorie sociologico-giuridiche relative all'efficacia del diritto, alle funzioni manifeste e latenti delle norme e quindi alle intenzioni espresse e non dal legislatore, all'efficacia simbolica del diritto e di singole legislazioni e all'impatto, inteso come comprensivo degli effetti indesiderati o collaterali. L'ipotesi di ricerca è che la norma esplichi una funzione simbolica di allineamento dell'ordinamento nazionale a quello europeo e transnazionale, di compromesso tra gli interessi politici in gioco, e di creazione di consenso pubblico verso il legislatore per essersi occupato della questione. Si ipotizza che il legislatore abbia quindi consapevolmente accettato o addirittura scelto di formulare una norma strumentalmente poco efficace, ma simbolicamente capace di raggiungere i suoi obiettivi latenti. Si solleva inoltre l'ipotesi che la norma sia stata appositamente approvata con lo scopo di non modificare lo status quo delle relazioni e strutture economiche, e di permettere quindi l'ingresso di capitali sporchi nel paese, sulla base del motto pecunia non olet. La suddetta ipotesi viene parzialmente smentita dai risultati della ricerca empirica. La ricostruzione del processo di produzione legislativa mette in risalto l'esistenza di svariati e contrastanti interessi e della forte pressione esercitata dagli organismi internazionali per l'introduzione e lo sviluppo del reato di riciclaggio, e conferma, quindi, l'argomentazione che la norma sia stata approvata in un contesto di pressione politica esterna e di necessità di trovare un compromesso tra diverse parti politiche. Anche l'analisi degli aspetti problematici dell'articolo 261 del codice penale tedesco messi in risalto dalla dottrina supporta l'ipotesi della simbolicità della norma. Il fatto che il legislatore abbia formulato un reato così complesso crea evidenti problemi di integrazione dello stesso all'interno del sistema penale tedesco, e quindi di accettazione da parte degli studiosi e potenzialmente da parte degli operatori del diritto. Inoltre, la scelta di costruire un reato così complesso riflette la necessità di venire a compromesso con opposti interessi, ma potrebbe essere anche essere interpretata come un disinteresse al raggiungimento di un'efficacia materiale. La ricerca empirica sull'implementazione dell'articolo 261, invece, smentisce l'idea che la norma abbia un'efficacia puramente simbolica. Infatti il numero di condanne, di investigazioni, ed in generale l'uso ricorrente della legge riscontrato nelle statistiche criminali provano che essa conduca ad effetti strumentali, oltre che simbolici. Inoltre, nella prospettiva di alcuni degli operatori del diritto e degli esperti intervistati, l'articolo 261 è percepito come una norma particolarmente efficiente, sia in relazione alle quote di chiarimento, che come strumento di demarcazione tra comportamenti leciti e illeciti, in un contesto di deregolamentazione del settore finanziario. Da un'analisi piè ravvicinata delle statistiche e di altri rapporti emessi da enti internazionali e nazionali emerge però un quadro non così univoco: La norma sembra colpire più le vittime dei network criminali che operano a livello transnazionale che gli autori, perché spesso i colpevoli sono coinvolti in transazioni sospette in cambio di guadagni monetari. Le cospicue indagini finanziarie non riescono a raggiungere coloro che operano dietro gli esecutori dei reati minori, ed infatti la maggior parte di esse si concludono senza una condanna per riciclaggio. Questo a fronte di un volume di denaro sporco circolante nel paese che rimane allarmante, secondo alcuni degli studi analizzati. Se da una parte i risultati dell'applicazione della norma, sebbene strumentali, non possono considerarsi soddisfacenti, perché non sono riusciti ad evitare l'ingresso di capitali illeciti nell'economia nazionale, dall'altra parte sembra che l'esistenza di interessi profondamente contrastanti in gioco renda quasi impossibile la formulazione di un reato piè efficace. La tesi è composta da cinque capitoli, un'introduzione e una conclusione. Nel primo capitolo espongo le teorie sociologiche adottate per la valutazione di efficacia della norma e il metodo della ricerca. Inizialmente richiamo concetti di efficacia forniti da discipline affini alla sociologia del diritto - tra cui per esempio il concetto di efficienza e di efficienza indipendente rispetto allo scopo (zielunhabhängige Effizienz) riferito agli apparati amministrativi - che torneranno utili per l'interpretazione dei risultati delle interviste. Successivamente procedo con una panoramica sulle definizioni di efficacia del diritto fornite in sociologia del diritto, sulla ci base adotto una nozione "elastica" -riprendendola da Ferrari- di efficacia di una norma che guarda alle funzioni della norma e alle intenzioni del legislatore, in una prospettiva "intenzionalistica": "la corrispondenza fra un disegno politico di utilizzo di uno strumento normativo e i suoi effetti". Tale nozione, oltre a prestarsi ad un'analisi critica del diritto, fornisce indicazioni utili per l'analisi empirica dell'efficacia della legge in questione. In particolare ritengo utile considerare le seguenti variabili: le intenzioni latenti e manifeste del legislatore, gli scopi diretti e ed indiretti, l'eventuale efficacia simbolica del diritto, l'implementazione, la ricezione della norma nel senso di accettazione nel sistema giuridico e di interpretazione e percezione da parte degli operatori giuridici. Nella seconda parte si evidenzia il rilievo di tali variabili con riferimento specifico al diritto penale. In conclusione, sulla base delle riflessioni teoriche, formulo l'ipotesi sull'efficacia simbolica del reato di riciclaggio nell'ordinamento tedesco, che verrà poi verificata nei capitoli successivi. Nello specifico, presumendo che il reato di riciclaggio, introdotto come strumento fondamentale della lotta alla criminalità organizzata, così com'è formulato non adempie agli scopi dichiarati, nonostante gli innumerevoli emendamenti finalizzati proprio ad aumentarne l'efficacia, ipotizzo un'efficacia simbolica della norma, introdotta per offrire un'immagine di efficienza al pubblico (elettori). Inoltre sollevo l'ipotesi che la norma sia stata emanata appositamente inefficace per neutralizzarne le aspirazioni di punizione delle condotte illecite tipiche dei colletti bianchi, in una lettura moderna del conflitto sociale che avviene tramite l'emanazione di norme, con la volontà di decriminalizzare secondariamente comportamenti tipici delle classi forti. Nel secondo capitolo analizzo il processo legislativo a livello internazionale, europeo e nazionale. Il processo che ha portato alla creazione del reato di riciclaggio a livello internazionale viene ricostruito tramite dichiarazioni di intenti degli attori partecipanti, opinioni pubblicate, trascrizioni dei dibattiti parlamentari. Una particolare attenzione è posta sulle diverse intenzioni degli attori che hanno partecipato alla formulazione del reato. Il processo legislativo che ha portato alla formulazione dell'attuale legislazione anti-riciclaggio è un processo complesso, in cui diversi attori partecipanti hanno contribuito con differenti aspettative e dunque attribuendo diverse funzioni alla criminalizzazione del riciclaggio. Al fine di permettere svariate interpretazioni del dettato normativo in modo da soddisfare i differenti bisogni, e con lo scopo di trovare un compromesso tra gli interessi divergenti, il reato di riciclaggio è stato formulato in modo vago. Mentre alcuni Stati (ad esempio la Francia) inizialmente sostenevano l'introduzione del reato con lo scopo di combattere i paradisi fiscali e rafforzare la lotta all'evasione fiscale, altri Stati, come la Svizzera, hanno accettato di firmare l'accordo internazionale sulla criminalizzazione del riciclaggio solo a condizione che l'evasione fiscale non fosse inserito nella lista dei reati antecedenti. Con la nascita del GAFI la policy viene usata allo scopo di difendere l'integrità del sistema finanziario dall'infiltrazione di capitale illecito e dal 2001 si aggiunge la funzione di lotta al finanziamento del terrorismo. Tramite la soft law emanata dal GAFI per la prevenzione del riciclaggio, si trasferiscono compiti solitamente pubblici al settore privato: banche e istituti finanziari devono segnalare alla polizia ogni transazione sospetta, devono raccogliere e mantenere informazioni sui clienti e verificare le identità dei clienti. L'Unione Europea finora ha emanato quattro direttive nell'ambito del riciclaggio, l'ultima risale al 20 maggio 2015. Inizialmente la CE non aveva competenza in ambito penale, perciò la materia riciclaggio fu assorbita nella sfera economica (DG Economia e industria). La funzione dichiarata dal legislatore è la protezione del mercato interno, con particolare riguardo al fatto che i criminali possano sfruttare la libera circolazione dei capitali e l'eliminazione delle frontiere. Le direttive esprimono anche la volontà di impedire agli stati membri di emanare regolamentazioni che possano bloccare il libero mercato al fine di difendere le proprie economie dall'infiltrazione di capitale illecito. Emerge dunque un ulteriore conflitto di interessi. Nella seconda parte ricostruisco il processo legislativo e le evoluzioni interne alla Germania fino al momento della scrittura e fornisco il quadro del sistema repressivo e di prevenzione anti-riciclaggio. L'articolo 261 StGB è stato introdotto con legge Gesetz zur Bekämpfung des illegalen Rauschgifthandels und anderer Erscheinungsformen der Organisierten Kriminalität, quindi nell'ambito della lotta alla criminalità organizzata. Il dibattito parlamentare rileva che la norma è il frutto di un compromesso sotto diversi aspetti, non ultimo il fatto che è stata emanata del 1992, a pochi anni dalla riunificazione, e che quindi è parte del processo di negoziazione per la formazione di un diritto penale adattabile alle due culture giuridiche. Il legislatore tedesco evidenzia alcune funzioni della norma: la lotta al consumo di eroina e al traffico di stupefacenti, la diffusione e la pericolosità della mafia alla luce dei fatti recenti italiani, la volontà di proteggere l'amministrazione della giustizia e di isolare i criminali puntando alla criminalizzazione dei cosiddetti gate-keepers. Nel terzo capitolo individuo alcuni dei problemi sollevati dalla dottrina tedesca sul piano teorico con riferimento alla criminalizzazione del reato di riciclaggio nel contesto del sistema penale tedesco. Uno dei temi più discussi è relativo al bene giuridico protetto. La dottrina non ha ancora trovato un accordo su quale interesse sia protetto dall'articolo 261 StGB, le ipotesi sono: gli interessi dei reati antecedenti, l'amministrazione della giustizia, il sistema finanziario e la sicurezza. La vaghezza del dettato normativo non aiuta a trovare un interpretazione dottrinale univoca. La questione del bene giuridico protetto, lungi dall'essere una mera questione teorica, risente delle diverse funzioni attribuite alla norma dagli attori partecipanti al processo legislativo. Finora la giurisprudenza, che pur è intervenuta a chiarire altre questioni relative alla norma, non è intervenuta sul tema. Un altro tema su cui il dibattito è ancora aperto è il fatto di aver previsto al comma 5 l'ipotesi di colpa lieve, in controtendenza rispetto al legislatore europeo. Questo, secondo alcuni studiosi porta all'assurdo per cui anche il panettiere Tizio che vende del pane ad un evasore fiscale Caio potendo aver riconosciuto che Caio fosse un evasore, si rende colpevole di riciclaggio. La questione del livello di mens rea richiesto per una condanna per riciclaggio era sorta anche durante il dibattito parlamentare e l'introduzione del comma 5 è stato sostenuto da un emendamento della SPD che avrebbe voluto criminalizzare anche l'ipotesi di colpa lievissima. Questo, secondo la CDU avrebbe messo un freno al mercato e alle transazioni, poiché avrebbe costituito una minaccia per chiunque avesse intrapreso operazioni economiche. Essendo la funzione della norma incerta, la dottrina si divide tra chi sostiene che