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Does international law prohibit the facilitation of money laundering?

Published online by Cambridge University Press:  08 November 2022

Anton Moiseienko*
Affiliation:
College of Law, Australian National University, 5 Fellows Road, Acton ACT 2601, Australia

Abstract

There is a broad political consensus that states must not facilitate money laundering, especially as relates to the proceeds of foreign grand corruption. Over the past 30 years, an elaborate regulatory regime has been put in place in most countries to ensure that proceeds of crime are interdicted and confiscated. It rests on the technically non-binding recommendations of the Financial Action Task Force, an influential intergovernmental grouping. Despite this progress and the adoption of international treaties against corruption and organized crime, international law contains no express treaty rule that enjoins states from facilitating money laundering. Furthermore, there are formidable legal and practical obstacles to invoking international legal responsibility of states that do choose to benefit from enabling money laundering. This article explores the disconnect between international law as it stands and the widely accepted political imperative that states must not facilitate money laundering. It argues in favour of recognizing a self-standing customary rule to that effect, and outlines the content and likely impact of such a rule.

Type
ORIGINAL ARTICLE
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of The Foundation of the Leiden Journal of International Law in association with the Grotius Centre for International Law, Leiden University

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Footnotes

*

I would like to thank Professor Valsamis Mitsilegas and the anonymous reviewers for their thoughtful and helpful feedback.

References

1 N. Mugarura, ‘Tax Havens, Offshore Financial Centres and the Current Sanctions Regimes’, (2017) 24 Journal of Financial Crime 200; Garcia-Bernardo et al., ‘Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network’, (2017) 7 Scientific Reports 1.

2 See, e.g., Transparency International UK, ‘Faulty Towers: Understanding the Impact of Overseas Corruption on the London Property Market’, March 2017, available at www.transparency.org.uk/publications/faulty-towers-understanding-the-impact-of-overseas-corruption-on-the-london-property-market; L. Story and S. Saul, ‘Stream of Foreign Wealth Flows to Elite New York Real Estate’, New York Times, 7 February 2015, available at www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html.

3 ‘Economic crime’ and ‘financial crime’ are general terms that encompass money laundering, terrorist financing, proliferation financing and, occasionally, other offences such as fraud or insider trading. See, e.g., HM Government and UK Finance, ‘Economic Crime Plan 2019–22’, July 2019, 10, paras. 1.11–1.12, available at www.gov.uk/government/publications/economic-crime-plan-2019-to-2022.

4 ‘Grand corruption’ is not a legal term of art but is often used to describe corruption so widespread and endemic that it distorts decision-making at the highest levels of government. See, e.g., FATF, ‘Laundering the Proceeds of Corruption’, July 2011, at 7, available at www.fatf-gafi.org/media/fatf/documents/reports/Laundering%20the%20Proceeds%20of%20Corruption.pdf.

5 UK Government, ‘Anti-Corruption Summit 2016’, 2016, available at www.gov.uk/government/topical-events/anti-corruption-summit-london-2016/about.

6 The White House, ‘Memorandum on Establishing the Fight Against Corruption as a Core United States National Security Interest’, 3 June 2021, available at www.whitehouse.gov/briefing-room/presidential-actions/2021/06/03/memorandum-on-establishing-the-fight-against-corruption-as-a-core-united-states-national-security-interest/.

7 See D. G. Trésor, ‘Le GAFI reconnaît l’efficacité de la France dans la lutte contre la criminalité financière’, 17 May 2022, available at www.tresor.economie.gouv.fr/Articles/2022/05/17/le-gafi-reconnait-l-efficacite-de-la-france-dans-la-lutte-contre-la-criminalite-financiere; HM Treasury, ‘UK takes top spot in fight against dirty money’, 7 December 2018, available at www.gov.uk/government/news/uk-takes-top-spot-in-fight-against-dirty-money.

8 J. C. Sharman, The Despot’s Guide to Wealth Management: On the International Campaign against Grand Corruption (2017), 4.

9 See, e.g., N. Kofele-Kale, The International Law of Responsibility for Economic Crimes: Holding State Officials Individually Liable for Acts of Fraudulent Enrichment (2008); N. Kofele-Kale, ‘Change or the Illusion of Change: The War against Official Corruption in Africa’, (2006) 38 George Washington International Law Review 697; S. Starr, ‘Extraordinary Crimes at Ordinary Times: International Justice Beyond Crisis Situations’, (2007) 101 Northwestern University Law Review 1257; I. Bantekas, ‘Corruption as an International Crime and Crime against Humanity’, (2006) 4 Journal of International Criminal Justice 466; E. Davidsson, ‘Economic Oppression as an International Wrong or as a Crime against Humanity’, (2005) 23 Netherlands Quarterly of Human Rights 173.

