Self laundering

Publication date 24-04-2019

Section 420bis.1 of the Dutch Penal Code reads as follows:

"Money laundering that consists of no more than acquiring and or being in possession of an object that originates directly from a person's own criminal activity is punishable with a maximum term of imprisonment of six months or a fourth-category fine."

Prior to the penalisation the situation of being in possession or acquiring an object that directly originates from a person’s own criminal activity usually resulted in discharge from prosecution if no actions to disguise the criminal origin were taken. The Supreme Court argued that merely acquiring and being in possession of an object that originates directly from a person's own criminal activity does not necessarily qualify as money laundering. For the qualification 'money laundering' the suspect must have performed an act aimed at hiding or concealing the criminal origin of the object in question.

The Explanatory Memorandum states that the raison d'être of self-laundering lies in the prevention of impunity. The impression had been created that the qualification-ground for exclusion too often led to impunity if the predicate offence could not be proven.

Recently the first judgment in which the new self-laundering article was proved was published (ECLI:NL:RBNNE:2018:727). Some of the details of this case are discussed below.

The suspect committed fraud. The suspect approached the victims via Whatsapp where he presented himself as a relative or close acquaintance of the victim. The victim would be persuaded to transfer large amounts of money to account numbers belonging to straw men. After the amounts of money had been deposited the suspect would receive the money from the straw men.

According to the Court, as from that moment the suspect was in possession of money that originated from his own criminal activity. The evidence does not show that the suspect performed acts to hide/conceal the criminal origin after receiving the money. Therefore, the proved facts cannot be qualified as money laundering and, therefore, the qualification-ground for exclusion applies, in the Court’s opinion. It is noteworthy that the Court does not regard the use of straw men as an act aimed concealing the criminal origin. It seems that the Court regards this as part of the fraud itself.
But, the Court argues, article 420bis.1 of the Dutch Penal Code came into force on 1 January 2017. As a result, the possession of an object that originates directly from a person’s own criminal activity is penalised in the form of self-laundering. The laundering took place after the date of coming into force. Therefore, the Court does consider it proved that the suspect committed self-laundering.

Declaring both the basic offence and the (culpable) self-laundering proved may lead to discussions about the application of the convergence rule. The Supreme Court suggested to charge the suspect with (culpable) self-laundering in the alternative to the predicate offence in order to prevent convergence. The first thing that is notable about this judgment is the fact that the Public Prosecution Service did not charge the self-laundering nor, therefore, the element 'from a person’s own criminal activity'. As a result, the element 'from a person’s own criminal activity' also does not reappear in the declaration of proved facts. In addition, the Court considers both the basic offence and the self-laundering of the proceeds of the fraud proved, but it does not address the possibility of convergence. In sentencing, the Court only appears to take into consideration the sophisticated nature of the fraud, the number of victims and the straw men who were not aware of the fact that their bank accounts were misused by defrauding people. It is unclear whether declaring the self-laundering proved has increased the sentence.