The Offence of Money Laundering (Articles 301–304 of the Criminal Code)

THE OFFENCE UNDER ARTICLE 301 OF THE CRIMINAL CODE. ANALYSIS, REQUIREMENTS AND APPLICABLE CASE LAW

The aforementioned article provides:

“1. Anyone who acquires, possesses, uses, converts or transfers assets, knowing that they originate from a criminal activity committed by themselves or by any third party, or who carries out any other act in order to conceal or disguise their illicit origin, or to assist the person who has participated in the offence or offences to evade the legal consequences of their acts, shall be punished with a prison sentence of six months to six years and a fine from one to three times the value of the assets.

In such cases, judges or courts, taking into account the seriousness of the offence and the personal circumstances of the offender, may also impose the penalty of special disqualification from exercising their profession or trade for a period of one to three years, and may order the temporary or permanent closure of the establishment or premises. If the closure is temporary, its duration may not exceed five years.

The penalty shall be imposed in its upper half when the assets originate from any of the offences related to trafficking in toxic drugs, narcotics or psychotropic substances described in Articles 368 to 372 of this Code. In such cases, the provisions contained in Article 374 of this Code shall apply.

The penalty shall also be imposed in its upper half when the assets originate from any of the offences included in Chapters V, VI, VII, VIII, IX and X of Title XIX or from any of the offences in Chapter I of Title XVI.

2. The same penalties shall be imposed, as appropriate, for the concealment or disguise of the true nature, origin, location, destination, movement or ownership rights over the assets or property thereof, knowing that they derive from any of the offences referred to in the previous section or from an act of participation in them.

3. If the acts are committed through gross negligence, the penalty shall be imprisonment from six months to two years and a fine from one to three times the value involved.

4. The offender shall also be punished even if the offence from which the assets originate, or the acts punished in the preceding sections, were committed wholly or partially abroad.

5. If the offender has obtained profits, they shall be confiscated in accordance with the rules set out in Article 127 of this Code.”

For its part, Article 302 continues:

“1. In the cases provided for in the previous article, custodial sentences shall be imposed in their upper half on persons belonging to an organisation dedicated to the purposes indicated therein, and the penalty shall be increased by one degree for the leaders, administrators or persons in charge of such organisations.

2. In such cases, when, in accordance with Article 31 bis, a legal entity is held liable, the following penalties shall be imposed:
a) A fine of two to five years if the offence committed by the natural person carries a prison sentence of more than five years.
b) A fine of six months to two years in the remaining cases.

Taking into account the rules established in Article 66 bis, judges and courts may also impose the penalties listed in letters b) to g) of paragraph 7 of Article 33.”

Article 303 provides that:

“If the acts provided for in the previous articles are carried out by a businessperson, intermediary in the financial sector, medical professional, public official, social worker, teacher or educator in the exercise of their office, profession or trade, the penalty of special disqualification from public office, profession or trade, industry or commerce for a period of three to ten years shall also be imposed, in addition to the corresponding penalty.

An absolute disqualification of ten to twenty years shall be imposed when the aforementioned acts are carried out by an authority or its agent.

For these purposes, medical professionals are understood to include doctors, psychologists, persons holding healthcare qualifications, veterinarians, pharmacists and their assistants.”

Article 304 of the Criminal Code punishes provocation, conspiracy or proposal to commit the aforementioned offences with a penalty one or two degrees lower.

The offence of money laundering requires that all the conducts described in Article 301.1 of the Criminal Code and related to the assets involved have the purpose of concealing or disguising their illicit origin or helping the perpetrator of the predicate offence evade the legal consequences of their acts (among others and most recently Supreme Court Judgment No. 362/2017 of 19 May).

Consequently, the conduct punished as money laundering does not consist simply of acquiring, possessing or using the profits obtained, but rather— as the provision specifies— in carrying out these or other acts when they tend to conceal or disguise their illicit origin.

Supreme Court Judgment No. 265/2015 of 29 April explains this in detail:

“The Criminal Code punishes as money laundering those conducts aimed at incorporating into legal circulation the assets, money and profits obtained through criminal activities, so that once the laundering process has been completed, they may be legally enjoyed without sanction. Specifically, Article 301 of the Criminal Code punishes as responsible for the offence of money laundering anyone who acquires, possesses, uses, converts or transfers assets knowing that they originate from criminal activity committed by themselves or by any third party, or who carries out any other act to conceal or disguise their illicit origin, or to assist the person who has participated in the offence or offences to evade the legal consequences of their acts.”

The inclusion in the legal wording of two clauses (“knowing that they originate from a criminal activity”, “committed by themselves or by any third party”) has led some interpreters of the rule to erroneously consider that the essential purpose of money laundering (concealing or disguising the illicit origin of the money) applies only to “any other act” and not to all the behaviours described in the provision.

From this perspective, it is argued that the mere possession or use of assets derived from criminal activity, with knowledge of their origin, constitutes money laundering, and it is maintained that punishing self-laundering violates the principle of non bis in idem.

However, this position cannot be regarded as correct.

To better understand the typical conduct, it is useful to temporarily disregard these two clauses and define the actions that constitute the offence as follows: whoever acquires, possesses, uses, converts, transfers or carries out any other act in order to conceal or disguise the illicit origin of assets derived from criminal activity.

The essence of the offence therefore lies in the expression “with the purpose of concealing or disguising the illicit origin.” This purpose or objective of the conduct must be present in all the behaviours described in the provision.

Accordingly, we are not faced with two different groups of conduct:

• the mere acquisition, possession, use, conversion or transfer of assets derived from criminal activity with knowledge of their origin; and

• the performance of any other act on those assets with the aim of concealing or disguising their illicit origin.

Such a distinction would lead to an excessively broad interpretation of the offence and would make it impossible to avoid violating the non bis in idem principle in cases of self-laundering.

On the contrary, Article 301 of the Criminal Code typifies only one form of conduct, consisting of performing acts aimed at concealing or disguising assets derived from criminal activity or helping the perpetrator of that activity evade the corresponding sanction.

With this more restrictive interpretation, excesses are avoided, such as punishing for self-laundering the perpetrator of the predicate offence merely for acquiring the assets that are the necessary and immediate consequence of the commission of their crime.

Likewise, it prevents considering as money laundering the mere use of money corresponding— for example— to an unpaid tax liability in a tax offence for ordinary expenses, when there is no intention of concealment nor any attempt to obtain an apparently lawful legal title over assets derived from a prior criminal activity, which is the essence of the conduct punished under the offence of money laundering.