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Private Actors in the Public Security Domain – The Case of Anti-Money Laundering

Dr Karin Svedberg Helgesson, Stockholm School of Economics
Prof Ulrika Mörth, Stockholm University

Date: 19 March 2013
Time: 1pm - 2.30pm
Venue: KSW 3.01

Abstract

In this presentation, Karin Svedberg Helgesson and Ulrika Mörth will theorize on anti-money laundering (AML) within the private sector and across organizations by drawing concepts and novel theories from two strands of literature – security/governance studies and management/organization studies. The risk-based approach adopted in regulations by the intergovernmental Financial Action Task Force (FATF) and in European Union Directives has forced banks, accountants and lawyers to assist and support law enforcement agencies.  Helgesson and Mörth argue that the emergence of this new public security domain cutting across the public-private divide can be explained by two broad political and economic changes: securitization and publicization.

Securitization is here understood as a multifaceted social practice that rests on three assumptions: ‘the centrality of audience’, ‘the co-dependency of agency and context’, and ‘the structuring force of the dispositif, that is a constellation of practices and tools’ (Balzacq 2011). The ‘centrality of audience’ or the empowered elite that pushes for the securitization of the financial sector is easily identified. However, in the context of AML the securitization process is complicated by the fact that private actors are simultaneously the prospective agents of securitization as well as the audience of such attempts. In line with Balzacq, Helgesson and Mörth argue that the conceptualization of security depends on the political, cultural and historical context (‘the co-dependency of agency and context’). In the case of AML this interplay is particularly salient when one analyses the relationship between public and private actors in their dual role as audience and agents. How do private actors interpret the security discourse of public actors? Drawing from various case studies on AML, the banking sector and law firms in Sweden, France and the UK, the speakers show that private actors interpret EU directives on AML in quite different ways. Depending on how they view their role in society, private actors handle the pressure from public actors by either complying, or by arguing that compliance goes against the rule of law. The third of Balzacq’s assumptions, the importance of practices in processes of securitization, is evident in the case of AML. The most immediate manifestation of these practices is the way the banking sector and law firms reorganize and construct new procedures in order to comply with EU directives. In doing so, they follow classic strategies of legitimization. Furthermore, the creation of new professionals is closely linked to the instrumentation of securitization through certain devices. One case in point is how pre-crime devices are used for tracing suspicious transactions (computerized due-diligence systems) and/or the beneficial owner (the World Check database).

This and other manifestations of securitization are contingent on the increasing publicization of corporations (Svedberg Helgesson & Mörth 2013).  The requirements from the securitization process – traceability, profiling and other alert systems to trace ‘dirty money’ – have had cognitive and organizational resonance due to NPM reforms and the way corporations have been expected to take on a political role in society (Scherer & Palazzo 2011).

References

Balzacq, T (ed) (2011) Securitization Theory: How Security Problems Emerge and Dissolve, London: Routledge.

Helgesson, K Svedberg and Ulrika Mörth (eds) (2012), Securitization, Accountability and Risk Management – Transforming the Public Security Domain, London: Routledge.

Helgesson, K Svedberg and Ulrika Mörth (eds) (2013), The Political Role of Corporate Citizens. An Interdisciplinary Approach, Basingstoke: Palgrave Macmillan.

Scherer, G and G. Palazzo (2011), “The New Political Role of Business in a Globalized World”, Journal of Management Studies, 48, 4:899-931.

About the speakers

Karin Svedberg Helgesson is Research Associate Professor at the Department of Management and Organization, Stockholm School of Economics. She has previously studied New Public Management Reforms, soft regulation and corporate accountability in various contexts. Her work has appeared in the Journal of Common Market Studies, Nordiske Organisajonsstudier, Organization Studies, and Surveillance & Society. A current research interest is the role of private actors in the public domain, as reflected in the volume Securitization, Accountability and Risk Management: Transforming the Public Security Domain (Routledge, 2012), co-edited with Ulrika Mörth.

Ulrika Mörth is Professor in Political Science at the Department of Political Science, Stockholm University. She has published several books including Organizing European Cooperation, Soft Law in Governance and Regulation, European Public-Private Collaboration.  Her research has appeared in the Journal of Common Market Studies, Journal of European Public Policy and Governance. Her most recent publications are the co-edited volumes Democracy and Public-Private Partnerships in Global Governance (Palgrave Macmillan, 2010) and Securitization, Accountability and Risk Management: Transforming the Public Security Domain (Routledge, 2012), with Karin Svedberg Helgesson.

 

 

 

 

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