The Council of Europe is an international organisation of 46 member states in the European region. Since its foundation in 1949 till now the Council of Europe has adopted more than 30 conventions, protocols to those conventions and international agreements that belong to the field of criminal law. Among these conventions there are two conventions relating to the prevention of money laundering. The Committee of Ministers has adopted Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime of 8 November 1990.[2] On 16[th] May 2005 the Committee of Ministers on its meeting in Warsaw adopted the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism which replaces the previous one.[3]
Below, I will present chapter III of the new Convention that relates to the measures that need to be taken at national level. I will try to show differences between old and new Convention and particular which are new measures to be taken at national level.
Measures to be taken at national level are regulated in articles 3 to 14 of the Convention. Article 3 determines confiscation measures. Each Party shall adopt such legislative and other measures as may be necessary to enable it to confiscate instrumentalities and proceeds or property the value of which corresponds to such proceeds and laundered property. Provided that paragraph 1 of this article applies to money laundering and to the categories of offences in the appendix to the Convention[4] , each Party may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, by a declaration addressed to the Secretary General of the Council of Europe, declare that paragraph 1 of this article applies
a) only in so far as the offence is punishable by deprivation of liberty or a detention order for a maximum of more than one year. However, each Party may make a declaration on this provision in respect of the confiscation of the proceeds from tax offences for the sole purpose of being able to confiscate such proceeds, both nationally and through international cooperation, under national and international tax-debt recovery legislation; and/or
b) only to a list of specified offences.
Parties may provide for mandatory confiscation in respect of offences that are subject to the confiscation regime. Parties may in particular include in this provision the offences of money laundering, drug trafficking, trafficking in human beings and any other serious offence.
Each Party shall adopt such legislative or other measures as may be necessary to require that, in respect of a serious offence or offences as defined by national law, an offender demonstrates the origin of alleged proceeds or other property liable to confiscation to the extent that such a requirement is consistent with the principles of its domestic law.
Convention brings two novelties. Limitation of application of paragraph 1 of article 3 is possible only in so far as the offence is punishable by deprivation of liberty or a detention order for a maximum of more than one year or to a list of specified offences. Paragraph 4 of article 3 provides the shifting of the burden of proof in respect of serious offences, but reservation on this provision is possible.
It is important to point out that article 53 provides more declarations and reservations relating to article 3 of the Convention. Any State or the European Community may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, make one or more of the declaration provided for in Article 3, paragraph 2. Any State or the European Community may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, declare:
a) that it will not apply Article 3, paragraph 4 of this Convention; or
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b) that it will apply Article 3, paragraph 4 of this Convention only partly; or
c) the manner in which it intends to apply Article 3, paragraph 4 of this Convention.
It shall notify any changes in this information to the Secretary General of the Council of Europe.
Article 4 obliges contracting Parties to adopt such legislative and other measures as may be necessary to enable it to identify, trace, freeze or seize rapidly property which is liable to confiscation pursuant to Article 3, in order in particular to facilitate the enforcement of a later confiscation.
Article 5 determines freezing, seizure and confiscation. Each Party shall adopt such legislative and other measures as may be necessary to ensure that the measures to freeze, seize and confiscate also encompass:
a) the property into which the proceeds have been transformed or converted;
b) property acquired from legitimate sources, if proceeds have been intermingled, in whole or in part, with such property, up to the assessed value of the intermingled proceeds;
c) income or other benefits derived from proceeds, from property into which proceeds of crime have been transformed or converted or from property with which proceeds of crime have been intermingled, up to the assessed value of the intermingled proceeds, in the same manner and to the same extent as proceeds.
Articles 4 and 5 extend freezing, seizure and confiscation also to the property into which the proceeds have been transformed or converted, property acquired from legitimate sources, if proceeds have been intermingled and to income or other benefits derived from proceeds, from property into which proceeds of crime have been transformed or converted or from property with which proceeds of crime have been intermingled.
