Who's the Legislator Anyway? How the Fatf's Global Norms Reshape Australian Counter Terrorist Financing Laws
| DOI | 10.1177/0067205X1704500106 |
| Date | 01 March 2017 |
| Published date | 01 March 2017 |
| Subject Matter | Article |
WHO’S THE LEGISLATOR ANYWAY? HOW THE FATF’S
GLOBAL NORMS RESHAPE AUSTRALIAN COUNTER
TERRORIST FINANCING LAWS
Doron Goldbarsht*
ABSTRACT
This article focuses on the Australian implementation of the Financial Action Task Force
(FATF) Recommendations, so-called ‘soft law’ instruments, which represent the
international standards in Counter Terrorist Financing (CTF) but which force legislators
to conform. The article will fill the gaps existing in the literature today by focusing on
the origins and motives of broad CTF legislation in A ustralia, then detailing each of the
FATF’s CTF Recommendations and the ways in which they are implemented in
Australia. Thi s approach d iffers significantly fro m other literature in the field, which
deals solely with Australian implementation of one of the FATF’s components. The
current paper’s examination will reveal the CTF regime in Australia, a decade after the
FATF’s first CTF Mutual Evaluation Report on Australia, and its decisive influence.
I INTRODUCTION
On 17 December 1996, the United Nations General Assembly (UNGA) adopted a
resolution which urged all Membe r States to take steps to prevent and counteract,
through appropriate domestic measures, the financing of terrorists and ter rorist
organisations.
1
Two years later, as a means of implementing the above-mentioned
resolution, the UNGA decided to draft an International Convention for the Suppression
of the Financing of Terrorism (otherwise known as the Terrorist Financing Convention);
2
hoping that it could complement the co nventions already in place to counter terrorism.
The convention contai ns provisions which declare terrorist financing a criminal act,
orders whic h impose re strictions on fi nancial institutions to prevent their use for the
* PhD (candidate), University of New South Wales Law School. The author wishes to thank
Professor Rosalind Dixon, Professor David Kinley, Professor Jackie Harvey, Mrs Hayley
Greenhalgh and the two anonymous commentators for their comments on an earlier draft.
1
Measures to Eliminate International Terrorism, GA Res 51/210, UN GAOR, 51st sess, 88th plen
mtg, UN Doc A/RES/51/210 (17 December 1996).
2
International Convention for the Suppression of the Financing of Terrorism, opened for signature
10 January 2000, 2178 UNTS 197 (entered into force 10 April 2002).
128 Federal Law Review Volume 45
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deposit and transfer of terrorist funds, and maintain that international cooperation is
critical for an effective fight against terrorist financing.
3
The Terrorist Financing Conventi on is an i mportant tool with which States regulate
their interactions with each other with regard to Counter Terrorist Financing (CTF),
however, it is not the only tool used to do so. The international standard today in the
field of CTF has been set by the Financial Action Task Force (FATF), a classic example of
an inter-gover nmental body formulating s oft law norms.
4
These norms are known as
‘Recommendations’, being detailed technical standards that cover regulatory,
supervisory, law enforcement, and legal issues.
5
The scholars of soft law (and hard) are many and varied, including Positivists—for
whom hard law refers to formally binding legal obligations, while soft law refers to non-
binding legal obligations which may nevertheless lead to binding hard law’;
6
Rationalists—who conten d that hard and soft law have distinct attributes that states
choose for diff erent contexts;
7
or Constructivists—who often favour soft law
instruments for their capacity to generate shared norms and a sense of common purpose
and identity, without the constraints raised by concerns over potential litiga tion.
8
Regardless of their views about the strengths and weaknesses of hard and soft law as
alternatives, all three schools depict the adoption of hard and soft law as issues of
choice.
9
This literature offers rich accounts of why states opt for harder or softer legal
agreements, and how hard and soft law can affect their behaviour and (possibly) their
interests.
3
Mark Pieth, ‘Criminalizing the Financing of Terrorism’ (2006) 4(5) Journal of International
Criminal Justice 1074.
4
Kenneth S. Blazejewski, ‘The FATF and Its Institutional Partners: Improving the Effectiveness
and Accountability of Transgovernmental Networks’ (2008) 22 Temple International and
Comparative Law Journal 1, 10; Kenneth W. Abbott, Duncan Snidal and Bernhard Zangl (eds),
International Organizations as Orchestrators (Cambridge University Press, 2 015) 289 (‘Abbott’);
See also Kenneth W. Abbott and Duncan Snidal, ‘Hard and Soft Law in International
Governance’ (2000) 54(3) International Organization 421 (‘Abbott and Snidal’); Daniel W
eDreznerDerzner, All Politics is Global: Explaining International Regulatory Regimes (Princeton
University Press, 2007).
5
Financial Action Task Force, Methodology for Assessing Technical Compliance with the FATF
Recommendations and the Effectiveness of AML/CFT Systems (February 2013) 2; Financial Action
Task Force, International Standards on Combating Money Laundering and the Financing of
Terrorism & Proliferation (February 2012, Updated June 2016) (‘FATF Recommendation’).
6
Gregory C. Shaffer and Mark A. Pollack, ‘Hard vs Soft Law: Alternatives, Complements and
Antagonists in International Governance’ (2010) 94 Minnesota Law Review 706, 707 (‘Shaffer &
Pollack’); See also Dinah L Shelton, Commitment and Compliance: The Role of Non-Binding Norms
in the International Legal System (Oxford University Press, 2003); Jan Klabbers, ‘The
Redundancy of Soft Law’ (1996) 65(2) Nordic Journal of International Law 167, 168.
7
Shaffer & Pollack, above n 6, 707; See also Charles Lipson, ‘Why Are Some International
Agreements Informal?’ (1991) 45 International Organization 495, 508; Andrew Guzman, How
International Law Works: A Rational Choice Theory (Oxford University Press, 2008) 71–111.
8
Shaffer & Pollack, above n 6, 708; See also David M. Trubek, Patrick Cottrell and Mark Nance
‘“Soft Law,” “Hard Law,” and EU Integration’, in Grainne De Burca and Joanne Scott (eds),
Law and New Governance in The EU and the US (Bloomsbury Publishing, 2006) 65, 67.
9
Shaffer & Pollack, above n 6, 708.
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