Second, the control over the allegedly dirty money in the “recipient” countries is quite weak. I would say that the very term “due diligence” shouldn’t be used for the description of what’s going on in Europe and in the United States. One can remember the most famous cases—like the case of Arthur Andersen insisting on Enron’s firmness five months prior to its bankruptcy; the case of Moody’s, Standard & Poor’s and Fitch drawing the AAA ratings to the “subprime” mortgage-backed securities in the wake of the 2008 crisis; the case of Wachovia which laundered close to $500 billion of drug cartels affiliated money in 2000s, etc. If it co­mes to purchases of the expensive real estate, as one can see, remaining in the shadows is even easier. The “investments” into the wealthy countries are welco­med by their governments—today, even the EU nations effectively sell citi­zenships or permanent residencies in hun­dreds of ways with the cheapest ones (as in Malta, Cyprus or Bulgaria) requiring not mo­re than Є1.2-2.0 million to attain citizenship. The British, who introduced “unexplained wealth orders” as part of the Criminal Finances Act of 2017, used this tool to prosecute only one person since the orders went into force—and I would remind that there are thirty-five thousand real estate units in Lon­don with a value of around $70 billion, which were paid for by unknown sources and belong to undisclosed owners. A total revision of the banking ac­counts owned by foreign residents and/or com­pani­es, as well as the real esta­te bought by such entities should be under way—but in most cases the lo­cal authorities prefer only to le­vy additional taxes on such objects rather than find the sources of mo­ney that bought them.

Third, I would say that there’s a fascinating multitude of laws and regulations that are applied to tracking money flows in different countries. No pan-Eu­ropean register of real estate exists; the banking regulations in Switzerland differ greatly from those in the EU countries; special regimes like the Liechtenstein-based trusts or Sociétés civiles d’immobilier founded in Monaco or Luxembourg are used for acquiring objects throughout Europe; British law is different from the continental one and will become even more different after Brexit is finalized. At the same time, all these jurisdictions are considered “safe”—so if someone sells a mansion in the UK or transfers funds from his Swiss bank account there will be no formal procedures in place to verify money’s origins. Without all these rules being standardized, if not unified, any progress in combating money laundering practices seems to be a pipe-dream—but I would say that in recent years the legislation is becoming rather more diversified than normalized. 

Of course, in some cases there might be expectations—like the one that happens today with the Russians who become extremely “toxic” if it comes to opening new banking accounts or acquiring property; but I would argue it happens not so much be­cause of the spread of corruption in Russia or since Russia’s “presen­ce” is too obvious in Europe, but exclusively due to the sanctions against Russia that were introduced because of the violation of international law and interfere­nce into other nations’ domestic affairs.

Fourth, there is another issue which deals with the growing problem of “state capture” on the world’s periphery. I’m addressing the very simple fact that most countries, if their authorities suppose some money parked in their banks or used for acquiring some property there, used to ask the authorities of those states where either the money or its owner originated from, and about his criminal records or/and the nature of the mentioned funds. If the originating country is not only corrupt, but acts as a state totally “captured” by its ruling elite where money is ea­sily exchanged for power, and vice versa, its authorities would prove the absence of any wrongdoings. Some authors argue that these days the political eli­tes in many countries have completely merged with the business ones, and call such nations a business-states—so in all these cases the Western judiciary looks almost impotent in ad­dressing the most vital money laundering cases. The renowned international bo­dies, like, e.g., Interpol, are also acting on the same basis and will not hunt anyone in case the national bureaus initiate the search. So I would say once again that if some wealthy person from a deeply corrupt state with good political con­nections launders money in Europe or the United States, there is highly unlikely she or he will be accused of any wrongdoing (even if regimes collapse, nothing may change—e.g., Ukrainian authorities after the Euromaidan did virtually nothing for chasing the funds of corrupt officials from the previous government owned in the European countries).

So what is to be done in such circumstances?

