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Comment by mullingitover | Hacker News Reader

> The local rulers have de facto control over government, jurisdictional and businesses

> ...the rule of the law does not apply...

All of these should be red flags - even if you yourself are shady, you want strong property rights and rule of law, not whatever the local despot feels like doing that day.

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Here is an example: https://www.theguardian.com/world/2009/may/03/uae-sheikh-acc... - from business associate to being tortured on tape. Edit: updated link with more context.

The article above is 12 years old. You will be shocked -- shocked! -- to hear that the prince doing the torturing was judged innocent, while the brothers who published the tape were convicted of blackmail.

https://en.wikipedia.org/wiki/Issa_bin_Zayed_Al_Nahyan

Indeed. If the Chinese & Indians fail to take advantage of this situation it will be a showcase of incompetence and corruption by Asian governments.

The checklist fir being an attractive investment target is large country, stable government (check, check), strong property rights and fair treatment of foreigners (don't know, don't know). If Americans start confiscating assets, then the Asians have an opportunity to absorb a lot of money if their governments can be held in check.

The problem is that especially in the case of China foreigners do not have any practical justice in the court. It is the rule of the party, not rule of the law. Any party member gets preferential treatment over a foreigner, as they know strings to pull and people to bribe.

Chinese elites get preferential treatment? Wow. It never happens in any other country. That's for sure.

A lot of countries bend over backwards for foreign money at the expense of locals.

Wow. Never happens in Europe. Or in the US. /s

China excels in certain categories, and protecting the rich and connected is one of those. If you get too rich and powerful independent of the government maybe you can go back to being in trouble too.

Indian Justice System is largely seen as fair, but it is tooooooooooooooooooooo slow.

Cases take years to be concluded. Sometimes, even decades. The backlog is huge and the relatively very low cost of suing creates a lot of civil suits. In the US, losing a case means paying the costs of the winning side usually - In India the costs are calculated at a ridiculously low rate, that does not deter frivolous cases at all.

Also, the Indian Govt is known for its over zealous taxation of foreign entities - termed tax terrorism. Hardly a tax haven.

Switzerland was above all stable. Perhaps one of the most stable countries on earth. The appeal was that stability paired with its murky banking.

Switzerland has some people leaking the egregious money laundering and connections to bad people parking their money there. And I want to applaud those people. Insider leaking that info is an important world wide defense against the moneyed rich getting too much power.

Indeed. The entire point of taking the money out of Russia to get away from the lack of rule of law, etc..

How are a bunch of dumb 2nd generation oil pumper warlords going to protect your money longterm?

I think the idea is to transit your money through there to launder it. part of a internation shell company game. sure the money coming from businesses and companies there look shady but not enough to cause anyone to investigate it as enough powerful and politically connected people from multiple countries would not like it to be looked at.

Agreed. Maybe Dubai the least worst choice.

You want lose rules and the appearance of legitimacy to wash the money and then move it to a safe place with the rule of law.

I’m guessing the money is made, moved to Dubai then on to the UK, Canada, USA, etc for it to be parked.

I don't think OP's characterization is accurate at all.

Rule of law very much exists in the UAE. So much so that they have carved out a distinct common law system (so called DIFC courts) which effectively provide English language common law as a service. This was explicitly done to make investment and commercial activity in the country attractive, and within DIFC boundaries (and IIRC at this point nation-wide) supersedes the authority of Dubai's own courts on a whole range of matters.

Those 'financial free zones' basically function like charter cities so international investors do not have to deal with the domestic Shariah law system.

https://en.wikipedia.org/wiki/DIFC_Courts

Do those courts help prevent the king or his brothers from torturing business partners?

https://en.wikipedia.org/wiki/Issa_bin_Zayed_Al_Nahyan

If that's a non-rhetorical question no they don't because that's a criminal matter, not a commercial one that was handled in an Emirati court in 2009. But distrust as a consequence of failures of the domestic system where exactly why they bothered to built an entire parallel judicial system largely in the decade afterwards.

Why would I trust the leaders of a country that make a parallel legal system to make themselves seem legitimate?

That type of judicial theater screams of corruption at the highest level.

In 2019, in DIFC, the anti-money laundering officer, whose job is to stop money laundering, was sacked on whistle blowing instead of money-laundering stopped:

https://www.bbc.com/news/business-50205956

DIFC harly has a reputable track record. While on a paper it might sound independent, in reality is it just another extension to Sheik’s tentacles. Any compliance is just lip services.

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