International legal and quasi-legal approaches to combat money laundering: an Australian perspective on norm-development

The purpose of this chapter is to provide an Australian perspective on norm development in the area of anti-money laundering (AML). It examines the extent to which the development of domestic legislation to curb money laundering was influenced by international obligations and standards. The chapter will first provide a brief overview of international regulatory efforts to combat money laundering. To this end, it will distinguish between traditional legal approaches and unconventional, quasi-legal methods of norm development. It argues that the FATF standards fall into the latter category and classify as an example of informal international law-making. The analysis will then turn to an examination of the FATF's approach to standard-setting and -enforcement. In a subsequent section, the chapter will focus on the Australian experience and assess how the FATF standards on combating money laundering have affected the development of domestic AML legislation. It is argued that in spite of the fact that Australia had ratified several key international treaties prior to the FATF's Mutual Evaluation Report of 2005, the bulk of legislative reform only occurred after the FATF review. The chapter will conclude with some observations on the implications of this process of norm development and aspects of democratic legitimacy of Australia's AML legislation.