Part IV Exchange Controls, Exchange Rates, and Sanctions, 16 The Private International Law of Exchange Control

Subject(s):

Foreign currency systems and institutions — Money laundering — Exchange control — Monetary obligations

This chapter suggests that private international law may offer significant scope for the application of foreign exchange control laws before the English courts. However, it must not be forgotten that a system of exchange control is of an essentially public character, and the English courts have traditionally been reluctant to enforce foreign laws of this kind. Foreign exchange legislation cannot be used offensively, in the sense that it may be invoked as a cause of action before the English courts; but it may be used defensively, in the sense that it may render the performance of an agreement illegal, or it may have other contractual consequences. The chapter then considers the impact of foreign exchange control regulations in the context of contractual and proprietary rights. It also looks at the effect of foreign exchange control regulations on money laundering and as an unenforceable prerogative right.