Lawyer engagement with proceeds of crime : a comparative study of anti-money-laundering regulation in the US, Russia and China

Abstract

All countries need to comply with the same set of global anti-money-laundering policies. This study adopts historical, doctrinal and socio-legal research methodologies to examine the local implementation of global anti-money-laundering policies for lawyers in the United States, Russia and China. Specifically, this thesis investigates five research questions. First, how have the anti-money-laundering regulations evolved in the three countries? Second, what systems do these three countries have for regulating lawyers? Third, how and to what extent have the three countries implemented global anti-money-laundering policies to regulate lawyers’ activities, and why? Fourth, what problems have these countries faced in implementing the global international anti-money-laundering policies for lawyers? Finally, how do the local institutions and practices affect lawyer engagement in anti-money-laundering and money-laundering activities in these three countries?

The findings demonstrate that differences in historical, cultural, social, political and legal contexts across the three countries have resulted in selective adaptation of global anti-money-laundering policies for lawyers at country level. In particular, the study has found that fierce resistance from the law profession, federalism (state autonomy) and separation of powers have undermined policy implementation in the United States. As the state judiciary traditionally regulates US lawyers, it is difficult for the federal government to implement global anti-money laundering policies at state level. As a result, the gatekeeper responsibilities have remained mostly voluntary for lawyers in the United States.

The research has also revealed that China has not imposed gatekeeper responsibilities on lawyers. The thesis also found that money laundering rarely involves lawyer facilitation, as public security officers can access lawyer-client communications in the absence of legal professional privilege in China. Moreover, Chinese lawyers can testify against their clients because of their limited scope of confidentiality duties and their obligations to report crimes.

What is more, this study has unveiled that the lack of a licensing system and official definition of the legal profession in Russia have made it impossible to regulate all lawyers in the country. Hence, the thesis has discovered that a significant part of the Russian legal profession remains largely untouched by global anti-money laundering policies despite formal policy compliance.

Based on the research findings, this thesis argues that local institutions and practices have led to different implementations of global anti-money laundering policies in the United States, Russia and China. The findings support the Selective Adaptation Theory, which postulates that different countries are constrained by their local conditions to adapt international policies to fit their domestic contexts, resulting in different policy implementations. More significantly, this study has revealed that differences in local conditions also result in selective compliance by local actors, such as lawyers. Specifically, the practice of retaliations, inadequate whistleblower protections or even illegal reprisals have driven lawyers in the United States, Russia and China to comply selectively with the regulatory requirements of the anti-money-laundering policies. Therefore, this thesis extends the Selective Adaptation Theory to explain how local actors undermine the implementation of global anti-money-laundering policies in their selective application of global policies.

This study enriches our understanding of how the United States, Russia and China implement global anti-money laundering policies for lawyers at local levels. Most importantly, the findings have advanced the Selective Adaptation Theory by providing original insights into the role of local actors in implementing global policies through their selective compliance.