ORGANISED CRIMES & THE LAW: A Comparative Study on Combating Money Laundering in Nigeria, India and Germany

Suspicious transactions entail any transactions which a reasonable person acting in good faith would conclude that they; gives rise to a reasonable ground to believe that they involve proceeds of crime; or appear to be made in circumstances of unusual or unjustified complexity; or appear to have no economic rationale or bona fide purpose. The author submits, therefore, that with respect the reporting of suspicious transactions, India has the most effective and comprehensive laws with very clear and detailed broad categories of reasons for suspicion. 2.2.3 Germany The cornerstone of the German AML Regime is the obligation on credit and financial institutions (including 'bureaux de change') to require identification of all their customers when beginning a business relationship (particularly the opening of an account or offering safe-deposit facilities), when a single transaction or linked transactions exceed 15,000 or when they suspect laundering.27 However, German legislation does not establish a specific sanction for the failure to report suspicions of money laundering, though it provides administrative sanctions (a fine up to 50,000) for informing the customer or a party other than a public authority of the filing of a report and for other types of administrative offences. If the financial institution does not report probable suspicions it becomes liable for an offence of negligent money laundering for which penalty is up to 2 years of imprisonment or a fine, and an offence of
www.pfiuindia.gov.indownloadsSTRBank.pdf and accessed on 3 October 2009 27 The European Commission, op cit.

obstruction of punishment, for which the penalty is up to 5 years of imprisonment or a fine.28 Though some authors have argued that in practice, administrative sanctions are available for serious cases of nonreporting,29 the author contends that Germany should consider amending its legislation to specifically impose a sanction for failure to report suspicious transactions. 2.3.0 Obligations on Non-Financial Businesses and Professions Combating money laundering and indeed any other white collar/organised crime demands the crossing out of the financial trading businesses to other businesses and professions as evidenced in the United Nations Convention against Transnational Organized Crime which requires member States to establish: ...a comprehensive domestic regulatory and supervisory regime for banks and non-bank financial institutions and, where appropriate, other bodies particularly susceptible to money-laundering, within its competence, in order to deter and detect all forms of money30 laundering.... Furthermore, FATF Recommendations require member states to empower their competent authorities to extend their mandate to obtain financial intelligence from non- financial institutions and other professions.31
28

J. A. A. Mndez et al, Germany: Report on the Observance of Standards and CodesFATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism (July 2004) IMF Country Report No. 04/213, IMF Publication Services, Washington DC, 4, para 18. 29 Ibid. 30 The Palermo Convention, 2000, Article 7. 31 Cf: L. Fernandez, Investigating Money Laundering 2 (September 2009) Lecture Materials: The Law Related to Anti- Money Laundering and Organised Crime, Masters Degree Program, South African- German Centre of Excellence, UWC, 2.

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