10 See, e.g., K. Benson, Lawyers and the Proceeds of Crime: The Facilitation of Money Laundering and its Control (2020); S. Platt, Criminal Capital: How the Finance Industry Facilitates Crime (2015); K. Hinterseer, Criminal Finance: The Political Economy of Money Laundering in a Comparative Legal Context (2002); Society for Advanced Legal Studies, Banking on Corruption: The Legal Responsibilities of Those Who Handle the Proceeds of Corruption (2000).

11 Immunities and Criminal Proceedings (Equatorial Guinea v. France), Judgment of 11 December 2020, [2020] ICJ Rep. 300.

12 G. Stessens, Money Laundering: A New International Law Enforcement Model (2000); C. Rose, International Anti-Corruption Norms: Their Creation and Influence on Domestic Legal Systems (2015), 177–2015.

13 For a methodical attempt to do so at country level see J. Ferwerda, ‘The Effectiveness of Anti-Money Laundering Policy: A Cost-Benefit Perspective’, in C. King, C. Walker and J. Gurulé (eds.), The Palgrave Handbook of Criminal and Terrorist Financing Law (2018), 317. According to one estimate, the worldwide cost of economic crime compliance reached US$213 billion in 2021: ‘Global True Cost of Compliance 2020’, Lexis Nexis, 2021, available at www.risk.lexisnexis.com/global/en/insights-resources/research/true-cost-of-financial-crime-compliance-study-global-report. A Thomson Reuters survey lists economic crime among the five biggest risks banks were facing as of 2021 in S. Hammond and M. Cowan, ‘Cost of Compliance 2021: Shaping the Future’, 2 June 2021, at 16, 35, available for download at insight.thomsonreuters.com.au/legal/resources/resource/cost-of-compliance-2021-shaping-the-future.

14 For instance, as demonstrated by the repatriation from Switzerland of over US$500 million in the assets misappropriated by Sani Abacha, Nigeria’s military dictator. See T. Daniel and J. Maton, ‘Is the UNCAC an Effective Deterrent to Grand Corruption?’, in J. Horder and P. Alldridge (eds.), Modern Bribery Law: Comparative Perspectives (2013), 293, at 299.

15 For example, as is evident from the conviction in the UK of three professional advisors to James Ibori, another corrupt Nigerian official: see R v. Ibori [2013] EWCA Crim 815, [2014] 1 Cr App Rep (S) 73; R v. Theresa Ibori [2011] EWCA Crim 3193 (Ibori’s wife); R v. Onuigbo [2014] EWCA Crim 6 (Ibori’s lover); R v. Gohil [2014] EWCA Crim 1393 (Ibori’s lawyer); R v. Preko [2015] EWCA Crim 42, [2015] All ER(D) 50 (Feb) (Ibori’s banker); and R v. McCann [2011] EWCA Crim 2038 (another associate).

16 W. M. Reisman, ‘Harnessing International Law to Restrain and Recapture Indigenous Spoliations’, (1989) 83 American Journal of International Law 56, at 58.

17 M. Pieth, ‘The Wolfsberg Process’, in Muller et al. (eds.), Anti-Money Laundering: International Law and Practice (2007), 93, at 95.

18 M. Ruehsen, ‘Professor Fact Checks Money Laundering Scenes, from “Ozark” to “Narcos”’, Vanity Fair, 24 June 2020, available at www.youtube.com/watch?v=U0e7OCfAO64.

19 B. Unger, ‘Money Laundering Regulation: from Al Capone to Al Qaeda’, in B. Unger and D. Van der Linde (eds.), Research Handbook on Money Laundering (2013), 19, at 19.

20 R. Pol, Effective Sentinels or Unwitting Money Launderers? The Policy Effectiveness of Combatting Illicit Financial Flows through Professional Facilitators (2017) (PhD thesis – Griffith University, Australia).

21 United Nations Convention Against Corruption, 2349 UNTS 41 (2005), Art. 23(1)(a); United Nations Convention against Transnational Organized Crime, 2225 UNTS 209 (2000), Art. 6(1)(a).

