Money Laundering: Transnational Criminals, Globalisation and the Forces of ‘Redomestication’
| DOI | https://doi.org/10.1108/eb027120 |
| Published date | 01 January 1997 |
| Pages | 51-63 |
| Date | 01 January 1997 |
| Author | Jarrod Wiener |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control 1/1
Money Laundering: Transnational Criminals,
Globalisation and the Forces of 'Redomestication'
Jarrod Wiener
Many scholars of international relations have long
argued that by plotting on a map of the world all
the transnational contacts of private individuals the
international system resembles a 'cobweb'.1 While
the filaments of the cobweb remain uneven in
their magnitude as there is a higher degree of con-
tacts between major centres, the globalisation of
financial markets, particularly since the 1970s, has
enabled the cobweb to have a more global spread.
As importantly, the speed and relative ease with
which funds may be transferred across borders has
intensified the degree of contact along its fila-
ments. While the intent of this model of world
society was to highlight 'legitimised' transnational
contacts, it has become evident that this cobweb is
conducive to spreading security threats emanating
from nearly all parts of the globe, as well as being
rather effective at hiding the spiders that lurk
within it.
Indeed, the
Strategic
Survey 1994/95 stated that
'transnational crime inescapably violates national
borders, thus challenging one of the most funda-
mental attributes of sovereignty'.2 It proceeded to
characterise as a 'security threat' the activities of
criminals who take advantage of bank secrecy laws,
24-hour global money markets, and electronic
fund transfer facilities to disguise the source of,
and thereby to launder, the profits from other
illicit activities. In an address to the United
Nations (UN) General Assembly, US President
Clinton stated that 'criminal enterprises now move
large sums through the international financial
system that dwarf the gross national product of
some nations'3 and called upon the international
community to formulate a collective response to
organised crime, which an earlier Presidential
Decision Directive (PDD-42) had called a 'threat
to US national security'.4 Former UN Secretary-
General, Dr Boutros Boutros-Ghali, echoed this
sentiment in an article in
Foreign
Affairs where he
drew attention to the 'alarming' elements of glo-
balisation, namely the growth of transnational
criminal activities.5
It has been estimated that the turnover from
organised crime in the USA amounted to between
US$170bn and US$250bn in 1989, and that the
world-wide figure approached US$ltrn.6 While
this pales in comparison to the estimated $1trn
that is transferred on global money markets daily,
large-scale money laundering docs threaten the
integrity of global financial institutions and par-
ticularly the confidence that the international
financial system must maintain. This is apart from
the fact that money laundering enables criminals to
reap the profits from other illegal activities, includ-
ing economic crime, such as firm fraud, commod-
ity futures trading abuses and drug trafficking.
Unlike traditional threats to national security, a
global response is mandatory to stop completely
transnational money laundering. States' banking
laws and the ability to regulate flows of capital stop
at their borders, whereas criminals, and the global
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