questa vasta criminalizzazione faccia perdere il senso del reato che sarebbe invece colpire i criminali che agiscono con intento, e chi invece sostiene che la norma abbia lo scopo di impedire qualsiasi infiltrazione di denaro illecito e quindi richieda una responsabilizzazione di tutti colori i quali prendano parte in operazioni finanziarie o economiche. Ancora una volta l'indeterminatezza del precetto legislativo è di ostacolo ad un'interpretazione univoca. Il quarto capitolo offre un'analisi qualitativa delle statistiche officiali sull'implementazione della legge dal 1992 ad oggi da parte delle istanze repressive e di prevenzione. Tra i dati analizzati i più rilevanti sono per esempio il numero di segnalazioni di transazioni sospette ricevuto dalle procure, il numero delle investigazioni condotte, il numero di condanne effettivamente inflitte ed eseguite e per quale delle ipotesi di riciclaggio, il volume di denaro confiscato. Essendo tali numeri indici del funzionamento del sistema penale e non del fenomeno del riciclaggio per sé, in conclusione si confrontano tali statistiche con le stime sul volume di flussi illeciti in Germania. Tale analisi, non potendo dare conto del numero dei reati evitati, sulla base dell'efficacia deterrente della norma, non intende esaurire il giudizio di efficacia della legislazione. Tra i risultati più rilevanti vi sono il fatto che il 60% delle persone condannate vengono condannate per l'ipotesi di colpa lieve, che solitamente consiste in casi in cui una persona poco abbiente ha accettato di far usare il proprio conto a terzi per operazioni sospette in cambio di un guadagno. Nel 5% dei casi le condanne sono inflitte per le ipotesi aggravate di commissione da membro di un'associazione criminale o in forma commerciale. Nel 90% dei casi le transazioni sospette segnalate alle procure portano a una chiusura dei procedimenti per mancanza di indizi che possano sostenere un rinvio a giudizio. La norma sembra colpire delinquenti minori e non grandi gruppi criminali, né altri delinquenti più potenti. Si ipotizza inoltre che l'incapacità di sostenere un rinvio a giudizio nonostante le informazioni acquisite e le indagini preliminari riduce la capacità deterrente della norma e permette, invece, ai criminali di conoscere le modalità di funzionamento del sistema repressivo e agire di conseguenza. Inoltre, le transazioni sospette sono segnalate nel circa 90% dei casi sa parte di istituti di credito, mentre gli altri enti obbligati dalla legislazione non sembrano partecipare attivamente al processo preventivo, in particolare il settore forense e immobiliare e del gioco d'azzardo. Sulla base di questi dati si ipotizza un effetto spill-over, ossia un trasferimento di illegalità dai settori più controllati a quelli meno controllati. I rapporti pubblicati dalla polizia, invece, considerano l'articolo 261 StGB come una norma con una delle più alte quote di chiarimento (ca 90%), quota calcolata sul numero di casi chiariti dal sistema penale, a prescindere dalle modalità di chiarimento. Per quanto riguardo il volume di denaro riciclato, il capitolo richiama alcune delle stime pubblicate da diversi enti, tra cui il Fondo Monetario Internazionale, il GAFI e la polizia criminale federale. Essendo il fenomeno del riciclaggio un campo in cui la cifra oscura è stimata essere molto alta, tali dati non possono essere presi come misura obiettiva del fenomeno. Infine il capitolo si conclude richiamando alcune analisi del tipo costi-benefici per misurare l'efficacia delle politiche anti-riciclaggio o alcune delle sue norme, condotte da enti terzi. Tali analisi sembrano concordare nel considerare i costi di implementazione della politica più alti rispetto ai benefici conseguenti. Nel quinto capitolo, infine, vengono discussi i risultati della ricerca empirica con gli operatori giuridici e con alcuni osservatori privilegiati, in modo da fornire una prospettiva interna sul funzionamento della norma. Tramite le interviste condotte si mettono in luce aspetti della prassi giuridica non fotografati dalle statistiche, allo scopo di offrire un'immagine dell'impatto della legge quanto più vicina possibile alla realtà. La ricerca empirica si avvale di interviste con operatori del diritto e con osservatori privilegiati che siedono in posizioni ministeriali rilevanti nella lotta al riciclaggio. La metodologia adottata è di tipo qualitativo, è stato fatto uso di interviste semi-strutturate a operatori del diritto e a osservatori privilegiati. Il capitolo presenta le percezioni degli intervistati su quattro temi principalmente: la dimensione del fenomeno del riciclaggio, l'adeguatezza tecnica della legislazione, i conflitti di interesse intrinseci alla legge e sorti dall'applicazione della norma e l'efficacia delle legge. A fronte di un rapporto emesso da quattro ONG nel novembre 2013, sulla base di statistiche prodotte dall'UNODC e dal Fondo Monetario Internazionale, e immediatamente riprese dai media, che descrive il paese come "Eldorado" per i riciclatori,10 le interviste sono dirette a cogliere l'opinione dei rispondenti sulle dimensioni del fenomeno del riciclaggio in Germania. Un intervistato ritiene inaccettabile desumere dal PIL tedesco il volume di affari del crimine organizzato nel paese, e obietta che non si possa, sulla base del giro d'affari del centro finanziario di Francoforte, definire lo stesso come centro di riciclaggio di denaro sporco. Un altro intervistato, dichiara, al contrario, che sicuramente il fatto che la Germania abbia un'economia stabile ed un settore bancario affidabile attiri coloro che vogliano investire proventi illeciti, neppure quest'ultimo possiede, però, dati affidabili sulla quantità di denaro riciclato. Il riciclaggio, come altri fenomeni legati alla criminalità organizzata, è una fattispecie che per definizione sfugge alle autorità e ai confini nazionali. Lo scopo dello stesso è nascondere proventi di reato e sottrarli in questo modo al sistema repressivo, questo è sicuramente un elemento che rende complessa, se non impossibile, la sua quantificazione. D'altra parte, osservano i soggetti intervistati autori del Rapporto del 2013, l'incapacità di fornire statistiche rilevanti dopo più di 20 anni di lotta al riciclaggio, sembra essere un sintomo di una carente volontà politica nel contrastare efficacemente il fenomeno. Secondo gli osservatori privilegiati se la Germania fosse davvero un paradiso per i riciclatori, ciò non sarebbe collegabile ad un deficit legislativo, dato l'impegno del governo nella lotta al riciclaggio, negando, quindi, l'accusa rivolta dai media per cui i criminali sceglierebbero il paese tedesco ai fini di riciclaggio di denaro sporco sulla base delle lacune normative. Agli intervistati è stato chiesto di evidenziare aspetti positivi e problematici della legislazione. Tra i più rilevanti vi sono: la necessità di bilanciare il bisogno di punire la condotta di riciclaggio e rispettare i principi fondamentali del sistema giuridico, il disinteresse da parte degli istituti finanziari nell'indagare l'origine del capitale investito dai clienti, anche in caso di sospetto di provenienza criminale, a causa della possibile conseguente perdita di reputazione nell'ipotesi di apertura di investigazioni da parte delle autorità sul cliente sospetto. Vi è poi una difficoltà materiale nel condurre indagini finanziarie, che spesso, conducono a condotte illecite commesse all'estero; sul punto si osserva che le condotte di riciclaggio, intese come operazioni atte ad ostacolare la provenienza delittuosa, non avvengono su territorio tedesco, bensì all'estero, il denaro che entra in Germania, è, quindi, già "pulito". Inoltre, l'articolo 261 è stato introdotto nel sistema tedesco come trasposizione di una direttiva Europea e non rifletteva una necessità interna dello Stato; la formulazione così vaga, infatti, si presta più per il sistema giuridico degli Stati Uniti, in cui non vige l'obbligo dell'azione penale, mentre in Germania, dove i pubblici ministeri hanno l'obbligo di azione penale, tale norma porta ad iniziare numerose indagini senza avere la capacità di proseguirle. In generale, gli intervistati rappresentanti dei Ministeri rilevano la forte pressione subita da parte del GAFI e dell'Unione Europea per l'emanazione della legge anti-riciclaggio e concordano nel dire che se la norma fosse stata creata sulla base di una necessità e di un dibattito nazionale sarebbe stata scritta diversamente. C'è chi individua nel sistema penale le cause di inefficacia dell'articolo 261, nello specifico, la limitata possibilità di effettuare intercettazioni telefoniche, le restrizioni in materia di inversione dell'onere probatorio, e lo scarso utilizzo della confisca dei proventi di reato a causa del disinteresse da parte delle procure (gestite a livello di Bundesländer) nell'investire risorse in tal senso dato che i beni confiscati non resterebbero in mano al Bundesland ma verrebbero raccolti in un fondo federale e poi spartiti. Si osserva una generale mancanza di risorse pubbliche che porta ad una carenza di personale coinvolto nelle investigazioni e, quindi, ad una incapacità di far fronte ai processi in corso in modo efficace. Per questo motivo, i pm non hanno la capacità di indagare più a fondo casi di riciclaggio all'apparenza semplici, ma che potrebbero portare alla luce organizzazioni criminali operanti nell'ombra. Alla totalità degli intervistati è stata chiesta un'opinione sull'efficacia della legge. L'articolo 261 del codice penale tedesco è stato definito da un soggetto "una legge scritta in modo indecente, che produce risultati banali sul piano delle statistiche criminali, soprattutto con riferimento alle condanne per riciclaggio in grossi casi di criminalità economica". Il reato è così difficile da provare in giudizio, che risulta facile, per la difesa, sfruttare le lacune legislative per evitare una condanna per riciclaggio. I rappresentanti dei Ministeri confermano che la lettera dell'articolo 261 crea confusioni e che quindi l'accusa, pur trovandosi di fronte ad un caso di riciclaggio spesso preferisca perseguire i delitti presupposto. Questo non è, però, un sintomo di inefficacia, dato che l'effettività a cui mira il Ministero dell'interno non è data dal numero di condanne per riciclaggio, ma dal numero di casi risolti, e quindi dal numero di condanne in generale, a prescindere dall'imputazione. D'opinione opposta un altro intervistato che ritiene che l'articolo 261 non abbia alcuna capacità deterrente nei confronti della criminalità organizzata, "la norma ricorre così raramente nella prassi giudiziaria che di fatto non rappresenta una "minaccia" per i potenziali criminali". I soggetti intervistati esprimono più soddisfazione a riguardo della legislazione di prevenzione (GWG); in particolare, con riferimento alle piccole e medie imprese, per le quali è difficile riconoscere tra i partner commerciali coloro i quali investono denaro di provenienza illecita, la possibilità di affidarsi alle autorità investigative, in caso di sospetto è fondamentale. Un avvocato specializzato in compliance per società, descrive la norma preventiva come molto efficace e severa, tanto che è impossibile per le aziende, specialmente per quelle di medie o piccole dimensioni, adempiere a tutti gli obblighi prescritti dalla norma, ma, egli osserva, l'efficacia del sistema sta proprio nel fatto che le autorità di controllo, consapevoli dell'elevata rigorosità della legge, chiudono un occhio di fronte a lievi inadempienze. Una legge meno severa e un controllo più fiscale non otterrebbero la stessa efficacia, perché la norma non avrebbe lo stesso potenziale deterrente. L'efficacia all'interno delle amministrazioni responsabili per la lotta al riciclaggio è interpretata come efficienza dell'apparato, per questo motivo, non ci sono verifiche sull'efficacia degli strumenti giuridici sulla base degli scopi dichiarati, quanto piuttosto sulla correttezza del funzionamento dell'amministrazione e sulle possibilità di migliorarlo; il punto è capire come migliorare, non se il sistema sia efficace o no. Agli intervistati è stata chiesta un'opinione