OCTOBER 4 — In “Money laundering offence: It does not matter that the money is spent for the welfare of others”, I referred to Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA) (Act 613) to illustrate what constitutes a money laundering offence.
Three elements must be established. First, the accused had received monies. Second, the monies received are the proceeds of an unlawful activity or instrumentalities of an offence — the common prerequisite. Third, the presence of knowledge of the accused on the source of the proceeds, which under Section 4(2) can be inferred from objective factual circumstances.
The third element is the mental element or mens rea of the offence.
According to High Court Judge Mohd Nazlan (now Judge of the Court of Appeal) in the case of Public Prosecutor v Dato’ Sri Mohd Najib bin Hj Abd Razak [2020], a useful starting point to illustrate the application of the mental element of knowledge for the offence of money laundering under Section 4(1) of AMLATFPUAA is the judgment of Judge of the Court of Appeal Abang Iskandar (now President of the Court of Appeal) who delivered the judgement of the Court of Appeal in Azmi bin Osman v Public Prosecutor and another appeal [2016].
The relevant parts of the judgement are as follows:
“[I]t is immaterial that [the accused], or for that matter anyone, is not convicted for the predicate serious offence. It is money laundering ... if [the accused] engages in any manner involving proceeds of an unlawful activity if he, without reasonable excuse, fails to take steps to ascertain whether or not the property is the proceeds of an unlawful activity.
“The law recognises the difficulty that the investigation may face in absolutely establishing the direct nexus between the accused and the illegal proceeds from the unlawful activity. That was the reason as to why the definition of money laundering has been couched in the manner that ... (a) imputes knowledge of the proceeds being from an unlawful activity viewed from an objective factual circumstance, and ... (b) in respect of a natural person, his conduct, where he had without reasonable excuse failed to take steps to ascertain that the monies are not proceeds of an unlawful activity, namely a duty is cast on him to take steps to ascertain the nature of the proceeds, in terms of their lawfulness or legitimacy.
“[Both (a) and (b)] define the mens rea necessary to turn the actus reus (conduct) into a money laundering offence. It does not excuse wilful blindness on the part of the accused person.”
What is wilful blindness?
The learned appellate judge explained as follows:
“The doctrine of wilful blindness imputes knowledge to an accused person who has his suspicion aroused to the point where he sees the need to inquire further, but he deliberately chooses not to make those inquiries.
“Professor Glanville Williams has succinctly described such a situation as follows: ‘He suspected the fact; he realised its probability but he refrained from obtaining the final confirmation because he wanted in the event to be able to deny knowledge. This, and this alone is wilful blindness’. (Glanville Williams, Criminal Law, 2nd ed, 1961).
“Indeed, in the context of anti-money laundering regime, feigning blindness, deliberate ignorance or wilful ignorance is no longer bliss. It is no longer a viable option. It manifests criminal intent.”
The learned appellate judge before that explained the rationale for the mental element as follows:
“There is no room for safe harbours, where proceeds of an unlawful activity may find itself quietly nestling in so-called bank accounts of ‘innocent’ account holders. A bank account holder must be vigilant and must take steps to ensure that monies that are received in his account are not proceeds of any unlawful activity and that he knows that the source of those monies is lawful, lest he runs afoul of [AMLATFPUAA] and runs the risk of being charged for an offence of money laundering.”
The culpability of an accused person under Section 4(1) of AMLATFPUAA is therefore premised on the mental element of a money laundering offence.
In other words, the third element of the money laundering offence — the mental element — will be satisfied if it is proved that the accused either knew, or had reason to believe or had reasonable suspicion that the monies that he received were the proceeds of an unlawful activity, or that the accused without reasonable excuse failed to take reasonable steps to ascertain whether or not the monies were the proceeds of an unlawful activity.
Section 4(2) of AMLATFPUAA speaks of the mental element being inferred from objective factual circumstances. In Public Prosecutor v Dato’ Sri Mohd Najib bin Hj Abd Razak, the learned trial judge found several key objective factual circumstances established during the prosecution case, pointing to the inevitable inference that the accused must have known or had reasonable suspicion that the monies that flowed into his account were proceeds of unlawful activity.
There was also inference under Section 4(2)(b) of AMLATFPUAA, which encapsulates the doctrine of wilful blindness.
The learned trial judge said:
“As such on a maximum evaluation of all evidence, I find that all the ingredients of the money laundering offence under Section 4(1)(b) of AMLATFPUAA ... have been proved.”
The accused was accordingly called upon to enter his defence.
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