22 A. Damais, ‘The Financial Action Task Force’, in Muller et al., supra note 17, at 69.

23 United Nations Convention against Transnational Organized Crime, 2225 UNTS 209 (2000), Art. 6(2)(b); Financial Action Task Force (FATF), International Standards On Combatting Money Laundering And the Financing of Terrorism & Proliferation (2022), at 12 (Recommendation 3).

24 Financial Action Task Force (FATF), International Standards On Combatting Money Laundering And the Financing of Terrorism & Proliferation (2022), at 13–14, 18 (Recommendations 10 and 20).

25 See Financial Action Task Force (FATF) Recommendations, supra note 23, at 22–3 (Recommendations 26 and 28 – regulation and supervision), 21 (Recommendations 24 and 25 – beneficial ownership), 11 (Recommendations 3 and 4 – criminalization, prosecution, and confiscation).

26 M. Pieth, ‘Finance and the “Shadow Economy”’, in F. Heimann and M. Pieth, Confronting Corruption: Past Concerns, Present Challenges, and Future Strategies (2018), 123, at 124–5.

27 See Rose, supra note 12, at 202–9.

28 K. Couvée, ‘Exclusive: FATF Leader Resigns, Raising Questions Over Independence’, moneylaundering.com, 1 October 2021, available at www.moneylaundering.com/news/exclusive-fatf-leader-resigns-raising-questions-over-independence/.

29 FATF, ‘FATF Ministers give FATF an open-ended Mandate’, 12 April 2019, available for download at www.fatf-gafi.org/publications/fatfgeneral/documents/fatf-mandate.html.

30 For a detailed analysis of the FATF framework as a form of soft law see D. Goldbarsht, Global Counter-Terrorist Financing and Soft Law: Multi-Layered Approaches (2020). See also D. Chaikin and J. C. Sharman, Corruption and Money Laundering: A Symbiotic Relationship (2009), 18.

31 The MER process engages separately not only with states, but also with discrete jurisdictions such as Hong Kong. Here, ‘country’ and ‘jurisdiction’ are used interchangeably.

32 FATF, ‘Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CTF Systems’, February 2013, available for download at www.fatf-gafi.org/publications/mutualevaluations/documents/fatf-methodology.html.

33 See note 7, supra.

34 FATF, ‘High-Risk Jurisdictions subject to a Call for Action’, October 2021, available for download at www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2021.html.

35 FATF, ‘Jurisdictions under Increased Monitoring’, October 2021, available at www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-october-2021.html.

36 M. Kida and S. Paetzold, ‘The Impact of Gray-Listing on Capital Flows: An Analysis Using Machine Learning’, May 2021, available for download at www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021153-print-pdf.ashx.

37 L. Pitel and S. Stubbington, ‘Turkish Lira Tumbles as Central Bank Slashes Interest Rate’, Financial Times, 21 October 2021, available at www.ft.com/content/53d3e970-c71e-42d5-b38b-6e8ca2d32c35.

38 K. Dehghan, ‘UK Bank Accounts of Iranian Customers Still Being Closed, Says Law Firm’, Guardian, 21 April 2017, available at www.theguardian.com/money/iran-blog/2017/apr/21/law-firm-reports-surge-in-iranians-uk-bank-accounts-being-closed-sanctions-iran-nuclear-deal-trump.

39 C. Scicluna, ‘Malta Faces Blow after Being Greylisted by Financial Crimes Watchdog’, Reuters, 23 June 2021, available at www.reuters.com/world/europe/malta-says-it-has-been-greylisted-by-financial-crimes-watchdog-2021-06-23/.

40 This arguably makes the FATF framework emblematic of a broader tendency to use non-binding political commitments in a fashion that is similar to the role of formal treaties: see D. B. Hollis and J. Newcomer, ‘“Political” Commitments and the Constitution’, (2009) 49(3) Virginia Journal of International Law 507, at 540–4.

41 P. Alldridge, What Went Wrong with Money Laundering Law? (2016), at 75–6; M. Redhead, ‘Deep Impact? Refocusing the Anti-Money Laundering Model on Evidence and Outcomes’, RUSI, 11 October 2019, available at rusi.org/explore-our-research/publications/occasional-papers/deep-impact-refocusing-anti-money-laundering-model-evidence-and-outcomes; J. Ferwerda, ‘Criminological Perspectives on Money Laundering’, in V. Mitsilegas, S. Hufnagel and A. Moiseienko (eds.), Research Handbook on Transnational Crime (2019), 112.

