Trade-based money laundering (TBML) is a major concern in Colombia, where criminal organisations employ under-invoicing to conceal drug-trafficking proceeds. In response, Colombia imposed a compound tariff on certain Panamanian importations that were considered linked to this phenomenon. Alleging that the policy measure infringed Colombia's tariff concessions, Panama activated the World Trade Organisation (WTO) dispute settlement mechanism. The dispute revolved around Article II:1 of the General Agreement on Tariff and Trade 1994. Colombia argued that this norm should be interpreted as to encompass licit trade only. Colombia looked for normative support in the investment treaty regime by establishing a parallel between undervalued imports and illegal investments. Therefore, just as investment treaty tribunals abstain from extending international legal protection to illegal investments, the WTO adjudicating bodies should not extend tariff concessions to importations linked to TBML activities. This article contends that by transplanting a more favourable doctrine of legality from the investment treaty regime to the multilateral trade regime, Colombia engaged in strategic regime shifting. Accordingly, drawing on regime complexes analysis, the article argues that by considering development a common issue-area, it is possible to articulate strategic connections between both regimes.
All Science Journal Classification (ASJC) codes
- Economía, econometría y finanzas (miscelánea)