Interagency Coordination in Economic Crime Investigations in Latvia

Assessment and recommendations

Abstract

This section outlines the policy recommendations resulting from the OECD analysis that can contribute to increasing and improving the existing cooperation and coordination mechanisms in Latvia amongst the State Police departments involved in economic and financial crime investigations, and also between the State Police and other institutions. The recommendations support the Latvian State Police in improving their capacity for the investigation and prosecution of economic crimes.

This report analyses the existing cooperation and coordination mechanisms in Latvia amongst the State Police departments involved in economic crime investigation, and between the State Police and other institutions. Based on this analysis, this section summarises key policy recommendations that aim to support the ongoing efforts in the country to strengthen the investigation and prosecution of economic crime cases and enable the State Police to increase effectiveness and quality of the economic crime investigations in Latvia. Given the current high rate and pace of change within the State Police, the recommendations link in, where possible, to the current areas of change.

Recommendations

Review the current investigative model used in economic crime investigation and develop a dedicated economic crime strategy in Latvia

Despite the change in the response to economic crime in Latvia, marginal positive impact has been achieved. Drawing from the literature, such an outcome is not surprising, because little has changed in recent years with the investigative model used. There is merit, therefore, in developing a fresh approach to serious crime investigation that is cognisant of the nature of new and emerging economic crime investigations. It is timely to consider how best to do this given the current structural review that is ongoing in the State Police.

An approach to doing so should be written up within a dedicated economic crime strategy for Latvia. An overarching economic crime strategy should set out the priority areas for combatting economic crime, identify the greatest barriers to combatting such crime and distinguish where there is most scope for collaboration and commitment. Given the range of different crimes that constitute economic crime, there should be an overarching strategy with room to develop more targeted strategies for different economic crime types. An overarching economic crime strategy should provide a core theme, carried through all specific economic crime strategies to ensure complementarity across them in any future strategies.

A dedicated strategy to Economic Crime should be viewed as the foundation to all related actions in the context of improving the response to economic crime investigation and prosecution. As a result and in the context of this report, this recommendation should be viewed as underpinning all the recommendations made hereafter. By seeing the problems and challenges identified as a part of an interconnected system, the reform of each priority should influence improvements and strengthen the overall response to economic crime. While it is beyond the scope of this recommendation to set the priorities for Latvia in this area, several recommendations are made that should help to develop these priorities and strategy as a whole.

Conduct a threat assessment of economic crime in Latvia

Conducting a threat assessment of economic crime in Latvia, and the related performance of actors involved, will help to develop a better understanding of the threat posed and the nature and type of response offered currently. This is likely to require at least three activities. First, conduct a threat assessment of economic crime in the country, looking at the potential impact not just relating to crime, but also to the nation, security, economy, reputation, privacy, etc. These should not be viewed as silos, rather as interconnected and mutually dependent factors. The second element may be best done as a case review, whereby a random selection of cases from over the last few years is chosen and analysed to identify the specific problems that arose for cases or the things that worked well. Doing a case review is useful to find out the specific issues that are affecting cases at the individual level, which should also offer powerful insight into the threat posed and the efficiency of response. Third, there is a need to re-examine whether the powers, procedures and tools of law enforcement, the justice system and the private sector are effective, especially where a fresh approach is implemented.

Given the significant change in these areas over the last few years and at present, it may not appear feasible to make significant change again based on the findings of the threat assessment. To have a positive change in these areas, however, there is a need to look for and design innovative options to work within the current system, while at the same time doing it differently. This requires innovation, trust, cooperation, and interagency commitment. People selection is key, and managing risk proactively is required.

Carry out a stakeholder analysis of all actors involved in Economic Crime investigation and prosecution in Latvia

Identifying stakeholders is imperative, as there is a growing need to include actors outside the criminal justice system (CJS) in the proper investigation and prosecution of economic crime. This requires, first, an examination of all actors that are or could be involved in economic crime, or other crimes commonly committed in unison with such crimes. Drawing on the impact piece above will help identify actors that may not routinely be recognised as stakeholders in this area. Once identified, it is recommended that this activity be extended to examine the nature of their role, the data they have that may be of use, whether there are data sharing agreements, what agreements might be needed, etc. A stakeholder group often forgotten in this process is researchers who can have a really impactful role in designing, assessing, monitoring and measuring actions and impacts.

Second, once identified, it is good to hand pick interested, committed and enthusiastic individuals (even if only a small group at the start) to share innovative ideas, to take chances and risks, all with a shared belief in the new approach to bring about change. This helps boost the opportunity for early positive impact. It is also imperative to support these groups with management who have similar desires.

Conduct an analysis between existing and future required capacity, capability and skills of actors involved in Economic Crime investigation and prosecution in Latvia

Improving the response to economic crime investigation and prosecution in Latvia is likely to require building people's capacity and capabilities in some, if not all, areas. The information gathered during this analysis clearly demonstrates enhanced capacity and capability is needed regarding the proper investigation and prosecution of economic crime. The specific requirements, however, are likely to change based on the creation of a dedicated Economic Crime Strategy and if a new model was applied to such investigations. Thus, the analysis recommended should be conducted cognisant of the recommended strategy and a new investigative model being applied and the skills required to implement this.

