The global anti‐money laundering court as a judicial and institutional imperative
| DOI | https://doi.org/10.1108/13685201111098888 |
| Published date | 04 January 2011 |
| Pages | 60-78 |
| Date | 04 January 2011 |
| Author | Norman Mugarura |
| Subject Matter | Accounting & finance |
The global anti-money laundering
court as a judicial and
institutional imperative
Norman Mugarura
Global Action Research and Development Initiative, Barking, UK
Abstract
Purpose – The paper aims to argue the case for the introduction of a global anti-money laundering
(AML) court. The proposed court as an institution can engender a rule-based ethos as well as an
environment for the transposition of AML regimes and requisite global changes into the society.
Design/methodology/approach – The paper was written by exploiting the significance of the
court system to the development of any society. In particular, the paper draws on a pivotal role played
by the European Court of Justice in enhancing economic integration of European member countries.
Another example utilised by this paper was the dispute settlement mechanism (DSM) in the WTO. The
DSM evolved an effective framework for settling international trade disputes and fundamentally
helped to streamline the system. This paper is of the contention that the court would ease the adoption
of global AML regimes and consequently ease the co-existence of countries in relation to global AML
initiatives.
Findings – The paper has delineated that any global initiatives either on money laundering (ML) or
otherwise will have to reside in a form of institutional framework for them to work effectively. Short of
that, it is possible that there will be enormous challenges for global AML regimes to function properly
as envisaged.
Research limitations/implications – The author is cognizant of the fact that states are still
mandated to veto his prepositions based on the principle of sovereignty of nations. States can also
refuse to lend their support – in its various dimensions to the proposed court.
Practical implications – It has to be noted that creating global AML regimes that are not going to
work is not good enough and in case it amounts to a wastage of scarce resources that would better be
utilised somewhere else.
Social implications – ML in its various manifestations has far reaching consequences for lives of
people wherever it is committed and should be accorded the seriousness it deserves.
Originality/value – The paper has been written based on the appreciation of the need to create
enforcement mechanisms of engendered global AML/combating financing of terrorism (CFT) regimes.
There are so many regimes masquerading as global, having been constituted with the mandate that
give them a global reach and yet, they do not live up to their expectation.
Keywords Money laundering,Law courts
Paper type Research paper
1. Introduction
Money laundering (ML) is as a process of manipulating legally or illegally acquired
wealth in a way that obscures its existence, origin or ownership for the purp ose of
avoiding law enforcement (Shams, 2004, p. 130). ML describes a deliberate, complicated
and sophisticated process by which proceeds of crime are camouflaged, disguised or
made to appear as if they were earned by legitimate means. It is a three-stage process
initiated when the potential launderer severs the dirty money from the predicate
crime generating it; followed by a series of transactions designed to obscure or destroy
The current issue and full text archive of this journal is available at
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JMLC
14,1
60
Journal of Money Laundering Control
Vol. 14 No. 1, 2011
pp. 60-78
qEmerald Group Publishing Limited
1368-5201
DOI 10.1108/13685201111098888
the money trail in order to foil pursuit; and reinvesting the crime proceeds in furtherance
of the objectives of the business (launderer) (Gilmore, 1990). ML[1] is described as “the
conversion or transfer of property; the concealment or disguise of its origin; its
acquisition or possession or use and the participation or association to commit, attempts
to commit and aiding, abetting, facilitating and counselling the commission of any of the
acts.” It also involves conduct, which in effect is similar to the offences of handling of the
proceeds of crime[2]. This is a well-established offence in many European Union (EU)
Member States (Gilmore, 1990) except that as ML, it would incur a higher penalty
(Gilmore, 1990). As for UK Proceeds of Crime Act (2002)[3], Section 329 criminalises mere
possession of criminal property. Thus, the conduct constituting ML extends beyond
mere handling of stolen goods as would be the case in relation to Section 22 of Theft Act
1968. As regards ML, there has to be action beyond mere possession of stolen goods,
such as assisting in retention or removal of property for the benefit of another person
(Alldridge, 2003). The Proceeds of Crime Act assimilates ML offences introduced by
criminal justice act (CJA) 1988 as amended by the CJA 1993. Section 93A(1)(a) of the CJA
1988 focuses on assistance when the retention or control by or on behalf of another (A) of
A’s proceeds of criminal conduct is facilitated whether by concealment, removal from
the jurisdiction or transfer of nominees or otherwise[4].
The complexity of prosecuting ML offences is underscored by the fact that ML has
become jurisdictional problematic[5]. ML might have been initiated in one country, by a
citizen of another country, who in turn channels the illicit money to a third country, and
in a currency of a fourth country. The intricate ML process can involve sovereign states,
state institutions, banks, state officials, criminals, criminal syndicates, complex legal
systems, international treaties, different cultures and traditions and the list goes on and
on. When the above problem is compounded by differences and fragmentation of
national anti-money laundering (AML) legislation has facilitated the growth of illicit
criminal activity around the globe (Mugarura, 2008). Criminals have exploited the
discrepancies among different legal systems of countries in different parts of the world
to gain access in the new markets. The tendency of national legal systems is to give
priority to the place of commission under the territoriality principle but as this situation
envisages there may be other intricacies beyond the scope of the above principle[6].
Added to the foregoing challenges is that sometimes there is indifference by states with
regard to global AML regimes either because of sovereignty issues but also the needfor a
state to protect its nationals from prosecution. Similarly, states might not want to lend
their support to the creation of global institution such as the court on ML because the
presence of such a court could undercut their global influence, and subsequent
prosecutions could undermine the state by creating an anti-investment climate locally.
It is therefore essential that the proposed global AML court be created to reinforce global
efforts adopted in relation to the threats of ML.
2. A brief glance at the International Criminal Court
With the inception of the International Criminal Court (ICC) in international arena, it
became evident that culprits who commit heinous crimes against their people as
opposed to the traditional approach of holding states accountable, are also brought to
book, and if found guilty in respect of the alleged crimes, are punished accordingly.
Article 13(b) of the Statute, provides for jurisdiction in any case where a territory or
nationality state has ratified the Statute, in which one or more of such crimes appears
Global
AML court
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