Leonardo S. Borlini

International anti‐money laundering programs

Purpose – The purpose of this paper is to present an empirical assessment and outline issues in criminal regulation relating to international anti‐money laundering (AML) programs.Design/methodology/approach – In the first part, this paper outlines the serious threats posed by transnational laundering operations in the context of economic globalization, and calls for highly co‐ordinated international responses to such a crime. The second part of the paper centres on elements of international criminal regulation of ML.Findings – The focus is on the phenomenological aspect of ML and highlights that to a large extent it is an economic issue. Economic analysis calls for an accurate legal response, with typical trade‐offs: it should deter criminals from laundering by increasing the costs for such illicit operations, calling for enhanced regulatory and enforcement activities; however, stronger enforcement yields increased costs and reduces privacy. These features have lately inspired the recent paradigm shift fr...

International Anti-Money Laundering Programs- Empirical Assessment and Issues in CriminalRegulation

The purpose of this paper is to present an empirical assessment and outline issues in criminal regulation relating to international anti-money laundering (AML) programs. Design/methodology/approach – In the first part, this paper outlines the serious threats posed by transnational laundering operations in the context of economic globalization, and calls for highly co-ordinated international responses to such a crime. The second part of the paper centres on elements of international criminal regulation of ML. The focus is on the phenomenological aspect of ML and highlights that to a large extent it is an economic issue. Economic analysis calls for an accurate legal response, with typical trade-offs: it should deter criminals from laundering by increasing the costs for such illicit operations, calling for enhanced regulatory and enforcement activities; however, stronger enforcement yields increased costs and reduces privacy. These features have lately inspired the recent paradigm shift from a rule-based regulatory framework to a risk-based approach which still represents an extremely delicate regulatory. Both at the international level and within the single domestic legal system, AML law is typically characterised by a multidisciplinary approach combining the repressive profile with preventive mechanisms: an empirical evaluation of the International Monetary Fund-World Bank AML program is presented, where these two aspects are assessed. The non-criminal measures recently implemented under the auspices of the main inter-governmental public organisations with competence in these fields seem to be consistent with the insights of economic analysis. However, some key criminal issues need to be better addressed.

Methodological Issues of the 'More Economic Approach' to Unilateral Exclusionary Conduct. Proposal of Analysis Starting from the Treatment of Retroactive Rebates

At the outset of this paper, I address the treatment of retroactive loyalty-inducing rebates from an economic angle by first considering specific models put forward by scholars who have severely criticised the Commission’s practice and the Luxemburg-based Courts’ case law on target and retroactive rebates. In the process, I highlight their common assumptions and the policy implications they entail vis-a-vis rather diverging approaches. I then move on to question whether or not the 82 Guidance’s analytical framework regarding the conduct under discussion is likely to satisfy those who have repeatedly criticises the Commission for not discarding an overly restrictive and formalistic case law on Article 82.By a typical inductive process, this leads me to critically consider the current role of economics within the context of competition policy and, in particular, with regard to unilateral allegedly exclusionary conduct by dominant firms. Accordingly, I examine the economic theoretical basis of EC competition policy and the primary goals the Commission has recently indicated as yardsticks for the ongoing effect-based review. The results of this analysis are somewhat counter-intuitive. Despite the apparent clarity of the Commission’s policy declarations, the foremost aims it explicitly pursues (ie consumer welfare and allocative efficiency) might be competing.The fact that the main aims might be competing is not the only counter-intuitive outcome. Even the expression “more economic approach” is susceptible to various (and diverging) interpretations that do not necessarily fit with one another. Furthermore, even though the current economic models advocating for grounding the review process of EC Competition policy are claimed to represent a reasonably solid anchor for the future application of Article 82 to exclusionary conduct, they still present inherent problematic aspects renowned economists and legal scholars have systematically highlighted.8 Therefore, in the third section of this paper, I attempt to outline the mainmethodological issues intrinsic to the so-called “modern economic approach”.9 My analysis is carried out keeping in mind what sometimes seems to be, at best, implied: the economic paradigms supposed to underpin the review process of abuse doctrine are not the most modern.10 Neoclassical microeconomic theories and industrial organisation’s tenets could be prolifically integrated with the fundamental insights of even-more-modern approaches, namely: information economics, economics of innovation and behavioural economics.Finally, I ponder whether the “more economic approach” orientating the internal review process of the abuse doctrine can be properly integrated with basic legal values and the peculiar aims assigned to competition policy by the EC Treaty. In other words, I question whether the privileged position lately accorded to (a certain meaning of) economic efficiency and consumer welfare can be conciliated with a richer synthesis between Community policies and legal principles preserved by the European Courts.11As a matter of clarification, I would also like to state that it goes beyond the scope of this work to propose definitive solutions as to what extent economic analysis should be employed and which shape it could end up taking. However, I aim at making it clear that any argument in favour of “the more economic approach” is remarkably vulnerable insofar as it does not explicate how it solves the inevitable trade-offs it faces. For instance, assuming consumer welfare as a guiding objective, any model has to show how regularly (and the standard length of the period over which) firms’ surplus is expected to be attained without affecting consumer welfare. The latter explanations represent the minimal contents of any system claiming to constitute the orientating paradigm even within the borders of traditional microeconomics. Hardly any relevance can be attributed to any arguments against the treatment of alleged foreclosing conduct by the Commission and European Courts—this holds true irrespective of how well articulated the pars destruens is—if the competent authorities are left without any solid parameter for carrying out their activity. My take is that any economic theory deployed for revising the abuse doctrine reflects a particular viewpoint of competition policy and, ultimately, represents a peculiar political choice. Formulated in slightly different words, the positivistic view of thinkers who deny an inherent and natural character of the marketplace permeates this study.

