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Common Law Legal Systems Model Legislative Provisions on Money Laundering, Terrorism Financing, Preventive Measures and Proceeds of Crime

image of Common Law Legal Systems Model Legislative Provisions on Money Laundering, Terrorism Financing, Preventive Measures and Proceeds of Crime

Corruption undermines the rule of law, good governance, and sustainable growth and development. Most countries have prohibited all forms of corruption, yet corruption persists due largely to a lack of appropriate strategies and structures to inhibit it. Such strategies include effective and comprehensive legal frameworks to prevent, punish and take the profit out of corruption.

The Common Law Legal Systems Model Legislative Provisions aims to enable Commonwealth countries to evaluate measures that can be incorporated into domestic law to prevent, detect, and effectively sanction money laundering and terrorism financing and to recover the proceeds of crime.

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Money Laundering and Terrorism Financing Offences

FATF Recommendation 3 provides for the criminalisation of money laundering, consistent with the Vienna and Palermo Conventions. In essence, money laundering is defined as the conversion, transfer, concealment, disguising, acquisition, possession or use of proceeds of crime. The term ‘proceeds of crime’ as set out under Section 3 covers any property or funds derived from or obtained as a result of or in connection with an ‘offence’. Funds or assets are ‘proceeds of crime’ and thus fall under the scope of the money laundering provision only if they are proceeds of an ‘offence’. To define the scope of the money laundering offence, drafting authorities must thus choose an approach to defining the term ‘offence’. Variants 1 (a), 2 (a) and 3 (a) below provide a number of alternatives for drafting authorities to consider. Variant 1 covers all offences under domestic law, variant 2 covers only those offence with a particular serious sanction and variant 3 covers only offences specifically listed in a schedule.

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