sull'eventuale efficacia simbolica della legislazione. La maggioranza delle risposte è stata negativa, gli sforzi compiuti da parte dello Stato -e quindi delle procure, della autorità competenti e della polizia- nel contrastare il riciclaggio e la criminalità economica non possono essere considerati simbolici. Alcuni intervistati ritengono assolutamente necessaria e strumentale – e quindi non simbolica- l'esistenza del reato nel codice penale come demarcazione di illegalità di tali condotte e come strumento atto a contrastare la criminalità economica perché mette in chiaro entro quali limiti le società possano perseguire profitti in modo legittimo. Di opinione diversa, invece, gli avvocati penalisti i quali si sono detti favorevoli a tale definizione sulla base dello scarso numero di condanne e soprattutto sulla mancata previsione da parte del Governo di mezzi adeguati per l'implementazione della legislazione. Lo stesso è osservato dal terzo settore, il quale sostiene che, a fronte di una legge complessa, oggetto di svariati emendamenti nel corso degli anni, non c'è stato un sufficiente impegno sul versante dell'implementazione; il coinvolgimento del GAFI e dell'OECD nella lotta al riciclaggio è percepito come un modo per creare posti di lavoro e nuove figure professionali, più che un'arena dove discutere efficaci strumenti di lotta ai reati economici. Altri elementi interessanti riscontrabili nelle interviste sono i conflitti di interessi che emergono dall'applicazione delle leggi anti-riciclaggio. Tra essi, vi è il dibattito tra il Ministero dell'Interno e quello di Giustizia in riferimento all'adeguatezza dello strumento penalistico nel contrastare la criminalità economica, dibattito già affrontato dalla dottrina, a cui, però finora, non è stata data una risposta univoca. Da una parte il Ministero dell'Interno auspica un intervento giuridico più deciso, che, per esempio, ricomprenda il reato di riciclaggio nella responsabilità penale degli enti (non ancora esistente in Germania) e sollecita una svolta politica generale in tema di criminalità economica dalla deregolazione del mercato finanziario all'intervento dello Stato in ambito economico ai fini di chiarire i comportamenti leciti e quelli illeciti. Dall'altra parte, il Ministero della Giustizia considera erroneo il ricorso al diritto penale ai fini di risolvere problemi di tipo economico o finanziario e cerca di frenare la tendenza moderna alla proliferazione penale, a favore di un intervento di tipo preventivo-sociale. A tal proposito, si osserva che agli incontri del GAFI a cui partecipano i rappresentanti dei Ministeri di Giustizia, coloro che provino a richiamare l'attenzione sulla necessità di rispettare i principi fondamentali costituzionali e di limitare l'intervento penale a tutela dei cittadini, vengano tacciati di non voler combattere la criminalità organizzata in modo efficace. In conclusione riapro la prospettiva a livello globale ed inserisco il reato di riciclaggio in una riflessione più ampia sulla governace finanziaria. In una prospettiva storica di analisi delle politiche economiche recenti si osserva come vi sia stata una tendenza a deregolare il mercato per mano delle istanze tradizionali pubbliche, e al contempo un aumento di strumenti transnazionali di cosiddetta soft-law che si sono fatti portatori di interessi particolari. Finché questa conflittualità non verrà risolta sarà impossibile impedire il riciclaggio di denaro sporco. Con particolare riferimento al contesto europeo, si prende atto che è stato molto più facile chiudere le frontiere per le persone fisiche e non a quelle giuridiche o ai capitali. ; This paper aims to question the sociolegal1 effectiveness of the money laundering offence.2 The literature that assesses the effectiveness of the anti-money laundering system is abundant. While most of it does not question the regime's goals this paper takes a step back and critically looks at the law-making process. In addition, while most studies have assessed the effectiveness of anti-money laundering law by looking at statistical outcomes, this paper takes a step forward and tries to explain those statistics by looking at legal praxis and at indirect effects. The significance of the research derives from the insertion of the analysis on money laundering offence in a broader political, economic and historical context. The methodology adopted is qualitative, with the intended purpose of underlining the complexity of the issue tackled, rather than reducing it through a quantitative approach. While most of the existing literature has quantitatively assessed the effectiveness of the anti-money laundering regimes on the basis of statistical data and other quantitative indexes and has tried to reduce the complexity of the issue by measuring it numerically, this research adopts a qualitative methodology, which instead highlights the entanglement and the different perspectives on the question. Money laundering is the process of giving profits originated illegally an appearance of having been made lawfully.3 Due to the tightening of economic criminal policies that limit the possibility of integrating ill-gotten gains in the legitimate economy, offenders have developed more and more complex methods and subterfuges to launder proceeds of crime, so the rise of a proper 'money laundering industry' (industria del riciclaggio) is mentioned.4 The total volume of money laundered is estimated to amount to between 2,5 and 5, 5 % of the world GDP.5 Due to the borderline nature of money laundering, which happens between the so-called 'legitimate economy' and the 'dirty economy', and thus involves different actors such as banks, the financial sector, certain professions and businesses, offenders, victims and law enforcement agencies, the legal response needs to compromise with all the various economic, political, social and financial interests at play. Furthermore, where legitimate business intermingles with illegal business and legitimate funds with illicit funds, it is very difficult to distinguish what is legal from what is not. The criminalisation of money laundering was specifically supposed to tackle this fine line. The goal of this research is to assess whether the choice of criminalising money laundering has been effective to tackle this fine line. In order to assess the impact of the domestic implementation of the existing legal framework, the research uses a case study that specifically questions the effectiveness of the money laundering offence in the German national criminal legal system. The interest in the German case derives from the fact that, according to the IMF, the OECD and the FATF, Germany might have 'a higher risk profile for large scale money laundering than many other countries'.6 There are some factors identified as enablers of money laundering activities, such as the large economy and financial centre, the strategical location in the middle of Europe, with strong international links, the substantial proceeds of the crime environment involving organised crime operating in most profit generating criminal spheres, the open borders, the large informal sector and a high use of cash, the large and sophisticated economy and financial sector, the important role in world trade, and finally the involvement in large volumes of cross-border trade and financial flows. The media have kept on reporting the fact that Germany is an ideal country, or even a paradise for money launderers.7 According to most recent media reports, corruption is increasing in Germany along with money laundering and organised crime,8 and illicit financial flows are estimated to amount to 50 Billion Euros annually.9 Renowned banks such as Commerzbank, Deutsche Bank, and Hypovereinsbank have been the focus of recent scandals due to their involvement in large tax evasion and money laundering schemes, investigated mostly by US law enforcement agencies.10 The legal framework has been considered as not being sufficient to tackle the estimated volume of money laundering. In 2007 and 2010 the European Commission initiated two proceedings against the German government for having contravened the European treaty by not having effectively transposed into national law the European framework to tackle money laundering and terrorist financing.11 In response to this wave of criticism, some important changes have been made.12 With specific regards to penal law, the legislature has amplified the scope of the money laundering offence and the sphere of criminal liability in order to improve the effectiveness of the existing legislation.13 Yet the continual expansion process has raised legal challenges that could constitute an obstacle for the effective enforcement of the measure. With regards to international legislation, scholars have often criticized the ineffectiveness of the anti-money laundering regime to not be able to achieve its goals and thus to be only appearance of public action. 14 While there is theoretical support for the perception that policies have contributed to a decrease in the incidence of money laundering, there is no evidence that this goal has actually been achieved.15 The official discourse describes the regime as a crucial tool to prevent and combat money laundering, and lawmakers have been focusing on expanding the reach of anti-money laundering laws. This work however takes a critical approach towards the existing legal framework and presents the view that questioning the effectiveness of the money laundering offence is essential before expanding the scope of the existing legal framework.16 On the background of the reflections based on the sociolegal framework that sets the definition of legal effectiveness with specific respect to criminal law, and on the critical literature on the inadequateness of the international anti-money laundering system to eliminate the targeted activity recalled in the introduction, the hypothesis underlying the case study is the following: Article 261 Gcc may be an example of a symbolic legislation, whose latent functions prevail on its declared functions. In particular, it is hypothesised that the law is an example of a 'compromise-law' that satisfy all parties taking part in the law-making process, thanks to the vagueness of the wording that allows a broad range of possible interpretations, and also thanks to the actual ineffectiveness, which pleases those who were contrary to the introduction of the provision. It is here necessary to recall the considerations on the 'legislator' being an heterogeneous group of parties not only constituted of members of the Parliament but often also by external actors, who can influence more or less transparently the law making-process. While the manifested function of tackling money laundering has in fact remained in the background, the thesis hypothesises that other latent goals have been pursued. It is further hypothesised that the 'law inaction' is part of a process of decriminalisation that intentionally grants impunity to a certain group of actors, in this case those laundering money, while giving the appearance that the practice is not accepted by law by labelling it as criminal. By using the concept of function, the study focuses on eventual conflicting interests emerging throughout the policy-making process and/or being displayed through the implementation of the provisions. In order to verify these hypotheses the research proceeds with a case study that aims at empirically assessing the sociolegal effectiveness of Article 261 Gcc. In particular, by applying the 'elastic' definition of effectiveness, the following chapters analyse the law-making process, the level of acceptance by legal scholars, the implementation, and the opinions of legal experts and professionals. The methodology adopted is qualitative. The research consists of a case study that includes a documental research, a qualitative analysis of statistical data and the conduction of interviews with privileged observers and legal actors. The study is a macro-sociological assessment of the effectiveness of a criminal legislation through the