Combating money laundering by criminal law

KEY POINTS

Criminal offences

• The following, if committed intentionally, are a criminal offences:
  • transferring or converting property (assets of any kind), knowing that it came from criminal activity, to hide or disguise its illicit origin or to assist anybody involved to evade the legal consequences of their actions;
  • hiding or disguising the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that it came from criminal activity;
  • acquiring, possessing or using property knowing, at the time it was received, that it had come from criminal activity;
  • aiding and abetting, inciting and attempting these offences.

Criminal activity (or ‘predicate offence’)

• For the purposes of this directive, the following conduct is considered to be a criminal activity, i.e. relevant for the crime of money laundering:
  • any kind of criminal involvement in the commissioning of any offence punishable, in accordance with national law, by imprisonment or a detention order for a minimum of more than 6 months or a maximum of more than 1 year; and
  • in so far as not already covered by the category above, offences within a list of 22 designated categories of crime, including all the offences defined in EU legislation designated by this directive.

Additional factors

• The offences extend to property derived from activity in another EU Member State or a non-EU country, where it would be considered a criminal activity if it had occurred domestically.
• Member States must ensure that persons who committed, or were involved in, this criminal activity are subject to punishment. Additional factors include:
  • criminal liability extends also to those who launder the proceeds of their own crimes (‘self-laundering’);
  • a previous or simultaneous conviction for the criminal activity from which the property came is not a prerequisite for a conviction for money laundering;
  • it is possible to convict without needing to establish all the facts about the criminal activity, including the perpetrator’s identity.

Aggravating circumstances which make offences more serious

• These include instances where:
  • the offence was committed within the framework of a criminal organisation as defined in Framework Decision 2008/841/JHA; or
  • the offender committed the offence when carrying out their professional activities as ‘obliged entities’, as defined in Article 2 of Directive (EU) 2015/849 (see summary).
• Member States may also choose to regard the following as aggravating circumstances:
  • where the laundered property is of high value; or
  • where the laundered property comes from racketeering, terrorism, human trafficking, narcotics trafficking or corruption.

Penalties and sanctions

• Punishment must be effective, proportionate and dissuasive. Member States should impose a maximum term of imprisonment of at least 4 years and, where necessary, apply additional sanctions or measures, including measures holding legal entities liable, such as:
  • exclusion from entitlement to public benefits or aid;
  • exclusion from access to public funding, including tendering, grants and concessions;
  • disqualification from carrying out commercial activities;
  • judicial supervision;
  • judicial winding-up orders;
  • closing premises used for committing the offence;
  • freezing or confiscating the property concerned.

Package of legislation

• The directive is part of a package of legislation which includes Regulation (EU) 2018/1672 on controls on cash entering or leaving the EU, and complements and reinforces the application of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

Investigation tools and cooperation

• Member States must ensure that effective investigative tools, such as those used in combating organised crime or other serious crimes, are available to those responsible for investigating or prosecuting the offences.
• The directive also removes obstacles to judicial and police cooperation between Member States by clarifying which country has jurisdiction, and how countries cooperate, as well as how to involve Eurojust.

Money laundering affecting the EU’s financial interests

• Directive (EU) 2017/1371 sets out rules concerning criminal offences and penalties on combatting fraud and other illegal activities detrimental to the Union’s financial interests (see summary). These activities include money laundering.
• Article 22(1) of Regulation (EU) 2017/1939 establishing the European Public Prosecutor’s Office (EPPO) (see summary) gives the EPPO powers in respect of the criminal offences affecting the financial interests of the Union that are set out in Directive (EU) 2017/1371.