The Truth is Out There: Examining Whether International Commercial Arbitration is a Conduit for Money Laundrering

Authors

Jaimee Salgado

Abstract

Since the beginning of the 21st century, investigative journalists uncovered hundreds of corrupt individuals using thousands of shell companies to evade taxes, and sometimes even launder billions of dollars using court systems for legitimacy. International commercial arbitration has fallen victim to illicit activity as well, with sham arbitrations sprouting into public view in recent years. While international organizations have made progress in increasing transparency in the use of tax havens and shell corporations, there is no identifiable data for whether corrupt individuals are conducting sham arbitrations to launder money, much like the aforementioned use of court systems. The troubling notion is, arbitration offers tenets formal litigation does not, making arbitration a prime target for opportunists. The arbitral world must increase transparency of tax havens and shell companies even further through automated information sharing, broadening the authorities involved with investigations, and employing the gold standard FATF Forty Recommendations to guide a new tax protocol and discover whether arbitration is indeed a conduit for such activity like money laundering. If corrupt individuals and entities are genuinely using sham arbitrations to clean illicit money, all the world needs to do is look.

Recommended Citation

Jaimee Salgado, The Truth Is out There: Examining Whether International Commercial Arbitration Is a Conduit for Money Laundering, 53 Denv. J. Int'l L. & Pol'y 109 (Fall 2024).