Abuse of Power: Starting the March to Restoring the Competitive Advantage of International Financial Centres
| Date | 01 April 2002 |
| Pages | 325-329 |
| DOI | https://doi.org/10.1108/eb027314 |
| Published date | 01 April 2002 |
| Author | Peter D. Maynard |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control — Vol. 5 No. 4
Abuse of Power: Starting the March to Restoring the
Competitive Advantage of International
Financial Centres
Peter D. Maynard
'The more laws, the less justice.' (Marcus Tullius
Cicero, De Officiis)
A lesson from the World Trade Center attack is that
you do not define a religious, ethnic or racial group
based on the bad people in that group. The vicious
and unconscionable acts of the terrorists do not
mean that all Muslims and followers of Islam and
all Arabs are terrorists. Similarly, the broader com-
munity should be defined in terms of noble accom-
plishments, such as human rights, instead of the
negative and reprehensible possibilities that may
take place.
More than two hundred years ago, Sir William
Blackstone in his classic Commentary on the Laws
of England, said it is better that ten guilty people
escape than one innocent suffer. For two centuries,
jurists have considered Blackstone's pronouncement
a profound statement of principle. On an individual
level, that maxim has been turned on its head in
recent years. Now, the innocent suffer, and the
guilty still go free. The fight against crime has
opened the door to introduce the excesses of a
police state. The pendulum has swung to the
extreme.
In the attack on the international financial centres,
human rights have suffered. At the same time, in the
new millennium, the economic development of
many countries depends on services, such as tourism
and finance, and not traditional sectors, such as agri-
cultural and raw material exports. Accordingly, the
economic viability of many countries is now under
threat, even when they had bona fide material,
human and infrastructural assets and a healthy com-
petitive advantage to make them legitimate financial
centres. Therefore, on a macro level, in many coun-
tries,
the right to a legitimate livelihood is in
danger in the present conditions.
A complaint of law enforcement authorities in the
metropolitan countries has been that the administra-
tion of justice is too slow in the developing world.
This complaint is not completely justified. But, as a
consequence, there has been a dangerous evolution
of a policy of circumventing the administration of
justice and short circuiting the right to due process.
Since the mutual assistance treaties, information has
been obtained and assets have been frozen, on the
basis of unilateral, ex parte court applications, in
which only one party, namely law enforcement, is
heard. Now, through the establishment of financial
intelligence units, law enforcement agencies of the
developed countries have gone a step further. They
seek to avoid the necessity of going before the
courts at all. Freezing of assets takes place purely by
executive, extra judicial action of a financial intelli-
gence unit. One executive requests another foreign
executive agency to freeze assets. It does so. The ben-
eficial owner has no legal recourse to stop the freezing
of its assets. It is as simple as that. What could be
faster? At the same time, this procedure takes place
at considerable cost and damage to the basic rights
and safeguards compatible with modern, democratic
societies.
This continuing and undesirable evolution has
been rejected in a new case, which reaffirms the
right to the protection of law, due process, and
access to the courts. The decision, now under
appeal, is a bold step, which has had reverberations
far and wide, well beyond the international financial
centre where it was pronounced. It can help to restore
the balance, which will make a realistic future in
financial services possible for many countries of the
world.
The case is Financial Clearing Corporation v
Attorney General.1 This paper deals with the facts,
human rights, the legislation, property and judicial
pre-authorisation, judicial function and the separa-
tion of powers, privacy, and the conclusion.
FACTS
The facts of the case are that the Financial Clearing
Corporation was an international business company
incorporated in the British Virgin Islands and had
Journal of Money Laundering Control
Vol.
5, No.
4,
2002, pp. 325-329
© Henry Stewart Publications
ISSN 1368-5201
Page 325
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