analysis of the motives that have triggered lawmakers to enact the current legal framework and the practical effects of the 'law in action'17 and of the 'law inaction'.18 Thanks to the use of sociological conceptual tools, as the ones of function, symbolic effectiveness, power, labelling, and legal culture, the research critically approaches the legal framework. In addition, the sociolegal perspective allows us to take into account the multidisciplinary nature of the phenomenon of money laundering and of its countermeasures and the diverse conflicting interests at play. The work has been conducted by a single person and not by a team of researchers; this has imposed a limit on the interviewing sample and the impossibility of undertaking, along with the qualitative analysis of the provision, a qualitative analysis of the jurisprudence and a quantitative analysis of the case law. In addition, criminal provisions have a deterrent purpose, yet in certain cases it is almost impossible to quantify the deterrence effect of those provisions, as in the case of the money laundering offence, and this represents a shortcoming of the current research. Official numbers are highly problematic, this element, despite impeding an objective quantification of the phenomenon, can represent a partial result for the qualitative analysis, because it highlights the complexity of the matter. The anti-money laundering regime is constantly evolving, and this would require continuously updating the assessment, instead the research provides a picture of the current situation. Yet the work offers the reader an instrument to critically interpret also possible changes in the wording of the money laundering offence that may be made following the publication of this work. The outcomes of the critical study on the reasons and effects of the current legislation can be used as a starting point for further research; the methodology set for the empirical analysis can be applied to assess the effectiveness of following developments. The structure of the thesis is the following: The first chapter presents the theoretical sociolegal framework and provides an operational definition of the concept of effectiveness that directs the empirical research. At the end the chapter describes the methodology of the qualitative research. Chapter two traces the genesis of the money laundering offence, as well on an internal, European and domestic level. The chapter analyses legislative intents, parliamentarian debates and other external contributions as declarations of intents and opinions through a desktop-study. The third chapter is dedicated to the doctrinal debate about the money laundering offence regulated in the German penal code. In particular the chapter highlights the controversial issues that have emerged through the abundant legal scholarship production, which might affect the effectiveness of the money laundering offence. Chapters four and chapter five present the empirical research. The fourth chapter analyses the quantitative data of the implementation of the money laundering offence from a qualitative perspective. The last chapter presents the results of the interviews. The main outcomes of the research are that the interests expressed more or less manifestly from the actors taking part in the initial phase of the creation of the anti-money laundering regime were strongly conflicting with each other. One representative example is the question whether to use the policy also to tackle large scale tax evasion or to leave proceeds deriving from fiscal crimes outside of the regime. Very different justifications were given for the criminalisation of money laundering at different stages. Often the declared motives did not correspond to the real goals of the actors taking part in the law-making process. The rhetoric connected to the seriousness of the drug issue was the manifest function of the new criminalisation of money laundering. However, other latent goals, for instance, the desire of financial institutions to clean their reputation and gain customs confidentiality or the interest of some governments to curb tax evasion were already present during this initial phase. Another controversial issue concerns the fact national states have adopted anti-money laundering measures under the pressure of the FATF, which is led by most industrialised countries.19 Despite lacking democratic legitimation, the FATF has imposed worldwide a brand new regime of criminalisation, prevention and enforcement. The legal framework has been used to address ever-new challenges, and this expansion process has been coupled by a rhetoric that scholars have defined the securitisation rhetoric.20 The most recent function manifestly attributed to the anti-money laundering legal framework, that is, in short, the protection of the soundness of the financial system. Especially in times of financial insecurity, the tendency of hardening laws against economic crimes increases. Having previously deregulated the financial system to enhance economic liberties, legislatures resort to criminal law to control illegality in the economy. As a response to the European financial crisis of 2007-2011, legislatures, instead of rethinking the approach towards the protection of the global finance, called for a tightening of economic crimes regulations. The European discourse on money laundering has mostly been related to the destabilisation of the market, the abuse of capitals' movement liberty, the disintegration of the internal economy. But, why was the EU so keen on imposing a common standard for the criminalisation of money laundering, without even enjoying competence in penal matters? The introduction of a common anti-money laundering control policy served to a latent function, namely to the purposes of the creation of the 'Single Market', by way of avoiding that Member States would have adopted measures inconsistent with the completion of the Internal Market, while taking action to protect their own national economies from money laundering.21 This was done by avoiding that domestic regulations implemented for protecting national economies from the infiltration of ill-gotten capital could have hampered the freedom of movement of capital within the European borders. The tension emerges, also in the wording of the most recent EU money laundering Directives, due to lack of Community action against money laundering could lead Member States, for the purpose of protecting their financial systems, to adopt measures which could be inconsistent with completion of the single market.22 There are thus conflicting interests between the claim for regulation to avoid the infiltration of illicit capital, and the demand for deregulation to foster the free market. The European legislature, however, did not declare completely this intention and justified, instead, the imposition of anti-money laundering rules given the threats posed by money laundering to the financial system and thus to society. According to this critical approach, the criminalisation of money laundering turns out to be more of a political tool aimed at achieving governance within the EU, while being presented to the public as an essential intervention to guarantee security and well-being. Once again, thus, the declared goals of the lawmakers did not correspond with the real intentions. It is especially in the interest of a research on the law's effectiveness to unveil functions that were undeclared, in order to evaluate the outcomes in a more critical way. Also from the analysis of the national law-making process emerged divergent opinions and expectations relating to the criminalisation of money laundering. The Parliamentarians debate that took place with regard to the introduction of the money laundering offence and other instruments to tackle drug-trafficking shows that the discussion was deeply embedded in the political-historical context. Given that Germany was just reunified after a period of two dictatorial regimes, the hearing gives the impression that lawmakers felt the responsibility of creating a new legal system against such historical background. In order to balance the very different legal cultures, the divergent approaches had to be compromised. The introduction of a new crime was particularly delicate due to the discriminatory and arbitrary use of criminal labels by the previous dictatorial regimes. Therefore, delegates would not easily give up on fundamental rights for the cause of persecuting criminals. The legislation can be seen as an attempt to balance the need to adopt more effective measures to tackle crime and the necessity of respecting the rule of law and creating a 'militant democracy'. Yet, given the external pressure of the FATF, the EU and of the media, the text was less of a compromise and rather a ratification of 'internationally' accepted standards. The rule of law was not the only issue emerged in the initial phase of the political debate. Controversial opinions were raised also with regard to the questions of the mens rea and the interest protected by the new criminal provision: Certain political parties supported the broadest criminal liability to ensure an effective prosecution of money laundering, other parties were worried that a widespread liability would have been cumbersome for the economic system. Moreover, along with the expansion of the international criminal legal framework to fight against money laundering, also the scope of Article 261 Gcc was extended to include ever-new predicate offences. From the analysis of the doctrinal debate, it emerged that legal scholars have revealed technical hindrances that hinder the provision's legitimacy and thus hamper a positive integration of the act in the criminal legal system. In addition, given that most controversial issues are caused by the wording of the offence, the chapter seems to uphold the idea of an intentional potential decriminalisation of money launderers. The wording of Article 261 Gcc has the potential of frustrating some of the intentions expressed by the legislature in occasion of the adoption of the provision. While the vague formulation of the money laundering offence was thought to tackle ever-new emergencies and has been justified by legislatures as necessary to ensure a more effective fight against money laundering, it has also raised issues that, far from being purely dogmatic, have undermined the acceptance of such law. If law makers have designed the offence in a broad way to allow the criminalisation of conducts that could not have been prosecuted by the existing offences before, the large discretion left to prosecutors, has resulted in a cumbersome element for the prosecution of money laundering. In addition, criminalising the reckless conduct without envisaging a specific criminal liability for security positions has widened the scope of the offence to the point that the law has missed its function of isolating criminals by criminalising gate-keepers' activities. In addition it emerged that there are some open questions with regard to the wording of the offence, for example the question of the interests protected by Article 261 Gcc. On one side a state intervention is considered necessary to contain the impact of economic misbehaviours to protect citizens, on the other side it is important to limit the resort to criminal law only for safeguarding individual or collective situations and not for defending an existing economic structure. The economic system may, in fact, not be considered as a collective interest that needs protection. Also, safeguards provided by penal law need to be substantial and not symbolic, because they urge to change a given situation of inequality, where criminals can profit from illegal practices while legitimate economic actors undergo unfair competition. From the doctrinal analysis it has instead emerged that the legislator seemed to be more interested in drafting a symbolic legislation that can be hardly integrated in the legal system and that raise strong challenges. Lawmakers have been focusing on expanding the reach of anti-money