Germany Introduces New Anti-Money Laundering Offense
Combating Financial Crime with a New Offense
In November 2015, Germany introduced a new offense aimed at combating financial crime by targeting individuals who bring illegal proceeds into circulation. The self-laundering offense criminalizes the physical elements of conversion, transfer, disguising, concealing, and acquisition of the proceeds of crime.
What Does “Bringing into Circulation” Mean?
According to authorities, “bringing into circulation” is interpreted broadly and covers any act that:
- Relinquishes control of the object (proceeds of crime)
- Allows a third person to obtain control over it
- Conceals the unlawful origin of the object
Examples of acts that may fall under this category include:
- Depositing illegal funds into an account in one’s name
- Placing them into a family member’s account
- Using them to buy goods and services
Rationale Behind the New Offense
The rationale behind this new offense is that by bringing illegal proceeds into circulation, individuals introduce criminal funds into the legal economy, which affects the integrity of the financial system and may distort competition. These acts are not covered and sanctioned by the punishment for the predicate offense itself, making it possible to prosecute and punish individuals for these additional offenses.
Exemptions
However, authorities have clarified that certain aspects of “possession” and “use” of the proceeds of crime are not covered by this new offense. This is because possession or use of illegal funds would typically accompany predicate offenses and are already covered and sanctioned by the conviction and punishment for those offenses.
Additionally, the German Constitution’s principles of rule of law and prohibition to punish someone twice for the same act (ne bis in idem) apply in these instances. This means that individuals cannot be prosecuted and punished for the same act or behavior typically linked to a criminal act.
Application Examples
Examples of this application include:
- Individuals who steal money and keep it for themselves, as punishment for theft is deemed to sanction subsequent socially accepted behaviors such as keeping the stolen goods or hiding them away.
The explanatory note on the amendments also referred to a third principle, namely that there is “special competitive relationship that is consumptive in nature” between acts that constitute money laundering and predicate offenses. This would always rule out punishment for self-laundering in cases where individuals are already liable to punishment for the predicate offense.