Law Firm of Linda Friedman Ramirez P.A.

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OFFICE OF FOREIGN ASSET CONTROL (OFAC)

 Sanctions against Drug Traffickers

 Specialty Designated Nationals and Blocked Persons

MATERIALS

Trade Based Money Laundering

Department of Treasury,Financial Crimes Enforcement Network,   Advisory on Shell Corporations, November 9, 2006.

Bank Secrecy Act Anti-Money Laundering Examiners Manual

Bank Secrecy Act/ Anti-Money Laundering

 EXCERPTS FROM US FEDERAL LAW

18 USC 1956. Laundering of monetary instruments

      (a)(1) Whoever, knowing that the property involved in a financial
    transaction represents the proceeds of some form of unlawful
    activity, conducts or attempts to conduct such a financial
    transaction which in fact involves the proceeds of specified
    unlawful activity -
        (A)(i) with the intent to promote the carrying on of specified
      unlawful activity; or
        (ii) with intent to engage in conduct constituting a violation
      of section 7201 or 7206 of the Internal Revenue Code of 1986; or
        (B) knowing that the transaction is designed in whole or in
      part -
          (i) to conceal or disguise the nature, the location, the
        source, the ownership, or the control of the proceeds of
        specified unlawful activity; or
          (ii) to avoid a transaction reporting requirement under State
        or Federal law,  

     Practice Pointer: Each of the offenses described above require 

1) the Government to prove a financial transaction, 2) knowledge that the

funds came from emanate from illegal activity, and 3) in fact 

funds are from specified unlawful activity.

             (2) Jurisdiction over foreign persons. - For purposes of
      adjudicating an action filed or enforcing a penalty ordered under
      this section, the district courts shall have jurisdiction over
      any foreign person, including any financial institution
      authorized under the laws of a foreign country, against whom the
      action is brought, if service of process upon the foreign person
      is made under the Federal Rules of Civil Procedure or the laws of
      the country in which the foreign person is found, and - 
          (A) the foreign person commits an offense under subsection
        (a) involving a financial transaction that occurs in whole or
        in part in the United States;
          (B) the foreign person converts, to his or her own use,
        property in which the United States has an ownership interest
        by virtue of the entry of an order of forfeiture by a court of
        the United States; or
          (C) the foreign person is a financial institution that
        maintains a bank account at a financial institution in the
        United States.

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"Knowing" 

      (c) As used in this section - 
        (1) the term "knowing that the property involved in a financial
      transaction represents the proceeds of some form of unlawful
      activity" means that the person knew the property involved in the
      transaction represented proceeds from some form, though not
      necessarily which form, of activity that constitutes a felony
      under State, Federal, or foreign law, regardless of whether or
      not such activity is specified in paragraph (7);

"Conducts"

        (2) the term "conducts" includes initiating, concluding, or
      participating in initiating, or concluding a transaction;

"Transaction"

        (3) the term "transaction" includes a purchase, sale, loan,
      pledge, gift, transfer, delivery, or other disposition, and with
      respect to a financial institution includes a deposit,
      withdrawal, transfer between accounts, exchange of currency,
      loan, extension of credit, purchase or sale of any stock, bond,
      certificate of deposit, or other monetary instrument, use of a
      safe deposit box, or any other payment, transfer, or delivery by,
      through, or to a financial institution, by whatever means
      effected;

"Financial transaction" 

        (4) the term "financial transaction" means (A) a transaction
      which in any way or degree affects interstate or foreign commerce
      (i) involving the movement of funds by wire or other means or
      (ii) involving one or more monetary instruments, or (iii)
      involving the transfer of title to any real property, vehicle,
      vessel, or aircraft, or (B) a transaction involving the use of a
      financial institution which is engaged in, or the activities of
      which affect, interstate or foreign commerce in any way or
      degree;

"Monetary Instrument"

        (5) the term "monetary instruments" means (i) coin or currency
      of the United States or of any other country, travelers' checks,
      personal checks, bank checks, and money orders, or (ii)
      investment securities or negotiable instruments, in bearer form
      or otherwise in such form that title thereto passes upon
      delivery;

"Financial Institution"

        (6) the term "financial institution" includes - 
          (A) any financial institution, as defined in section
        5312(a)(2) of title 31, United States Code, or the regulations
        promulgated thereunder; and
          (B) any foreign bank, as defined in section 1 of the
        International Banking Act of 1978 (12 U.S.C. 3101);

"Specified Unlawful Activity" 

