Money Laundering and Globalization

Publication Date01 Dec 2008
DOIhttp://doi.org/10.1111/j.1467-6478.2008.00446.x
AuthorPeter Alldridge
JOURNAL OF LAW AND SOCIETY
VOLUME 35, NUMBER 4, DECEMBER 2008
ISSN: 0263-323X, pp. 437±63
Money Laundering and Globalization
Peter Alldridge*
The article traces the various imperatives generated by the com-
bination of the money laundering panic of the late 1990s with the
advent of globalization. If there is to be an attempt legally to regulate
laundering, it (laundering) must be a relatively serious offence, and
consequently the anticipated harm must be something other than
complicity. The regulatory framework must aspire to being universal
and watertight, and (because otherwise the policing costs would be too
great) the professions must be recruited to that endeavour. Laundering
must be one of the driving forces of international cooperation in
criminal justice and thus a force for the homogenization of criminal
justice systems.
INTRODUCTORY
Money laundering has become one of the great morals panic of our day. A
range of sources, including mass media, assert that it is bad, very interesting,
and slightly daring, but do not deal so much with what it is, how it is done, or
why (otherwise than as a form of complicity in some previous offence) it is
so damaging. One of the elements of the Westphalian conception of
sovereignty is the power of each nation-state to write and enforce its distinct
criminal laws. That power was one of the last to be swept away by
globalization.
1
Other specific crimes have from time to time provided a
437
ß2008 The Author. Journal Compilation ß2008 Cardiff University Law School. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
*School of Law, Queen Mary, University of London, Mile End Road,
London E1 4NS, England
p.w.alldridge@qmul.ac.uk
With thanks for comments made by colleagues at seminars at the University of London
Institute in Paris and the London Criminal Law/Criminal Justice Seminar, and by
anonymous referees. Errors and omissions that remain are mine.
1E.Nadelmann, `Global Prohibition Regimes: The Evolution of Norms in
International Society' (1990) 44 International Organization 479.
focus for this move ± sex tourism,
2
bribery of foreign officials,
3
and
terrorism offences, but this essay will suggest that money laundering, more
than any other, is the crime that reflects and energizes globalization, and that
it warrants attention in that context.
4
How has behaviour that until 1990 was not, without more, a crime in the
United Kingdom,
5
come to such prominence so rapidly, not just in the United
Kingdom but elsewhere, and what does any of this have to do with
globalization? There has been an enormous growth of law in the past almost
twenty years dealing with money laundering. Act, Instrument, Treaty, Con-
vention, and initiative have followed one upon another, and provision in res-
pect of laundering is part of the template for international agreements dealing
with almost any area of criminal law.
6
A significant branch of the financial
services sector of the world economy has been established in their wake.
The ambit of laundering law has become wider. A common tactic in the
extension of criminal law is to select `soft targets', that is, conduct to the
criminalization of which few would object, and then advance the frontiers of
criminality incrementally from them outwards. Had the decisions to pursue the
war on drugs
7
(and thus to generate criminal markets) not been taken in the
early 1970s, then the concern with the profits of drug dealing and
consequently the entire anti-money laundering (AML) industry would not
have arisen.
8
Under the United Nations Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances (signed in 1988 and enacted two
years later),
9
signatory states agreed to criminalize dealing in proceeds derived
from drug traffic; to enable the confiscation of narcotics-linked money and
property purchased therewith; and provide other signatories with the widest
measure of mutual legal assistance in investigating, prosecuting, and
confiscating narcotics-linked money from those who engage in acts deemed
criminal under the Convention.
10
In an historically significant move that
438
2 The Sexual Offences (Incitement and Conspiracy) Act 1997.
3OECD Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions (in force 1999).
4R.Hu
Èlsse, `Creating Demand for Global Governance: The Making of a Global
Money-laundering Problem' (2007) 21 Global Society 155.
5Criminal Justice (International Co-operation) Act 1990 s. 14 first made it an offence
to conceal or transfer the proceeds of drug trafficking.
6 Such provision appears, for example, in the 2006 UN Convention Against
Corruption .
7S.Duke and A. Gross, America's Longest War (1993).
8K.Hinterseer, Criminal Finance: The Political Economy of Money Laundering in a
Comparative Legal Context (2002); P. Van Duyne and M. Levi, Drugs and Money
(2005); D. Masciandaro (ed.), Global Financial Crime: Terrorism, Money
Laundering, and Off Shore Centres (2004).
9U.N. Doc. E/Conf. 82/15, 20 December 1988.
10 D.P. Stewart, `Internationalising the War on Drugs: the UN Convention Against
Illicit Traffic in Narcotic Drugs and Psychotropic Substances' (1990) 18 Denver J.
of International Law and Policy 387.
ß2008 The Author. Journal Compilation ß2008 Cardiff University Law School

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