Issues of the International Criminal Regulation of Money Laundering in the Context of Economic Globalization

This work has a twofold aim. First, it outlines the serious threats posed by transnational laundering operations in the context of economic globalization, showing, at the same time, the foremost reasons for sustaining the need of international responses to such crime. In the first part the focus is on the phenomenological aspect of money laundering as the necessary means through which criminal activity can live on and proliferate. Moreover, we analyse the main results economic studies on the matter has lately achieved. In this way, we aim at highlighting that money laundering is also (if not mainly) an economic issue and an accurate diagnosis of it can not exclude its economic essence and consequences. The economic analysis calls for an accurate legal response, which faces a typical trade-off. It should, indeed, deter criminals from laundering by increasing the costs for such illicit operations. Arguably this aim can be achieved by intensifying regulation and enhance the enforcing activities. However, a stronger enforcement yields increased costs and reduces the privacy of citizens. Both at the international level and within the single domestic legal systems, anti money-laundering law is typically characterised by a multidisciplinary approach combining the repressive profile with preventive mechanisms. The non-criminal measures lately implemented both at the international level and by the national legislation seem to be consistent with the insights the most recent economic studies on money laundering have put forward. On the other hand, the economic analysis highlights that some crucial criminal issues are in the need of further revision. Therefore, the second part of our work centres on elements of international criminal regulation of the crime under discussion. The adoption of international hard law instruments since 1988 is encouraging. The treaty-approach regarding criminalisation has unquestionably contributed in calibrating the national responses and, in some cases (e.g. the definition of the actus reus, and the promotion of the liability ex crimine for legal entities) formulating them ex novo. Nonetheless, there still seems to be a hiatus between the well-recognised need of concerted criminal strategies, the challenges posed by transnational dynamics of laundering crimes, and a certain determination of States to maintain their criminal prerogatives. For instance, issues regarding the national definitions of predicate offences persist. Again, the emergence of causal chains stretching across national jurisdictional boundaries with effects that transgress one or more national criminal norms poses serious jurisdictional challenges.

Corruption - Economic Analysis and Evolution of the International Law and Institutions

The purpose of the article is two-fold:1) To provide an outline of the main results of our upcoming book Corruption Economic Analysis and Evolution of the International Law and Institutions, by focusing in particular on the economic findings along with the policies we deem must be widely implemented in order to effectively curbing corruption both at the national and international level.2) To show, by illustrating three recent serious cases of corruption, the need of a multidimensional approach aiming at getting together and co-ordinating the whole array of instruments and actors endowed with effective competences to tackle corruption. Furthermore, the transparent interconnections between the economic, legal and institutional elements of the below illustrated cases provide us with a strong argument as to the accuracy of a multidisciplinary approach.The article includes four sections: Part I summarises our methodological approach and the main findings of our economic analysis. The factual background and the main legal issues of the three cases are then illustrated. The aim is to show how the international legal standards (described in part III) are relevant to cope with cases as those under discussion, also by relying on an active co-operation between international and national authorities.Part II outlines the main policies we identify as effective constraints to corruption. Part III provides an overview of the main pillars of the international treaties against corruption.Part IV finally mentions parallel developments of the international institutions and law, which may prove to be crucial in bridging some of the gaps of the anti-corruption international treaties.