Money laundering: the silent killer of corporate criminal law
What is money laundering?
Imagine: you are shown the door by your bank without any reason. There is a good chance that this is a consequence of the so-called anti-money laundering legislation (Act of 18 September 2017). On this basis, banks are not only obliged to identify their customers (Know Your Customer or KYC), but also – whenever they know or suspect that a customer possesses funds or conducts transactions related to money laundering – to report this to the Financial Information Processing Unit (CTIF-CFI), also known as the anti-money laundering unit. Once your bank’s compliance department decides to terminate the banking relationship, it is often too late (cf. DS 25 September 2020).
And when the public prosecutor’s office opens a criminal file, whether or not following an investigation by the CTIF-CFI, it is often the prosecution for money laundering that strikes the most fear in fraud cases.
But what exactly is money laundering?
Although the criminalisation appears very complicated from a technical point of view, the phenomenon itself is not so difficult to explain. In fact, it comes down to money laundering being a so-called “consequential offence”. In other words, there can only be a question of money laundering if another offence (theft, fraud by deception, breach of trust, corruption, forgery, …) has previously been committed by which a financial advantage was obtained. The manipulation of this inherently illegally obtained financial advantage is then what is separately criminalised as money laundering.
From a technical standpoint, our Belgian criminal law recognises not one but three money laundering offences, which are described in Article 505, first paragraph, 2° – 4° of the Criminal Code. Essentially, it means that almost any act committed with an illegally obtained financial advantage is criminalised, provided it was committed with the requisite criminal intent. Specifically, the following acts are criminalised: buying, exchanging or receiving free of charge, possessing, keeping or managing illegal financial advantages (= first money laundering offence); converting or transferring them (= second money laundering offence); and concealing or disguising their nature, origin, location, disposition, movement or ownership (= third money laundering offence).
For the aforementioned acts to be punishable, they must have been committed with criminal intent. In practice, this means that for the first and third money laundering offences, it must be demonstrated that the perpetrator knew or ought to have known of the illegal origin at the time of committing the act. For the second money laundering offence, it must be shown that the perpetrator intended to conceal the illegal origin or to help a person evade the legal consequences of their actions.
The broad definition and especially the combination of the three money laundering offences together mean that in almost every fraud file where actions are subsequently taken with ‘the loot’, there is room to prosecute not only for the basic offence (e.g. fraud by deception), but also on the basis of money laundering.
The danger of the money laundering offence
In recent years, we have seen increasing attention paid to money laundering by the public prosecutor’s office. And there are good reasons for this.
Money laundering is an autonomous offence. This autonomous character has several important consequences. Firstly, it is not necessary for the defendant suspected of money laundering to have committed the offence from which the illegal funds originated as a perpetrator themselves. Furthermore, to prove the money laundering offence, this basic offence does not need to be proven. As a rule, the basic offence therefore does not have to be specified for a conviction. Because of this, the defendant and their lawyer must make the legal origin of the funds ‘credible’. If they fail to do so and the criminal judge is consequently of the opinion that they can rule out any legal origin, they can convict for money laundering. In a sense, the burden of proof is thus reversed, placing the public prosecutor in a comfortable position.
In addition, money laundering is a so-called continuous offence. This means that the limitation period for money laundering only begins to run as soon as the actions suspected of money laundering have been rectified. On this basis, it is often – rightly – stated that money laundering offences are virtually imprescriptible: as long as the origin of illegal financial advantages is concealed, the offence continues and the limitation period does not even begin to run.
Finally, the law also stipulates that in cases of money laundering, the illegally obtained financial advantage must be confiscated. This means that the perpetrator of money laundering, in addition to a prison sentence or fine, also risks seeing the entire financial advantage awarded to the Belgian State.
Conclusion
The convergence of all this – far-reaching prevention with reporting obligations to the CTIF-CFI; reporting to the public prosecutor’s office; virtual imprescriptibility and strict sanctioning possibilities – makes money laundering an increasingly popular offence. Especially in fiscal criminal law, where the illegal financial advantage constitutes the evaded tax, the contours of Art. 505 CC are the most heavily litigated, both before the court and when negotiating a criminal settlement or declaring a tax regularisation.
Our team has extensive experience, both concerning anti-money laundering legislation (reporting obligations, …) and in criminal defence regarding money laundering. In addition, we can also assist you with finding an amicable arrangement with the tax authorities and/or the public prosecutor’s office. Contact us without obligation.