Originally from: Stockholm International Arbitration Review

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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.