Disciplinary Transnational Legal Orders: The Triumph and Puzzle of Anti-Money Laundering

Terence Halliday (with Michael Levi & Peter Reuter)

Abstract

From the late 1980s to the present, states and supra-state institutions have erected one of the most comprehensive regulatory TLOs in recent decades. Designed originally to suppress the drug trade and interdict dirty money in search of money laundering, after 9/11 this regulatory regime was extended to starve the financing of terrorism, and most recently to slow the spread of nuclear weapons. In a remarkable feat of global standard-setting, the Financial Action Task Force has created standards, recommendations and methodologies that involve a global network of 34 member jurisdictions, two regional organizations, nine regional bodies, and 22 observer bodies, substantially supported by the global reach and institutional resources of the IMF and World Bank. Virtually all countries in the world submit themselves to assessment on their conformity with these global standards. This paper draws on an intensive interior empirical study of the IMF’s role in maintaining and adapting this TLO. It extends TLO theory by observing how a narrowly defined TLO can be reframed to extend its reach far beyond either its earlier conceptions or its institutional capacities; by appraising the consequences of resting its normative force on criminal law and institutions; and by considering how a TLO may sow the seeds of its own destruction by expanding its mandate far beyond its capacity to deliver its promise.