Article 6 obliges contracting Parties to adopt such legislative or other measures as may be necessary to ensure proper management of frozen or seized property in accordance with Articles 4 and 5 of this Convention.
Article 7 regulates investigative powers and techniques. Each Party shall adopt such legislative and other measures as may be necessary to empower its courts or other competent authorities to order that bank, financial or commercial records be made available or be seized in order to carry out the actions referred to in Articles 3, 4 and 5. A Party shall not decline to act under the provisions of this article on grounds of bank secrecy.
Without prejudice to paragraph 1, each Party shall adopt such legislative and other measures as may be necessary to enable it to:
a) determine whether a natural or legal person is a holder or beneficial owner of one or more accounts, of whatever nature, in any bank located in its territory and, if so obtain all of the details of the identified accounts;
b) obtain the particulars of specified bank accounts and of banking operations which have been carried out during a specified period through one or more specified accounts, including the particulars of any sending or recipient account;
c) monitor, during a specified period, the banking operations that are being carried out through one or more identified accounts; and,
d) ensure that banks do not disclose to the bank customer concerned or to other third persons that information has been sought or obtained in accordance with sub-paragraphs a, b, or c, or that an investigation is being carried out.
Parties shall consider extending this provision to accounts held in non-bank financial institutions.
Each Party shall consider adopting such legislative and other measures as may be necessary to enable it to use special investigative techniques facilitating the identification and tracing of proceeds and the gathering of evidence related thereto, such as observation, interception of telecommunications, access to computer systems and order to produce specific documents.
Obligations listed in the paragraph 2 of article 7 of this Convention are new.
It is important to point out that paragraph 2 of article 53 provides reservation relating to article 7 of the Convention. Any State or the European Community may also, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, by a declaration addressed to the Secretary General, reserve its right not to apply, in part or in whole, the provisions of Article 7, paragraph 2, sub-paragraph c.
Article 8 obliges Parties to adopt such legislative and other measures as may be necessary to ensure that interested parties affected by measures under Articles 3, 4 and 5 and such other provisions in this Section as are relevant, shall have effective legal remedies in order to preserve their rights.
Article 9 is particularly important because it determines laundering offences. Each Party shall adopt such legislative and other measures as may be necessary to establish as offences under its domestic law, when committed intentionally:
a) the conversion or transfer of property, knowing that such property is proceeds, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of the predicate offence to evade the legal consequences of his actions;
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b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is proceeds; and, subject to its constitutional principles and the basic concepts of its legal system;
c) the acquisition, possession or use of property, knowing, at the time of receipt, that such property was proceeds;
d) participation in, association or conspiracy to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the offences established in accordance with this article.
For the purposes of implementing or applying paragraph 1 of this article:
a) it shall not matter whether the predicate offence was subject to the criminal jurisdiction of the Party;
b) it may be provided that the offences set forth in that paragraph do not apply to the persons who committed the predicate offence;
c) knowledge, intent or purpose required as an element of an offence set forth in that paragraph may be inferred from objective, factual circumstances.
Each Party may adopt such legislative and other measures as may be necessary to establish as an offence under its domestic law all or some of the acts referred to in paragraph 1 of this article, in either or both of the following cases where the offender
a) suspected that the property was proceeds,
b) ought to have assumed that the property was proceeds.
Provided that paragraph 1 of this article applies to the categories of predicate offences in the appendix to the Convention, each State or the European Community may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, by a declaration addressed to the Secretary General of the Council of Europe, declare that paragraph 1 of this article applies:
a) only in so far as the predicate offence is punishable by deprivation of liberty or a detention order for a maximum of more than one year, or for those Parties that have a minimum threshold for offences in their legal system, in so far as the offence is punishable by deprivation of liberty or a detention order for a minimum of more than six months; and/or
b) only to a list of specified predicate offences; and/or
c) to a category of serious offences in the national law of the Party.
Each Party shall ensure that a prior or simultaneous conviction for the predicate offence is not a prerequisite for a conviction for money laundering.
