ABSTRACT
What is meant by money laundering? One of the fundamental difficulties faced by those trying to criminalise the behaviour is that as behaviour, it may be perceptually indistinguishable from normal commercial activity of law-abiding persons depositing, transferring, and using funds for lawful purposes. Its distinguishing characteristic is that the purposes for which these transactions take place are unlawful because the activities that give rise to the funds are criminal. The Realpolitik is that money laundering is a term of opprobrium to describe the movement of money to or from undesirable persons, organisations, or countries. When the CIA move money via BCCI, the Americans call it facilitating the national interest; when the Mafia do the same thing, we call it money laundering (though there may be ambivalences when they may be acting for the intendedthough not effective-purpose of assisting the Catholic Church, as with Banco Ambrosiano during the 1970s). The label may be used contemporaneously, as when a bank under surveillance knowingly launders “drugs money” (viz. BCCI); but the judgment may also be applied retrospectively, as we can see in the succession of UK Serious Fraud Office cases such as Barlow Clowes, Polly Peck 259 International and Maxwell, which were never spotted as money laundering at the time. (Indeed, given the acquittal of the Maxwell sons on fraud charges, we may now redefine them back to ‘money movement’!) We note immediately one crucial difference: drugs trafficking proceeds are criminal ipso facto; indeed, under US law they are the property of the government. However, what are in fact fraudulent transactions are labelled laundering only if and when the fraud is discovered and recorded as crime. (Though sometimes civil cases involving constructive trust are really laundering cases.) Fraudsters also have the terrific
advantage over most drugs traffickers that they already have corporate structures to utilise for “layering” and “integration” purposes-making suspicion less likely —and that they probably have legitimate financial instruments (such as cheques and bankers’ drafts) rather than large quantities of cash to process through their accounts.
