An Evolving Series of Proceeds of Crime Models
| Date | 01 March 2000 |
| Published date | 01 March 2000 |
| Pages | 21-31 |
| DOI | https://doi.org/10.1108/eb025963 |
| Author | R.E. Bell |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 8 No. 1 — Analysis
An Evolving Series of Proceeds of Crime Models
R. E. Bell
Over the last two decades in particular, national
legislatures have passed legislation aimed at ensuring
that criminals do not profit from crime. This has
been in response to the rise of organised crime and
to the massive amounts of money being generated,
in particular, by drug trafficking. It has been an
attempt to destroy 'the heart of the monster, its finan-
cial base'.1 This paper seeks to demonstrate that the
proceeds of crime response by national governments
can be perceived as evolving through a series of
dif-
ferent models, thus allowing a comparative approach
amongst different jurisdictions. Each model is com-
posed of elements from three different strands:
money-laundering legislation, confiscation legisla-
tion" and organisational structures and arrangements.
These strands have each gone through their own evo-
lution, which will now be examined.
THE COMPONENT PARTS OF THE
MODELS
Money-laundering legislation
Money-laundering legislation often starts with crim-
inalising the laundering of drug proceeds. States then
realise that the proceeds of non-drug-trafficking
crime are also a problem in their jurisdiction and
the laundering of these requires to be addressed. An
example of this evolution can be found in Cypriot
law. The Confiscation of Proceeds from Trafficking
of Narcotic Drugs and Psychotropic Substances
Law 39(I) of 1992 criminalised the acceptance of
property derived from drug-trafficking profits and
aiding and abetting the concealment of such profits.
This law was modelled on the Drug Trafficking
Offences Act 1986 in England and Wales. Following
ratification of the Council of Europe Convention on
Laundering, Search, Seizure and Confiscation of the
Proceeds of Crime, Cyprus then replaced the 1992
legislation with the Prevention and Suppression of
Money Laundering Activities Law 61(1) enacted in
1996,
which criminalised money laundering con-
nected with a range of serious criminal offences.
The mental element which the prosecution are
required to prove in respect of money-laundering
offences has also evolved. There has been a move-
ment away from relying simply on 'subjective'
mens rea towards also including 'objective' wens rca.
When initially introduced, the offences may require
the prosecution to prove actual knowledge. As the
legislation evolves, 'knowing' is frequently accom-
panied by 'or ought reasonably to know'.3 Juris-
dictions also vary as to the legal basis for the
reporting of suspicious transactions by financial insti-
tutions. Sometimes there is a positive obligation to
report a suspicious transaction. Other jurisdictions
simply make it an offence to fail to report a suspicious
transaction.
Confiscation legislation
One of the best examples of the evolution of confis-
cation legislation in recent years has taken place in the
UK. The first confiscation legislation introduced was
the Drug Trafficking Offences Act 1986, which
applied, as its name suggests, to drug-trafficking
offences only. It introduced a conviction-based
system of confiscation with discretionary statutory
assumptions which allowed the court to assume that
certain property was the proceeds of drug trafficking
unless the defendant could prove otherwise. This
Act was followed by the Criminal Justice Act 1988
which allowed confiscation orders also to be made
in non-drug-trafficking cases. However no statutory
assumptions were capable of being made in such
cases.
In 1991 the Home Office Working Group on
Confiscation recommended that the legislation be
strengthened by replacing discretionary assumptions
in drug-trafficking cases by mandatory assumptions.
This recommendation was implemented by the
passing of the Drug Trafficking Act 1994. Then,
following a recommendation of the Home Office
Working Group on Confiscation in its 1992 report,
the Proceeds of Crime Act 1995 introduced discre-
tionary assumptions for non-drug-trafficking cases.
Another significant trend has been a recognition
that recovery of the proceeds of crime need not
solely be a part of the criminal justice process. This
has been accompanied by a move towards civil for-
feiture, that is to say a non-conviction-bascd system
of confiscation which operates on the balance of
probabilities. Ireland introduced criminal confis-
cation under the Criminal Justice Act 1994 and then
Journal of Financial Crime
Vol 8 No
1.2000.PP
21-31
© Henry Stewart Publications
ISSN 0969-6453
Page 21
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