How [European Union] defines Money Laundering

European Union [EU]

?2022 estimates - Population 446.8 m, GDP USD 23.7 tr

EU is an international organization comprising 27 European countries and governing common economic, social, and security policies.

?Member states

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

DIRECTIVE (EU) 2018/1673

EU issues Directives to be used by member states while preparing laws. (Directive 2018/1673) deals with efforts to curb/prevent money laundering.

Article 1: Subject matter and scope

1.???This Directive establishes minimum rules concerning the definition of criminal offences and sanctions in the area of money laundering.

2.???This Directive does not apply to money laundering as regards property derived from criminal offences affecting the Union’s financial interests, which is subject to specific rules laid down in Directive (EU) 2017/1371.

Article 2: Definitions

‘criminal activity’ means any kind of criminal involvement in the commission of any offence punishable, in accordance with national law, by deprivation of liberty or a detention order for a maximum of more than one year or, as regards Member States that have a minimum threshold for offences in their legal systems, any offence punishable by deprivation of liberty or a detention order for a minimum of more than six months. In any case, offences within the following categories are considered a criminal activity:

(a) participation in an organised criminal group and racketeering, including any offence set out in Framework Decision 2008/841/JHA; (b)terrorism, including any offence set out in Directive (EU) 2017/541 of the European Parliament and of the Council; (c) trafficking in human beings and migrant smuggling, including any offence set out in Directive 2011/36/EU of the European Parliament and of the Council?and Council Framework Decision 2002/946/JHA; (d) sexual exploitation, including any offence set out in Directive 2011/93/EU of the European Parliament and of the Council; (e)illicit trafficking in narcotic drugs and psychotropic substances, including any offence set out in Council Framework Decision 2004/757/JHA; (f)illicit arms trafficking;(g)illicit trafficking in stolen goods and other goods;(h)corruption, including any offence set out in the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union?and in Council Framework Decision 2003/568/JHA; (i) fraud, including any offence set out in Council Framework Decision 2001/413/JHA; (j) counterfeiting of currency, including any offence set out in Directive 2014/62/EU of the European Parliament and of the Council; (k) counterfeiting and piracy of products; (l) environmental crime, including any offence set out in Directive 2008/99/EC of the European Parliament and of the Council?or in Directive 2009/123/EC of the European Parliament and of the Council?; (m) murder, grievous bodily injury; (n) kidnapping, illegal restraint and hostage-taking; (o) robbery or theft; (p) smuggling; (q) tax crimes relating to direct and indirect taxes, as laid down in national law; (r) extortion; (s) forgery; (t) piracy; (u) insider trading and market manipulation, including any offence set out in Directive 2014/57/EU of the European Parliament and of the Council; (v) cybercrime, including any offence set out in Directive 2013/40/EU of the European Parliament and of the Council.

Article 3 Money laundering offences

1.???Member States shall take the necessary measures to ensure that the following conduct, when committed intentionally, is punishable as a criminal offence:

(a) the conversion or transfer of property, knowing that such property is derived from criminal activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such an activity to evade the legal consequences of that person’s action;

(b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of, property, knowing that such property is derived from criminal activity;

(c) the acquisition, possession or use of property, knowing at the time of receipt, that such property was derived from criminal activity.

2.???Member States may take the necessary measures to ensure that the conduct referred to in paragraph 1 is punishable as a criminal offence where the offender suspected or ought to have known that the property was derived from criminal activity.

Penalties for Money Laundering Offenses

The?minimum penalty?for crimes related to money laundering increases?from one to four years in prison. Similarly, economic sanctions rise to?5 million euros?(and their equivalents in other currencies). The directive also encourages authorities to impose exemplary sanctions.

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