The Physical Element Or Actus Reus of Money Laundering 1. Overview In

chapter four

The physical element or actus reus of money laundering

1. Overview

In criminal law an intentional offence is usually analysed through a basic distinc- tion between the physical or objective element (the actus reus) and the mental or subjective element (the mens rea). The prosecution must prove both the specific objective facts and the accussed’s criminal intent or ‘guilty mind’. To the criminal lawyer, the ‘elements of the offence’ are fundamental because they set out the ground rules of the trial, showing what must be proven by the prosecution for a case to reach a conviction. In the event the prosecution establishes all the elements of the offence beyond a reasonable doubt (or, in other words, beyond the intime conviction) of the trier of fact, then a conviction may lie. Nevertheless, if the defense casts a reasonable doubt on even one element of the offence, then the accused is entitled to acquittal. Later, in chapter V, we will address the subjective or mental element of the criminal offence called ‘money laundering’ or ‘laundering the proceeds of crime’. This chapter will try to determine whether or not the implementation of basic physical or actus reus elements of this international criminal offence at the domestic level might undermine the guarantee of due process and the adequate protection of human rights principles, such as the legality principle and the pre- sumption of innocence. And, if the adaptation of any physical element of the international crime proves to be inconsistent with human rights principles I will propose how the deficiencies can be remedied. The definition of the treaty crime of ML includes several acts of laundering, such as the conversion, transferring, possession and use of proceeds of crime, among others. These acts apply upon ‘proceeds of crime’, that is, the ‘property’ derived from a predicate offence. The expression ‘predicate offence’, at the same time, refers to the criminal offence as a result of which the assets have been generated or derived. All these are essential physical or actus reus elements of the 240 chapter four so-called ML criminal offence that will be critically analyzed in this chapter, from a global-comparative perspective. The discussion is organized as follows: first, I will focus the analysis on the act(s) or conduct(s) of laundering—e.g., the conversion, transferring, possession and use of proceeds of crime (Section 2). Then, I will examine the word ‘property’ that represents the ‘proceeds of crime’ (Section 3). Next, I will analyze several key aspects related to the ‘predicate offence’ of ML offences; that means the criminal offence as a result of which funds or ‘property’ have been generated or derived (Section 4). Later, I will evaluate the key reasons against the penalization of administrative/civil non-criminal offences as predicate offences of ML (Sec- tion 5). Finally, I will study the convenience and legal justification of penalizing the act(s) of laundering/transfering funds derived from a legitimate source (i.e., legal assets) but with the intent to promote the carrying on of serious criminal offences (Section 6).

2. The Actions of Laundering

The already described international treaties and EU Directives (hard law instru- ments) oblige State Parties to establish, as a criminal offence, the following acts of laundering. First, the conversion or transfer of proceeds of crime for the purpose of concealing or disguising the criminal origin of such property or of assisting any person who is involved in the commission of the predicate offence to evade the consequences of his or her actions (i.e., the first type of ML criminalization).731 Secondly, the concealment or disguise of the true nature, source, location, dis- position, movement or ownership of or rights with respect to proceeds (i.e., the second type of ML criminalization).732 Thirdly, the acquisition, possession or use of proceeds of crime (i.e., the third type of ML criminalization).733 This last definition of the crime is an ‘optional’ clause for State Parties, in that its adaptation is subject to the fundamental/constitutional principles and basic concepts of the country’s legal system.734

731 See, e.g., article 3(1)(b) of the Vienna Convention and article 6(1)(a)(i) of the Palermo Convention, as well as, article 1(a) of the Third EU Directive (2005/60/EC). 732 See, e.g., article 3(1)(b)(ii) of the Vienna Convention and article 6(1)(a)(ii) of the Pal- ermo Convention, as well as, article 1(b) of the Third EU Directive (2005/60/EC). In the Vienna text the reference to ‘ownership’ follows rather than precedes the more general ‘rights with respect to’ property. 733 See, e.g., article 3(1)(b)(i)–(ii) of the Vienna Convention, and (c)(i); and, article 6(1)(a) (ii) and (b)(i) of the Palermo Convention. See also, article 1(c) of the Third EU Direc- tive (2005/60/EC). 734 See, e.g., article 3(1)(c)(i) of the Vienna Convention and article 6(1) of the Palermo Convention.