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.
Better countries, in that regard, represent a different approach:
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.
- 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.
- Similarly, money laundering is processed in the Netherlands.
- 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:
- 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.
- 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: - Estonia: The legal system requires the prosecution to prove that a preliminary crime has occurred. Else its impossible for the prosecution to seize assets.
- Germany: Under German law, the prosecutor must prove that the funds were the proceeds of a criminal activity in money laundering cases.
- 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.
- 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.
