U.S. dollar dominance in global transactions facilitates the extraterritorial reach of U.S. law, including sanctions and anticorruption laws. The FIFA case is highlights the links between dollar dominance and legal jurisdiction.
Recent investigations of financial institutions for “corrupt” hiring of foreign officials’ family members highlight links between anticorruption and AML compliance and enforcement. Financial institutions dealing with politically exposed persons and state-owned enterprises should leverage AML expertise to bolster anticorruption compliance.
American economic and financial heft facilitates the extraterritorial reach of U.S. law. For example, global transactions that are denominated in U.S. dollars and processed through the U.S. financial system “touch” the United States, come within its jurisdiction and create a jurisdictional nexus to foreign parties, property and events associated with those transactions.
Dollar dominance fuels the global reach of U.S. law, including U.S. sanctions. Emerging trade and finance channels, led by non-Western nations, may if successful stem the global reach of U.S. law.
Enforcement authorities in the US and Asia reportedly are investigating financial institutions for potentially corrupt employment and business relationships with family members of government officials. The investigations underscore policy links between anti-corruption and anti-money laundering regimes where dealings with Politically Exposed Persons (PEPs) are involved.
This article, published by Hdeel Abdelhady in Butterworths Journal of Banking and Financial Law, briefly discusses the pending investigations and the anti-corruption-AML policy nexus, and suggests, with respect to PEPs and more generally, that financial institutions facilitate fluidity in their compliance programs to allow for the sharing of information and adaptation of compliance protocols across (sometimes impermeable) internal functional and disciplinary lines.
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