MONEY LAUNDERING AS A CRIME AGAINST JUSTICE AND PUBLIC SECURITY

On May 5, within the framework of the regular webinar of the FPA RF on professional development of lawyers, a lecture on “Legalization (laundering) of criminal proceeds” was delivered by the Head of the Department of Criminal Law, Criminal Procedure and Criminalistics of PFUR, Doctor of Law, Professor Lyudmila Bukalerova.

Starting from the fact that legalization (laundering) of criminal proceeds, which occupies a special place in the structure of crime and is a secondary criminal activity, gives practical sense and often determines the primary criminal activity, the lecturer cited data from the Department of Financial Monitoring and Currency Control of the Central Bank of the Russian Federation (Bank of Russia), according to which in 2017 the volume of withdrawal of funds abroad amounted to 96 billion rubles, cashing of money – 326 billion rubles.

Despite the small number of persons prosecuted annually under Articles 174 and 174.1 of the Criminal Code of the Russian Federation, these crimes are quite widespread and have a high latency rate. The main documents regulating counteraction to these crimes are Federal Law No. 115-FZ dated August 7, 2001 “On Counteracting the Legalization (Laundering) of Proceeds of Crime and the Financing of Terrorism” and Resolution of the Plenum of the Supreme Court of the Russian Federation No. 32 dated July 7, 2015 “On Judicial Practice in Cases of Legalization (Laundering) of Money or Other Property Obtained by Criminal Means and Acquisition or Sale of Property Obtained by Criminal Means”.

According to Rosfinmonitoring estimates, 250-300 billion rubles are legalized annually in Russia, with law enforcement agencies detecting about 30 billion rubles of legalized criminal proceeds.

It should be taken into account that according to the official definition legalization (laundering) of proceeds of crime is giving a lawful form to the possession, use or disposal of money or other property obtained as a result of committing a crime.

Based on the examples of court practice, Lyudmila Alexandrovna dwelt in detail on the elements of the elements of crimes providing for liability for legalization (laundering) of money or other property acquired by others by criminal means and legalization (laundering) of money or other property acquired by a person as a result of committing a crime.

In the theory of criminal law there is no unambiguous assessment of the legal nature of legalization (laundering) of criminal proceeds, there are several main approaches: legalization of criminal proceeds is considered as a crime against justice and as a crime against public security. The nature of legalization (laundering) of criminal proceeds is considered ambiguously depending on the purpose of committing the crime: if the purpose of such act is to enable the perpetrator to freely dispose of criminal proceeds, then this crime infringes on the relations of justice; if the purpose of legalization (laundering) of criminal proceeds is to commit subsequent crimes, then harm is caused to the relations of public security.

During the lecture, the expert gave a detailed definition of predicate offenses. The results of the study of 126 verdicts passed over four years by Russian courts on money laundering showed that the most frequent sources of laundered proceeds were: crimes against property (54.2%), drug trafficking (21.2%), corruption crimes in the private (non-public) sphere (abuse of power in a commercial organization) (8.6%), economic crimes (5.3%). At the same time, legalization (laundering) of criminal proceeds is not an independent crime, but only aimed at “servicing the interests” of the person who committed the predicate crime.

When analyzing the subject matter of crimes under Art. 174 and 174.1 of the Criminal Code of the Russian Federation, the speaker paid special attention to the provisions of the Plenum of the Supreme Court of the Russian Federation, which approved the Resolution of February 26, 2019, No. 1 “On Amendments to the Resolution of the Plenum of the Supreme Court of the Russian Federation of July 7, 2015, No. 32 “On Judicial Practice in Cases of Legalization (Laundering) of Money or Other Property Obtained by Criminal Means and on Acquisition or Sale of Property Knowingly Obtained by Criminal Means”.”

The Supreme Court of the RF indicated that cryptocurrency may be used in money laundering, therefore the subject of legalization (laundering) of money or other property acquired by criminal means (Articles 174, 174.1 of the Criminal Code of the RF) may be, among other things, money transformed from virtual assets (cryptocurrency) acquired as a result of committing a crime.

In relation to the issue of the subject of legalization (laundering) of money or other property acquired by criminal means, the question arises about the possibility of criminal liability for legalization of criminal proceeds acquired as a result of crimes against intellectual property.

The lecturer supported all her conclusions with numerous examples of court practice.

Ludmila Bukalerova drew special attention to the subtleties of defining the objective side of crimes. She named important that the commission of financial operations and other transactions with property acquired by criminal means, solely for the purpose of its withdrawal from circulation does not form the corpus delicti provided for by Article 174.1 of the Criminal Code of the Russian Federation. Thus, in order to establish the presence of a special purpose of legalization in the actions of the perpetrator, it is necessary that the result of financial operations and other transactions with criminally acquired property was the introduction of this property into legal turnover.

However, according to the expert, judicial practice is ambiguous: there are verdicts that acquit defendants of money laundering. The courts, despite the similar actions of the defendants, did not establish the existence of the purpose of making the criminal proceeds legal. In particular, the verdict of the Supreme Court of the Komi Republic of May 15, 2017 in case No. 2-5/2017 states: “Committing crimes with the use of financial institutions in order to conspire a way of obtaining income from participation in a criminal association and illegal sale of narcotic drugs is covered by the relevant crimes. At the same time, the commission of financial transactions with criminally obtained funds for personal consumption does not form a corpus delicti under Article 174.1 of the Criminal Code of the Russian Federation”.

The lecturer considered a rather problematic issue of whether a court verdict is necessary to recognize the proceeds of a predicate crime as criminal. In this regard, the General Prosecutor of the Russian Federation in the Information Letter No. 12/2-04 dated November 25, 2004 pointed out that the establishment of “the fact of receipt by a person of money or other property, knowingly obtained by criminal means or as a result of committing a crime, does not mean the existence of an effective court conviction, which established the event of the main crime”.

The criminal method of obtaining money or other property by a person should be confirmed by the totality of evidence collected during the preliminary investigation, emphasized Lyudmila Bukalerova.

She then elaborated on the ways of detecting suspicious transactions, noting that money laundering is often carried out when money (or material valuables) is moved abroad: through banking transactions; through export transactions; by other means.

Four moments of the end of legalization (laundering) of money or other property acquired by criminal means were considered.

The issues of liability of legal entities are also analyzed. Thus, at the end of May 2017. The US Federal Reserve again fined the largest German bank Deutsche Bank for 41 million dollars (37 million euros) for failure to take sufficient measures to prevent money laundering from Russia.

The purpose of giving a lawful form to the possession, use and disposal of money or other property acquired by criminal means (as a result of committing a crime) as a mandatory feature of the corpus delicti provided by Art. 174 and 174.1 of the Criminal Code of the Russian Federation. This purpose, according to the expert, can be established on the basis of the actual circumstances of the case, indicating the nature of financial transactions or deals, as well as other related actions of the guilty person and his accomplices, aimed at concealing the fact of criminal acquisition of property and ensuring the possibility of its free circulation.

Also during the online lecture the speaker paid special attention to the qualified types of legalization (laundering) of money or other property acquired by criminal means. In particular, she considered five variants of activities of organized criminal groups in the process of money laundering.

At the end of her speech Lyudmila Bukalerova informed that the most effective form of exemption from criminal liability for the purpose of suppression of predicate offense is active repentance. Application of this institute will allow to detect and suppress predicate offenses at any stage.

Source: https://fparf.ru/news/fpa/legalizatsiya-dokhodov-kak-prestuplenie-protiv-pravosudiya-i-obshchestvennoy-bezopasnosti/