42 R. Pol, ‘Anti-money Laundering: The World’s Least Effective Policy Experiment? Together, We Can Fix It’, (2020) 3 Policy Design and Practice 73.

43 P. C. Van Duyne, J. Harvie and L. Gelemerova, The Critical Handbook of Money Laundering: Policy, Analysis and Myths (2018), at 278–98.

44 See, e.g., Global Witness, ‘Undue Diligence: How Banks do Business with Corrupt Regimes’, March 2009, available at www.globalwitness.org/en/campaigns/corruption-and-money-laundering/banks/undue-diligence/.

45 See, e.g., M. Findley, D. Nielson and J. C. Sharman, Global Shell Games: Experiments in Transnational Relations, Crime, and Terrorism (2014); V. Zoppei, Anti-Money Laundering Law: Socio-Legal Perspectives on the Effectiveness of German Practices (2017).

46 See M. Levi, P. Reuter and T. Halliday, ‘Can the AML System Be Evaluated Without Better Data?’, (2017) 69 Crime, Law & Social Change 307, at 325 (referring to grand corruption); M. Levi and P. Reuter, ‘Money Laundering’, in M. Tonry (ed.), Crime and Justice: A Review of Research (2006), 289, at 358 (referring to drug trafficking).

47 See, e.g., Pontes et al., ‘Anti-money Laundering in the United Kingdom: New Directions for a More Effective Regime’, (2021) 25 Journal of Money Laundering Control 401. The article is noteworthy in part as three out of the four co-authors are practitioners with significant AML experience.

48 See note 30, supra.

49 P. Cochrane, ‘Nuclear Deal: Iran Faces the Most Powerful Organisation You’ve Never Heard Of’, Middle East Eye, 8 May 2018, available at www.middleeasteye.net/fr/news/iran-versus-most-powerful-organisation-you-ve-never-heard-52153913. In fairness, more than one organization has been thus described.

50 See, e.g., D. Ziouvas, ‘International Asset Recovery and the United Nations Convention Against Corruption’, in King, Walker and Gurulé supra note 13, 591, at 591.

51 Ad Hoc Committee for the Negotiation of a Convention against Corruption, Interpretative Notes for the Official Records (Travaux Préparatoires) of the Negotiation of the United Nations Convention against Corruption, UN Doc. A/58/422/Add.1 (2003), para. 48; Cf. J.-P. Brun, ‘Ch.V Asset Recovery, Art.51: General Provision’, in C. Rose, M. Kubiciel and O. Landwehr (eds.), The United Nations Convention Against Corruption: A Commentary (2019), 517, at 517 (‘any doubt concerning the interpretation of provisions related to asset recovery should be resolved in favour of recovery’).

52 A. Moiseienko, ‘The Ownership of Confiscated Proceeds of Corruption under the UN Convention against Corruption’, (2018) 67(3) International and Comparative Law Quarterly 669. See also P. Webb, ‘The United Nations Convention against Corruption: Global Achievement or Missed Opportunity?’, (2005) 8(1) Journal of International Economic Law 191, at 209.

53 United Nations Convention Against Corruption, 2349 UNTS 41 (2005), Art.57(3)(a).

54 See R. Ivory, Corruption, Asset Recovery, and the Protection of Property in Public International Law: The Human Rights of Bad Guys (2014).

55 R. Messick, ‘Will the Swiss Condone Torture in the Rush to Return Assets to Uzbekistan?’, Global Anticorruption Blog, 20 November 2019, available at www.globalanticorruptionblog.com/2019/11/20/will-the-swiss-condone-torture-in-the-rush-to-return-assets-to-uzbekistan/.

56 United Nations Convention Against Corruption, 2349 UNTS 41 (2005), Art. 57(3)(b).

57 Ibid., Art. 57(3)(c).

58 See note 11, supra.

59 See note 15, supra.

60 US v. Lazarenko, Case No 00-cr-0284-01 CRB (N.D. Cal. 4 February 2010), Amended Judgment.

61 United Nations Convention against Transnational Organized Crime, 2225 UNTS 209 (2000), Art. 7(1)(a); United Nations Convention Against Corruption, 2349 UNTS 41 (2005), Art. 14(1)(a).

