The Recommendations of the Financial Action Task Force (FATF) are crucial guidelines for preventing money laundering and terrorist financing. In this article, we will explore FATF Recommendation 3, which mandates the criminalization of money laundering.
Recommendation 3 is clear and concise. Countries are urged to apply the offense of money laundering to all serious crimes, aiming to cover as many predicate offenses as possible that generate illicit funds.
For the crime of money laundering to exist, the funds must originate from a prior offense, known as the predicate offense. These crimes can vary by country but may include activities such as drug trafficking, corruption, fraud, smuggling, among others.
This Recommendation 3 is accompanied by an interpretive note. This note expands on the key aspects of the recommendation. The first point it makes is the need to criminalize money laundering in accordance with the provisions of the Vienna Convention and the Palermo Convention.
This further development of Recommendation 3 specifies that each country must extend the offense of money laundering to any type of property, regardless of its value, that directly or indirectly represents the proceeds of criminal activities. Additionally, predicate offenses should also extend to conduct committed in third countries.
The Vienna Convention — United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances — and the Palermo Convention — United Nations Convention against Transnational Organized Crime — are international legal instruments used to combat drug trafficking and money laundering.
The recommendation goes on to emphasize the need to ensure four key elements within countries:
- The intent and knowledge required to prove the crime of money laundering can be inferred from objective factual circumstances.
- Effective, proportionate, and dissuasive criminal sanctions must be applied.
- Penalties should be applied to legal persons, and if that is not possible, administrative sanctions should be used.
- There must be ancillary offenses related to money laundering, such as participation in related activities or association with the perpetrators of the crime.
This Recommendation 3 has a significant impact on the Criminal Directive on money laundering, as it embraces several concepts mentioned in the recommendation.
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