Corruption and Money Laundering

Citation

Levi, M. (2010), "Corruption and Money Laundering", Journal of Financial Crime, Vol. 17 No. 1, pp. 168-169. https://doi.org/10.1108/13590791011009446

This book examines a key neglected theme in the money laundering literature – its relationship with corruption. The authors describe this as a symbiotic relationship, and review and find wanting the controls currently available to reduce Grand Corruption. The work is based on legal and political institutional scholarship, cases upon which Chaikin has worked as a lawyer over the last two decades, and interviews with public and private sector officials. The result is a valuable detailed study of the interplay between measures aimed at combating corruption and those aimed at combating money laundering, and what is known about the impact of each, especially but not exclusively in parts of the Asia Pacific region.

It is a nuanced study, showing on the one hand, the tardy and perhaps only partial identification of accounts beneficially or overtly owned by kleptocrats and, on the other, bankers' preferences for globally consistent AML processes that go beyond what is legally required. Chaikin and Sharman reveal the importance of PEP definitions and Head of State immunity, noting the variation in levels of immunity and the differences between those countries (like Switzerland) that have rejected this as a constraint on repatriation of assets and those (like France) that have accepted this constraint.

The foundations for mutual legal assistance are discussed in some detail, showing how the refusal to allow assistance where no dual criminality can be shown impacts on investigations. The authors commend the EU extradition (and, by implication, evidence) warrants as the role model, while allowing the right to refuse assistance on a case‐by‐case basis. Yet, as some critics in the UK might observe, it is important to reserve the power not to cooperate or not to extradite, if one thinks that the venue denies the human rights of suspects. Why the very rich should be the principal beneficiaries of such fundamental rights arguments might take us into uncomfortable territory. There is some thoughtful comparative analysis of why some cases such as Marcos are relatively unsuccessful and very slow while others, such as Montesinos, are relatively successful and fast.

This book tries to tease out the devil in the detail, and represents a fine effort to pull together the troubled relationship between corruption in developing countries and money laundering in the developed world and their governance. This does not mean that there are no gaps, but gaps – for instance in discussion about the laundering of proceeds within developing countries – mostly reflect what Donald Rumsfeld might have termed the “known unknowns”. What we need in this field is less rhetoric and a little more sustained analysis. The book should be read by those seriously interested in investigating, prosecuting and recovering the proceeds of Grand Corruption. It would be sad if its main readership was those interested in frustrating those objectives!