Money laundering

What is money laundering?

Money laundering is criminalized as an offense in Articles 420bis et seq. of the Dutch Criminal Code. These provisions define various acts as money laundering. This includes concealing or disguising an object, often cash, jewelry, luxury goods, or crypto, knowing that it is derived from a criminal offense. Intentionally acquiring, possessing, transferring, or converting an object that originates from crime is likewise punishable as money laundering.

Which objects can be laundered?

A wide variety of objects can be laundered, including both tangible items and property rights (such as a bank account). It frequently concerns cash, jewelry, luxury goods, or cryptocurrencies, provided they originate from a criminal offense.

Which predicate offenses are we talking about?

The law refers to an object derived from “any” criminal offense (also known as the predicate offense). In principle, that can be any offense. Tax evasion (fraud) is included: the tax underpaid is then considered proceeds of that offense.

It is sufficient to establish that it cannot reasonably be otherwise than that the object is derived from some criminal offense. This means it need not be proven from which specific offense the object originates, nor who committed that offense.

The step-by-step framework when money laundering is suspected

Case law has developed a so called “step-by-step framework” for situations where the predicate offense is unknown, that is, where it is not known from which crime the object (money, etc.) originates. This is referred to as an unknown predicate offense.

In such cases, the Public Prosecution Service must first present facts and circumstances that justify a suspicion that it cannot reasonably be otherwise than that the object is the proceeds of crime. To that end, so called money laundering typologies are used.

The Financial Intelligence Unit (FIU) has developed numerous typologies with “more or less objective characteristics which, in practice, indicate laundering of criminal proceeds.” The Public Prosecution Service uses these typologies to substantiate a suspicion of money laundering. For example, possessing large amounts of cash, or transporting them, is quickly viewed as indicative of money laundering. It is also relevant whether the cash is hidden in unusual places and whether banknotes are found in high denominations that are uncommon in everyday transactions, such as €500, €200, and €100 notes.

Statement by the suspect

If the Public Prosecution Service’s suspicion is justified, the suspect may be expected to provide “a concrete, verifiable, and not highly implausible explanation” that the object is not derived from crime.

If such an explanation is not provided, for example, when someone invokes their right to remain silent, or if the explanation fails to meet the judicial standards, the court may weigh that against the suspect in establishing proof. In practice, proof of money laundering is then often accepted.

If the suspect does provide an explanation that meets the requirements, the Public Prosecution Service must investigate it. The court will assess the results of that further investigation when deciding on the evidence. In particular, it will consider whether the explanation can be substantiated.

If the Public Prosecution Service does not conduct further investigation into the suspect’s explanation, there is a good chance the court will acquit. After all, it cannot simply be assumed that the cash must necessarily originate from a criminal offence.

Whether and when the suspect provides an explanation is therefore crucial in money laundering cases. The timing of the explanation also matters: if it is offered only at a very late stage, this may be construed to the suspect’s disadvantage.

Qualification exclusion ground

Where a suspect possesses an object that is directly derived from an offense they themselves committed, case law imposes additional requirements for a money laundering charge. It must then be proven that the criminal origin of the object was actually concealed or disguised. In other words, active conduct is required. These requirements also apply where the suspect of money laundering themselves acquired the object. In that situation, more must be shown than the mere acquisition of the object.

If the requirements developed in case law are not met, the suspect must be discharged from all criminal liability. In that case, the alleged offence cannot be classified as money laundering. Hence the term: qualification-exclusion ground.

Negligent money laundering

If intentional money laundering cannot be proven, a person may still be prosecuted for negligent money laundering. In that case, it must be proven that the person who performed the laundering acts reasonably should have suspected that the object was derived from some criminal offense.

Why Hertoghs

Money laundering is a complex criminal provision, and a suspicion of it can have far-reaching legal and financial consequences. Insight into the relevant legislation and the role of investigative authorities, such as the FIOD is therefore essential. Thanks to our extensive experience handling money laundering cases, we understand the complexity and are well-positioned to protect your interests.