        (7) the term "specified unlawful activity" means - 
          (A) any act or activity constituting an offense listed in
        section 1961(1) of this title except an act which is indictable
        under subchapter II of chapter 53 of title 31;
          (B) with respect to a financial transaction occurring in
        whole or in part in the United States, an offense against a
        foreign nation involving - 
            (i) the manufacture, importation, sale, or distribution of
          a controlled substance (as such term is defined for the
          purposes of the Controlled Substances Act);
            (ii) murder, kidnapping, robbery, extortion, destruction of
          property by means of explosive or fire, or a crime of
          violence (as defined in section 16);
            (iii) fraud, or any scheme or attempt to defraud, by or
          against a foreign bank (as defined in paragraph 7 of section
          1(b) of the International Banking Act of 1978)); (!1)

            (iv) bribery of a public official, or the misappropriation,
          theft, or embezzlement of public funds by or for the benefit
          of a public official;
            (v) smuggling or export control violations involving - 
              (I) an item controlled on the United States Munitions
            List established under section 38 of the Arms Export
            Control Act (22 U.S.C. 2778); or
              (II) an item controlled under regulations under the
            Export Administration Regulations (15 C.F.R. Parts
            730-774); or

            (vi) an offense with respect to which the United States
          would be obligated by a multilateral treaty, either to
          extradite the alleged offender or to submit the case for
          prosecution, if the offender were found within the territory
          of the United States;

"Continuing Criminal Enterprise"

          (C) any act or acts constituting a continuing criminal
        enterprise, as that term is defined in section 408 of the
        Controlled Substances Act (21 U.S.C. 848);

Extraterritorial jurisdiction

           (f) There is extraterritorial jurisdiction over the conduct
    prohibited by this section if - 
        (1) the conduct is by a United States citizen or, in the case
      of a non-United States citizen, the conduct occurs in part in the
      United States; and
        (2) the transaction or series of related transactions involves
      funds or monetary instruments of a value exceeding $10,000.

    ////

            (h) Any person who conspires to commit any offense defined in
    this section or section 1957 shall be subject to the same penalties
    as those prescribed for the offense the commission of which was the
    object of the conspiracy.

    ////

      (3) For purposes of this section, a transfer of funds from 1
    place to another, by wire or any other means, shall constitute a
    single, continuing transaction. Any person who conducts (as that
    term is defined in subsection (c)(2)) any portion of the
    transaction may be charged in any district in which the transaction
    takes place.

18 USC  1957.  Engaging in monetary transactions in property derived from specified unlawful activity 
(a) Whoever, in any of the circumstances set forth in subsection (d), knowingly engages or attempts
 to engage in a monetary transaction in criminally derived property that is of a value greater than $ 10,000 and is derived from specified unlawful activity, 
shall be punished as provided in subsection (b).
 
(b) (1) Except as provided in paragraph (2), the punishment for an offense under this section is a fine 
under title 18, United States Code, or imprisonment for not more than ten years or both.
   (2) The court may impose an alternate fine to that imposable under paragraph (1) of not more than twice the amount of the criminally derived property involved in the transaction.
 
(c) In a prosecution for an offense under this section, the Government is not required to prove the defendant knew that the offense from which the criminally derived property was derived was specified unlawful activity.
 
(d) The circumstances referred to in subsection (a) are--
   (1) that the offense under this section takes place in the United States or in the special maritime and territorial jurisdiction of the United States; or
   (2) that the offense under this section takes place outside the United States and such special jurisdiction, but the defendant is a United States person (as defined in section 3077 of this title [18 USCS § 3077], but excluding the class described in paragraph (2)(D) of such section).
 
(e) Violations of this section may be investigated by such components of the Department of Justice as the Attorney General may direct, and by such components of the Department of the Treasury as the Secretary of the Treasury may direct, as appropriate, and, with respect to offenses over which the Department of Homeland Security has jurisdiction, by such components of the Department of Homeland Security as the Secretary of Homeland Security may direct, and, with respect to offenses over which the United States Postal Service has jurisdiction, by the Postal Service. Such authority of the Secretary of the Treasury, the Secretary of Homeland Security, and the Postal Service shall be exercised in accordance with an agreement which shall be entered into by the Secretary of the Treasury, the Secretary of Homeland Security, the Postal Service, and the Attorney General.
 
(f) As used in this section--
   (1) the term "monetary transaction" means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title [18 USCS § 1956(c)(5)]) by, through, or to a financial institution (as defined in section 1956 of this title [18 USCS § 1956]), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title [18 USCS § 1956(c)(4)(B)], but such term does not include any transaction necessary to preserve a person's right to representation as guaranteed by the sixth amendment to the Constitution;
   (2) the term "criminally derived property" means any property constituting, or derived from, proceeds obtained from a criminal offense; and
   (3) the term "specified unlawful activity" has the meaning given that term in section 1956 of this title [18 USCS § 1956].