In simple terms, the recommendation calls for an assessment of the current objectives of the response to economic crime, vis-à-vis an assessment of the skills, policies, practices, capacity and capabilities needed to achieve these. This analysis should also involve the newly identified stakeholders, as they are likely to bring new skills and capacities which should actually benefit the approach, and thereby reduce the overall need for certain skills.

Clearly define what successful investigation and prosecution look like and improve metrics for measuring it

To implement the last recommendation, a clear set of measurable objectives are required to define what a successful approach to investigation and prosecution looks like. This is currently not publicly available. It is recommended, therefore, that a collective effort be made between stakeholders in this area to determine and define what success looks like. Measuring impact is easier if the problem is clearly defined.

Taking a problem-oriented approach could assist in this regard, as it allows for a more scientific and methodological approach to measuring impact. In addition, such a metrics would help in determining where progress is made in relation to recommendations and actions taken. For example, it is very difficult to measure whether recommendations of previous reports have been implemented and if they have, whether improvements have been made, because there are few, if any, performance indicators of success provided within these recommendations or actions taken. This is problematic, but is also because of the nature of the recommendations made and the absence of a clear agreement on what success might look like. As a result, it is recommended that clearer performance indicators are developed and aligned with all actions taken on foot of the recommendations contained here by collective agreement of the key stakeholders in this area. It is also highly recommended that reasonable timelines are aligned with such indicators, as different actions are likely to take effect over varying periods.

Within this context, and similar to other reports, there is merit in exploring and developing a better system to collect data and measure success. At present, there are developments in this area in relation to improved IT systems, so any action taken should bear this in mind, as the situation is likely to improve with implementing these new systems. For example, if changes are made to the investigative model on foot of this review, changes to these data gathering systems may be necessary to ensure data required for performance management is available.

Enhance innovation in the application of legislation and procedures

Some prosecutors and investigators noted that where cooperation was good between them, there was a growing tendency to be innovative in how the law was applied and utilised. There are merits to such approaches for complex and evolving crime types. Investigations and prosecutions must stay at pace with evolving patterns of criminality. The fortunate thing about the criminal justice legal framework in Latvia is that it is broad enough to provide multiple procedural choices. Understanding such choices, and how they relate to differing context is key for both police and prosecutors being flexible to respond differently when required. This may also provide a mechanism to deal with simple and complex cases differently, without having a strict protocol for all cases.

To do this effectively, experienced, driven teams of investigators and prosecutors should be allocated to new complex cases, or older cases in which a resolution has yet to be found. At the start, it would be useful to have several mechanisms to identify such cases. This could include, for example, identification by the Prosecutor General’s Office, by the Lead Investigative Prosecutor and/or the Lead Investigator. Once identified, a small interagency team could be appointed that would examine innovative ways to approach each case. Individuals are already reportedly doing this, so their experiences should be gleaned in advance and their momentum used to streamline this as a process. It would be pertinent to closely monitor such cases to firmly establish what works and what does not, and appropriate action taken to change responses if necessary, or if effective to circulate such learning.

Develop a different system for dealing with simple and complex cases

There is clearly a difference in how the State Police and the Prosecutors deal with simple and complex investigative cases. The former being dealt with predominately by the police, and the latter requiring more intervention with the prosecutors. It might be easy to jump to the conclusion to allow this process to continue, given that the interviewees report large workloads on the part of the prosecutors, making it unlikely that they could oversee all investigations. For new investigators, however, they may not have the experience or know how to deal with even the simplest cases, so any new system for simple cases, should have early intervention by the prosecutors even if only to sign off a course of action for the more experienced investigators. This way, new investigators will develop good skills through oversight and cooperation with the prosecutors. Moreover, this approach will also enable prosecutors to better anticipate and manage their own workloads and appropriately balance the allocation of resources between simple and complex cases.

A process of early intervention by the prosecutors in all cases may also mitigate unintended avoidance practices on behalf of police officers. If the police learned that simple cases avoided interaction with the prosecutors, they may start splitting up cases to detract from their complexity; thus, benefiting from an unintended change in approach (e.g. the case with 700 victims, could be dealt with as 700 individual cases). Therefore, early intervention would allow prosecutors and the police to decide on the best approach for each case, including coordination on the allocation of resources, investigative strategies, and the sequencing and timeline of activities. Such early intervention would increase accountability and could act as a mechanism of oversight to ensure compliance with the law and guidelines for both police and prosecutors. In this way, protecting both the police and prosecutors for allegations of misconduct or improper practices. The important thing here is that a change to how simple and complex cases are dealt with needs to be cognisant of both new police and prosecutors and the opportunity to learn on simple cases, while also not indirectly providing some officers with an opportunity to misuse the system. There is also a need to ensure workloads are managed better to ensure parties have the capacity to fulfil these roles effectively.

