Today there seems to be a broad consensus that a complex financial investigation followed by seizure of illegal assets is the most powerful tool both to control crime and, increasingly, to preempt terror. Such a strategy has led to: the creation of an unprecedented new class of offenses; the conscription of the private financial sector in a way previously unknown even in wartime; a rollback of traditional legal protections combined with a de facto reduction in the burden of proof; a sharp shift in law enforcement priorities towards the money trail; and the introduction of a new complication in international relations. Yet these remarkable initiatives are hardly the product of careful consideration of the nature of a threat and possible responses. Rather they emerged in the 1980s in an atmosphere of inflated fears and exaggerated expectations, and have resulted in a cumbersome, costly, and increasingly intrusive regulatory framework which lacks any defensible criteria by which its success (or failure) can be judged.

The Logic of the Strategy

The U.S. was the first to implement a (more or less) coherent follow-the-money strategy, and remains the sole country with the financial and political muscle to impose some uniformity of standards abroad. The American model is built on five pillars.¹