62 Gretta Fenner’s remarks at Parliament of Canada, Standing Committee on Foreign Affairs and International Development, Evidence on Monday, 5 December 2016 at 16:15, available at publications.gc.ca/collections/collection_2016/parl/xc11-1/XC11-1-2-421-39-eng.pdf.

63 On non-conviction-based asset forfeiture see J. Boucht, The Limits of Asset Confiscation: On the Legitimacy of Extended Appropriation of Criminal Proceeds (2017), at 67–93 (for a European perspective); S. Cassella, Asset Forfeiture Law in the United States (2021) (for a US perspective).

64 See Moiseienko, supra note 52, at 15.

65 Ibid., at 19–23.

66 M. Koehler, The Foreign Corrupt Practices Act in a New Era (2014), at 238.

67 H. Thirlway, The Sources of International Law (2019), at 62–3; J. Crawford, ‘Chance, Order, Change: The Course of International Law’, in The Hague Academy of International Law, Recueil des Cours de l’Académie de Droit International—Tome 365 (2013), 9, at 56–69.

68 J. Goldsmith and R. Posner, ‘A Theory of Customary International Law’, (1999) 66(4) University of Chicago Law Review 1113, at 1116–18.

69 Y. Dinstein, ‘The Interaction Between Customary International Law and Treaties’, in the Hague Academy of International Law, (2006) 322 Recueil des Cours de l’Académie de Droit International 243, at 295. See also J. Crawford and T. Viles, ‘International Law on a Given Day’, in J. Crawford, International Law as an Open System: Selected Essays (2002), 69.

70 S. Talmon, ‘Determining Customary International Law: The ICJ’s Methodology between Induction, Deduction and Assertion’, (2015) 26(2) EJIL 417; Cf. O. Sender and M. Wood, ‘The International Court of Justice and Customary International Law: A Reply to Stefan Talmon’, EJIL Talk!, 30 November 2015, available at www.ejiltalk.org/the-international-court-of-justice-and-customary-international-law-a-reply-to-stefan-talmon/.

71 A. Roberts, ‘Traditional and Modern Approaches to Customary International Law: A Reconciliation’, (2001) 95(4) American Journal of International Law 757.

72 M. Hakimi, ‘Unfriendly Unilateralism’, (2014) 55(1) Harvard International Law Journal 105; E. Criddle, ‘Humanitarian Financial Intervention’, (2013) 24(2) EJIL 583.

73 United Nations General Assembly, Our Common Commitment to Effectively Addressing Challenges and Implementing Measures to Prevent and Combat Corruption and Strengthen International Cooperation, UN Doc. A/RES/S-32/1 (2021).

74 United Nations General Assembly, Preventing and Combating Corrupt Practices and the Transfer of Proceeds of Corruption, Facilitating Asset Recovery and Returning Such Assets to Legitimate Owners, In Particular to Countries of Origin, In Accordance with the United Nations Convention against Corruption, UN Doc. A/RES/68/195 (2013).

75 UN Office on Drugs and Crime, ‘Money Laundering and the Financing of Terrorism: The United Nations Response’, 2001, at 21, available at www.imolin.org/pdf/imolin/UNres03e.pdf, citing Political Declaration, guiding principles of drug demand reduction and measures to enhance international co-operation to counter the world drug problem, UNDCP(092)/D794 (1999), available for download at www.unodc.org/pdf/report_1999-01-01_1.pdf.

76 See Thirlway, supra note 67, at 92–4.

79 Permanent Council of the Organization of American States, Resolution 875 (1460/05), 11 January 2005; APEC, ‘Santiago Commitment to Fight Corruption and Ensure Transparency’, 17–18 November 2004.

80 African Union, ‘Assembly Special Declaration on Illicit Financial Flows’, 2015; African Union, ‘Declaration on the African Anti-Corruption Year’, 2018.

81 Transparency International, ‘43 Countries, 600 Commitments: Was the London Anti-Corruption Summit a Success?’, 12 September 2016, available at www.transparency.org/en/news/43-countries-600-commitments-was-the-london-anti-corruption-summit-a-succes. The full commitments database can be downloaded via that page.

82 UK Government , London Anti-Corruption Summit 2016, ‘Germany Country Commitments’, 2016.

83 Cabinet Office and Prime Minister’s Office, ‘Global Declaration Against Corruption’, 9 December 2016, available for download at www.gov.uk/government/publications/global-declaration-against-corruption/global-declaration-against-corruption.

