Money-laundering in Southeast Asia: liberalism and governmentality at work

Abstract

This article discusses the diffusion of a regulatory system against money-laundering in Southeast Asia. To this end, the article reconstructs how the Financial Action Task Force has securitised the issue of money-laundering into a global problem requiring a global solution and how this has spread to developing nations. The article seeks to demonstrate how these international norms and practices spread and are transformed into national law within Southeast Asia. The article further shows that these transformations reflect an increasing level of multilateral cooperation within the region and that this phenomena can be better understood as the articulation of a global expression of governmentality where a set of strategies and policing techniques emerges to effect control.

Keywords:

• money-laundering
• governmentality
• liberalism
• regulation
• Southeast Asia

Acknowledgements

An earlier version of this paper was presented at the Regional Leadership and Norms: EU and Asia-Pacific Trajectories, University of Western Australia, Perth, 2 and 3 August 2012. I have benefited from generous comments offered by John Burgess and two anonymous referees.

Notes

The FATF is essentially a political organisation in its membership and practices; to qualify for membership, a country has to ‘strategically important’. Non-member states who may be members of FATF regional bodies do not have access to FATF membership and therefore not involved in decision-making processes.

In effect, the banks are incorporated into this intelligence gathering function. They co-produce financial intelligence with national and regional enforcement agencies, becoming part of what Abrahamsen and Williams (2009) call a security assemblage.

The blacklist has been so successful that the last non-cooperative country, Burma was de-listed in October 2006.

Remittances from migrants working abroad typically use informal systems of value transfer. This may be because it is the only option for such money transfer. This is particularly in areas ravished by wars and famine. Many also utilise these channels to avoid corrupt ‘rake-offs’ from officials, including corruption in the local banking system. Even the FATF recognises it. As they put it: ‘It is worth noting … that a desire for anonymity does not necessarily mean that a particular remittance transaction is related to criminal activity. There is evidence that anonymity, in certain instances, may also be a means of circumventing the pressure from government officials that ask the recipient for bribes or try to impose taxes on cross border flows’ (FATF 2005, p. 6).

Despite this, AML legislations and regulations continue to mitigate such informal money transfers.

McCulloch and Pickering (2005) have argued that the application of anti-money laundering law is however, unlikely to have much effect on the prevention of terrorism or the apprehension of terrorists.

Additional information

Notes on contributors

Loong Wong

Loong Wong has been teaching and researching the political economy of Southeast and East Asia for many years. He has published widely on cyber-democracy, political and social change, corporate governance and corporate social responsibility.