Anti-Money Laundering

Money laundering is the process by which criminal proceeds are disguised to hide their illicit origins and to retain them for use. Criminals will attempt to distance themselves from their crimes by finding safe havens for their profits where they can avoid confiscation orders, and where those proceeds can be made to appear legitimate.

Money laundering schemes can be very simple or highly sophisticated. The most sophisticated money laundering schemes usually involve the following three stages:

• Placement/Hiding - the process by which the proceeds of crime are placed into the financial system;
• Layering/Moving - the process of moving money in the financial system through complex webs of transactions, often via offshore companies, to conceal the ownership of such assets;
• Integration/Investing - the process by which the proceeds of crime are absorbed into the legitimate economy.

Different types of money laundering offences exist. There are 'mixed' cases, in which money laundering can be charged with the underlying proceeds-generating predicate offence. These can be further divided into cases which involve 'own proceeds' or 'self laundering', where the defendant in a money laundering case may also have committed the predicate offence, and those cases where the laundering is by a person who has not committed the predicate offence.

In cases where money laundering is the only charge capable of being prosecuted, these can also be divided into cases where the offender is laundering his own proceeds of crime, and those where the laundering is undertaken by a person other than the perpetrator of the predicate offence.

Money laundering offences usually require the prosecution to prove three elements: that a transaction involving property took place, that that property is the proceeds of a crime and that the offender knows or suspects that the property is the proceeds of crime.

The advantages of having separate anti-money laundering offences are that they do not require a conviction on a substantive offence and that any investigation will help to identify the assets and establish the connection between the predicate offence and those assets.

Such legislation needs to be accompanied by laws that permit the disclosure by institutions of suspicious financial transactions; that allow access to and investigation of bank accounts and other financial documents; that give the power to make cash seizures; and that create criminal offences for anyone to tip-off someone that he is under investigation for money-laundering.