Money laundering is a fraudulent technique used to hide the criminal origin of funds. Money laundering consists of concealing the origin of a sum of money, acquired illegally, by reinjecting it into a legal activity.

Money laundering: definition

Qualified as dirty money, money laundering is a financial crime. This allows a criminal to conceal the illicit origin of a sum of money, by reinvesting it in legal channels.

The Financial Action Task Force (FATF) identifies offenses of this type, and points to the sums of money which are collected under criminal activities such as drug trafficking, theft, tax evasion, or even of weapons.

There are many mechanisms for laundering money. Among these, we can cite:

• Placing funds from criminal acts in a traditional financial system, concealing the origin of the funds, or abroad through a currency exchange office, or even in a tax haven where no control of the origin of the fund is operated.
• Carry out numerous operations and transactions with dirty money in order to reduce the traceability of fraudulent funds. To this end, false invoices between often fictitious companies are produced.
• Invest funds from criminal activities in a completely legal business, such as a restaurant, a vineyard, a real estate group.

Having become a real problem at the global level, money laundering is the concern of the legislator who has established an arsenal of preventive measures:

The establishment of payment ceilings, in order to monitor transactions: 10,000 euros for a real estate purchase, 1,000 euros for a payment to a professional. Beyond these sums, the origin of the funds must be justified. For this purpose, the Ministry of Economy and Finance has set up an anti-money laundering unit called Tracfin (Treatment of intelligence and action against clandestine financial circuits).

The obligation to declare the transfer of cash to the customs authorities beyond the sum of 10,000 euros. In the case of transfers of more than 50,000 euros to a European country, the origin of the funds must be justified by the production of a bank certificate or a contract.

On court order ordering the lifting of banking secrecy, it is possible to detect a money laundering procedure. The Ministry of Economy and Finance also calls on certain professions, such as banks, brokers, lawyers, notaries, bailiffs, accountants, and calls on them to submit a declaration of suspicion of money laundering be made to Tracfin. If these professionals refuse to denounce such practices, even if it is only a suspicion, they risk a criminal sanction.

Finally, there is software that monitors criminal activities, and makes it possible to compare certain operations carried out by terrorists with large international transfers.

Money laundering: penalties

According to the provisions of the Penal Code (article 324-1), money laundering is punishable by five years' imprisonment and a fine of 375,000 euros. Persons who facilitate the concealment of the source of property or income of the perpetrator of a crime or misdemeanor are punished. Also punished are persons who have helped convert the proceeds of a crime or a money laundering offence. The penalty of five years' imprisonment and a fine of 375,000 euros is doubled if the money laundering is committed regularly, and in an organized gang.