Compliance issues in arbitration proceedings – bribery, money laundering and other abuses
| Date | 31 January 2023 |
| Pages | 759-767 |
| DOI | https://doi.org/10.1108/JFC-10-2022-0241 |
| Published date | 31 January 2023 |
| Author | Fabian Teichmann,Sonia Ruxandra Boticiu,Bruno S. Sergi |
Compliance issues in arbitration
proceedings –bribery, money
laundering and other abuses
Fabian Teichmann and Sonia Ruxandra Boticiu
Teichmann International (Schweiz) AG, St. Gallen, Switzerland, and
Bruno S. Sergi
Harvard University, Cambridge, Massachusetts, USA
Abstract
Purpose –The purpose of this study is to providea firsthand perspective on the challengesand risks that
can arise in arbitrationproceedings.
Design/methodology/approach –To investigate the concrete methods money launderers use, a
qualitative study was conducted with 10alleged money launderers and 18 prevention experts. The results
were then tested quantitatively, and it was concluded that among money launderers, the highly regulated
financialsector is less popular than other sectors.
Findings –Money launderers relocate to unregulated sectors or offshore banks to avoidbeing questioned
by compliance officers. Therefore, it is necessary for arbitrators involved in commercial or investor–state
arbitration to have the expertise to readily identify the issues raised by these criminal law concepts and
provide answers.
Originality/value –This paper examines the intersectionbetween the areas of international commercial
arbitration and money laundering, bribery, as well as embezzlement.At the same time, it draws attention to
the need to analyzecompliance issues in arbitration proceedings.
Keywords Arbitration proceedings, Money laundering, Bribery, Embezzlement
Paper type Research paper
1. Introduction
International trade and investment disputes are frequently settled by arbitration, as investment
laws, investment treaties and commercial or investment contracts often contain arbitration
clauses. For this reason, in investment and global trade, arbitrators have played a crucial role
(Betz,2017a, 2017b). Arbitration is an alternative to national courts and allows for fairer dispute
competition. A relatively neutral tribunal can apply the rules of an impartial institution convened
in a country accessible to both parties. In a common language, proceeds can be conducted
according to rules that do not give either party an unfair advantage (Park, 2004). International
arbitration is often regarded as the most common method of resolving international commercial
disputes, whether between private or state entities, and its success is widely praised (Hedberg,
2016). However, international trade relations and investment may be affected by criminal
activities. In this context, economic crimes such as money laundering, corruption and fraud can
occur. One example is when an investment is obtained through fraud or br ibery or illegal funds
are used to finance investments or commercial transactions(Betz,2017a, 20 17b).
Disclosure of potential conflicts of interest: The authors have no relevant financial or non-financial
interests to disclose.
Compliance
issues
759
Journalof Financial Crime
Vol.31 No. 3, 2024
pp. 759-767
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-10-2022-0241
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
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