Each Party shall ensure that a conviction for money laundering under this Article is possible where it is proved that the property, the object of paragraph 1.a or b of this article, originated from a predicate offence, without it being necessary to establish precisely which offence.
Each Party shall ensure that predicate offences for money laundering extend to conduct that occurred in another State, which constitutes an offence in that State, and which would have constituted a predicate offence had it occurred domestically. Each Party may provide that the only prerequisite is that the conduct would have constituted a predicate offence had it occurred domestically.
Article 9 extends the circle of predicate offences. Prior or simultaneous conviction for the predicate offence is not a prerequisite for a conviction for money laundering. Conviction for money laundering under this Article is possible where it is proved that the property, the object of paragraph 1.a or b of this article, originated from a predicate offence, without it being necessary to establish precisely which offence. Predicate offences for money laundering are extended to conduct that occurred in another State, which constitutes an offence in that State, and which would have constituted a predicate offence had it occurred domestically.
Article 53 provides declaration and reservation relating to article 9 of the Convention. Any State or the European Community may, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, make one or more of the declaration provided for in Article 9, paragraph 4. Any State or the European Community may also, at the time of signature or when depositing its instrument of ratification, acceptance, approval or accession, by a declaration addressed to the Secretary General, reserve its right not to apply, in part or in whole, the provisions of Article 9, paragraph 6.
Article 10 determines corporate liability. Each Party shall adopt such legislative and other measures as may be necessary to ensure that legal persons can be held liable for the criminal offences of money laundering established in accordance with this Convention, committed for their benefit by any natural person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, based on:
a) a power of representation of the legal person; or
b) an authority to take decisions on behalf of the legal person; or
c) an authority to exercise control within the legal person,
as well as for involvement of such a natural person as accessory or instigator in the above-mentioned offences.
Apart from the cases already provided for in para-
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graph 1, each Party shall take the necessary measures to ensure that a legal person can be held liable where the lack of supervision or control by a natural person referred to in paragraph 1 has made possible the commission of the criminal offences mentioned in paragraph 1 for the benefit of that legal person by a natural person under its authority.
Liability of a legal person under this Article shall not exclude criminal proceedings against natural persons who are perpetrators, instigators of, or accessories to, the criminal offences mentioned in paragraph 1.
Each Party shall ensure that legal persons held liable in accordance with this Article, shall be subject to effective, proportionate and dissuasive criminal or non-criminal sanctions, including monetary sanctions.
The regulation of article 10 that establishes corporate liability for money laundering is new.
Article 11 regulates previous decisions. Each Party shall adopt such legislative and other measures as may be necessary to provide for the possibility of taking into account, when determining the penalty, final decisions against a natural or legal person taken in another Party in relation to offences established in accordance with this Convention.
Article 12 determines Financial intelligence unit.[5] Each Party shall adopt such legislative and other measures as may be necessary to establish an FIU as defined in this Convention.
Each Party shall adopt such legislative and other measures as may be necessary to ensure that its FIU has access, directly or indirectly, on a timely basis to the financial, administrative and law enforcement information that it requires to properly undertake its functions, including the analysis of suspicious transaction reports.
Article 13 determines measures to prevent money laundering. Each Party shall adopt such legislative and other measures as may be necessary to institute a comprehensive domestic regulatory and supervisory or monitoring regime to prevent money laundering and shall take due account of applicable international standards, including in particular the recommendations adopted by the Financial Action Task Force on Money Laundering (FATF).
In that respect, each Party shall adopt, in particular, such legislative and other measures as may be necessary to:
a) require legal and natural persons which engage in activities which are particularly likely to be used for money laundering purposes, and as far as these activities are concerned, to:
i) identify and verify the identity of their customers and, where applicable, their ultimate beneficial owners, and to conduct ongoing due diligence on the business relationship, while taking into account a risk based approach;
ii) report suspicions on money laundering subject to safeguard;
iii) take supporting measures, such as record keeping on customer identification and transactions, training of personnel and the establishment of internal policies and procedures, and if appropriate, adapted to their size and nature of business;
b) prohibit, as appropriate, the persons referred to in sub-paragraph a from disclosing the fact that a suspicious transaction report or related information has been transmitted or that a money laundering
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investigation is being or may be carried out;
c) ensure that the persons referred to in sub-paragraph a are subject to effective systems for monitoring, and where applicable supervision, with a view to ensure their compliance with the requirements to combat money laundering, where appropriate on a risk sensitive basis.
