Volume 41, Issue 1

March 3 Symposium: Fintech, Privacy, and Developing a Federal Digital Dollar

Vol. 40, Issue 3

Volume 40, Issue 2

Chasing the Fruits of Misery: Confronting the Historical Relationships Between Opioid Revenues, Offshore Financial Centers, and International Regulatory Networks

By: Wilks, Stephen C | January 1, 2020

As the opioid crisis continues to claim lives throughout the U.S., tort litigants have faced challenges pursuing Purdue Pharma – one of the drug makers responsible for aggressively promoting OxyContin while downplaying the drug’s addictive effects. Much of this litigation posture sought to recover billions in public health costs incurred responding to the crisis at federal, state and local levels. As the plaintiff class grew, Purdue Pharma petitioned for bankruptcy protection, at which point auditors discovered the entity’s beneficial owners had caused it to wire billions in opioid profits into offshore accounts – placing them beyond the reach of litigants. These transactions reveal the limits of domestic financial reporting regulations and international regulatory bodies, like the Financial Action Task Force (FATF), whose frameworks narrowly focus on intercepting proceeds of terrorism and money laundering. Existing scholarship has not considered why the offshoring of opioid revenues remains legal in a regulatory landscape conceived to protect the common good. The soft-law system of norm-building responsible for building these frameworks would best fulfill its purpose by broadening its reach to include a wider sweep of capital mobility. The opioid crisis offers a useful context for exploring this claim. By devising a class of activity – described below as the Public Interest Transaction (PIT) – modified FATF rules would offer a principles-based alternative to the existing system’s language and provide a pathway for intercepting a wider variety of capital mobility with an emphasis on profits derived from “high casualty” crises such as the opioid crises. By precluding language that targets other forms of publicly harmful transactions, existing norms will continue to undermine the public good in a transnational banking environment lacking more principles-based approaches to financial regulation. The timing and context of Purdue Pharma’s wire transfers offer a useful laboratory for making these arguments.

Mechanisms for Consultation and Free, Prior and Informed Consent in the Negotiation of Investment Contracts

By: Szoke-Burke, Sam,Cordes, Kaitlin | January 1, 2020

Investor-state contracts are regularly used in low- and middle-income countries to grant concessions for land-based and natural resource investments, such as agricultural, extractive industry, forestry, or renewable energy projects. These contracts are rarely negotiated in the presence of, or with meaningful input from, the people who risk being adversely affected by the project. This practice will usually risk violating requirements for meaningful consultation, and, where applicable, free, prior and informed consent (FPIC), and is particularly concerning when the investor-state contract gives the investor company rights to lands or resources over which local communities have legitimate claims. This article explores how consultation and FPIC processes can be practically integrated into investor-state contract negotiations to better safeguard the land rights and human rights of members of project-affected communities. Based on a review of relevant international law standards and guidance documents, a close analysis of typical investor-state negotiations and of consultation and consent processes in other contexts, and a workshop with Indigenous and civil society representatives, the article provides three options for integrating consultation and consent processes into contract negotiations, the appropriateness of which will vary depending on local contexts and communities’ resources and decision-making structures.

Comparative Analysis of U.S. and Saudi Arabia Investment Funds Regulations

By: Tang, Gabriella | January 1, 2020

The investment funds sector has always been a major player in the financial industry globally. As such, many countries with mature financial markets have enacted regulations to govern the activity and management of investment funds. The U.S. Securities and Exchange Commission (SEC) enacted the Investment Company Act of 1940(the Act) as an effort to restore investor confidence in investment funds and safeguard investors from future abuses after the market crash in 1929. On the other hand, emerging financial markets started to take part in regulations in the hope to attract more investors and outside resources. The Capital Market Authority of Saudi Arabia (hereinafter CMA) enacted the Investment Funds Regulation (hereinafter the Regulation) in 2006, as the Sovereign aims to turn the State into an investment powerhouse. Due to the newness of the Regulation, an analysis of the Act will be helpful for the CMA to improvise the Regulation and avoid mistakes. This paper will first focus on four areas of the Investment Company Act of 1940, analyzing the strengths and weaknesses of the Act with suggestions provided. It will then offer an analysis of the Investment Funds Regulation of Saudi Arabia and discuss areas for improvement based on the analysis of the Investment Company Act of 1940.