A money launderer seeks to obliterate the origin of money obtained through criminal activity so that the money appears legitimately obtained. The money is circulated through a legal payment system in order to conceal its true nature, origin and owners. You might also become guilty of money laundering by receiving such money while being aware of its nature.
Prevention of money laundering also prevents other crime, since a money launderer might use the money to finance new crimes. Money laundering is often a part of organised and international crime.
Money laundering can threaten the stability, reliability and competitiveness of the financial system. For example, instability might increase the costs of loans, payment traffic and insurances and, it might even have a larger impact throughout the economy.
The UN estimates that up to 800 billion to two trillion dollars are laundered annually. This corresponds to two to five per cent of global gross domestic product. According to a study, the authorities are only able to seize or freeze one per cent of the laundered funds.
A money launderer obliterates and conceals
Money laundering is criminalised in the Criminal Code of Finland. Money laundering means the concealment or obliteration of the origin of money obtained through an offence. The aim is to introduce the illegitimate money into the legitimate financial system so that the perpetrator can use the money freely.
A money launderer transfers, conceals or converts property to another form. For example, cash obtained through drug offences might be deposited into a bank and then circulated through other banks. The money launderer might then use the money to purchase shares or immovable property in order to make the source of the money appear legitimate.
Money laundering in the Criminal Code
A person who
- receives, uses, converts, conveys, transfers or transmits or possesses property acquired through an offence, the proceeds of crime or property replacing such property in order to obtain benefit for himself or herself or for another or to conceal or obliterate the illegal origin of such proceeds or property or in order to assist the offender in evading the legal consequences of the offence or
- conceals or obliterates the true nature, origin, location or disposition of, or rights to, property acquired through an offence, the proceeds of an offence or property replacing such property or assists another in such concealment or obliteration,
shall be sentenced for money laundering to a fine or to imprisonment for at most two years.
An attempt is punishable.
Chapter 32 in the Criminal Code
Drug crime and financial crime lies are the driving forces
Money laundering requires a predicate offence. A money launderer seeks to conceal or obliterate the origin of money obtained from the predicate offence. The predicate offence might be any punishable offence that has brought financial benefit for the perpetrator. The most common such offences are drug offences, fraud or financial crime.
It is possible to be punished for money laundering even if nobody has been punished for the predicate offence. However, the predicate offence must be sufficiently identifiable. Even a crime committed abroad can be considered a predicate offence of money laundering in most cases.
The perpetrator of the predicate offence is not usually punished for money laundering, but only for the predicate offence, such as a drug offence. To some degree, the predicate offence will also be considered to consist of concealment and obliteration of the property obtained through criminal activity.
The party that will be punished for money laundering will be the one that has not participated in committing the predicate offence, but has helped its perpetrator to conceal or obliterate the criminal origin of the money. However, no punishment for money laundering is issued to the perpetrator’s family members, i.e. people living in a joint household with the offender, and who only used or consumed property obtained by the offender for ordinary needs in the joint household.
Transfer and possession of money might be money laundering
The object of money laundering might be:
property obtained by criminal activity, such as money obtained through fraud
proceeds from crime, such as savings obtained from tax fraud
property that replaced the above, such as real estate purchased with illegitimate money.
Money laundering is the reception, use, conversion, assignment, transfer, brokerage (such as in real estate agency operations) or possession of such funds. The person must have an intent to launder money, i.e. his or her purpose is to obtain a benefit, assist the perpetrator or obliterate the illegal origin of the money. Other actions that are considered money laundering are those that conceal or obliterate the true nature, origin, location or disposition of, or rights to, property acquired through an offence.
Aggravated money laundering
The punishment for regular money laundering is a fine or a maximum of two years of imprisonment. In addition to regular money laundering, the other offences punishable under the Criminal Code of Finland are aggravated money laundering, negligent money laundering, a money laundering violation and a conspiracy for the commission of aggravated money laundering.
A money laundering offence is an aggravated one if the property acquired through the offence is very valuable. In case law, property considered ‘very valuable’ is property whose value exceeds approximately EUR 13,000. Aggravated money laundering can also be a case in which very valuable property has been divided across several money launderers.
A particularly systematic case of money laundering is also considered aggravated money laundering. Features of particularly systematic money laundering include complexity of the money laundering arrangements or a specific division of labour in them. Another indication of a systematic approach is using professionals, such as lawyers and accountants, to carry out the offence. Punishing a money laundering offence as an aggravated one also requires that the offence is an aggravated one when assessed as a whole.
The punishments for aggravated money laundering are a minimum of four months and a maximum of six years in prison.
In cases of aggravated money laundering, punishments might also be issued to the perpetrator or a participant in the predicate offence. Cases like these involve self-laundering. The punishability of self-laundering only applies to aggravated money laundering in cases in which the money laundering offence forms the most essential and reprehensible part of the totality of offences, when taking into account the continuous and planned nature of the acts.
A conspiracy for the commission of aggravated money laundering means agreeing with another party to carry out aggravated money laundering the object of which is proceeds obtained through bribes, aggravated tax fraud and benefit fraud.
Your negligence might make you guilty of money laundering
A money laundering offence does not have to be intentional, since a person who through gross negligence undertakes actions that meet the criteria of money laundering may be punished for negligent money laundering.
An example of such a case is a situation in which a person receives property in circumstances that differ so much from normal that the recipient has serious grounds to suspect the origin of the property. Other grounds for suspicion are awareness of the lifestyle of the perpetrator of the predicate offence, their financial difficulties or a criminal investigation targeting the perpetrator.
The punishment for negligent money laundering is a fine or a maximum of two years of imprisonment. However, the punishability of aggravated money laundering requires that the act was performed intentionally.
If the money laundering or the negligent money laundering is petty when assessed as a whole, the offender will be sentenced to pay a fine for a money laundering violation.
An attempt at money laundering is punishable
An attempt at money laundering and aggravated money laundering is punishable, whereas an attempt at conspiracy for the commission of aggravated money laundering, negligent money laundering and a money laundering violation are not punishable.
Money laundering in the Criminal Code of Finland (Finlex)
See also: Grey economy & economic crime website