I would argue that what we need is an institution that is able to confront money lau­n­dering activity and all types of corruption globally, or at least for the sake of all developed countries where dirty money are accumulated and invested. Therefo­re, we need an international organization that can either establish new rules for fi­gh­ting illegal financial operations or at least use the existing ones on its own, without needing to as­k governments for approving its actions. If one takes all these points into ac­count the only option that suits them all will be to create an International Finan­cial Court since the judiciary is the branch of authority that acts independently from the executive. Such an International Finan­cial Court might possess several crucial features.

To start with, the court can be established by several nations and blocks which consider themselves as “transparent” and “doing their best” to fight financial fraud. The European Union, the United Kingdom (in case Brexit finally happens), Japan, Canada, and some Asian countries relatively free from corruption might become the founding signatories to its statute (another approach may be based, for exam­ple, on invol­ving all the OECD nations into the new venture—and if the count­­ries that benefit the most from these schemes, like the United States or Britain, will oppo­se the measure, it could be introduced either by France or even by some of the pe­ripheral countries). The major idea behind this move is that the court may first make its rulings based on natio­nal legislation (e.g., the British law about Unexplained Wealth Orders), but these rulings will have an equal power in all the states that ratified the court’s statute. In the long run, therefore, the anti-corruption and anti-money laundering practices of all the “transparent” and “decent” nations will move closer to one another and may eventually even merge into one code of conduct. There is a long story in the West telling us how effective the courts had been in implemen­ting laws and treaties that were adopted by executive authorities. The Fourteenth Amen­d­ment to the U.S. Constitution declaring equal rights for African Americans in 1868, was de facto enacted by the 1954 Supreme Court ru­ling in the Brown v. The Board of Education case, while the provisions of the Tre­a­ty of Rome which established the European Communities in 1957 beca­me fully im­plemented only after European Court of Justice’s landmark Cassis de Dijon ruling of 1979. The courts, I would argue, have a powerful say in putting into acti­on the laws and rules that already exist but are easy to be avoided, and this is the major reason why I am advocating for a new international judicial institution to combat these problems.

What makes the new anti corruption vehicle so different from any other international organization?

First of all is its independent character. The  International Finan­cial Court might be able to nominate in­dependent counsels, prosecutors and investigators not reporting to the national law enforcement agencies, with their powers co­vering the territory of all parti­cipating states. Its rulings, as I already noted, should have uni­versal reach—that means that, in due course, they will be implemented into the national legislation. Both features greatly enhance the court’s reach and authority.

The next crucial point is the system of claims behind the cases the court investigates and deliberates. These claims might be filed by any private or corporate person who considers itself a complainant or aggri­eved—and in this case the set of actors might be very wide, beginning from any taxpayer in the country where money originates or from a client of any bank ruined by its owners. The claims would be directed towards any citizen of the country where the money goes whose ri­ghts have been violated by the decreasing level of decency in his country’s governing authorities caused by the inflow of “dirty funds.” This me­ans the propo­sed option is able to overcome the negligence of the national investigators who, for different re­asons, might be disinclined from launching an inquiry into the nature of unexplained funds or its uses inside the receiving nations’ financial do­mains.

Yet what may become the court’s greatest advantage is its powers to block and arrest the funds and assets owned or controlled by the citizens of the countries which did not become signatories of its Statute, but whose funds and assets are on the territory of its member na­tions. This very fact might undermine the fundamental principle of safety that today motiva­tes corrupt individuals and entities from around the world to hide their property ab­road: just imagine how senseless such a move will become if an anti-corruption activist’s documented claim sent from the country where the money was stolen, can cause the seizure of funds in the country where either the real estate was ac­quired or the bank deposit was opened. Even though the court may not become a well functioning institution overnight, it can be anticipated as a crucial danger by anybody engaged in corrupt and illicit financial operations around the world, therefore, greatly curb the inflows of “dirty money” from the peripheral nations to the developed ones.