84 Office of the UN High Commissioner for Human Rights, Comprehensive Study on the Negative

Impact of the Non-Repatriation of Funds of Illicit Origin to the Countries of Origin on the Enjoyment of

Human Rights, in Particular Economic, Social and Cultural Rights, UN Doc. A/HRC/19/42 (2011); UN Human Rights Council, The Negative Impact of Corruption on the Enjoyment of Human Rights, UN Doc. A/HRC/RES/35/25 (2017).

85 See A. Peters, ‘Corruption as a Violation of International Human Rights’, (2018) 29(4) EJIL 1251. Cf. C. Rose, ‘The Limitations of a Human Rights Approach to Corruption’, (2016) 65(2) International and Comparative Law Quarterly 405; K. Davies, ‘Corruption as a Violation of International Human Rights: A Reply to Anne Peters’, (2018) 29(4) EJIL 1289; F. Peirone, ‘Corruption as a Violation of International Human Rights: A Reply to Anne Peters’, (2018) 29(4) EJIL 1297.

86 On the relevance of international organizations see K. Daugirdas, ‘International Organizations and the Creation of Customary International Law’, (2020) 31(1) EJIL 201.

87 See the FATF’s table listing the overall state of compliance with its recommendations. While the effectiveness of countries’ AML measures varies widely, technical compliance is prevalent: see FATF, ‘Consolidated Assessment Ratings’, 9 June 2022, available at www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf.

88 A. Moiseienko, ‘Limitations of Unexplained Wealth Orders’, (2022) 3 Criminal Law Review 230.

89 The Royal United Services Institute (RUSI), ‘The Role of Financial Information-Sharing Partnerships in the Disruption of Crime’, 17 October 2017, available at www.rusi.org/explore-our-research/publications/occasional-papers/role-financial-information-sharing-partnerships-disruption-crime.

90 J. Cassara, Trade-Based Money Laundering: The Next Frontier in International Money Laundering Enforcement (2016), at 181–2.

91 AUSTRAC, ‘Money Transferred to and from Overseas: International Funds Transfer Instruction (IFTI) Reports’, January 2021, available at www.austrac.gov.au/business/how-comply-guidance-and-resources/reporting/money-sent-overseas-itfi.

92 A. Knobel, ‘Transparency of Asset and Beneficial Ownership Information: FACTI Panel Background Paper 4’, 19 July 2020.

93 A. Moiseienko, Corruption and Targeted Sanctions: The Law and Policy of Anti-Corruption Entry Bans (2019).

94 D. Lewis, ‘Remarks at the RUSI Meeting on the Financial Action Task Force Strategic Review’, FATF, 19 November 2019, available at www.fatf-gafi.org/publications/fatfgeneral/documents/rusi-fatf-strategic-review.html; HM Treasury and Home Office, ‘Economic Crime Plan, 2019 to 2022’, 4 May 2021, paras. 2.14–2.16; Parliament of Australia, ‘The Adequacy and Efficacy of Australia’s Anti-money Laundering and Counter-terrorism Financing (AML/CTF) regime’, available at www.aph.gov.au/Parliamentary_Business/Committees/Senate/Legal_and_Constitutional_Affairs/AUSTRAC.

95 Sharman, supra note 8, at 180 (emphasis added).

96 See North Sea Continental Shelf Cases (Federal Republic of Germany v. Denmark, Federal Republic of Germany v. Netherlands), Merits, Judgment of 20 February 1969, [1969] ICJ Rep. 3, at 42, para. 73.

97 K. J. Heller, ‘Specially-Affected States and the Formation of Custom’, (2018) 112(2) American Journal of International Law 191.

98 See, e.g., Thirlway, supra note 67, at 97–100; J. Tasioulas, ‘Opinio Juris and the Genesis of Custom: A Solution to the “Paradox”’, (2005) 26 Australian Year Book of International Law 199.

99 M. Koskenniemi, From Apology to Utopia: The Structure of International Legal Argument (2005), 414–27; B. Lepard, Customary International Law: A New Theory with Practical Applications (2010), 171. See also D. Lefkowitz, ‘Sources in Legal-Positivist Theories: Law as Necessarily Posited and the Challenge of Customary Law Creation’, in J. d’Aspremont and S. Besson (eds.), The Oxford Handbook of the Sources of International Law (2017), 323, at 333.