laundering in order to improve its effectiveness, yet without providing legitimacy for such expansion. One of the most meaningful fact observed in the qualitative analysis of statistical data is that organised crime and 'gross money laundering' are not persecuted through Article 261 Gcc. This fact can be inferred by the low number of convictions pursuant to Article 261 (4),23 by the low number of money laundering proceedings categorised as organised crime and by the low number of investigations in the field of money laundering, tax crimes and economic crimes recorded by public prosecutors offices in 2013, where more than one person was involved (18 %). Yet, this does not mean that the criminal justice system does not act against them, but rather that it uses other tools to achieve the goal. While the low conviction rate for serious money laundering cases could be also a symptom of a high degree of deterrence of the provision, it seems that law enforcement uses the money laundering charge as a fallback for authorities who are unable to acquire sufficient evidence in a preliminary phase for the predicate crime and necessitate further information otherwise not accessible. The charge of money laundering allows investigators to access the vast amount of information recorded pursuant to the GwG, which would not be otherwise accessible. Yet, after the investigative phase, prosecutors seem to prefer to modify the charge and opt for indictment for predicate offences instead. The law seems to be effective to the extent that it facilitates the initial investigations, while it does not serve directly the function of punishing money launderers. Besides having a substantial nature, the provisions seem to have a procedural function. It can be inferred that prosecutors find particularly difficult to bring evidence against organised money launderers also due to the fact that professional offenders do not leave traces. From the scarce use of Article 261 Gcc for tackling organised criminality, it can be inferred that the measure is not serving for one of the purposes declared by the legislature when introducing the offence. In addition, it can be hypothesised that other measures may be more suitable to tackle 'gross money laundering'. Given the high number of STRs filed and the low number of money laundering charges and of convictions deriving from the STRs since the introduction of the laws, it can be assumed that the system has been anyway maintained because it still provides some sort of benefits. It can be hypothesised that one benefit is the number of information provided to law enforcement agencies. This amount of recorded information is helpful not only to support further indictments, but also to increase the personnel awareness about the ever-changing money laundering techniques and schemes. Again the effect of the 'law in action' differs in respect to the declared legislative intentions, which justified the criminalisation of money laundering with the necessity of tackling organised crime's economic power. By spelling out this function, the assessment on the effectiveness of the law - as the possibility of collecting information - can be positive. Yet, this effect could be considered a social cost rather than a benefit. On a theoretical side, many scholars see the recording of personal information by private actors as an infringement of the right to privacy.24 On a more practical side such mechanism imposes significant costs on the designated businesses and professions that are in charge of collecting the data.25 When compared to the effective outcomes of the preventive regulations, in terms of law enforcement results, this aspect does not seem to win a cost-benefit analysis, as showed in the quoted researches. If one considers the advantages in terms of information collected, the policy may be considered worth the burden imposed, instead. However, the fact that the laws would have an effective impact on the long run on the fight against money laundering and organised crime may be seen as a diminished deterrence effect, because perpetrators would have the time to adapt to the new laws and find new ways of circumventing them. A collateral effect of the long-run effectiveness of the policy hypothesised on the basis of the outcomes of the research on the implementation is the fact that perpetrators could take advantage of the initiated but not completed cases, by acquiring knowledge about law enforcement strategies and thus develop subterfuges to elude them. On the contrary, it seems that the legislature is always running after to cope with the offenders' ever-new strategies. In fact, regulations about a new sector are updated when there is evidence that there is a risk of money laundering in that specific sector. Yet, offenders might have already moved their laundering activities to another sector. On the assumption that the inclusion of the reckless conduct would have potentially criminalised daily activities, a focus was posed on the number of convictions related to Article 261 (5) Gcc26 to verify the target of the criminal provision. Since 2005 a high number of convictions have been actually referring to reckless money laundering. This shows that the offence is used to punish primarily 'petty money laundering'. This fact can also be inferred from the relevant number of money laundering cases to the detriment of senior citizens, signalled by the FIU in the recent years. Also the fact that a significant number of STRs is filed in relation to the 'financial agents' phenomenon' is a symptom that the preventive mechanism targets more 'small fishes' rather than big perpetrators. Individuals convicted for the reckless conduct may be even victims of a fraud perpetrated by criminal networks. However, the criminal network acting behind the offender remains undetected. If on the one side it cannot be claimed that such offenders, given the lower degree of culpability should not be punished at all, on the other side this effect of the law involves a change of paradigm. The money laundering offence was initially introduced with the goal of tackling serious crimes. The observed effect, however, changes the function and the nature of the law, so that Article 261 Gcc could be considered rather a 'blue collar crime' more than a 'white collar crime'. From the analysis on the quality of STRs filed to the FIU, it can be inferred that certain designated professions and businesses are very reluctant in filing STRs, despite their notably exposure to money laundering risks. The list of designated professions and businesses has been amplified over the years exactly with the goal of facing this transfer of crime from one area to the other. Yet some professionals, such as legal advisors, do not report them, although they possess the capacity of recognising illicit transactions. The fact that some sectors do not actively participate in the effort of preventing money laundering, by allowing criminal proceedings to enter the legitimate economy, may lead to a general ineffectiveness of the system, because it can significantly hinder the capacity of the whole anti-money laundering system to respond to the ability of offenders to move their field of activity there where the law is lax. The provision does generate some instrumental effects by punishing offenders and by triggering a cooperation directed at signalling suspicious transactions between the obliged entities and law enforcement. However, some of the effects do not seem to completely fulfil the legislature's declared goals. For example the chapter seems to prove wrong the legislature's expectation of tackling the grey area by punishing gate-keepers or the attributed function of eliminating organised and serious crime. Given the high costs of implementation highlighted by the cost-benefits analyses, the rather low outcomes seem to be insufficient to fulfil the legislature's goals. Since it is sufficient that without latent functions it would be impossible to explain the adoption and maintenance of a legal act,27 it can be concluded that the intents declared by lawmakers do not satisfy the reasons why the provision was introduced. This opens up the hypothesis that Article 261 Gcc is an example of a symbolic legislation, which has been enacted with the purpose of compromising a complex parliamentarian debate. The analysis of the law-making process has revealed the existence of different expectations attributed to the introduction of Article 261 Gcc. Expectations that were conflicting with each other had to be negotiated and were compromised through the formulation of a vague offence that allowed different interpretations. Yet, the implementation of the law has led to the re-emersion of some of the conflicting situations. In addition, given that the policy regulates a complex and multifaceted issue new conflicts have emerged through its enforcement. The effects triggered by the norm can be indeed perceived positively or negatively by the different actors involved. In particular five principal conflicting situations have surfaced from the interviews. The first issue is the role played by external actors in the law-making process and the constant influence exercised by those actors in the process of updating the policy. The imposition of a US American approach to money laundering control through the role of the FATF has also been highlighted in the second chapter. Specifically, some scholars see the development of a global prohibition regime fostered by the US in the diffusion of anti-money laundering law. According to this literature, the powerful state creates an international regime focussed on achieving its own goals through global acceptance triggered by the securitisation rhetoric and compliance processes imposed through the menace of exclusion by international business relations. The second conflict that emanates from the words of the respondents is the one of the demand for criminal law to face financial misbehaviours and the necessity of limiting the tendency of expanding criminal law on the background of a situation of financial instability. Given the previous deregulation of the market, policy makers need to control and sanction economic abuse in order to protect fair competition and law-abiding individuals. On the other hand, the state needs to respect fundamental principles, such as the rule of law and the principle of ultima ratio that imposes a restriction of the use of criminal law in situations in which no other measures are suitable. This conflict has already been raised along the formulation of the money laundering offence with regards to the question of the interests protected by the law. Despite the legislator tying to limit the scope of the offence by attributing to Article 261 Gcc the protection of the administration of justice and of the interests protected by the predicate offences, this explanation was not considered suitable to the peculiarity of the offence. Indeed, shortly after the enactment, legal scholarship and the judiciary entered in a vivid debate in order to identify more suitable interests protected by the law, among them the financial and economic system under different perspectives. However, as chapter three shows, no solution could be found. In fact, the question concerning the suitability of criminal law to tackle illicit financial flows is perceived in the current research as still unsolved. The matter does not only concern money laundering control. On the contrary, it is a fairly widespread issue that has recently emerged due to the tendency of hardening economic crimes on the background of a situation of financial instability. The third conflict can be summarised as the following: on the one hand the policy being required to interfere with the personal sphere of suspected money launderers; on the other hand private institutions being interested in protecting their relations with loyal and trusted customers. Therefore, they are reluctant to give law enforcement the possibility to interfere too much in their business. The interest manifested by the private sector involved in the