What does Money Laundering mean today?
In Chapter 4, Money Laundering, First Edition, Money Laundering – A Handbook for CDD Compliance enlightens the meaning of money laundering with the exhibit of Diagram 10, The Money Laundering Cycle Diagram. In a specific situation, investigators or public prosecutors may encounter challenging to prove money laundering during the criminal investigation process.
- The Vienna Convention predicates offences related to narcotic drugs, which is, illicit money arising from drug trafficking.
- The Palermo Convention extended the predicate offences of money laundering to cover all predicate offences: Article 6.2(a).
What Predicate Offence means?
According to Article 2(h) of the Palermo Convention, “Predicate Offence” shall mean any offence as a result of which proceeds have been generated that may become the subject of an offence as defined in article 6 of this Convention.
For example. Mary shopping inside Galaxy Diamond Store. Mary managed to take out a piece of a diamond worth US$500,000; she did not pay for it Mary sold the diamond to John Gems for cash US$250,000. With the money, Mary bought an old wooden house in the suburb.
In the above example, Mary predicates an offence under Article 6.1 of the Palermo Convention. Firstly, for Mary, without paying for the diamond is an offence of theft and theft is a crime. Secondly, the diamond is the property: Article 2(d). Thirdly, the cash US$250,000 is the proceeds of crime: Article 2(h). On the other hand, for John Gems, it is also money laundering, a breach of Article 6.1(a)(i) for helping Mary who is involved in the predicate offence to evade legal consequences or Article 6.1(b)(i) the acquisition of property, knowing, at the time of receipt, that the diamond is the proceeds of crime.
See Chapter 4.3, Money Laundering Crimes, First Edition, Money Laundering – A Handbook for CDD Compliance.
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Categories: UNODC, UNCAC, FATF, AML/CFT Compliance, Money Laundering