100 See notes 8 and 16, supra.

101 See D. Thomas-James, Offshore Financial Centres and the Law (2021).

102 The Royal United Services Institute (RUSI), ‘For Whose Benefit? Reframing Beneficial Ownership Disclosure Around Users’ Needs’, 23 November 2020, at 19, available at www.rusi.org/explore-our-research/publications/occasional-papers/whose-benefit-reframing-beneficial-ownership-disclosure-around-users-needs.

103 S. Pegg and D. Rushe, ‘Pandora Papers Reveal South Dakota’s Role as $367bn Tax Haven’, Guardian, 4 October 2021, available at www.theguardian.com/news/2021/oct/04/pandora-papers-reveal-south-dakotas-role-as-367bn-tax-haven.

104 ILC Report of the International Law Commission on the work of its fifty-third session, 23 April–1 June and 2 July–10 August 2001, Official Records of the General Assembly, Fifty-sixth session, Supplement No.10 [Draft articles on Responsibility of States for Internationally Wrongful Acts], 2001 YILC, Vol. II, Arts. 4, 8.

105 C. Walker, ‘Counter-Terrorism Financing: An Overview’, in King, Walker and Gurulé, supra note 13.

106 Application of the International Convention for the Suppression of the Financing of Terrorism and of the International Convention on the Elimination of All Forms of Racial Discrimination (Ukraine v. Russian Federation), Preliminary Objections, Judgment of 8 November 2019, [2019] ICJ Rep. 558, at 585, para. 60.

107 See, e.g., D. Byman, Deadly Connections: States that Sponsor Terrorism (2005).

108 B. Saul, ‘The Emerging International Law of Terrorism’, in D. Chatterjee (ed.), Indian Yearbook of International Law and Policy (2009) 163. This view shares some similarities with the argument that terrorism is now a crime under customary international law: see, e.g., A. Cassese, ‘The Multifaceted Criminal Notion of Terrorism in International Law’, (2006) 4 JICJ 933.

109 See M. Milanovic, ‘Special Rules of Attribution of Conduct in International Law’, (2020) 96 International Law Studies 295, at 299–301.

110 M. Foucault, Discipline and Punish: The Birth of the Prison (translated by A Sheridan) (1995).

111 O. Bullough, Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals (2022).

112 State responsibility (A/CN.4/302 and Add. 1-3), 1977 YILC, Vol. 1, at 215–18, 227–9.

113 P.-M. Dupuy, ‘Reviewing the Difficulties of Codification: On Ago’s Classification of Obligations of Means and Obligations of Result in Relation to State Responsibility’, (1999) 10(2) EJIL 371; C. Economides, ‘Content of the Obligation: Obligations of Means and Obligations of Result’, in Crawford et al. (ed.), The Law of International Responsibility (2010), 371.

114 FATF, ‘Consolidated Assessment Ratings’, 9 June 2022, available at www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf. The UK’s results were the best between December 2018 and May 2022, when the FATF published France’s MER.

115 National Crime Agency, ‘National Strategic Assessment of Serious and Organised Crime 2018’, May 2018, at 38; HM Treasury and Home Office, ‘National Risk Assessment of Money Laundering and Terrorist Financing 2017’, October 2017, at 23.

116 For a description of that framework see FATF, ‘Anti-money Laundering and Counter-terrorist Financing Measures: United Kingdom, Mutual Evaluation Report’, December 2018.

117 For instance, the latest instalment of the US government’s annual review of money-laundering jurisdictions of concern in connection with drug trafficking spans the gamut from Afghanistan, with its limited investigative and regulatory capabilities, to the Netherlands, where despite the high-quality regulatory regime, ‘[t]he magnitude of money laundering remains a concern’. See US Department of State, ‘International Narcotics Control Strategy Report: Volume II – Money Laundering’, March 2021, at 144.

118 See FATF Recommendations, supra note 23, at 10 (Recommendation 1).

119 See J. Vittori, ‘Five Things the United States Can Do to Stop Being a Haven for Dirty Money’, (2021) Carnegie Endowment for International Peace, 7 October 2021, available at www.carnegieendowment.org/2021/10/07/five-things-united-states-can-do-to-stop-being-haven-for-dirty-money-pub-85530.

