What Are Predicate Offenses In Money Laundering

Predicate Offenses or predicate crime, refers to a crime which is a component of a larger crime. In a financial context, the predicate offense would be any crime that generates monetary proceeds. The larger crime would be money laundering or financing of terrorism. A predicate offence is a crime that is a component of a more serious crime. For example, producing unlawful funds is the primary offence and money laundering is the predicate offence. The term “predicate offence” is usually used to describe money laundering or terrorist financing activities.

 Examples of Predicate Offences are given below.

With respect to money laundering, in particular, a predicate offense that generates funds or assets is required as an entry condition. Predicate offences vary in each country and are usually codified in a country’s criminal code. Since 2004, the FATF has updated the 40 Recommendations to expand the list of predicate offences. Financial intelligence units in the European Union and the United States have created legislation to mirror or expand these offences. In the United States, these offences were initially created by the Bank Secrecy Act of 1970 and have subsequently been expanded by the USA PATRIOT Act of 2001. With the passage of the 6th EU Money Laundering Directive, the European Union has now adopted as standard set of Predicate Offences to mitigate loopholes in member state AML legislation. In the European Union, for example, the so-called sixth European Union Anti-Money Laundering Directive defines and standardizes 22 such offenses for money laundering in all its member states.

Predicate Offenses

Exemplary predicate offenses include crimes such as narcotrafficking, tax evasion, murder and grievous bodily harm, corruption, fraud, smuggling, human trafficking, illegal wildlife trafficking, and forgery. 

Literal Meaning: “Predicate” as an adjective originally means “something said of a subject”, originally from Latin praedicare ‘to proclaim or make known’. In logic, it came to mean to assert something. In U.S. legal usage, it is a “basis or foundation on which something rests”

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