prevention of money laundering seems thus to collide with the legislative intent of preventing the infiltration of dirty money by way of preventing gate-keepers to help money launderers. The clash emerges at a micro-economic level and is triggered by the fact that the anti-money laundering policy demands an active participation by private sector in the detection of suspects. Private actors, are not appropriate to bear the burden of detecting offenders, moreover they need to protect the relationships with customers by avoiding unnecessary interferences. At the same time, the privatisation of crime control is questionable also from a governance point of view. It seems therefore that the public interest in persecuting crimes through having access to personal information from the private sector only marginally collides with the interest of protecting the right to privacy. Businesses and professions are predominantly interested in not interfering with their clients and in not bearing the burden of detecting offenders. The issue was also addressed during the national Parliamentarian debate, with regards to the degree of mens rea required for money laundering criminal liability. Making everybody taking part in economic or financial activities actively participating in the monitoring of the economic system under the threat of criminal liability for negligent money laundering was considered harmful for the business market. The same debate has been picked up by legal scholarship too. Yet, it seems that, despite the law being the result of negotiations, the question is still open. The fourth issue consists of discording opinions with regards to the opportunity of including tax evasion as predicate offence for money laundering. On one hand there is the interest of tackling tax evasion through the anti-money laundering regime, on the hand the concern of keeping the two phenomena distinct in order to avoid an overrating of money laundering. Since the genesis of the anti-money laundering policy, some actors taking part in the international law-making process, opposed the labelling of 'black money', naming money deriving from tax violations, as 'dirty money', indicating all proceeds of crime typically committed by organised crime. This distinction was based on the perception that tax-related offences were less serious and less harmful than capital flight and were advocated by financial centres in order to maintain a good reputation while still granting peculiar financial services, such as bank secrecy. This issue is a good example of the labelling theory, to the extent that it shows how a practice that was firstly not considered criminal enough to amount to a predicate offence for money laundering, has become part of the scope of the anti-money laundering regime on the basis of a political decision of labelling it as such. Respondents of the current research show to have different perceptions of the degree of the seriousness of tax laws violations and thus about the appropriateness and necessity of tackling them under the umbrella of the anti-money laundering policy. Again, the matter, which seemed to have been resolved through the negotiations on an international and European level, is still being debated at national level. The last two contrasting interests are the necessity of regulating the flows of money and the free movements of capitals in a neoliberal economy. The question is intrinsic in the nature of money laundering, which is a phenomenon that happens at the interface between legality and illegality. Regulations that facilitate the licit exchange of goods, capitals and services do also facilitate the flow of ill-gotten gains; there are thus conflicting interests between the public interest of persecuting crime and the claims for less regulation in a free market economy. From the interviews surfaced that not only opinions on the effectiveness of the law differ, but the very concept of effectiveness is perceived differently among the interview partners. Perceptions about how effective the anti- money laundering policy is appear to be similar among respondents belonging to the same experts' group. In particular, given the fact that the policy triggers many preliminary investigations, investigators work on a daily basis with the provision. This led to their opinion on the implementation of the legislation being rather positive. Positive opinions have common ground: they assert that the policy is not a simple one to implement, however, they believe that the legal practice has found its way through. On the contrary, defence attorneys specialised in economic crimes do not receive a significant amount of clients suspected for money laundering. For this reason they tend to have a rather negative opinion on the policy's effectiveness, also driven by the perception that the policy is not able to achieve the indirect goals. The diverse concepts of effectiveness provided by disciplines close to the sociology of law and the different definitions of effectiveness given by sociologists of law turn out to be useful here. Particularly the notions of 'efficiency' and of 'efficiency regardless of the goals' are proved very useful to interpret the respondents' opinions. Efficiency, is according to the administrative legal approach, the optimal relation between the goals achieved and the instruments used. A subcategory of this concept is the efficiency calculated through a cost-benefit analysis, of which some examples have been presented in the fourth chapter, which defines efficiency as the functioning of a legal order without assessing the goals achieved. This type of analysis focuses on the correctness of the operating system since the purpose of the system is its own existence. It refers to a whole legal order rather than to a specific single provision. Given that the anti-money laundering policy constitutes a legal order, due to the diverse regulations involved and the competent authorities created in order to achieve the goals of the policy, this notion can be applied. In the field of administrative legal theories, the first chapter has focussed on the approach that considers the (in)effectiveness of a law depending on its (failing) enforcement. A high degree of compliance of the anti-money laundering legislation might correspond to a high level of effectiveness of the policy with respect to its direct function, but at the same time to a rather low level of effectiveness with regards to its indirect purposes. The way to evaluate the degree of effectiveness is therefore also different. While compliance with legal provisions is calculated through a quantitative assessment of the processes in force and of the functioning of the system, the achievement of the indirect functions is measured on the impact of the policy. Interview partners have different perceptions about the indirect functions of the legislation too. This reflects, once again, the fact that the policy was a result of a compromise between different expectations and that the legislator was not able to limit the scope of its application to a particular goal. The different expectations and intents, which already emerged in the doctrinal debate about the legally protected interests, appears again in the different perceptions of the interviewees. The respondents were asked about the legislation's effectiveness with regards to one of the indirect functions, namely the capacity to deter organised crime. The legislator enacted the money laundering offence in the context of the fight against drug trafficking and other forms of organised crime, thus Article 261 Gcc's expressed rationale is the prevention and repression of organised crime. Finally, a relevant outcome regards the respondents' opinions on article 261 Gcc's latent symbolic function. Some of them agree with this. Others strongly oppose the hypothesis. They argue instead that the policy has instrumental effects on their daily practice, which cannot be defined as purely symbolic. According to most respondents, the law cannot be defined as symbolic, because it has led to instrumental effects. In the first place information gathered thanks to the GwG is used to start preliminary investigations under Article 261 Gcc. Secondly, the structure enacted to comply with the anti-money laundering policy is attainable and is visible and cannot be denied. Thirdly, the law is considered necessary because it labels a deviant behaviour. In particular, despite the fact that investigations do not lead to a conviction for money laundering they allow investigators to collect information in support of criminal cases for the predicate offences or to start a preliminary investigation for a predicate offence. In this sense, the function of the 'law in action', despite being questionable, is objectively instrumental. However, the fact that the law serves the purpose of tackling predicate offences through the support of investigations does not exclude the hypothesis that the law was enacted to pursue latent functions too. According to the sociologist Aubert, it is not necessary that the latent goal is the only one that plays a role, but it is necessary that the other purposes would not explain the analysed phenomenon completely. Indeed, in the opinions of those who exclude the symbolic function, yet the results achieved through compliance do not legitimate the burden imposed by the legislation. In other words, it seems that they recognise that the purpose of compliance cannot completely explain the policy makers' motivation, which re-opens the doors for the hypothesis of the existence of latent functions. In fact, such a demanding policy cannot be accepted for the sole purpose of re-enforcing the action of the criminal justice system in tackling predicate offences. On the other hand, compliance with the policy in terms of building of a structure and of expertise does not automatically mean fulfilling the policy's purpose. Particularly the creation of new professionalism, has been interpreted by scholars as a sign given to the public that the policy has produced certain effects. In conclusion, on the background of the research's outcome, the paper tries to reply to the question: (How) can the effectiveness of the money laundering offence be improved? While technical hindrances can (and perhaps) will be removed through legal reforms, 28 the inherent political economic and financial conflicting interests that impede a higher level of effectiveness are more difficult to solve. In contemporary industrialised economies there is a complicated and sometimes shifting boundary between legitimate and illegitimate transactions. This is particularly exacerbated in the context of financial capitalism, which 'subordinates the capitalist productive process to the circulation of money and monetary assets and hence to the accumulation of money profits'. Since the very beginning, determining the boundary between an area defined as 'criminal' and the space of 'legality' has been controversial. In fact, money has a neutral nature, pecunia non olet, making profit, irrespective of the monies' origin, is a very strong interest for both private and public entities, which collides with the one of eliminating illicit financial flows. In other words criminal policy goals diverge from purely economic interests. While one can assume the justice and correctness of the current financial system, and thus describes money laundering as harmful because it interferes with the existing economic order, one can also assume that the capitalist system leads per se to injustice and inequality, and that money laundering is actually embedded in this profit-oriented system and represents just the darker side of the capitalist economy. A compromised viewpoint is the one that describes money laundering as an accepted collateral effect of the capitalist system, that is to say 'a certain amount of illicit financial flows may be considered an acceptable price to pay for a market where free mobility of capital is guaranteed'. In other words, money laundering is intrinsic in or at least exacerbated by the capitalist system.