120 J. Zarate, Treasury’s War: The Unleashing of a New Era of Financial Warfare (2013), at 153.

121 See, e.g., M. Riccardi, Money Laundering Blacklists (2022).

122 See FATF Methodology, supra note 32, at 16.

123 Ibid.

124 S. Young, ‘Policing and Prosecution of Money Laundering’, in Mitsilegas, Hufnagel and Moiseienko, supra note 41, at 138–40; R. Pol, ‘Anti-money Laundering Effectiveness: Assessing Outcomes or Ticking Boxes?’, (2018) 21(2) Journal of Money Laundering Control 215, at 4.5.3; L. de Koker and M. Turkington, ‘Anti-Money Laundering Measures and the Effectiveness Question’, in B. Rider (ed.), Research Handbook on International Financial Crime (2015), 42.

125 See FATF Methodology, supra note 32, at 16.

126 In L. Fuller’s The Morality of Law (1969), compliance with the eight desiderata of a functional legal system was posited to necessarily realize the moral value of law.

127 FATF, ‘Consolidated Assessment Ratings’, 9 June 2022, available at www.fatf-gafi.org/media/fatf/documents/4th-Round-Ratings.pdf.

128 FATF, ‘FATF Public Statement on the Situation in Ukraine’, March 2022, available at www.fatf-gafi.org/publications/fatfgeneral/documents/ukraine-2022.html; FATF, ‘FATF Statement on the Russian Federation’, June 2022, available at www.fatf-gafi.org/publications/fatfgeneral/documents/ukraine-june-2022.html.

129 D. Goldbarsht, ‘Who’s the Legislator Anyway? How the FATF’s Global Norms Reshape Australian Counter-terrorist Financing Laws’, (2017) 45(1) Federal Law Review 127, 133.

130 I. de Oliveira, ‘The Governance of the Financial Action Task Force: an Analysis of Power and Influence Throughout the Years’, (2018) 69 Crime, Law and Social Change 153, at 160.

131 See the list of FATF members at www.fatf-gafi.org/countries/; the list of jurisdictions under increased monitoring (grey list) is available at www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-october-2021.html.

132 See Zarate, supra note 120, at 159.

133 See Couvée, supra note 28.

134 FATF, ‘Report on the State of Effectiveness and Compliance with the FATF Standards’, April 2022, at 5.

135 Ibid., at 6.

136 See P. Alldridge, Money Laundering Law (2003), at 7–14.

137 See Koskenniemi, supra note 99, at 395.

138 P. Goodrich, ‘Law and Language: An Historical and Critical Introduction’, (1984) 11 Journal of Law & Society 173, at 174.

139 J. Noonan, Bribes (1987), at 97.

140 W. M. Reisman, Folded Lies: Bribery, Crusades, and Reforms (1979), at 31.

141 B. Zagaris, ‘UN General Assembly Approves UN Convention against Corruption’, (2004) 20(1) International Enforcement Law Reporter 27, cited in Sharman, supra note 8, at 49.

142 M. Koehler, ‘The Story of the Foreign Corrupt Practices Act’, (2012) 73 Ohio State Law Journal 929, 934–5.

143 United Nations Convention against Transnational Organized Crime, 2225 UNTS 209 (2000), Art. 7(1)(a); United Nations Convention Against Corruption, 2349 UNTS 41 (2005), Art. 14(1)(a).

144 C. Greenwood, Friday Lunchtime Lecture, Lauterpacht Centre for International Law, ‘Challenges of International Litigation’, 7 October 2011, at 30:31, available at podcasts.apple.com/us/podcast/challenges-of-international-litigation-by-sir/id472214191?i=1000411359200.

145 Immunities and Criminal Proceedings (Equatorial Guinea v. France), Application Instituting the Proceedings, 13 June 2016, paras. 35–40.

146 Immunities and Criminal Proceedings (Equatorial Guinea v. France), Provisional Measures, Judgement of 7 December 2016, [2016] ICJ Rep. 1148, at 1160; Immunities and Criminal Proceedings (Equatorial Guinea v. France), Preliminary Objections, Judgment of 6 June 2018, [2018] ICJ Rep. 292, at 321–3, paras. 93–99.

147 The Royal United Services Institute (RUSI), ‘The Financial Action Task Force Should Embrace the Opportunity to Reform’, 24 June 2019, www.rusi.org/explore-our-research/publications/commentary/financial-action-task-force-should-embrace-opportunity-reform.

148 ‘A persistent anxiety about CIL is that … it is too elastic at any given moment to be like a rulebook’: M. Hakimi, ‘Making Sense of Customary International Law’, (2020) 118(8) Michigan Law Review 1487, 1501.

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