Money laundering is something that has been in the news a bit lately. During the lead up to the Royal Commission into Banking, a lot was said of some institutions’ potential complicity in money laundering schemes. However, that’s not necessarily money laundering as most people know it. When those allegations were raised, they related to a specific act: The Anti-Money Laundering and Counter-Terrorism Financing Act. That Act is Commonwealth legislation, which means it applies to Queensland. But it’s also formed for a specific purpose, as its title suggests. That makes it a slightly more complex example of anti money laundering law. Nevertheless, it offers the most comprehensive source of anti-money laundering law in Australia. It also affects money laundering provisions in the Criminal Code Act (Cth). Like the other, this Act is a Commonwealth one that applies in Queensland, and all other Australian jurisdictions. So let’s take a look at what it says.
The broadest source of law against money laundering is the Criminal Code Act (Cth)
Under sections 400.9(1)–(5) of the Criminal Code Act, it is an offence to deal with money or property that might reasonably be suspected of being the proceeds of crime. Indeed, that is much broader than the Anti-Money Laundering and Counter-Terrorism Financing Act. However, the Criminal Code still relies on the Anti-Money Laundering Act for certain definitions. Most notably, the Code relies on the Act to establish offences where there is evidence that a person tried to avoid their obligations under the Act. That might sound confusing, but its purpose is straightforward. The Anti-Money Laundering and Counter-Terrorism Financing Act creates certain obligations around the reporting and management of money that is received in certain circumstances. To ensure no person attempts to avoid those obligations, the Criminal Code makes an offence of any effort to do so. As a result, between both statutes, liability is imposed across all dealings with the proceeds of crime.
You’ve probably heard of it a lot, but what exactly is money laundering, and why does it occur?
Money laundering is a complex crime, that generally involves the proceeds of crime, and occurs in organised ways. The purpose of money laundering is simple: to legitimise money that has been obtained illegitimately. Generally, money laundering is intended to minimise the suspicions of law enforcement, with regard to illegal income. There are many different approaches to money laundering—from business, to property—and some are incredibly sophisticated. However, all fall within the provisions offered by the abovementioned Act and Code. As a result, even the most sophisticated money laundering schemes are liable for prosecution.
Money laundering is not always an offence of strict liability in Australia – here’s what that means
In any money laundering scheme, some legitimate or apparently legitimate entity is necessary. But what if a legitimate entity is caught up without realising? In the Code, a person can be liable for money laundering where it is reasonable to suspect that the money or property with which they were dealing, is the proceeds of crime. As a result, liability is generally absolute. That means that a person can be prosecuted for money laundering, even if he or she was not actually aware that it was occurring. However, that is exceptionally rare due to the ‘reasonableness’ clause of the provision. To satisfy the reasonableness clause, the money laundering must be obvious enough that any reasonable person would be aware of it. The likelihood of being caught up in a money laundering scheme inadvertently is therefore very low.
Quality legal advice will steer your clear of liability for money laundering under Commonwealth law
This overview of money laundering doesn’t cover some of the more complex reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act. Those obligations don’t apply to all businesses in all circumstances; there are certain criteria to be met. So get some legal advice to ensure that you’re not falling foul of anti-money laundering provisions. They can be complicated, but with legal expertise on your side, compliance will not be an issue.
By Finian McGrath
Disclaimer
The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.
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