Self-Laundering

Some legal systems used to treat laundering as a crime only for people who handled money from someone else's offence, reasoning that hiding your own spoils was part of the original crime. International standards now ask countries to make self-laundering an offence too, unless a basic principle of national law prevents it. The change means a thief or bribe taker can face two charges: the predicate offence and the later act of concealing, converting or spending the proceeds. It helps prosecutors because the laundering acts, such as buying property, moving funds to an offshore firm or transferring through nominees, are often easier to prove than the original crime. Banks do not need to distinguish between self-laundering and third-party laundering when they report suspicion. Lawyers and investigators need to know whether the person handling the money also earned it, because that decides which charges are available.

A hospital procurement head takes kickbacks from an equipment supplier, pays them into a brokerage account and buys shares. In a country that criminalises self-laundering, prosecutors charge him with bribery and with laundering the proceeds. In one that does not, the second charge is unavailable, and only a third party who knew the source could face it.