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AML Regulations: Understanding the two distinct approaches when choosing the jurisdiction of your financial institution

Don

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Dec 19, 2020
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The regulations of some countries require the authorities to prove that the preliminary crime has been committed to prosecute for money laundering.

To elaborate further, there have been cases where, if money laundering is suspected, politically influential persons from authoritarian countries who do not cooperate with the Western world have been able to get away without prosecution or loss of assets. Simply, because the country where money laundering took place fails to prove that a preliminary crime was committed in another country, as that country did not cooperate.

You might be quick to judge and label such countries as bad. However, one should keep in mind that such regulations could also negatively affect situations where no crime has been committed, resulting in the loss of all assets. After all, what is lawful in the first place is vastly different across jurisdictions. E.g. donating to support LGBTQ propaganda might be honourable in one jurisdiction but crime in another, so connected financial flows should effectively be treated as money laundering from one perspective.

  1. In France, for instance, the prosecution does not have to prove that transactions are of criminal origin. Instead, the suspect must prove that his transactions are legal.
  2. Similarly, money laundering is processed in the Netherlands.
  3. In Latvia, assets can be confiscated in money laundering procedures if their owner is unable to prove their legal origin.

Better countries, in that regard, represent a different approach:
  1. United States: The legal system requires the prosecution to prove beyond a reasonable doubt that money laundering occurred. The defense might present evidence that the money was derived from legitimate sources as part of their case, but the initial burden is on the government.
  2. United Kingdom: Similarly, the UK's legal system mandates that the prosecution prove any accusations of money laundering. Unexplained Wealth Orders (UWOs) are an exception where the individual must explain the origin of assets, but these are specific investigative tools rather than a standard prosecutorial approach.

    Some EU countries:
  3. Estonia: The legal system requires the prosecution to prove that a preliminary crime has occurred. Else its impossible for the prosecution to seize assets.
  4. Germany: Under German law, the prosecutor must prove that the funds were the proceeds of a criminal activity in money laundering cases.
  5. Canada: Prosecutors are responsible for proving that money laundering has occurred, though financial institutions are required to report and perform due diligence on suspicious transactions.
  6. Sweden: The Swedish legal system also places the burden of proof on the prosecution to demonstrate that money laundering has taken place.

    EU in general is harmonizing UWO rules with a New EU Directive on Asset Recovery and Confiscation.
    At first glance, the confiscation of unexplained wealth is meant to be an extraordinary measure, applicable solely under two procedural conditions:
    i) in cases where other forms of confiscation cannot be imposed on the suspected proceeds, and
    ii) the suspected proceeds are connected to an offence committed as part of the activities of a criminal organisation, and not to other crimes.

    However, this limited scope is not binding for member states, which are not prevented by the Directive “from adopting measures that enable the confiscation of unexplained wealth for other crimes or circumstances.

    It is worth noting that despite the successive introduction of invasive legal tools, laundered criminal wealth in the EU is still on the rise.
In conclusion, when selecting a jurisdiction for opening a personal or company account, it is crucial to understand the distinct approaches to the burden of proving the legal origin of funds; one approach may pose significant risks of losing your funds, as you might not always be able to prove the legal origin of funds, even if they are legitimate, which can complicate compliance and financial management.
 
What about Switzerland?
In Switzerland, the burden of proof and the requirement for a preliminary crime in money laundering cases are addressed as follows(based on gpt):

Burden of Proof
- The prosecution bears the burden of proof in money laundering cases. This means that prosecutors must demonstrate beyond a reasonable doubt that:
- The assets in question have an illicit origin (i.e., they stem from a predicate crime).
- The accused engaged in activities to conceal or disguise the origin of these assets or otherwise obstruct their confiscation.
- Defendants are not required to prove their innocence but may present evidence to counter the prosecution's claims.

Need for a Preliminary Crime:
- In Switzerland, money laundering presupposes that the assets in question derive from a predicate crime, as defined under Article 305bis of the Swiss Criminal Code. A predicate crime can include:
- Felonies (serious offenses punishable by more than three years' imprisonment, e.g., drug trafficking, human trafficking, organized crime).
- Qualified tax offenses (e.g., cases where the evaded tax exceeds CHF 300,000 per tax period).
- Proof of the predicate crime is required, but:
- It is not necessary to secure a prior conviction for the predicate crime.
- The prosecution must prove that the assets are reasonably presumed to originate from criminal activity. Direct proof of the predicate crime is not always required if the criminal origin of the assets is evident from the circumstances (e.g., unexplained wealth).

Practical Application

- The courts assess whether the origin of the funds can be reasonably tied to a predicate crime. For instance:
- If someone deposits large sums of money without a legitimate source and attempts to conceal it, this may suffice to prove money laundering, even if the exact predicate crime isn't fully determined.

This approach ensures that money laundering can be prosecuted effectively while upholding due process rights.
 
Confiscation doesn’t equal to freezing (temporary seizure).

A freezing injunction can and will be issued in any country of the world, purely based on suspect. Such suspect doesn’t need to have any kind of real ground. If there is no ground, it will be fabricated.

At that point, the show begins, with lawyers, prosecutors and judges running it at your expense.
It’s a long, expensive and debilitating battle to regain possession of your property, against the mafia state who will win in any case, as its objective is to steal your money. It will reach its objective even if you “win”, as in the best case scenario you will have paid lawyers, who have to pay taxes.

Do not ever think that one country is better than another in terms of laws. In fact, you should not even pay too much attention to the law, and just focus on how to protect your assets from the biggest and nastiest thief of all, the state.
Only if you think and act as a criminal you can have a chance of success in this criminal game.

The law is not justice.
 
This is a very informative thread, but it should be crystal clear that Germany finds it quite easy to prove money laundering, terrorism financing, and any other accusation they can come up with when you move your secret savings of 1 million euros to another bank. Germany is part of the EU, and Germany has a huge economic problem; they act just like all other EU countries.
 
This is a very informative thread, but it should be crystal clear that Germany finds it quite easy to prove indict and sentence for money laundering, terrorism financing, and any other accusation they can come up with when you move your secret savings of 1 million euros to another bank. Germany is part of the EU, and Germany has a huge economic problem; they act just like all other EU countries.
I fixed a small error in your text. Criminals don’t need to prove anything to steal your assets.
 
They no longer have to prove that your assets are illegitimate. Under the Gesetz zur Einführung der Vermögensabschöpfung bei Organisierten Kriminalität, authorities can confiscate your assets, and it is your responsibility to prove their legitimacy. And for them almost everything is organized crime ...
 
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At that point, the show begins, with lawyers, prosecutors and judges running it at your expense.
It’s a long, expensive and debilitating battle to regain possession of your property, against the mafia state who will win in any case, as its objective is to steal your money. It will reach its objective even if you “win”, as in the best case scenario you will have paid lawyers, who have to pay taxes.
oh well very true.

And especially the part where the state runs the case at your expense and can make the costs so exorbitant for the accused/victim that it is akin to interrogating a prisoner while pulling out their nails to force a false confession!
 
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oh well very true.

And especially the part where the state runs the case at your expense and can make the costs so exorbitant for the accused/victim that it is akin to interrogating a prisoner while pulling out their nails to force a false confession!
@jafo could testify about state torture
 
@jafo could testify about state torture
count me :mad:
 
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