As conflicts ignite around the world, dragging on in Ukraine while sparking off in the Middle East, venture capital is banking on defense.Indeed, United States-based venture capital investment in defense start-ups has doubled in four years. Only investing about $16 billion in 2019, U.S.-based VCs went on to seal over 200 defense and aerospace deals worth nearly $17 billion in the first five months of 2023 alone. Meanwhile, VC giant Sequoia invested in its first defense group, Mach Industries, earlier this year.Who are the defense VCs?Through their collective efforts, prominent venture capital firms including billionaire Peter Thiel's Founders Fund, Andreessen Horowitz (a16z), and Lux Capital are upstarts among today's rising stars in the defense sector, including Anduril, Hadrian, and Rebellion Defense. And in the process, VCs accrue not only high investment returns, but also growing influence over U.S. foreign policy.Moreover, VC-backed groups in the defense space are giving established defense contractors like Lockheed Martin and RTX (formerly Raytheon) a run for their money. As Jamie Martin noted on BookForum four years ago, Founders Fund-backed Palantir had beaten out RTX to secure an $800 million army contract, and Elon Musk's VC-powered SpaceX had been gobbling up satellite sector funds, forcing Boeing and Lockheed Martin to develop their own venture capital operations, Horizon X and Lockheed Martin Ventures respectively, to compete.Fast forward to 2023 and VC's domination of the defense space has crystallized in a conflict-mired era. Newcomer machine-parts startup Hadrian was founded only in 2020, but has already soared to the defense industry's forefront, raising almost $100 million in funding as of late 2023,Likewise, venture capital has buoyed defense newcomer Rebellion Defense's rapid rise to prominence, with Rebellion raising $63 million in 2019 through the likes of former Google CEO Eric Schmidt's new venture capital firm Innovation Endeavors, Founders Fund, and angel investor James Murdoch, son of FOX News Founder Rupert Murdoch. Schmidt, Murdoch, and In-Q-Tel (the CIA's venture capital firm) Trustee Ted Schlein sit on Rebellion's Board. "It doesn't seem to be that working for the Pentagon is a dirty word anymore," explains William Hartung, a Senior Research Fellow at the Quincy Institute for Responsible Statecraft. "It seems like a lot of these startups are very much seeking that, and then the VC companies are facilitating it."Defense VCs thrive on conflictAt its heart, venture capital is a risky form of private equity financing. Despite the hundreds of billions of dollars U.S.-based VCs invest each year, about 75% of venture capitalist backed start-ups fail.Success in venture capital, therefore, depends on heavy-handed risk-taking in the hopes of big returns from a few investments. In the defense sector, however, high returns comparable to other VC-frequented industries, like tech, are uncommon, rendering VC investing choices complex. Ultimately, these coveted, yet elusive returns become more plausible in periods of tension and conflict, when governments — which VC-backed defense groups "depend" on for business-sustaining contracts — have a greater appetite for weaponry and adjacent tech.Mastering the influence game In any case, defense-focused VCs are gaming this primary client in their favor: like the U.S. government-defense contractor revolving door's advocacy for perpetual conflict, VCs are now becoming major Washington influencers while simultaneously jumpstarting defense's newest and biggest names.In this respect, billionaire VCs like Peter Thiel and Eric Schmidt are conspicuous for involvement in both sides of government-defense sector relations. While Thiel says he won't fund candidates in the 2024 race, he's previously supported a slew of successful Republican congressional campaigns. And after stints as Chief Financial Officer for Thiel's now-defunct Clarium Capital Management and Chief of Staff at Thiel Capital, Michael Kratsios took White House and Defense Department positions in the Trump administration, giving Thiel closer proximity to power.Furthermore Rebellion investor Schmidt is a member of the Defense Innovation Board, which advises lawmakers and the Pentagon on tech policies and, as the American Prospect former managing editor Jonathan Guyer writes, is "allocating resources toward the exact technology Rebellion [is] selling." Rebellion Defense obtained U.S. Air Force contracts worth up to $950 million in 2020. According to Guyer, the arrangement suggests "no firewall between Schmidt's work for the government and the private sector." Two Rebellion Defense employees also served on the Biden Administration's Presidential transition team.Indeed, VCs' lack of transparency and visibility in the public eye shields their activities in the defense space from critical scrutiny."If the head of the Joint Chiefs goes on the board of Lockheed Martin, everybody knows about it," says Hartung. "If a general goes on the board of some small tech company or as an advisor, that's not as visible. But their activities may actually be more dangerous because they're helping launch a whole new generation of technologies where we don't really know what the consequences will be as they apply to military issues."Meanwhile, talk from defense-focused VCs and their beneficiaries' suggests an urge to stir global tensions, or otherwise convince the Pentagon to prepare for the worst. For starters, VC-powered defense organizations are making their allegiance with Israel clear as it continues to pummel Gaza, with Palantir and Anduril making public pro-Israel statements and Israel employing VC-backed Shield AI's Nova 2 drone in besieged Gaza.Moreover, VC groups are poking the stick at China, now a nemesis in what Palantir senior policy adviser Jacob Helberg deems a brewing "tech war." (Helberg is also a member of the U.S.-China Economic Security and Review Commission, putting him in a prime position to focus lawmakers' national security-related policy concerns). Meanwhile, Lux Capital's website plainly states that China is "a serious threat to U.S. global hegemony." And a16z Cofounder Marc Andreesen has observed he has more success in policy conversations with lawmakers when he mentions China: "[A]ll of a sudden it's like, 'Oh well we need American A.I. to succeed, and we need American technology companies to succeed, and we need to beat the Chinese.'"Teaming up earlier this year, further, a group of 13 prominent tech companies and adjacent VC groups signed an open letter requesting defense procurement reforms to better open the U.S. defense budget to start-ups. The letter warns that if no changes are made, U.S. "competitors will continue to gain ground on the technological battlefield" leaving American warfighters at a disadvantage on the physical one.Anduril's Palmer Luckey even characterized VCs as "hawkish" for the sake of protecting existing investments in a recent interview, observing that "[e]veryone who cares about Ukraine is also watching Taiwan, because…Taiwan going south is an actual existential threat to many of their investments [based there]. And so I think you're seeing a lot of hawkishness on the part of venture capitalists" as a result. More bluntly, VC America's Frontier Fund (AFF) representative gloated that "if there is a kinetic event in the Pacific," referencing Taiwan,"some of our investments will [go up] 10x, like overnight."Meanwhile, cash flows suggest VCs' efforts are paying off: Anduril has earned an estimated $342 million in revenue in 2023, telling investors it's slated to score $625 million in new government contracts this year. Rebellion Defense's contracts doubled in 2023 alone. And, despite years of unprofitability, Palantir's stocks jumped 20% after impressive third-quarter results, in which the company made $72 million in net income. As Palantir's Alex Karp previously put it, "[b]ad times are very good for Palantir." Ultimately, VCs' success in this sector relies on conflict. In other words, they're looking for a fight.Dear RS readers: It has been an extraordinary year and our editing team has been working overtime to make sure that we are covering the current conflicts with quality, fresh analysis that doesn't cleave to the mainstream orthodoxy or take official Washington and the commentariat at face value. Our staff reporters, experts, and outside writers offer top-notch, independent work, daily. Please consider making a tax-exempt, year-end contribution to Responsible Statecraft so that we can continue this quality coverage — which you will find nowhere else — into 2024. Happy Holidays!

