Financial Crimes

Proof of the Predicate Offence Under Section 4(4) of the AMLATFPUAA

Q. Must the prosecution obtain a conviction for the predicate offence before a person can be convicted of money laundering?

Answer

No.

Section 4(4) of the AMLATFPUAA provides that:

A person may be convicted of a money laundering offence under section 4(1) irrespective of whether:

• there is a conviction for the serious offence or foreign serious offence; or
• a prosecution has even been initiated for the serious offence or foreign serious offence.

This means that a conviction for the predicate offence is not a legal prerequisite to a conviction for money laundering.

However, this does not mean that the prosecution is relieved from proving the existence of an unlawful activity.

The prosecution must still prove that the property involved constitutes proceeds of unlawful activities or instrumentalities of an offence. What section 4(4) removes is the requirement for a separate prosecution or prior conviction for the predicate offence.

Accordingly, a person may be convicted of money laundering even though:

• the predicate offender has never been charged;
• the predicate offender has been acquitted for procedural reasons;
• the predicate offence occurred overseas and cannot be prosecuted in Malaysia; or
• the predicate offence cannot be prosecuted for practical reasons.

The court need only be satisfied, based on the evidence, that the property originated from an unlawful activity.

Q. Why did Parliament enact section 4(4)?

Answer

Section 4(4) reflects one of the principal objectives of the AMLATFPUAA, namely to deprive criminals of the proceeds of crime and facilitate asset recovery.

Money laundering often occurs long after the predicate offence has been committed. In many cases, it is impossible or impractical to prosecute the predicate offence because:

• the offender has absconded;
• the offender has died;
• witnesses are unavailable;
• the predicate offence occurred overseas;
• evidence relating to the predicate offence has been destroyed; or
• investigators are only able to prove the laundering activity.

If Parliament required a prior conviction for every predicate offence, many money laundering prosecutions would fail despite overwhelming evidence that the property represents criminal proceeds.

Section 4(4) therefore ensures that criminals cannot escape liability merely because the predicate offence cannot be separately prosecuted or has not yet resulted in a conviction.

Q. How did the Court interpret section 4(4)?

Answer

In Aisyah Mohd Rose & Anor v PP, Tengku Maimun Tuan Mat JCA (as Her Ladyship then was) explained that a conviction for money laundering can be sustained even without a conviction for the predicate offence.

The Court held that what is essential is that the prosecution proves the existence of the unlawful activity giving rise to the criminal proceeds.

The decision confirms that:

• proof of the unlawful activity is required; but
• a conviction for the predicate offence is not.

Illustrations

Example 1 – Predicate Offender Dies Before Trial

Facts

Mr A receives RM8 million in bribes.

Before he can be prosecuted for corruption, he dies.

Investigators subsequently discover that his wife knowingly used the RM8 million to purchase several luxury apartments.

Application

Although no corruption conviction can ever be obtained against Mr A, the prosecution may still charge the wife with money laundering, provided it proves that the RM8 million constituted proceeds of corruption.

Section 4(4) allows the money laundering prosecution to proceed.

Example 2 – Predicate Offence Occurred Overseas

Facts

A foreign public official receives kickbacks in Country X.

He transfers the money into Malaysia and purchases commercial properties.

Country X does not prosecute him.

Application

Malaysia may still prosecute the money laundering offence if the prosecution proves that the money represents proceeds of a foreign serious offence.

A conviction in Country X is not required.

Example 3 – Predicate Offender Absconds

Facts

Mr A commits criminal breach of trust involving RM15 million before fleeing Malaysia.

His business partner later transfers and invests the stolen money in Malaysia.

Application

Although Mr A cannot presently be prosecuted because he has absconded, his business partner may still be prosecuted for money laundering, provided the prosecution proves that the RM15 million originated from criminal breach of trust.

Example 4 – Insufficient Evidence to Charge the Predicate Offence

Facts

Police discover RM6 million hidden inside a warehouse together with drugs, drug ledgers and money-counting machines.

The evidence is insufficient to prosecute anyone for a specific drug trafficking offence.

However, investigators establish that the money represents proceeds of drug trafficking.

Application

Although no person is prosecuted for the predicate drug offence, a money laundering prosecution may still proceed against any person who subsequently dealt with the RM6 million as proceeds of unlawful activities.

Example 5 – Different Person Commits the Money Laundering

Facts

Mr A commits corruption and gives RM4 million in bribe money to his brother, Mr B.

Knowing that the money is illicit, Mr B purchases several luxury vehicles and registers them under different companies.

Mr A is never prosecuted for corruption.

Application

Mr B may nevertheless be convicted of money laundering if the prosecution proves that the RM4 million constituted proceeds of corruption.

Section 4(4) makes it unnecessary for Mr A to be prosecuted or convicted before Mr B can be convicted of money laundering.

Exam Note

When applying section 4(4), remember these important principles:

• A conviction for the predicate offence is not a prerequisite to a conviction for money laundering.
• A prosecution for the predicate offence need not even have been commenced.
• The prosecution must nevertheless prove that the property represents proceeds of unlawful activities or instrumentalities of an offence.
• Section 4(4) prevents criminals from escaping liability merely because the predicate offence cannot be prosecuted or has not resulted in a conviction.
• The provision supports the fundamental objective of the AMLATFPUAA, namely to deprive criminals of the proceeds of crime and facilitate asset recovery.

Remember the distinction:

• Need to prove the unlawful activity? → Yes.
• Need a prosecution for the predicate offence? → No.
• Need a conviction for the predicate offence? → No.

This distinction is central to understanding section 4(4) and is frequently tested in examinations.