money laundering, a tool of social control clémentine boulanger [email protected]...
TRANSCRIPT
Money Laundering, a tool of social control
Introduction and definition of the term of the topic:
a) The definition of Money laundering in the EU legal order:
Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 concerning the prevention of the use of the financial system for the purpose of money laundering and terrorist financing : article 1 paragraphs 2 (a) to (d)
“the conversion or transfer of property, knowing that such property derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his action;
The concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property was derived from criminal activity or from an act of participation in such activity;
The acquisition, possession or use of property, knowing at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity.
Participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned in the foregoing points.”
Money Laundering, a tool of social control
b) Money laundering is not an autonomous infraction:
Primary Infraction + Money laundering = the qualification of money laundering.
i.e. of primary infraction: drug trafficking, human trafficking, serious organised crimes, corruption etc…
c) The elements of qualification of money laundering:
A material and a moral element.
A material element may be the criminal origins of the money (primary infraction such as money laundering) but also all the actions taken in order to hide the criminal origins of the money.
A moral element is the awareness of the criminal origins of the money but may also be the intention to clean the money.
Money Laundering, a tool of social control
d) The process of money laundering:
The process of money laundering is divided into 3 steps:
•the initial investment of the money (pre-wash),
•the layering of the funds
•The absorption of the money in the legal channels.
How defining the social control?
Social control may be considered as the control of the society, the control of individuals, the control exerted upon all of us. The control of the society derives from the surveillance of individuals and has originally one aim: maintaining the order within the society, in other words, fighting against a chaotic situation.
Is there a permanent state of chaos today and if yes, what is the impact of such a situation on the money laundering?
Money Laundering, a tool of social control
I. The fight against money laundering, a priority in Europe
A. The fight against money laundering within the EU legal order
1) A fight largely influenced by the EU policies and objectives
• The Amsterdam treaty adopted the 2 October 1997: fighting against cross border criminality in general + the creation of an area of Freedom Security and Justice.
• The Stockholm program which begins in 2011 and will end in 2014: 5 objectives which enable to guarantee the security of the EU and one of them is of course the fight against money laundering
Money Laundering, a tool of social control
2) The evolution of the EU legislation concerning money laundering
•Council directive 91/308/EC of June 1991 on prevention of the use of financial system for the purpose of money laundering. The ratioane materiae and the rationae personae of that directive were extremely restricted => primary infraction: drug trafficking and only the financial sector was concerned.
•Directive 2001/97/EC of the European Parliament and of the council of 4 December 2001 amending Council Directive 91/308/EEC on prevention of the use of financial system for the purpose of money laundering. It extends the scope rationae materiae and rationae personae of the previous one.
•The Directive 2005/60/EC of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. This directive replaces the first directive of money laundering attempt to modernize the financial sector. Its scope of application appears to be extent by dealing with terrorism financing
Money Laundering, a tool of social control
Since 2011 the legal framework concerning money laundering evolved a lot.
• In 2011 the Commission launched a study to measure the effectiveness of the third directive.
• In February 2012 the FATF adopted new international norms in the field of money laundering.
• The 5th of February 2013 the Commission proposed a directive and a regulation which aimed at strengthening the rules preventing and fighting against money laundering.
The EU legislation constantly expands its scope of application but also involves more and more professionals, more actors in the fight against money laundering which aims at extending and strengthening the surveillance of their client if there are detecting an suspect behavior, a suspect transaction.
Money Laundering, a tool of social control
Surveillance of the clients
Transmisison of the investigative file to the court
Professionals
Clients
Money laundering is qualified, sanctions
Money laundering is not qualified, no sanctions
Court
Financial Intelligence
Unit from other states
Financial Intelligence
Unit Investigation
No money laundering Infraction, end of the investigation
Money Laundering, a tool of social control
B. The fight against money laundering within the legal order of Luxembourg, Belgium and France
•Belgium legal order: the law of 11 January 1993 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing. This law was amending several times by other legislations: law of the 7 April 1995 and the law of 2007. The article 505 of the criminal code enounces some sanctions for money laundering.
