Insolvency Service investigations into trading companies
There has been a recent run of articles concerning ‘The Global Laundromat’ (see for example here and here). This name was given to a scheme by the US Organized Crime and Corruption Reporting Project to describe the laundering of billions of dollars into Europe, the US and Asia from Russia and Moldova. It is alleged that from 2010 to 2014, the wealthy elite in Russia, Moldova and the Ukraine, was moving cash derived from illegal activity from their home states abroad into offshore companies, false companies and luxury goods.
The alleged head of the operation, Moldovan businessman, Vyacheslav Platon, was arrested last year and extradited from the Ukraine to Moldova on charges of fraud and money laundering. Platon complains that there is no evidence of a predicate crime; i.e. there is no evidence that the money sent from Russia was derived from illegal activity and, therefore, it cannot be shown that the money was being laundered.
This question of whether or not it is necessary for a requesting state to provide evidence of a predicate crime in a request for the extradition of a person accused or convicted of money laundering is an interesting and pertinent one. In Part 1 cases, where the Framework List includes laundering the proceeds of crime as one of the “framework offences” (i.e for which dual criminality need not be shown), it is arguable, that it may be sufficient for a requesting state to secure a person’s extradition simply by ticking the “laundering the proceeds of crime” box with no requirement to provide further details of the underlying conduct. Theoretically at least, it may therefore be possible for an EU country to extradite a person for dealing with the proceeds of a lawful activity. But in other cases (i.e., Part 2 cases, where there is no Framework List; Part 1 cases where the Framework List has not been ticked, or even Part 1 cases where the Framework List has been ticked but where the description of the predicate offence is of conduct that would not constitute an offence in the UK) will the request for extradition be invalid for failing to provide details of a qualifying predicate offence?
In the UK, ss.327-329 of the Proceeds of Crime Act 2002 (“POCA”) create money laundering offences which are committed in relation to “criminal property”. Criminal property is defined in POCA as property which a person knows or suspects constitutes a person’s benefit from criminal conduct, being conduct which would constitute an offence in the UK (or would constitute an offence in any part of the UK if it occurred there) . In short, therefore, in order to commit a money laundering offence, it must be proved that the proceeds are the benefit of criminal conduct. As is well known, if the request for extradition is to be successful, both non-Framework List Part 1 EAWs and Part 2 requests must satisfy the requirement for dual criminality, that is, that the conduct for which extradition is sought must be shown to constitute an offence under the law of the relevant part of the UK. In the case of money laundering it is arguable that this requirement will not be satisfied unless the extradition request explains how the money in question is illegal (or more specifically, how it constitutes or represents a person’s benefit from criminal conduct) and why therefore the use of the money for which extradition is sought constitutes money laundering.
A decision on the necessity or otherwise of a qualifying predicate offence in a request for extradition for money laundering has yet to be handed down in the magistrates’ courts and, therefore, has not had the opportunity for further debate on appeal. However, should such a request be forthcoming the absence of a description of a predicate offence, or at least an offence which would satisfy the requirements of the Proceeds of Crime Act 2002 might well render the request invalid. In such a case it is all the more important to analyse scrupulously the conduct for which extradition is sought.
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