Author: Inan Uluc*
Published: June 2021
In recent years, the international community has become more cognizant of the threats posed by money laundering; specifically, the threats posed to society and of the social consequences in overlooking this illicit activity. This awareness has led to the commitment of many governmental and non-governmental institutions to employ a more proactive role in developing measures and guidelines focused at countering money laundering practices. These measures and guidelines, however, largely instruct practitioners how to identify and combat money laundering in credit and financial institutions. Disregarded are policies focused in other institutions and mechanisms, such as arbitration. This lack of guidance in how to identify and prevent money laundering in the arbitral setting has unfortunately polarized the arbitral approach to money laundering and, accordingly, has inhibited the formation of doctrine on the treatment of money laundering in arbitration. In this respect, this article assesses the principal issues upon which arbitral actors diverge. More specifically, this article analyzes arbitral tribunals’ right and/or duty to conduct sua sponte money laundering inquiries and what indicia of money laundering that may be utilized to corroborate these inquiries. The article then explores possible impediments to arbitral tribunals conducting sua sponte inquiries and concludes with a discussion of how the risk-based approach to anti-money laundering, which is predominantly applied by financial institutions, may serve as the foundation for coalescing the arbitral treatment of money laundering.
*Inan Uluc is an Assistant Professor of Law, Social Sciences University of Ankara.