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Anti-Money Laundering 2020 a Practical Cross-Border Insight Into Anti-Money Laundering Law Third Edition

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Anti-Money Laundering 2020 a Practical Cross-Border Insight Into Anti-Money Laundering Law Third Edition Anti-Money Laundering 2020 A practical cross-border insight into anti-money laundering law Third Edition Featuring contributions from: Allen & Gledhill LLP Delecroix-Gublin King & Wood Mallesons Allen & Gledhill (Myanmar) Co., Ltd. DQ Advocates Limited Linklaters LLP Anagnostopoulos Enache Pirtea & Associates Marxer & Partner Attorneys at Law Ballard Spahr LLP Galicia Abogados, S.C. Morais Leitão, Galvão Teles, Soares da Silva & Beccar Varela Gibson, Dunn & Crutcher LLP Associados Blake, Cassels & Graydon LLP Herbert Smith Freehills LLP Nakasaki Law Firm CHR Legal JahaeRaymakers Nyman Gibson Miralis City Legal Joyce Roysen Advogados Rahmat Lim & Partners Cohen & Gresser (UK) LLP Kellerhals Carrard SMM Legal Maciak Mataczyński Soemadipradja & Taher ISBN 978-1-83918-043-9 ISSN 2515-4192 Published by 59 Tanner Street London SE1 3PL United Kingdom Anti-Money Laundering 2020 +44 207 367 0720 [email protected] www.iclg.com Third Edition Group Publisher Rory Smith Publisher Jon Martin Editor Contributing Editors: Amy Norton Joel M. Cohen & Stephanie L. Brooker Senior Editor Sam Friend Gibson, Dunn & Crutcher LLP Head of Production Suzie Levy Chief Media Officer Fraser Allan CEO Jason Byles Printed by Ashford Colour Press Ltd. Cover image www.istockphoto.com ©2020 Global Legal Group Limited. All rights reserved. Unauthorised reproduction by any means, Strategic Partners digital or analogue, in whole or in part, is strictly forbidden. Disclaimer This publication is for general information purposes only. It does not purport to provide comprehen- sive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. © Published and reproduced with kind permission by Global Legal Group Ltd, London Table of Contents Expert Chapters The International Reach of the U.S. Money Laundering Statutes 1 Stephanie L. Brooker & M. Kendall Day, Gibson, Dunn & Crutcher LLP The Intersection of Money Laundering and Real Estate 8 Peter D. Hardy, Terence M. Grugan, Priya Roy & Mary K. Treanor, Ballard Spahr LLP EU Legislation in the Area of AML: Historical Perspective and Quo Vadis 15 Stefaan Loosveld, Linklaters LLP Anti-Money Laundering in the APAC Region: An Overview of the International 22 Law Enforcement and Regulatory Framework Dennis Miralis & Phillip Gibson, Nyman Gibson Miralis Q&A Chapters Argentina Malaysia 32 Beccar Varela: Maximiliano D’Auro & Rodrigo Allende 121 Rahmat Lim & Partners: Karen Foong Yee Ling Australia Malta 38 King & Wood Mallesons: Kate Jackson-Maynes & 128 City Legal: Dr. Emma Grech & Dr. Christina M. Laudi Amelia Jamieson Mexico Belgium 136 Galicia Abogados, S.C.: Humberto Pérez-Rocha 46 Linklaters LLP: Françoise Lefèvre & Rinaldo Saporito Ituarte & Claudio Kurc Citrin Myanmar Brazil 143 53 Joyce Roysen Advogados: Joyce Roysen & Veridiana Allen & Gledhill (Myanmar) Co., Ltd.: Minn Naing Oo Vianna Chaim & Dr. Ei Ei Khin Netherlands Canada 150 60 Blake, Cassels & Graydon LLP: Katie Patterson & JahaeRaymakers: Jurjan Geertsma & Madelon Vladimir Shatiryan Stevens Poland China 157 66 King & Wood Mallesons: Chen Yun & Liang Yixuan SMM Legal Maciak Mataczyński: Wojciech Kapica & Magdalena Jaczewska France 72 Portugal Delecroix-Gublin: Alexis Gublin, Pierre Calderan, 165 Louise Lecaros de Cossio & Thomas Bourceau Morais Leitão, Galvão Teles, Soares da Silva & Associados: Tiago Geraldo & Frederico Machado Germany Simões 80 Herbert Smith Freehills LLP: Dr. Dirk Seiler & Enno Appel Romania 171 Enache Pirtea & Associates: Simona Pirtea & Greece Mădălin Enache 87 Anagnostopoulos: Ilias G. Anagnostopoulos & Alexandros D. Tsagkalidis Singapore 178 Allen & Gledhill LLP: Lee Bik Wei & Lee May Ling Indonesia 94 Spain Soemadipradja & Taher: Ardian Deny Sidharta, Erie 185 H. Tobing, Oene J. Marseille & Aris Budi Prasetiyo CHR Legal: José M. Cusí, María J. Hernández & Clara Tizón Isle of Man 101 Switzerland DQ Advocates Limited: Kathryn Sharman, Michael 194 Nudd & Sinead O’Connor Kellerhals Carrard: Dr. Omar Abo Youssef & Lea Ruckstuhl Japan 107 Nakasaki Law Firm: Ryu Nakasaki & Kei Nakamura United Kingdom 203 Cohen & Gresser (UK) LLP: John Gibson & Tim Harris Liechtenstein 113 Marxer & Partner Attorneys at Law: Laura Negele- USA 213 Vogt, MLaw & Dr. Stefan Wenaweser, LL.M. Gibson, Dunn & Crutcher LLP: Joel M. Cohen & Linda Noonan © Published and reproduced with kind permission by Global Legal Group Ltd, London 6 Chapter 1 The International Reach of the U.S. Money Laundering Statutes Stephanie L. Brooker Gibson, Dunn & Crutcher LLP M. Kendall Day In the