9 Money laundering and the proceeds of
crime
| (25649)
9251/04
COM(04) 230
+ ADD 1
| Commission Report based on Article 6 of the Council Framework Decision of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime
|
| Legal base | Article 6 of Council Framework Decision of 26 June 2001 on Money Laundering
|
| Document originated | 5 April 2004
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| Deposited in Parliament | 12 May 2004
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| Department | Home Office |
| Basis of consideration | EM of 25 May 2004
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| Previous Committee Report | None
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| To be discussed in Council | No date fixed
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
9.1 The Tampere European Council in 1999 asked for further measures
to increase the effectiveness of the fight against money laundering,
such as the approximation of definitions, of incriminations and
of sanctions or of full mutual legal assistance in the investigation
and prosecution of this type of crime. The purpose of the Council
Framework Decision of 26 June 2001 on money laundering, the identification,
tracing, freezing, seizing and confiscation of instrumentalities
and the proceeds of crime is to give more binding form to some
of Member States' commitments under the 1998 Joint Action on the
same subject matter and to complement the provisions of the 1998
Joint Action in some important respects, for example by introducing
a minimum harmonisation of penalties.
The document
9.2 This document is a report which the Commission is required
to produce under Article 6 of the Council Framework Decision of
26 June 2001, to assess the extent to which the Member States
have taken the necessary measures to comply with the Framework
Decision. Section two analyses those measures on an Article-by-Article
basis.
Article 1: reservations in respect of the 1990 Convention
9.3 Article 1(a) of the Framework Decision obliges Member States
to lift reservations in relation to Article 2 of the 1990 Council
of Europe Convention on laundering, search, seizure and confiscation
of the proceeds from crime where they concern offences which under
national law are punishable by a custodial sentence of at least
12 months. The Convention also provided for reservations in respect
of tax offences. The UK made a reservation at the time of ratification
of the Framework Decision to reflect the legal position in Scotland
as regards drugs trafficking. This reservation was lifted on
16 September 1999.
9.4 Article 1(b) of the Framework Decision requires
Member States not to make or uphold reservations to Article 6
of the 1990 Convention wherever these concern serious offences
defined as those punishable by imprisonment of at least 12 months
maximum or six months minimum under national law. The Commission
reports that five Member States have never made a reservation
in respect of this Article. Three Member States have withdrawn
existing reservations, whilst seven Member States still uphold
reservations.
Article 2: penalties
9.5 This Article requires that Member States penalise
money laundering by a maximum prison sentence of at least four
years. This is to reflect the seriousness of the offence. The
UK penalises money laundering by a maximum of 14 years imprisonment
or an unlimited fine or both. The Commission reports that 11
Member States have provided the Commission with details of measures
taken to implement the Article and that in these cases the measures
taken meet the terms of the Framework Decision.
Article 3: value confiscation
9.6 This Article requires that Member States, where
they cannot seize the proceeds for confiscation, should be able
to confiscate property which corresponds to the value of such
proceeds. This applies to domestic orders and the enforcement
of foreign orders. The Commission report states that, domestically,
"value confiscation" is possible in nine Member States,
including the UK. The UK's provisions are contained in the Proceeds
of Crime Act 2003, which abolishes the distinction between drug
trafficking offences and other crimes. The Act bases the UK's
confiscation regime on the concept of "criminal lifestyle",
which the defendant is deemed to have if convicted of one of the
offences listed in schedule 2 of the Act (e.g. acquisitive offences
such as drug trafficking, money laundering or counterfeiting).
Nine Member States are able to comply with foreign requests for
confiscation of sums of money corresponding to the value of the
proceeds.
Article 4: processing of requests for mutual
assistance
9.7 This Article imposes the obligation that foreign
requests with regard to tracing and freezing are processed with
the same priority as orders originating in domestic proceedings.
Member States have not notified the Commission of specific provisions
implementing this Article and therefore it has not been able to
assess the degree of transposition. The Commission notes that
the issue has lost some relevance in the light of the new mutual
recognition instruments regarding freezing and confiscation.
Article 7: territorial application
9.8 Those provisions stipulate that the Framework
Decision shall apply to Gibraltar as soon as the application of
the 1990 Convention is extended to it. The Commission reports
that the United Kingdom has not provided information making it
possible to conclude that this provision was transposed.
9.9 In conclusion the Commission notes that not all
Member States have provided it with the necessary information
to assess the extent and correctness of transposition in these
countries. Amongst the countries that have provided no information
are Austria and Portugal. The Commission urges Member States
to ensure a rapid and complete transposition of the Framework
Decision and to provide details of the transposition measures
taken not later than 1 September 2004.
The Government's view
9.10 In her Explanatory Memorandum of 25 May 2004
the Parliamentary Under-Secretary of State at the Home Office
(Caroline Flint) emphasises that the UK has fully implemented
the Framework Decision and that the Commission Report has no further
policy implications for the UK. In response to the statement
in the Commission's Report that the UK has failed to provide any
information about the extension of application of the Framework
Decision to Gibraltar, the Minister writes that the Framework
Decision will apply to Gibraltar as soon as the 1990 Council of
Europe Convention on laundering, search, seizure and confiscation
from the proceeds of crime is extended to Gibraltar, but that
this has not yet been done.
Conclusion
9.11 We thank the Minister for her helpful summary
of and comments on the Commission report. We are content to clear
the document.
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