•Luxembourg legal order: the law of 12 November 2004 concerning the fight against money laundering and terrorist financing. This law was amending by the law of the July 2008 which transposed the directive 2005/60/CE in the Luxembourgish legal order and strengthen the preventive measure in order to prevent money laundering.
Money Laundering, a tool of social control
• Within the French legal order: the “ordonnance” 2009-104 of the 3rd January 2009 on the prevention on the use of the financial system for the purpose of money laundering and terrorist financing. The law n°2013-100 of the 28 January 2013 which include in the French legal order the new EU measures on money laundering. The article L561-1 and others of the French Code “monétaire et financier” are establishing mechanisms of control in order to prevent money laundering.
1) Professionals responsibilities in the prevention of money laundering
• Obligation of caution
• Obliglation to operates a permanent control upon their clients: control of their identity, their transactions (its nature and the beneficiary).
• Obligation to document its control: reports etc…
• Possibilitty to temper the surveillance according to the risks presented by the client.
• Data retention: minimum 5 years after the end of the contractual relationship.
Money Laundering, a tool of social control
b) A suitable internal organization prescribed whiting the Luxembourg, Belgium and French legal order
Professionals have to retain any information, documents, making risk evaluation etc… enabling their cooperation with the FIU but also complying with their obligation of caution.
c) Obligation of training
Professionals have to train their employee in the prevention and detection of money laundering. Indeed they have to know the legal provisions and obligations in that field in order to be able to prevent money laundering infraction but also to detect it easily.
Money Laundering, a tool of social control
2) The other actors involved in the fight and prevention of money laundering:
a) Authorities of control
Various authorities are exerting a control upon professionals in order to see whether they are exerted correctly their obligation and their duties. Those authorities of control are in fact additional actors of the surveillance mechanism established by the different legal orders.
i.e.: In Luxembourg La Commission de Surveillance du Secteur Financier, Le Commissariat aux assurances et l’Administration de l’Enregistrement et des domaines. In France, the ACP l’Autorité de Contrôle Prudentiel and the AMF l’Autorité des Marchés Financiers.
Money Laundering, a tool of social control
d) The Financial Intelligence Units
Financial Intelligence Units are the authorities in charge of investigating upon money laundering behavior. In the EU there are one Financial Units per member States.
•In France the Intelligence Unit is TRACFIN: cellule de Traitement du Renseignement et action contre les circuits Financiers Clandestins,
•In Belgium there is the CTIF : Cellule de traitement des informations financières.
•In Luxembourg there is the CRF : Cellule des Renseignements Financiers.
The exchange of information is taking enormous proportions and such a network with new actors illustrates the establishment of a social control. The aim is no longer to fight and prevent money laundering but more to control individual’s life.
Money Laundering, a tool of social control
Outline of the exchange of client’s data:
Clients’data
Intelligence services
National professionals
Judges (commercial courts, civil courts, criminal courts)
Third countries’ FIUs
National FIU
EU member States’ FIUs
EU professionals of the same
sector
Third countries professional of the same sector
Administrative authoritiesSocial
agencies
Police forces
Tax authorities
Money Laundering, a tool of social control
II. The state-of-the-art of the fight against money laundering in Luxembourg, Belgium and France
Evolution of the number of files open by the Luxembourg’s FIU, judicial procedures and decisions in matter of money laundering from 2008 to 2012:
Money Laundering, a tool of social control
Evolution of the number of files open by the CTIF, files transfer to court and those which were not qualified as suspicious from 2008 to 2012
Money Laundering, a tool of social control
Evolution of the number of files open by TRACFIN, judicial procedures and judicial decisions in matter of money laundering from 2008 to 2012
Money Laundering, a tool of social control
What conclusion may be drawn from such facts?
The low number of condemnations for money laundering during the past five years illustrates the fact that EU law and the law of member States to counter money laundering are not effective. Indeed, the surveillance operated by professionals upon their clients appears to focus more on their personal data than their financial transactions. The networks of actors involved in the fight against money laundering may be considered as a type of Panopticon which detain, share individuals data not only for money laundering purposes but to operate a large scale surveillance upon them without their awareness. Therefore, the fight and the prevention of money laundering is becoming more an excuse for operating a social control than a real objective of the EU