Money Laundering
Criminal Code (Cth) Div 400

The drafting of these provisions has a superficial simplicity which is belied by any attempt to apply them.

Basten JA in the New South Wales Court of Criminal Appeal Chen v DPP (Cth) (2011) 210 A Crim R 523 at [17]

Federal money laundering offences

The Criminal Code (Cth) contains the most commonly charged criminal money laundering offences.The single most frequently charged offence is found in s 400.9. It is unique in its approach. The other offence provisions (sections 400.3 to 400.8) are identical save for the amount involved.

Criminal Code (Cth) section 400.9

Section 400.9 imposes liability if the person possesses or deals with (for instance, deposits at a bank) money or property and it is reasonable to suspect that the money or property is derived (either in whole or in part) from the commission of indictable offence against a federal law, a state or territory law, or a foreign law.

Section 400.9 contains a number of deeming provisions. So in various scenarios money or property will be deemed to be reasonably suspected to be derived from the commission of a relevant offence.

Sections 400.3 - 400.8 of the Criminal Code (Cth)

The difference between these sections and s 400.9 lies in the additional requirement imposed on the prosecution to secure a conviction. Specifically under ss 400.3 to 400.8 the prosecution must prove that the money is proceeds of crime. In some cases the prosecution can prove the money is an instrument (ie was used in, or in connection with, the commission of the crime). But it is not enough for the prosecution to prove that the money is ‘suspicious’.

This poses particular challenges to prosecutors:

First, the appeal Courts have been clear that charging a drug dealer (or any other offender) with money laundering, simply for possessing the profits of their underlying offences, is an inappropriate use of prosecutorial discretion. See for example Thorn v The Queen [2009] NSWCCA 294, Nahlous v The Queen [2010] NSWCCA 58 and Schembri v The Queen [2010] NSWCCA 149. If prosecutors charge such people the Courts will likely impose only nominal sentences on top of the sentence for the underlying offence. In short, the practice is heavily discouraged and rarely occurs. Money laundering offences are typically used to charge others who assist in moving money that comes from criminal activity.

Second, they must prove that there was some other crime, at least in a general sense. For instance they must show the money came from ‘the sale of a prohibited drug contrary to s 6(1) Misuse of Drugs Act 1981 (WA)’. See Chen v DPP (Cth) (ibid). That might sound easy. But proving that money that X has was derived from a crime that Y committed is often challenging. Particularly if X only came to Police attention as a result of attempting to bank the money or similar.

Division 400 Criminal Code (Cth) Penalties



Section 400.9

Section 400.9 carries a maximum penalty of 3 years imprisonment for an amount of $100,000 or more. The maximum penalty is 2 years imprisonment if the amount is less than $100,000. People with no prior convictions who deal with more than $100,000 are regularly sentenced to an immediate term of imprisonment.

For example, see: Arora v Cobern [2015] WASC 440; 257 A Crim R 163



Sections 400.3 to 400.8

Sections 400.3 to 400.8 in contrast carry far higher penalties, up to 25 years jail for dealing in $1,000,000 or more, up to 20 years for dealing in $100,000 or more.

Below are the maximum sentences imposed for offences against sections 400.3 to 400.8.

400.3


Amount:
over $1 million

Penalty: ss (1) Intention
25 years and/or
$315,000 fine

Penalty: ss (2) Reckless
12 years and/or
$151,200 fine

Penalty: ss (3) Negligent
5 years and/or
$63,000 fine

400.4


Amount:
over $100,000

Penalty: ss (1) Intention
20 years and/or
$252,000 fine

Penalty: ss (2) Reckless
10 years and/or
$126,000 fine

Penalty: ss (3) Negligent
4 years and/or
$50,400 fine

400.5


Amount:
$50,000 or more

Penalty: ss (1) Intention
15 years and/or
$189,000 fine

Penalty: ss (2) Reckless
7 years and/or
$88,200 fine

Penalty: ss (3) Negligent
3 years and/or
$37,800 fine

400.6


Amount:
$10,000 or more

Penalty: ss (1) Intention
10 years and/or
$126,000 fine

Penalty: ss (2) Reckless
5 years and/or
$63,000 fine

Penalty: ss (3) Negligent
2 years and/or
$25,200 fine

400.7


Amount:
$1000 or more

Penalty: ss (1) Intention
5 years and/or
$63,000 fine

Penalty: ss (2) Reckless
2 years and/or
$25,200 fine

Penalty: ss (3) Negligent
1 year and/or
$12,600 fine

400.8


Amount:
any value

Penalty: ss (1) Intention
1 year and/or
$12,600 fine

Penalty: ss (2) Reckless
6 months and/or
$6,300 fine

Penalty: ss (3) Negligent
no custodial sentence
$2,100 fine

The fines are expressed above in dollar terms, however in the Criminal Code (Cth) they are expressed in penalty units. From 1 July 2017 a penalty unit is $210. It is indexed to increase automatically from 1 July 2020: s 4AA Crimes Act 1914 (Cth).Companies that contravene Division 400 face maximum fines five times higher than those listed above: section 4B(3) Crimes Act 1914 (Cth).

Why is money laundering so complex?

Money laundering prosecutions can raise complex issues, including of statutory interpretation. See for example the High Court’s analysis of how the money laundering provisions operate in the context of an instrument of crime; Milne v R [2014] HCA 4.

The prosecution or defence of an otherwise legally and factually straightforward offence can also be complicated by unusual procedures. For instance the need to take evidence either under Commission or pursuant to the Mutual Assistance in Criminal Matters Act 1987 (Cth) and the Foreign Evidence Act 1994 (Cth).

For more information about the practical process of a money laundering prosecution, review the criminal trial timeline.