Money Laundering – Commonwealth Model Law

Q: How is money laundering defined under the Commonwealth Model Law?

A: The Commonwealth Model Law adopts a broad definition of money laundering. It includes:

• Engaging, directly or indirectly, in any transaction involving property that is the proceeds of crime.
• Receiving, possessing, concealing, disguising, transferring, converting, disposing of, removing from, or bringing into the country any property that is the proceeds of crime.
• Knowing, or having reasonable grounds to suspect, that the property is derived, directly or indirectly, from unlawful activity.
• Failing to take reasonable steps to determine whether the property is derived from unlawful activity, where the conduct is that of a natural person.
• Failing to implement or apply adequate anti-money laundering procedures and controls, where the conduct is that of a financial institution.

Q: What is the significance of the Commonwealth Model Law?

A: The Commonwealth Model Law provides one of the most comprehensive definitions of money laundering and has served as the basis for the money laundering legislation of several Commonwealth countries, including Malaysia. It recognises that money laundering encompasses a wide range of activities designed to conceal or disguise the proceeds of crime, including proceeds derived from drug trafficking, corruption, and other serious offences.