by Michelle M. Gallant – University of Manitoba (October 4, 2013)
Abstract: Money laundering regulation emerged in the later part of the 20th century as a strategy for dealing with the global trade in illegal drugs. It is based on the idea that criminal activity with significant financial underpinnings can better be tempered by the specific targeting of those underpinnings. It is a strategic approach that has grown strikingly over the course of more than thirty years, expanding from drug crimes to tax evasion, to corruption, to organized crime and to terrorism. It has stretched to cover all manner of financial activity from the deposit of monies into bank accounts to visa declarations and casinos operations and from donations to charitable entities to the delivery of professional services. It has spawned a modern regulatory environment forged of international treaties, of domestic law, of guidelines, of recommendations, of principles, of policies, of practices and of commitments.
An ambitious project, the impact of this initiative is often the subject of dispute, much of which centers on whether regulation adequately, if at all, moderates criminal activity. Rather than entering into that debate, this paper takes a long view of three decades of development and identifies five particular consequences attributable to money laundering regulation. Ranging from the deprivation of tainted wealth to attending to tax havens and the opacity of international finance, these consequences, not all clearly foreseen, demonstrate tangible impacts of the regulatory effort.
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