Authors: Rick Tallman, Daniel Cardenas, and Morgan BazilianMartin Scorsese's new film, "Killers of the Flower Moon" brings David Grann's award-winning book to a wide audience. The story depicts the murders of tens of Osage people in Oklahoma after the discovery of oil—a brutal attempt to limit the amount of wealth given to the Native Americans. As the energy transition plays out across the United States, tribal communities see both a tremendous opportunity and a direct threat to their sovereignty. The immense natural resources of tribal lands will almost certainly be needed to help secure the future of American energy security. At the same time, a history of energy exploitation has left reservation communities with systemic problems and unmet needs that energy policy makers, regulators and industry leaders must acknowledge, understand, and address in any go-forward plans.Each Tribe's energy strategy is driven first and foremost by the needs and priorities of their tribal citizens, especially those living on reservation land. Although community needs vary greatly between tribes and their reservation locations, they share a root of rampant poverty fueled by a pervasive lack of economic opportunity. These challenges are made more difficult by layers of government bureaucracy, including Federal, State, Local, and Tribal, that severely limit the impact of many tribal efforts. Priority needs of Native American communities include a focus on economic development, education, and environment. Fighting generational poverty is the key. More than one in four Native Americans live in poverty, the highest rate of any group in the United States. The poverty rate is even higher for those who reside on reservations. Unemployment continues to drive much of daily life on reservations. Although the official unemployment rate among Native Americans is high (currently 8% - about twice the national average), unemployment among people living on reservations continues to hover around its historical 50% mark. Additionally, less than 50% of native homes are connected to a public sewer system and of those, 16% lack indoor plumbing and 14% lack electricityStanding in stark contrast to the challenges reservation communities face is the opportunity to access the trillions of dollars of natural resources found on their sovereign lands. Unfortunately, structural political and regulatory barriers have made it difficult for tribes to take advantage of development opportunities, combined with the paternalistic policies of the Federal government towards tribes continue to make self-determination and tribal sovereignty an uphill battle in terms of resource development. The resource mix of each tribe is different, and greatly impacts their respective economic and political positions. Oil and natural gas have long been associated with Tribal Lands. Indian reservations hold more than 35% of America's fossil fuel resources. Energy Resource Tribes puts the total combined value of these fuels at $1.5 trillion. Although Native American reservations represent only 2% of US land, they hold 20% of the country's oil and gas reserves. The Bakken shale formation continues to provide the Mandan, Hidatsa and Arikaara Nation in North Dakota billions of dollars of revenues, although major regulatory issues remain. Other tribes with major oil holdings include the Osage in Oklahoma, the Navaho (Dine') in the Southwest and various Native corporations in Alaska. The Southern Ute Indian Tribe has some of the most sophisticated natural gas producing operations anywhere and operates with a philosophy of maximizing benefits to tribal membership from natural resource development while minimizing the impact on the natural and cultural environment. The Navajo-owned operation in the Aneth field in southern Utah brings in about $28 million to $35 million annually.Native American lands are also home to large coal reserves, mines, and power plants. Navajo, Hopi, and Crow lands all have coal mines as well as remaining coal deposits. The Uintah, Ouray, Fort Berthold, Northern Cheyenne, and Zuni have coal reserves with potential for development. In 2019, coal-related operations ended abruptly for the Hopi tribe with the closure of the Navajo Generating Station (NGS) and the associated Kayenta Mine. This translated into over 1,000 jobs lost and an 85% reduction to the Tribe's revenue. The Hopi are now working to reinvent their tribal economy away from coal, forming a diverse revenue base that includes renewable energy development. It is hard to overstate the impact of uranium on the Native American community. From roughly 1950 to 1980, 928 nuclear tests took place on Shoshone territory, and 96% of all U.S. defense-related uranium mines were located in the Navajo Nation. Today, there are at least 523 abandoned uranium mines and four abandoned uranium mills on or near the Navajo Nation. The Lakota tribal territory hosts over 3,200 uranium mines, many of which await cleanup. With today's urgent demand for large capacity clean power generation, anticipated future uranium demand is skyrocketing. Tribes find themselves faced again with balancing desperately needed new revenue streams with an unsettled history of resource exploitation and a lack of direct tribal economic prosperity linked to such development.Solar energy is emerging as a key opportunity to many Tribes that do not hold natural resources on their land. The low cost to generate solar power coupled with high demand for clean energy across western states is driving tribal interest in solar energy. Federal support has been strong for solar projects on reservations. The DOE recently awarded $34 million to 18 different Native American energy projects. Fourteen were solar projects, primarily as a component of community microgrids. Recently, the Navajo Nation signed an MOU with the Department of Energy to facilitate funding for a solar-based clean energy transition. The Hopi Tribe were named as finalist for an EDA award and have received $1.2 million for solar infrastructure design and planning. The Great Plains of the US are home to some of the best wind resource in the world. Material revenue opportunities and net energy independence are achievable for many tribes through utility-scale wind power. Several tribes are currently using wind power or developing new projects, including the Standing Rock Sioux and Spirit Lake Tribes, Cherokee Nation, and several Native Alaskan communities. A case study to consider is the Octet Sakowin Power Authority (OSPA), a coalition of 7 Sioux tribes created to develop the major wind capacity on tribal lands in South Dakota. Their first two projects total almost 2GW of capacity, and would have a massive positive impact on local tribal economies. Earlier this summer after 10 years of pre-construction work, OSPA and their development partner were hit with a $48-million security deposit in order to secure the projects' place in the interconnection queue. The tribes, unable to make the deposit, have had to drop out of the queue, adding years to project schedules.How can it be that our country's most valuable natural resource portfolio is collectively owned by our poorest citizens? Without the basic authorities to enforce laws or levy taxes, hamstrung tribal governments are often forced to bargain for basic financial solvency at the expense of their cultural values. At least three things can help. First, Federal and state policy makers, regulators and industry leaders must seize the opportunity offered by the energy transition to achieve national energy security goals in partnership with tribal communities and with respect to their energy sovereignty and self-determination. Second, Tribes should be included early and often in meaningful discussions about permitting and revenue sharing, before outside development plans are finalized. Third, vastly increased funding for tribal energy development projects should be allocated by congress and the federal government, which minimize funding match requirements and direct competition amongst tribes. If federal and state policy makers, industry, and academia can rise to meet these challenges, pursuit of the dual goals of energy security and tribal self-determination can support a new era of economic opportunity and prosperity for tribes and American energy independence.

The demand for energy in East Asia Summit (EAS) countries led mostly by their power and transport sectors has been growing substantially. The energy demand in the transport sector is mainly on oil, of which imports have been growing rapidly as the demand surpasses domestic production, causing concerns on energy supply security. Some EAS countries subsidise oil products to ensure affordable price levels for social considerations, but this exacerbates their fiscal balance. In addition, the upsurge in motorised vehicles in their cities has worsened the air quality. As these incidents prove, increases in transport demand and thus oil demand have great socio economic impact, and the improvement in the efficiency in the transport sector's oil demand is an important policy agenda across EAS countries. The growth in the transport sector's oil demand has been caused by the motorisation in cities where income levels have been rising rapidly. Particularly in urban areas, such rise in passenger vehicle ownership has been causing a number of socio economic issues, including chronic traffic congestion. In fact, the average travel speed in some urban areas in Asia is low for example, Jakarta's travel speed is at 15 km per hour, and Bangkok's is at 12 km per hour. This incurs energy waste, lost time in economic activities, and poor air quality. It is thus necessary for EAS countries to take on a growth pattern different from that of developed countries. For a sustainable socio economic development, emerging Asian countries are required to meet three objectives: enhance energy security improve environmental quality and stabilise economic growth and create smart communities''. Unlike conventional economic development paths these three objectives have to be achieved simultaneously. Smart communities aim to simultaneously achieve efficiency in the transport sector and lower the environmental burden by optimising transport infrastructure such as roads and railways , introducing next generation vehicles (hybrid, plug in hybrid vehicle , and electronic vehicle), and managing the transport. In other words, a smart community for the transport sector can cope with various transport issues in Asian urban areas. A number of studies had considered the energy saving potential in Asia's transport sector by shifting towards fuel efficient vehicle units. However, this particular study is unique in that its approach focuses on the interrelationship between energy demand and traffic flow. It utilises a simulation model that will be able to analyse the impact of infrastructure development on traffic flow and the subsequent impact of the transport sector's energy efficiency improvements. The outcomes from the study are expected to provide new insights that will contribute to the sustainable development in EAS cities with urban transport improvements.

 The change in the connection between education and party--a shift of educated voters towards the Democrats and less educated voters towards the Republicans--has received a lot of attention.  One popular view is that working class voters have moved away from the Democrats because the party no longer pays attention to their economic interests.  Writing in the New York Times, Pamela Paul says "When it comes to economics, the authors say, Democrats have too often pursued the interests of their own elites and donors. Since the 1990s, the party has pursued policies that worsen the economic plight of Americans who are not well off."  However, although you can find examples that arguably support this analysis, if you look at spending on a range of social programs, the idea that the Democrats have stopped trying to help people with low and moderate incomes doesn't hold up:  see this post.  A new paper by Ilyana Kuziemko, Nicolas Longuet Marx & Suresh Naidu offers a more promising idea:  that education affects relative support for "predistribution"--policies designed to affect jobs and wages--versus "redistribution."  Less educated people tend to favor predistribution, while more educated people favor redistribution, so as educated people have come to have more influence in the Democratic party, policies have shifted towards redistribution.  Thus, although they are still trying to help the working class, they're doing it in a way that has less appeal to the working class.  As an example of the effect of education on different kinds of opinions, here is the percent of college graduates and others who take the liberal position on some questions from a 2015 CBS News/NY Times survey:           Not grad grad    DifferenceTax stock transactions 35 39        4Tax million incomes     69 69      0sick leave          86 85       -1caregiver leave 83 79       -4Union power         45 40      -5trade restrictions         69 64         -5Minimum wage $15         40 35         -5Minimum wage $10     75 69          -6limit CEO pay         56 45       -11schedule notice 78 66       -12Distribution fair 75 63        -12Positive numbers in the "difference" column mean that college graduates are more liberal than less educated people; negative numbers mean they're more conservative.  Most of the figures are negative, but if you look more closely there's a pattern--more educated people are equally or more liberal when it comes to raising taxes on people with high incomes, but more conservative on things that involve direct regulation.  The biggest difference ("schedule notice") is for a question about whether hourly workers should be given two weeks notice of any change in hours worked or compensated with overtime pay.* None of the differences are especially large, but they are consistent, so they can contribute to a general image of the parties.  I think that their analysis explains at least part of the shift in party support, and I've made a similar but less systematic account in this paper, although I think that the effect of education on economic opinions has also shifted in a liberal direction--definitely on redistribution, but probably on predistribution as well.  Finally, there's a question of whether the shift led to a change in overall support for the parties?  A New York Times article by Peter Coy on the Kuziemko et al. paper says it does--the title is "How Democrats Lost Voters With a 'Compensate Losers' Strategy."  But the paper doesn't actually discuss this issue, and in principle it could go in either direction--the gains among educated voters could be bigger, smaller, or equal to the losses among less educated voters.  I'll discuss this point more in a future post, but at this point I'll just observe that the assumption that this shift is bad for the Democrats is revealing in itself--there is now a general idea that it's better to appeal to the "working class" than to "elites."  So Democrats worry about the shift, while Republicans are proud of it.[Data from the Roper Center for Public Opinion Research]* I take support for trade restrictions as the liberal position.  In addition to the policy questions, I also show the results for a question on whether the overall distribution of income is fair.