ICT Views


Single Criminality vs Dual Criminality

by: (Research & Development Manager) on

I came across an article recently that reported on a money laundering conviction in Thailand in which a Dutchman, Johan van Laarhoven, received a prison sentence of 103 years. Now, on the face of it Van Laarhoven elicits no sympathy from me, if you’re involved in money laundering you deserve to face the consequences, right?

This particular story though, has a slight twist in the tale (You can read the full article here), you see the conviction has been founded on the fact that Van Laarhoven’s money was earned through trading in soft drugs, a crime in Thailand (and most other jurisdictions come to that), however, this trade was carried out in his native Holland where the laws are not as clear-cut.

By way of background, the Opium Act – also referred to as the Narcotics Act – is the Netherlands’ main drug legislation. The Act criminalizes possession, cultivation, trafficking and importing or exporting. The 1976 Amendments established two classes of drugs: Schedule I drugs are deemed to present an unacceptable risk to Dutch society and include heroin, cocaine, amphetamines and LSD; Schedule II drugs include “traditional hemp products” such as marijuana and hashish. The sale of cannabis is technically an offence under the Opium Act, but prosecutorial guidelines provide that proceedings will only be instituted in certain situations. For example, an owner or operator of a coffee shop in Holland (which is not permitted to sell alcohol) will avoid prosecution for the sale of cannabis provided no more than 5 grams is sold per person in any one transaction.

drugsNow, I don’t know the specific circumstances of Van Laarhoven’s soft drug business, but for arguments sake, if he made his money in Holland, in the way described above (one has to assume he traded within the requirements of the prosecutorial guidelines given what his defence lawyer has said), and paid his share of taxes on those earnings, and essentially earned a living and lived a life that is considered acceptable, is it fair that he faces a prison sentence in Thailand based on those activities? I wonder if UK courts would prosecute in the same circumstances?

I’m currently studying for the ICA Diploma in AML, some of you may be doing so to, and this case screamed single criminality vs dual criminality to me. Thailand appear to have taken a single criminality stance in this case as it has judged Van Laarhoven’s conduct as criminal because it doesn’t comply with Thai law, even though the activity took place in another jurisdiction where the activity did not constitute an offence.

The issue of single criminality has been addressed by PoCA in the UK with the introduction of the dual criminality override defence, whereby activity outside the UK that would normally be considered criminal under UK law will not constitute an offence, provided it is considered a lawful activity in the jurisdiction in which it took place. The classic example used in the course material, of course, is the Spanish Matador earning a legitimate living in Spain before moving his money to the UK, only to face money laundering offences as the earnings are deemed to be the proceeds of crime under UK law. The Van Laarhoven case is, in my opinion, another really good example of this, the parallels I think are quite clear. But, is there an equivalent defence in Thai law? And if not, does this type of case raise the need for one?

I’m expecting this case to polarise opinion, and in all honesty, that’s a key reason for putting this piece out there! So, let’s hear the arguments for and against, give me your opinions - do you think the Thai courts have acted appropriately? Do you think Van Laarhoven has been harshly treated or does he deserve his comeuppance?

I look forward to the debate!

 

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4 Comments :

Dawn said...
I take your point - with drugs though I think it safe to say proceed with caution when telling people how you make your money - especially Thailand......
November 16, 2015 09:50
Jason said...
Dawn, you make some good points, and maybe the conviction is perfectly justified to the letter of the law. However, how is this individual expected to know that he was breaking the law? As far as he's concerned, his money has been earned in an acceptable way. Why would he expect to face criminal charges in Thailand (or the UK for that matter) just by visiting that country and spending his money? Is he expected to have intricate knowledge of the laws of each and every country he visits?
November 13, 2015 12:06
Dawn said...
oh..... and the sale of drugs often goes hand in hand with other types of organised criminality, including forced prostitution and people trafficking so IMHO anyone involved in any part of the drugs trade arguably facilitates perpetuation of the cycle so to the question of harsh treatment - I think it obvious which side of the fence I sit on.
November 12, 2015 03:04
Dawn said...
And I will kick that debate off......I think there are a couple of issues here when considering single and dual criminality, especially if making parallels to the UK....as I think the concept of dual criminality causes confusion for many. In the case of persons generating proceeds through the sale of cannabis in Holland the first issue is my understanding is that it is not exactly legal, rather tolerated as long as certain limits are not breached but the question that a UK institution would ask is whether the conduct would amount to a 'serious' crime in the UK i.e. one that would incur a custodial sentence in excess of 12 months or more under UK prosecutorial guidelines per the Proceeds of Crime Act 2002 (Money Laundering Exceptions to Overseas Conduct Defence) Order 2006. Under UK sentencing guidelines possessing cannabis with intent to supply would generally receive a custodial sentence of at least 12 months and as it is not the place of financial institutions to second guess the criminal justice system, I would certainly consider UK FIs obligated to report in such circumstances.

If Thailand has applied the same logic then the conviction certainly makes sense to me
November 12, 2015 02:55

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