Money Laundering And The Concept Of Willful Blindness
Money laundering, quite simply, is the process of making dirty money appear clean. The Financial Action Task Force, FATF for short, is the multinational body that sets the global tone for AML efforts. Formed in 1989, it is based in Paris.
Its working definition of Money Laundering:
- 1. The conversion or transfer of property knowing it is derived from a criminal offense, for the purpose of concealing or disguising its illicit origin or of assisting any person who is involved in the commission of the crime to evade the legal consequences of his actions,
- 2. The concealment or disguising of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property knowing that it is derived from a criminal offense, and
- 3. The acquisition, possession, or use of property, knowing at the time of its receipt that it was derived from a criminal offense or from participation in a crime
As you see, in each part of the definition, the word "Knowing" is used. While that is a critical element, the concept of Willful Blindness – which generally will prevent someone from just saying, "I didn't know" and getting away with it.
The integral component of the definition of money laundering is the "knowledge" that the money is of illicit origin. However, in the United States (and other jurisdictions around the world), the concept of willful blindness now can be employed by law enforcement.
For those of you old enough to remember "Hogan's Heroes," Sgt Schultz with his "I know nothing" is the epitome of willful blindness. He would totally disregard all facts and circumstances around him, preferring to live in his world where there were no problems, no issues.
But with money laundering and the concept of willful blindness, if even a cursory view of the facts and circumstances could lead one to believe that the money being dealt with is illegal money, it is the same as "knowing" that it is illegal money.