Money laundering may be defined as an act where the origin of illegally obtained money or property is disguised to appear legitimate. This includes situations where there is any arrangement that involves the proceeds of another person's crime or the benefit of one's own criminal conduct. The objective of money laundering is that a criminal wants to benefit from the crime and not get caught.
Money laundering is a criminal offence set out in section 45 of the Proceeds of Crime Act ("POCA"). The offence is made out where a person knows or has reasonable grounds to suspect that property is "criminal property" and deals with that "criminal property" in some way such as receiving it, taking possession of it, transfers it, conceals it, disposes of it, disguises it, engages in a transaction (directly or indirectly) in relation to it, converts or brings into or sends it out of the country.
What is criminal property is any property which is a benefit or represents a benefit from criminal conduct, being conduct which is an offence whether committed here or abroad. The underlying criminal conduct to money laundering, therefore, can be any offence which may involve trafficking in arms and narcotics, organised crime, corruption, fraud and robbery to name a few.
Whether property is seen as criminal property will not depend on proving the underlying criminal conduct for it is unnecessary to show who carried out an offence, or who benefited, or whether the offence occurred before or after the passage of the law creating the offence of money laundering.
To be liable in law, a person would have to be dealing with criminal property knowing or suspecting that it was property, which may have been illegitimate in some way even if you did not know what offence may have taken place and who carried it out. The law reflects, therefore, how we have come to understand the way in which money-laundering activity takes place in circumstances where it may be carried out not only by the criminal but by any person who helps someone benefit from the proceeds of crime.
Typically, the process of laundering illegitimate proceeds can take place in three stages known as placement, layering and integration.
Placement is where cash is put into the financial system. Layering usually involves a complex system of transactions designed to hide the source and ownership of funds. And finally, integration is the stage where the laundered funds are re-introduced into the legitimate economy appearing from a legitimate source.
Where all or any one of these stages occur, and you participate or are involved in dealing with illegally obtained money or property, you may be suspected of committing the offence of money laundering depending on whether you knew, or ought to have known or suspected that this was illegally obtained money or property.
The law also criminalises money laundering in order to take the profit out of crime by ensuring that proceeds can be recognised, reported, traced and confiscated. Where an offence takes place, the ill-gotten proceeds can be seized and assets may be restrained, confiscated and ultimately forfeited to the State.
�2 To be continued: "Why am I being asked for proof of address and to show a form of personal identification?"
This column is not legal advice. If you have a legal problem, you should consult an attorney-at-law.