In the context of more complex cases, the situation appears to be improving, so this should be given time to continue. In the interim, a quantitative review of all cases in the last few years should be conducted from report to police, prosecution and conviction, to see if the situation is actually improving. This should be coupled with a qualitative approach using a random selection of cases, to examine the problems or challenges that are present in these cases, and how they are being overcome and contributing to these positive improvements. Even if it is deemed to be effective, this opportunity should be seen as a chance to tweak the system to ensure further improvements can be achieved. Any big changes in this area at present may undermine the improvements that have been seen in the cases and prevent positive change having time to take effect.

Develop a comprehensive Training Strategy for the Latvian State Police

Issues pertaining to training are clearly identifiable in the investigation and prosecution of economic crime, with the closure of the Police Academy reported as a significant influencing factor. Similar to the need for a strategy specific to economic crime, it is highly recommended that the Latvian State Police explore the need to revitalise their training curriculum as a matter of priority, to ensure police officers are provided with the cross-functional and skills-based training they require at the point of entry into the organisation, but also as they move through the organisation, including specialized training curriculum designed for the different expert roles. There should be a focus on cross-functional and skills-based approach to training. For example, a financial crime investigator should be proficient not only in areas like accounting and financial analysis, but also using computer software that helps to summarize and visualize financial evidence (Excel, MS Power BI, IBM i2 Analyst’s Notebook, etc.) and digital evidence. These skills are necessary given that metadata from electronic records can be vital source of proof in cases of economic crime, corruption, and money laundering.

One of the first steps in this regard is to ensure that any changes are made within the broader training strategy of the Latvian State Police, which would benefit from having at least three layers–organisational training, role specific training, and professional development. It was evident in the review that there are different training needs and professional skills for different roles in the process of investigation and prosecution. No one curriculum will address all, therefore, it is recommended that each role is identified, responsibilities and requirements are assessed and training provided, prior to undertaking such positions. This does not take away the need for continuous professional development throughout service.

Training needs may overlap across different units or positions. This should be considered as beneficial, as inter-unit and interagency training is useful and can help develop relationships and identify shared goals. This is likely to be more impactful during professional development, rather than role specific training, but either way, it should be viewed as an opportunity for positive engagement and networking, elements highlighted as important during the analysis.

Assess role requirements and develop a dedicated training curriculum for Serious Crime Investigators in Latvia

In the context of economic crime investigators specifically, it is recommended that the State Police review the investigative model to be adopted and then build a new, dedicated and role led curriculum that all investigators are required to complete before taking up their new positions. This curriculum should be reviewed periodically to ensure it stays in tune with the changing landscape and also be flexible enough to be adapted if and when changes are made to investigative models. The content of the course should be developed with clear input from investigators and prosecutors to ensure it is fit for purpose and equips them with the information and learning opportunity required.

This recommendation is timely, given that there are plans in place and work progressed to introduce dedicated training for specific roles in 2022, such as serious crime investigations. Thus, this recommendation is made to ensure this is prioritised and that any recommendations made on foot of this report are communicated with those responsible for designing the training content to confirm the material is in line with any changes in the investigative model, or approach taken to economic crime investigation and prosecution more broadly. Careful communication between training content creators, investigators and management is key to ensuring training needs are met.

Enhance specialisation in financial, economic and corruption crimes

Similar to the OECD report (2021) it is highly recommended that both the police and prosecutors look to enhance specialisation in economic crime investigations, forensic expertise and prosecutions, in terms of roles and skills (OECD, 2021[1]). The complexity and specificities of such crimes require specialist, professional responses, which can only be built up through education, training, experience, and mentorship. Mentorship also ensure that officers are learning “on the job” in an effective manner. It should be borne in mind that specialisation and professionalisation in this area are likely to make both prosecutors and investigators more attractive to the private sector, which could be an unintended risk that needs to be managed.

Enhance attractiveness of the prosecution and investigation as a profession

An observation noted in the OECD report (2021) related to attracting and retaining the right human talent to the prosecution office. A similar reflection was made in this research in relation to investigators and forensic experts, as it is reportedly difficult to attract and retain these investigators because of the nature of economic crime investigation and the movement between other institutions and departments in the State Police. Some noted that talented investigators were increasingly been headhunted by the private sector. Thus, it is important to examine sustainable mechanism that motivate people to join and stay for prolonged periods so they can acquire the specialist knowledge and experience needed, and use this for the betterment of economic crime investigation. This is unlikely to be fixed solely with promises of greater remuneration. Consultation with stakeholders is important in this regard to ensure the underlying motivations and reasons for leaving are understood.

Reference

[1] OECD (2021), Performance of the Prosecution Services in Latvia: A Comparative Study, OECD Publishing, Paris, https://doi.org/10.1787/c0113907-en.