National criminal jurisdiction over transnational financial crimes
| DOI | https://doi.org/10.1108/JFC-09-2019-0117 |
| Pages | 1361-1377 |
| Date | 03 February 2020 |
| Published date | 03 February 2020 |
| Author | Chat Le Nguyen |
| Subject Matter | Financial crime,Accounting & Finance |
National criminal jurisdiction over
transnational financial crimes
Chat Le Nguyen
School of Law, The University of the South Pacific, Suva, Fiji
Abstract
Purpose –The purpose of this paper is to examine the international standards for establishing national
jurisdiction over the transnational crimes of money laundering and bribery and identify challenges to the
adoptionof those standards by different states in practice.
Design/methodology/approach –This paper, first, defines transnational money laundering and
transnational bribery; then, itexamines the legal bases and principles on which a state can claim criminal
jurisdiction over these offences. This paper also discusses the application of jurisdictional conditions in a
transnationalcontext and how to deal with the problems arisingfrom national claim of jurisdiction over these
offences,for example, jurisdictional concurrence.
Findings –This paper argues that when the jurisdictional concurrence occurs, the involved states should
consult one another by taking into account a number of relevant factors and take the “centre of gravity”
approachto deciding whichstate or forum shouldprosecute eventually.States lessable to establish jurisdiction
overthe offences are oftenthose which havea weak legal basisand/or insufficient resources.
Originality/value –To the authors’knowledge, this article wouldbe the good guidance on how a state
could claimjurisdiction over the offences of transnationalmoney laundering and transnational bribery.
Keywords Money laundering, Bribery, Criminal jurisdiction, Jurisdictional concurrence
Paper type General review
1. Introduction
Economic globalization and advanced technologies have facilitated the commission of
financial crimes, such as money laundering, corruption and financial frauds, beyond
national border. A financial crime now may occur in more than one national territory. The
emergence of transnational financial crimes has necessitated states to establish adequate
extraterritorialjurisdiction to eliminate “havens”for the offenders.
National criminal jurisdiction includes first, prescriptive (or legislative) jurisdiction,
which denotes the authority of a State to criminalize a given form of conduct; second,
executive jurisdiction (or enforcement jurisdiction), which indicates the power of national
law enforcement agenciesto investigate, arrest,detain, prosecute and confiscate the criminal
proceeds and third, adjudicativejurisdiction over a criminal case. Driven by the principle of
sovereign equality and territorial integrity of states, in general criminal jurisdiction is
facultative rather than mandatory. The exercise of criminal jurisdiction is ultimately a
matter for individualstates.
Nevertheless, the gravity of transnational crime has forced states to join different
international conventions to set up regulations of establishing national jurisdiction over
certain criminal offences. These regulations are stated in Article 4 of United Nations (UN)
convention against illicit traffic in narcotic drugs and psychotropic substances (1988
Vienna Convention) (UN, 1988), Article 15 of UN Convention against Transnational
Organized Crime (Palermo Convention)(UN, 2000) and Article 42 of UN Convention against
Corruption (UNCAC) (UN, 2003). These frameworks provide for both binding and
National
criminal
jurisdiction
1361
Journalof Financial Crime
Vol.27 No. 4, 2020
pp. 1361-1377
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-09-2019-0117
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
permissive jurisdiction. Accordingly, the state parties “shall”assert their jurisdiction over
the given offences based on the principle of strict territorialityor “quasi territoriality[1]”and
“may”extend their jurisdiction over such offences in several ways beyond their territory,
known as extraterritorial jurisdiction. Although the assertion of extraterritorial jurisdiction
over the given offences is necessary to preventthe offenders from utilizing national borders
for the avoidance of prosecution,it is optional.
The general permissive bases for establishing national criminal jurisdiction include
territoriality and its variations, nationality (or active personality), passive personality,
protective principle and universality. In addition, the exercise of jurisdiction over
transnational crime should have to satisfy certain further conditions and principles,
of which the double/dual criminality and the principle of non bis in idem (or prohibition of
double jeopardy in common law states) are the most important.However, the application of
these principles and conditions varies upon different type of transnational crimes with its
own characteristicsand constituent elements, and sometimes is controversial.
The term “transnational crime”wasfirst used by the UN Crime Prevention and Criminal
Justice Branch at the Fifth UN Congress on the Prevention of Crime and Treatment of
Offenders (1975) “in orderto identify certain criminal phenomena transcendinginternational
borders, transgressing the laws of several states or having an impact on any countries”
(Mueller, 2001, p. 272).In the Fourth UN Survey of Crime Trends and Operations of Criminal
Justice System (1995), transnational crimes were described as “offences whose inception,
perpetration and/or direct or indirect effect involved more than one country”[2]. Following
this approach, Article 3(2) of the Palermo Convention provides that an offence is
“transnational”innature if it satisfies one of the following features:
it is committed in more than one State;
it is committed in one state but a substantial part of its preparation, planning,
direction or control takes place in another State;
it is committed in one state but involves an organized criminal group that engages
in criminal activities in more than one state; or
it is committed in one state but has substantial effects in another state.
It should be noted that the adjective “transnational”usually implies cross-frontier activities,
however entirely intra-national offence may be justified as “transnational”offence, for example,
if it belongs to category of the Palermo Convention provision.
This paper examines and discusses how a state establishes criminal jurisdiction over
transnational financial crimes, with the focus on transnational money laundering and
transnationalbribery. This paper is structured in three parts:
the general concept of transnational money laundering and transnational bribery;
the bases and principles on which a state can claim criminal jurisdiction over these
offences;
the application of jurisdictional conditions in a transnational context; and
how to deal with the particular problems arising from national claim of jurisdiction
over these offences, for example, jurisdictional concurrent.
2. Transnational money laundering
Despite different definitions, money laundering is generally understood as the process of
converting the proceeds derived from underlying criminal offences, called predicate
offences, to apparentlylegitimate property[3].
JFC
27,4
1362
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