past decade, U.S. courts have reiterated that there is a and bribery abroad. The chapter concludes by illustrating the presumption against statutes applying extraterritorially,1 and risks that the broad reach of the money laundering statutes can explicitly narrowed the extraterritorial reach of the Foreign have for financial institutions. Corrupt Practices Act (“FCPA”)2 and the wire fraud statute.3 But the extraterritorial reach of the U.S. money laundering stat- 1 The U.S. Money Laundering Statutes and utes—18 U.S.C. §§ 1956 and 1957—remains uncabined and Their Extraterritorial Application increasingly has been used by the U.S. Department of Justice (“DOJ”) to prosecute crimes with little nexus to the United In 1980, now-Judge Rakoff wrote that “[t]o federal prosecutors States. Understanding the breadth of the money laundering stat- of white collar crime, the mail fraud statute is our Stradivarius, utes is vital for financial institutions because these organizations our Colt 45, our Louisville Slugger, our Cuisinart—and our true often can become entangled in a U.S. government investigation love.”4 In 2020, the money laundering statutes now play as an of potential money laundering by third parties, even though the entire string quartet for many prosecutors, particularly when financial institution was only a conduit for the transactions. conduct occurs outside of the United States. In this chapter, we examine how DOJ has stretched U.S. Title 18, Sections 1956 and 1957 are the primary statutes money laundering statutes—perhaps to a breaking point—to that proscribe money laundering. “Section 1956 penalizes the reach conduct that occurred outside of the United States. We knowing and intentional transportation or transfer of mone- begin by providing a general overview of the U.S. money laun- tary proceeds from specified unlawful activities, while § 1957 dering statutes. From there, we discuss how DOJ has relied on addresses transactions involving criminally derived property a broad interpretation of “financial transactions” that occur “in exceeding $10,000 in value.” Whitfield v. United States, 543 U.S. whole or in part in the United States” to reach, for instance, 209, 212-13 (2005). To prosecute a violation of Section 1956, conduct that occurred entirely outside of the United States and the government must prove that: (1) a person engaged in a included only a correspondent banking transaction that cleared financial transaction; (2) knowing that the transaction involved in the United States. And while courts have largely agreed with the proceeds of some form of unlawful activity (a “Specified DOJ’s interpretation of the money laundering statutes, a recent Unlawful Activity” or “SUA”);5 and (3) the person intended acquittal by a jury in Brooklyn in a case involving money laun- to promote an SUA or conceal the proceeds of an SUA.6 And dering charges with little nexus to the United States shows that if the person is not located in the United States, Section 1956 juries occasionally may provide a check on the extraterritorial provides that there is extraterritorial jurisdiction if the transac- application of the money laundering statutes—for those willing tion in question exceeds $10,000 and “in the case of a non-United to risk trial. Next, we discuss three recent, prominent exam- States citizen, the conduct occurs in part in the United States.”7 ples—the FIFA corruption cases, the 1MDB fraud civil forfei- The word “conducts” is defined elsewhere in the statute as tures, and the recent Petróleos de Venezuela, S.A. (“PDVSA”) “includ[ing] initiating, concluding, or participating in initiating, indictments—that demonstrate how DOJ has increasingly used or concluding a transaction.”8 Putting it all together, establishing the money laundering statutes in recent years to police corruption a violation of Section 1956 by a non-U.S. citizen abroad requires: Figure 1: Applying Section 1956 Extraterritorially Anti-Money Laundering 2020 © Published and reproduced with kind permission by Global Legal Group Ltd, London Gibson, Dunn & Crutcher LLP 7 Section 1957 is the spending statute, involving substantially the Although correspondent banking transactions can occur same elements as Section 1956 but substituting a requirement that using a number of predominant currencies, such as euros, a defendant spends proceeds of criminal activity for the require- yen, and renminbi, U.S. dollar payments account for about 50 ment that a defendant intends to promote or conceal an SUA.9 percent of correspondent banking transactions.16 Not only that, but “[t]here are indications that correspondent banking activ- ities in US dollars are increasingly concentrated in US banks a. “Financial Transaction” and Correspondent
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