MONEY LAUNDERING

Money laundering is the conversion or transfer of property, knowing that such property is the

proceeds of crime, for the purpose of disguising the illicit origin of the property or of helping any

person who is involved in the commission of the predicate offence to evade legal consequences

of his / her actions.

See the United Nations convention against transnational organized crimes.

Money laundering is the deliberate, complicated and sophisticated process by which the proceeds

of crime are camouflaged, organized or made to appear as if they were earned by legitimate

means.

See also the case of Daudu v FRN for the definition of Money Laundering.

The principal legislation in Nigeria on the offence of money laundering is the Money Laundering

prohibition act 2011.

The principal legislation on Money Laundering in the UK is the proceeds of crime act 2002.

In the USA, the most prominent law on the offence of money laundering is the money laundering

control act 1986.

In Nigeria, money laundering involves the directly or indirectly concealing or disguising,

converting or transferring, removing from the jurisdiction or acquiring, using, retaining or taking

possession or control of any fund or property that is a proceed of an unlawful act.

One of the similarities among the three jurisdiction is that money laundering is an offence that

operates upon the commission of prior crimes known as the predicate offence. Also, the laws of

the three jurisdiction focuses on the proceeds of the predicate crime and not the predicate crime

itself.
See USA v Santos where the court defined the proceeds of crime to mean the profits rather than

the gross receipts realized from the offence. All jurisdictions recognize money laundering

offences to include attesting counselling, aiding and procuring the prohibited acts. See section 18

MLA, section 340(11) POCA ; the penalties provided for the offence in the three jurisdiction

include extensive prison terms, confistication of the property laundered or involved in the

laundering and fine.

One of the offences or acts of money laundering in the UK is concealment. For the accused to be

guilty of concealing offence, the prosecution must prove that the accusssed person either

conceals, disguises, converts, transfers or removes a property; the property which was concealed

must be a criminal property; and the offence occurred within the UK.

See section 307 POCA and R v Montilla

It is sufficient if what was concealed was the source, disposition, nature, movement, location or

ownership of any right in relation to property.

Section 15 MLA also criminalizes the concealment of any proceeds of an unlawful activity but

thr law only punishes the origin of the unlawful activity. This shows that the UK position is

larger in scope than the offence relating to concealment in the ML. In the USA, concealment is

also an offence and it is sufficient when the thing concealed is the nature, location, ownership,

source or the control of the proceeds of specified unlawful activity.

It is an offence in the UK if a person enters into or becomes concerned in an arrangement which

he knows or suspects facilitates the acquisition, retention, use or control of any criminal property

by or on behalf of another person. Section 308 POCA. POCA did not define the word

‘arrangement’ but the court held in the case of Bowman v Fels that the proper interpretation
given to the term would not be intended to cover ordinary conduct of litigation by a legal

professional.

In Nigeria, section 18 MLA, provides for arrangements in form of conspiracy, aiding and

abetting, counselling any other offence to commit an offence including being or attempting to be

an accessory to the act or offence.

However, section 340 (3) of the POCA, while defining the phrase ‘criminal property’ as a

property which constitutes a person’s benefit from an illegal conduct and the alleged offender

knows or suspects that it constitutes or represent such benefits.

The combined reading of section 329 & 340(3) would reveal that before a person can be guilty

of acquiring a criminal property thereby committing money laundering the offender must know

that the property is a proceeds of crime. While the UK law is generous in providing statutory

exceptions to the acts constituting money laundering, the Nigerian law provides a wider

spectrum of conducts that constitutes ML with little clarification on what constitutes their

exceptions. For instance section 18 of the MLA provides for the offence of arrangement in the

form of conspiracy, aiding, abetting or counselling without defining these terms in order to

determine the context and scope of the offence; section 328 of the POCA which also provides

for the offence of arrangement in the form of acquisition, retention, use or control of criminal

property provides three exceptions which include

1. Disclosure
2. The conduct occurred outside UK and the conduct is not a crime in the foreign territory

3. Acts done in the usual course of business.

In the USA, the offences created by the law are promoting, concealment and disguising. For the

promotional offence, the prosecution is required to prove that there was a transaction which was

financial in nature and that the property involved in the financial transaction was a proceed of
crime and also that the proceed of crime was meant to promote an unlawful act. Also, it is an

offence in the USA for a person to conceal or attempt to conceal the nature, location, source,

ownership or the control of the proceeds of specified crimes.

See the case of USA v Brown where the court held that the promotional offence and the

promotion element of money laundering cannot be met simply by demonstrating that the

unlawfully earned monies were used to promote the continued functioning of an otherwise

legitimate business enterprise. In the USA it is only money laundering when the proceeds of

crime is used for promotion of unlawful acts but if the proceed of crime was used for the

promotion of a lawful business then it isn’t money laundering.

In the USA, it is possible for the accused to be guilty of money laundering even when the

property used for the promotion of an unlawful act is not a proceed of crime. Such an offence is

committed when a person transports, transits or transfers or attempts to transfer a monetary

instrument or funds from a place in the USA to or through a place outside the USA.

The elements of the offence of money laundering are

1. The proceeds laundered must have emanated from a criminal activity

2. There must be intent to conceal the proceeds of the criminal activity ( only applicable in
the USA)
3. There must be knowledge or reasonable suspicion that the money is proceeds from
criminal activity.
4. There must be claim or assertion by the accused to the proceeds as untainted proceeds.

In the UK, the law expressly provides for exceptions to a charge of money laundering and they

are;

1. Authorized disclosure or intention to disclose

2. The criminal conduct occurred outside UK and it is not an offence in the foreign country.
3. Acts done in the usual course of business.
4. Acquisition of criminal property for adequate consideration.
5. Acquisition of a criminal property for law enforcement purposes.
In the USA, entrapment is the use of the defences which may be available to an accused. See the

case of Jacobson v USA. The intention to conceal the proceeds of crime is a requisite intention

in the USA law. This intention is not required under the MLA & POCA. There is requirement of

knowledge that the property is a proceed of crime in the jurisdictions. The words used in the

MLA are “knowingly or reasonably ought to have known”. In the UK, the act is silent on the

issue of knowledge of the defendant in the offence of money laundering.