Money Laundering Amidst Mortars: Legislative Process and State Authority in Post-Invasion Iraq

Abstract

There existed a substantial divergence between the Coalition Provisional Authority, the U.S. and U.K. run entity responsible for governing Iraq after the fall of the Saddam Hussein regime, and the Iraqi body politic over the most fundamental assumptions and biases underlying political and economic forms of human association. This made effective governance by the CPA an impossible proposition. The disparate assumptions and biases in question related to the relationship of state authority and law to alternative religious and culturally based sources of authority. Specifically, the dominant Iraqi assumption is that religious institutions of authority, and in particular, the powerful Shi'i religious institution known as the marja'iyya, are not political, and that therefore matters that should be governed by religious authority are to be administered largely by elements operating beyond state control. Any prescriptive approach to legal change in Iraq requires an understanding of this central fact.

The Article attempts to demonstrate this thesis with reference to a CPA order concerning money laundering whose terms the author participated in negotiating. In this example, the Iraqi presuppositions and biases manifested themselves in objections to CPA proposals regarding preferred modalities of regulation and enforcement, with regulatory exemptions sought for particular commercial actors over whom it was assumed that alternative, non state based forms of authority were more appropriate. The Article proposes a solution to this problem through a paradigm shift in the understanding of certain religious prohibitions on commercial activity, which could lead to a more salutary regulatory regime that harmonizes both state and religious forms of authority.

Keywords: Islamic Law, Iraq, CPA, Iraqi Law, Shi'ism, Legal Order