In that respect, each Party shall adopt such legislative or other measures as may be necessary to detect the significant physical cross border transportation of cash and appropriate bearer negotiable instruments.
Article 14 regulates postponement of domestic suspicious transactions. Each Party shall adopt such legislative and other measures as may be necessary to permit urgent action to be taken by the FIU or, as appropriate, by any other competent authorities or body, when there is a suspicion that a transaction is related to money laundering, to suspend or withhold consent to a transaction going ahead in order to analyse the transaction and confirm the suspicion. Each party may restrict such a measure to cases where a suspicious transaction report has been submitted. The maximum duration of any suspension or withholding of consent to a transaction shall be subject to any relevant provisions in national law.
Articles 12 to 14 determine FIU and prevention. Convention is the first international document with binding provisions that regulates definition, powers and international cooperation of FIU. Measures to prevent money laundering are listed in article 13.
The new Convention brings some novelties that need to be taken into account while amending national legislation. If we summarize the novelties of this part of Convention, they are the following.
Limitation of application of paragraph 1 of article 3 is possible only in so far as the offence is punishable by deprivation of liberty or a detention order for a maximum of more than one year or to a list of specified offences. Paragraph 4 of article 3 provides the shifting of the burden of proof in respect of serious offences, but reservation on this provision is possible.
Articles 4 and 5 extend freezing, seizure and confiscation also to the property into which the proceeds have been transformed or converted, property acquired from legitimate sources, if proceeds have been intermingled and to income or other benefits derived from proceeds, from property into which proceeds of crime have been transformed or converted or from property with which proceeds of crime have been intermingled.
Obligations enumerated in the paragraph 2 of article 7 of this Convention are new.
Article 9 extends the circle of predicate offences. Prior or simultaneous conviction for the predicate offence is not a prerequisite for a conviction for money laundering. Conviction for money laundering under this Article is possible where it is proved that the property, the object of paragraph 1.a or b of this article, originated from a predicate offence, without it being necessary to establish precisely which offence. Predicate offences for money laundering are extended to conduct that occurred in another State, which constitutes an offence in that State, and which would have constituted a predicate offence had it occurred domestically.
The regulation of article 10 that establishes corporate liability for money laundering is new.
Articles 12 to 14 determine FIU and prevention. Convention is the first international document with binding provisions that regulates definition, powers and international cooperation of FIU. Measures to prevent money laundering are gathered in article 13. If we take into account the possibility of declarations and reservations, I believe that coordination of national legislations with this Convention would not be so difficult. ■
NOTES
[1] European Treaty Series No. 198.
[2] European Treaty Series No. 141.
[3] Hereinafter referred to as Convention.
[4] Appendix:
a) participation in an organised criminal group and racketeering;
b) terrorism, including financing of terrorism;
c) trafficking in human beings and migrant smuggling;
d) sexual exploitation, including sexual exploitation of children;
e) illicit trafficking in narcotic drugs and psychotropic substances;
f) illicit arms trafficking;
g) illicit trafficking in stolen and other goods;
h) corruption and bribery;
i) fraud;
j) counterfeiting currency;
k) counterfeiting and piracy of products;
l) environmental crime;
m) murder, grievous bodily injury;
n) kidnapping, illegal restraint and hostage-taking;
o) robbery or theft;
p) smuggling;
q) extortion;
r) forgery;
s) piracy; and
t) insider trading and market manipulation.
[5] Hereinafter referred to as FIU.
Lábjegyzetek:
[1] The Author is a Professor at Faculty of Law University of Ljubljana.
Visszaugrás
