Transparency International. International Secretariat Alt-Moabit 96
10559 Berlin…Phone: +49 – 30 – 34 38 200 Fax: +49 – 30 – 34 70 39 12
ti@transparency.org www.transparency.org
Europol’s estimate that 98.9 per cent of all criminal profits in the EU, escape seizure and confiscation
legal tools to catch corrupt private individuals:
a. IE (illicit enrichment) legislations:
IE allows a court to impose criminal or civil sanctions if illicit enrichment is found, without requiring the establishment of a separate or underlying criminal activity…. However, (unlike in PML OR II), in IE, the question of how the money is handled, never comes into play
IE is the classical tool, used by countries to target both public and private individuals…IE justifies an investigation for possible transnational corruption, simply by finding disparities between official income and a lavish lifestyle….but of course, is much easier to find evidence against public officials than against private individuals (eg oligarchs)…
today’s countries strategy is v Russian oligarchs, as private individuals. This is an error as it precludes the use of IE (to catch them)….thus, to catch private corrupts, new legal tools were needed:
b. SE ‘sanctions evasion’: the US secured its first confiscation of a Russian oligarch’s asset on this basis, and the EC has a legislative proposal to harmonise the offence of ‘SE’ among Member States. However, SE applies only to a particular person and a particular asset.
b. NCCBC: non-criminal-conviction-based confiscation
c. the II ground “irresistible inference”, established by the English Court of Appeal in a 2008 decision, provides that ML crime can be proved only by showing that the modalities [structure of financial vehicles and the management of fund] of the property purchase give rise to the II that it can only derive from crime
c. PML = presumption of money laundering (eg France): inverts the onus of proof to the alleged perpetrator
PML. france
-ml is a stand-alone offence [ =no need to rely on a prior conviction]….as required by International stadards [ eu directive 2018 + FATF + Article 23 of (UNCAC)], and in many countries, like france,
-pml = <> cocoo will use these arguments:
”the [source=operation] : [ investment, concealment or conversion] of funds, is presumed illicit, if either the:
- a. material conditions
- b. legal conditions
- c. financial conditions: eg. unnecessarily complex financial vehicles lacking economic rationality
have no other justification than to conceal either:
- a. the asset/income origin
- b. the bo”
steps to establish PML :
- French law enforcement authorities must demonstrate the existence of an investment, concealment, or conversion operation
- deducing the purpose of concealing the origin of the funds or the beneficiary
- the burden of proof no longer lies on the prosecution but on the defendant, who must demonstrate that the operation fulfils a lawful purpose
thus, pml beats the launderers at their own game: The more sophisticated the techniques used to conceal the proceeds of crime, the easier it is to implement the pml
PML is not really such, but rather “a presumption of illicit origin”, thus, it does not breach the constitutional right to presump.of innocence….this is why the pml, as of today, has never been challenged before the European Court of Human Rights.
CAN PML BE APPLIED RETROACTIVELY?:
PML came into force in December 2013.
if the pml is interpreted by the courts as a substantive rule, then is not be retroactive…but if the pml is interpreted by courts as a procedural rule, then it can be applied retroactively.
To date, French law enforcement authorities have avoided applying the pml retrospectively.
GROWING USE OF THE PML
EG to fight embezzlement of public funds and foreign bribery.
case:
transportation of such a sum of money in cash from Spain to France. The purpose of concealing the origin of the funds or the beneficiary of the transaction was deduced from the fact that the funds were hidden in different caches of the train. thus, the onus of proof was now on the defendant to demonstrate the lawful origin of the funds and operation…. the defendant provided documents to justify the cash inflows. However, the Court observed that the provided documents were too old wrt the date of the offence, and he was never able to provide either any justification for the alleged commercial activity, or the identity of the persons he was in spain to meet
case: Court of Appeal; Paris 2021; n° 20/04290:
The Court showed that the defendant repeatedly and systematically chose to interpose members of his family and chains of French and foreign companies with accounts located in tax havens, even though he was the sole decision- maker. The Court considered that there was a total interlingling of the assets of the different companies, and that the targeted flows had no economic justification other than to maintain the real estate assets within the framework of operations aimed to conceal the identity of the real beneficiary. This made it possible to characterise the abnormality of the investment, concealment or conversion. the defendant was not able to demonstrate that the targeted flows were licit and the operations had an economic justification.