Originally from:
Stockholm International Arbitration Review (SIAR) 2006-1
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THE PLACE OF ARBITRATORS IN
COMBATING MONEY LAUNDERING
Tatiana Minaeva*
Introduction
Arbitrators need to ensure that arbitral proceedings are not delayed by a
party seeking to obstruct the proceedings in order to avoid an unfavorable
arbitral award. On the other hand, arbitrators need to be equally concerned
that arbitral proceedings are conducted with due regard to important
mandatory provisions of law and with respect for observing applicable legal
rules and prohibitions. These objectives can come into conflict when a
party raises issues of potential money laundering charges against the
opposing party in a pending arbitration. Increasingly, issues of moneylaundering
are raised in arbitration and such allegations impose certain
obligations on the arbitrators. This article will consider these obligations
and will analyze the issues which are raised when allegations of money
laundering are introduced in arbitral proceedings. Before considering these
issues, it is useful to first review the development of legislation intended to
combat money laundering.
International Cooperation to Combat Money Laundering
The problem of money laundering is becoming more topical each year.
Because of the clandestine nature of money laundering, it is difficult to
estimate the total amount of money that goes through the laundry cycle.
Estimates of the amount of money laundered globally in one year have
ranged between $500 billion and $1 trillion. Though the margin between
those figures is huge, even the lower estimate underlines the seriousness of
the problem governments have pledged to address.
Essentially, money-laundering is the process by which criminal proceeds
are “cleaned” in order to hide their illegal origins. Money laundering was
first introduced as an offense under Article 3 of the Vienna Convention.1
Subsequently, the international Financial Action Task Force (“FATF”), a
special body to cope with the issue of money laundering, considered the
ways the above convention could be extended to cover a broader range of
offenses. As a result, in 1990 FATF published 40 recommendations (“Forty
Recommendations”) on combating the laundering of money gained from
Tatiana Minaeva, Associate, White & Case LLC (Moscow)
