Tax Crimes and AML

Money laundering is the processing of criminal proceeds to disguise their illegal origin. These criminal proceeds must be derived from a “predicate offence”. The Financial Action Task Force (FATF), being the standard setter in the field of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT), included “tax crimes (related to direct taxes and indirect taxes)” for the first time in its 2012 FATF Recommendations. At EU level, the Fourth EU AML Directive ((EU) 2015/849) and the Criminal Money Laundering Directive ((EU) 2018/1673) explicitly include tax crimes relating to direct taxes and indirect taxes as predicate offences, although leaving their definition to the Member States. As there is no common definition of tax crimes, neither internationally nor at the European level, countries can generally define tax crimes autonomously in their domestic laws without being obliged to include specific offences (e.g., tax evasion).

Making tax crimes predicate offences for money laundering raises several structural issues. In particular, the relationship between the money laundering offence and the underlying tax crime is not entirely clear, and should therefore be subject to extensive analysis from both perspectives – criminal law and taxation.

Peter Denk addresses all these issues in his post-doctoral thesis (Habilitation) on “Tax Crimes and Money Laundering”.