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After giving a series of Scriptures proving the universality of sin, Romans 3:19 says,
19 Now we know that whatever the Law says, it speaks to those who are under the Law, that every mouth may be closed, and all the world may become accountable to God."
Sin is the violation of the Law, and since all have sinned, the Law convicts every man of sin. Every mouth is closed, because no one can defend himself in the divine court, where all sin is reviewed with perfect clarity. Hence, the entire world is accountable to God. This is another way of saying the whole world is "under the Law." Anyone who violates the Law is "under the Law," that is, convicted by and subject to the penalty of Law.
In Romans 6:14, Paul says of believers, whose penalty has been paid by Christ's death on the cross,
14 For sin shall not be master over you, for you are not under law, but under grace.
This is part of Paul's discussion later, where he shows that Christians are not to continue violating the Law just because the cross of Christ has paid their penalty. Having been given a favorable court ruling (grace), shall they now think they can sin with immunity? God forbid.
Getting back to Romans 3:20, Paul writes,
20 Because by the works of the Law no flesh will be justified in His sight; for through the Law comes the knowledge of sin.
Keep in mind that this is primarily part of Paul's discussion with a hypothetical rabbi. His point is that all mankind, including Jews, have violated the Law and cannot, therefore, be justified by the Law. That is, the Law cannot give grace (favor) to a sinner, regardless of his genealogy or calling.
The purpose of the Law is merely to define sin and to set the standard of righteousness, for it is the expression of the character of God by which we are supposed to live. We were created in the image of God, after all, and the entire divine plan is that we become the full expression of His image.
21 But now apart from the Law the righteousness of God has been manifested, being witnessed by the Law and the prophets, 22 even the righteousness of God through faith in Jesus Christ for all those who believe; for there is no distinction; 23 for all have sinned and fall short of the glory of God.
When Paul speaks of "the righteousness of God," he is not so much referring to God's moral perfection but rather His righteousness as a Judge. Men used to talk about righteous and unrighteous judges, depending on their incorruptibility, their knowledge of the Law, and their ability to making rulings according to the mind of God and the intent of the Law.
Thus, the righteousness of God is manifested in His righteous sentence upon all mankind. Paul is telling us that God is not unrighteous when He holds the entire world "without distinction" accountable to the Law. The rabbi might possibly object, thinking that Jews were not sinners like everyone else. But Paul shows that the Scriptures prove otherwise.
24 being justified as a gift by His grace through the redemption which is in Christ Jesus, 25 whom God displayed publicly as a propitiation [hilasterion, "atonement"] in His blood through faith....
Our justification, or acquittal, is given as a gift through faith in the work of the cross, by which He has paid our penalty to redeem us from the debt incurred by sin. Paul also uses the Greek termhilasterion, which was the Greek equivalent to "atonement" as used in the Septuagint Greek translation of the Hebrew Old Testament. Of this word, Dr. Bullinger says in his notes on Romans 3:25,
"This word comes to us from the Sept. In Exodus 25:17 kapporeth(cover) is rendered hilasterion epithema, propitiatory cover, the cover of the ark on which the blood was sprinkled as the means of propitiation."
I prefer to translate hilasterion as "atonement." Propitiation is an English word that means to appease, which suggests an idolator appeasing his angry god. The blood of the goat on the mercy seat did not appease God, but covered sin, giving men a positional righteousness even before the second goat has removed our sin. This covering results in grace, not appeasement.
While a Jew in Paul's day, or a Christian today, might do things to appease God, it is because they entertain a wrong concept of God. They are still influenced by Jonathan Edwards' concept of "sinners in the hands of an angry God." But the wrath of God is judicial only. His personal character is only Love. As Paul will explain later, the wrath of God is designed to convict the whole world of sin and present the need for justification, redemption, and grace. The plan was not to destroy but to save.
Continuing now with the last half of Romans 3:25,
25 .... This was to demonstrate His righteousness, because in the forbearance [anoche, "tolerance"] of God He passed over [paresis, "pass over, neglect, disregard"] the sins previously committed,
Paul obviously had in mind the atoning blood that was sprinkled upon the mercy seat to cover sin. On the Day of Atonement each year (Yom Kippur), the priests chose two goats and cast lots over them to see which would be killed, and which would be released. The blood of the one killed was sprinkled on the mercy seat to "atone" (cover) our sin. The second goat was not killed, but was sent into the wilderness to remove our sin.
Both goats prophesy of Jesus Christ, the first in His first work on the cross which covered our sin. The second goat prophesied of His second coming, in which He does not have to die again, and it is the work that removes sin from us.
It is for this reason that, as Christians, we are not yet perfected. Sin has not yet been removed from us, though our sin has been covered. Because it is covered, God is tolerating the presence of "sins previously committed" in his forbearance. He is able to forbear the sin that is still resident in us, because those sins have been covered by the blood of Christ. Hence, as we shall yet read in Romans 4, God has imputed us righteous, for God is calling what is NOT as though it were (4:17).
26 for the demonstration, I say, of His righteousness at the present time, that He might be just and the justifier of the one who has faith in Jesus.
What is the demonstration of God's righteous judgment in dealing with sin? It is the divine plan that is two-fold--first to cover sin, and later to remove it. The principle of Law by which this is done is set forth in Leviticus 16 in the law of the two goats. This law was demonstrated each year on the Day of Atonement, and it prophesied of the two comings of Christ and the work that He was to do on each occasion.
In fact, the entire Old Covenant method of dealing with sin laid down those principles as types and shadows. Under the Old Covenant itself, sin was merely covered, while under the New Covenant sin is removed (in two stages, as previously stated). A Jew, whose sin was covered by the blood of bulls and goats, could not boast of perfection, for his sin had merely been covered--not removed.
27 Where then is boasting? It is excluded. By what kind of law? Of works? No, but by a law of faith. 28 For we maintain that a man is justified by faith apart from works of the law.
Animal sacrifice never removed any man's sin. So a Jew could not boast of righteousness.