Money Laundering: Analysis

1.- Concept and Regulation

Money laundering, also colloquially known as “washing money”, constitutes a crime typified in the Criminal Code, which is criminally sanctioned differently depending on the criminal activity carried out for its achievement, considered a socioeconomic crime due to its patrimonial nature.

The RAE defines the term “Blanquear” (to launder) as “To adjust to fiscal legality money originating from criminal or unjustifiable businesses”.

Money laundering is regulated by the Criminal Code, as previously mentioned, in articles 301 to 304. Furthermore, in Law 10/2010, of April 28, on the prevention of money laundering and the financing of terrorism, we can find certain administrative nuances that bring us closer to a better understanding and action against this type of crime.

Article 301.1 states that:

“Whoever acquires, possesses, uses, converts, or transfers assets, knowing that these originate from a criminal activity, committed by them or by any third person, or performs any other act to conceal or disguise their illicit origin, or to help the person who participated in the infraction or infractions to evade the legal consequences of their actions…”

That is, it punishes both the knowing performance of these acts and helping another person to do so, as well as having knowledge of it and concealing it.

With regard to community regulations, it can be found reflected in Directive (EU) 2015/849, concerning the prevention of the use of the financial system for money laundering or terrorist financing.

2.- What are the penalties?

As a general rule, it is punishable by a prison sentence of 6 months to 6 years and a fine, which will range from the value of the laundered assets up to triple that amount. Likewise, there will be cases in which the Judge may determine special disqualification from practicing one’s profession for a period between 1 to 3 years or, even, the definitive or temporary closure of an establishment, the latter not exceeding 5 years.

Additionally, the penalty may be aggravated if the illicit money comes from the commission of certain crimes:

1.- The origin of the assets is related to the trafficking of toxic drugs, narcotics, or psychotropic substances.

2.- Crimes against land use planning and urban development.

3.- Crimes against Public Administration (bribery, embezzlement, prohibited negotiations and activities for public officials, …).

4.- If the culprit belongs to a criminal organization or group.

When carried out with gross negligence, the penalty will be imprisonment from 6 months to 2 years and a fine of one to three times the amount.

3.- What are the modalities in which it can occur? What type of criminal activities lead to it?

Common modalities of this crime include, for example, the purchase of a home, a car, luxury items, and/or the division of money, among others. These are seemingly normal actions, but all of them are a consequence of criminal activities. Some of the most well-known could be drug trafficking, tax fraud, human trafficking, arms sales, corruption, etc.

All of these are listed in the Criminal Code as illegal actions, but carrying them out does not automatically constitute the crime of money laundering. It will occur in cases where a (usually very large) amount of money is obtained from the aforementioned activities and introduced into the financial system. In this way, it is put into circulation without appearing too suggestive to attract the attention of various authorities, until the money, which was initially illegal, is converted into legal funds.

4.- Necessary Phases

For the crime of money laundering to truly occur, several phases must take place:

1.- When the defrauding person includes or places illegal money into the financial system in a fractional manner.

2.- In such a case, when the fraudster carries out a series of transactions (e.g., concealment) through which they aim to erase the trace of the illegal money’s origin.

3.- When that illicitly obtained money is integrated or reinvested into legitimate activities, thus allowing it to be used legally in the market.

5.- Some of the consequences it entails

In addition to the obvious, very harmful consequences can arise from this crime in society. Among them we can find:

1.- Increase in property prices, since, when setting them, the economic situation of the country at that time is taken into consideration. If illegal money is introduced, a distortion of reality occurs, making it seem that the economy is doing well and prices can be increased.

2.- Contaminating effects on transactions. This means that when the fraudster carries out money laundering, they have to pay a cost to do so in the form of commissions or bribes, leaving that illicit money in the hands of another person.

3.- Regarding social and political effects, we can direct them towards countries that have ineffective money laundering prevention measures. That is, when money laundering occurs, it is carried out in places where it is easier or there is less repression. If a country has ineffective measures, that is where the crime will be focused.

4.- And, finally, as is logical, it produces harmful consequences for the financial and banking system.

6.- How can we help you?

The Legal Area specialized in Money Laundering, Prevention, Defense, and Legal Services of IN DIEM Abogados carries out its activity in all areas and sectors related to capital movements or operations.

In Diem Abogados has a team of professionals, experts in Criminal Law, ready to defend your interests and needs.

In Diem Abogados can assist you in drafting risk assessment reports, as well as integrating Anti-Money Laundering Prevention Systems (AML/CFT), providing training in Money Laundering Prevention, and offering Legal Defense.

Author: Rocío Moreno Toro

Specialist Lawyers in Money Laundering Prevention and Defense | In Diem: Malaga, Marbella, Seville, Madrid, Las Palmas de Gran Canaria, Almeria, Huelva…

IN DIEM Abogados has extensive experience and a high degree of specialization in the area of Criminal Law, related to the Prevention and Defense of Money Laundering, offering its clients the necessary advice at all times.

IN DIEM Abogados has a team with experience in previous roles such as Magistrate-Judge, State Attorney, Prosecutor, or University Professor, which will provide you with peace of mind and security, by having the best, most competitive, and highly prepared team to achieve your objectives and meet your needs.

We are at your disposal for whatever you need. You can reach us via IN DIEM Lawyers Phone (+34) 901 900 071. For emergencies, you can find us at IN DIEM 24-Hour Emergency Lawyers Phone: (+34) 610 667 452.

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For more information on the Online Legal Advisory Service HERE, and for the 24-hour and Urgent Service, HERE.

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