Globalisation as a legal problematic: balancing legal efficiency against legal principle: the case of money laundering

Abstract

PhdOver the relatively short period of the last three decades, an extensive body of law, both penal and regulatory, has developed in order to prevent and to control th1s seemingly burgeoning phenomenon of money laundering. Initial examination of this body of law immediately reveals that it is a legal order that pushes against the traditional frameworks of criminal justice. For example, this new legal order persistently rings "alarm bells" regarding its compatibility with such fundamental principles as the presumption of innocence, the principle of legality, the immunity against double jeopardy, and the rights to privacy especially financial privacy. It also blurs the public nature of policing, the prosecutorial burden of proof and the jurisdictional territoriality of criminal law. Its formation at the international level shows strong signs of supranationalism that challenges State sovereignty and the principle of consent in international law. This tension between money laundering law and traditional legal principles poses two related questions: (1) What is the reason for this apparent exceptionality of money laundering law?; and (2) How could the tension between law and principle be resolved? As conventional wisdom has it, understanding the law can-not be disassociated from its social context. Certainly, understanding money laundering law is only possible through an understanding of the process of social change that shaped it. During these past three decades "globalisation" characterised the process of social change that has been gathering momentum. It is this context that has instigated and shaped money laundering law. Globalisation has been propelled by both rapid technological innovation that rendered massive instantaneous communication possible as well as extensive processes of de-regulation and liberalisation. The combined effect of these developments was the emergence of non-state actors that operate across national borders and master substantial economic and informational power. Meanwhile, the State, as the primary agency of governance, has remained jurisdictionally territorial while becoming less dominantly powerful. Both features have resulted in a "governance crisis" and has turned globalisation into a "legal problematic. " The core thesis that emerges from this contextual analysis is that money laundering law is a response to globalisation as a legal problematic. As a solution, it employs six modalities of governance: de- glob alisation, extraterritorialisation, harmonisation, co-operation, privatisation and supranatinl-ql--,] -iq---ti,o, n, which are characterised by deviation from traditional legal principles. In terms of its modalities and their characteristics, money laundering law is not a unique response to the legal problematic. It is part of a current and general trend in legal governance. Resolving the tension between this trend and traditional legal principles is a two-way process that involves revising both the law and the principles. In presenting this thesis, the volume will be organised into seven chapters. Following ail introductory Chapter, Chapters Two and Three will analyse the legislative policy underlying money laundering law by conducting contextual and historical analysis. Chapters Four, Five and Six will expound upon the six modalities utilised by money laundering law to address the governance problem posed by globalisation. Finally, Chapter Seven will sum up the argument and suggest some direction for the future