Money laundering

Criminal enforcement

Which government entities enforce your jurisdiction’s money laundering laws?

In the Greek system of criminal justice, the prosecutor has the power to initiate a criminal investigation in all cases. Enforcement agencies, such as the Hellenic Financial Intelligence Unit (FIU), the Financial and Economic Crime Unit and the Capital Market Commission, must forward their findings and all evidence gathered by them, where these are related to suspicious activities, to the prosecutor’s office. In large-scale crimes or offences related to public officials, the prosecutor in charge is the Financial and Economic Crimes Prosecutor, who is a prosecutor with the Athens Court of Appeal and may initiate any proceedings that he or she deems appropriate or request for pending case files to be handed to him or her for further processing.

Defendants

Can both natural and legal persons be prosecuted for money laundering?

Criminal liability lies, in principle, with natural persons; however, there are provisions for sanctions against legal entities or businesses as a result of the conduct of natural persons. These sanctions constitute a number of measures (administrative penalties and fines) imposed against a legal entity or business when certain criteria are met, and they vary depending on the seriousness of the violation.

The offence of money laundering

What constitutes money laundering?

The act of money laundering is described in article 2 of Law 4557/2018 as follows:

  1. the conversion or transfer of property, knowing that the property is derived from criminal activity or from an act of participation in the activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of the activity to evade the legal consequences of his or her action;
  2. the concealment or disguise of the true nature, source, location, disposition, use, movement or rights with respect to or ownership of the property, knowing that the property was derived from criminal activity or from an act of participation in the activity;
  3. the acquisition, possession or use of property, knowing, at the time of receipt or administration, that it was derived from criminal activity or from an act of participation in the activity;
  4. the utilisation of the financial sector by placing therein or moving through it proceeds from criminal activities for the purpose of lending false legitimacy to those proceeds;
  5. the formation of a group or organisation comprising at least two persons for committing one or more of the acts described in (1) to (4) and participating in in such an organisation or group; or
  6. participation in, association to commit, attempts to commit and the aiding, abetting, facilitating and counselling of the commission of any of the actions in (1) to (4).

 

The crime of money laundering is established even if the activities, which constitute the predicate offences, were committed abroad, provided that the principle of dual criminality applies.

By special legal provision, the state of mind of a natural person may be drawn from the overall circumstances of the act committed.

Rules on the state of mind of the perpetrator are not applicable to legal entities because, under Greek law provisions, criminal liability lies with a natural person, and consequently there is no criminal liability in its traditional sense regarding a business or entity. For the purposes of applying legal provisions related to corporate practices and activities, there are provisions for liability in the form of administrative penalties and fines depending on the seriousness of the act, the size of the business, etc. Article 45 of Law 4557/2018 provides that legal entities are liable for acts of money laundering and predicate offences if these are acts of corruption, namely, active and passive bribery of public officials (domestic and foreign) and political officials or members of the judiciary.

Liability of legal entities, mainly financial institutions, can be the result of:

  • deliberate misconduct by a natural person with representative and management powers or a person with authorisation to make decisions on behalf of the entity, or a person with the power to perform internal control, who acts in this way to provide benefits or gains to the business; or
  • negligent or reckless behaviour of natural persons that results in the violation of articles 12, 13 and 14 of the law (due diligence towards the client, confirmation of the origin of the assets, validation of the transaction, etc). This is applicable to entities that have a special obligation to perform anti-money laundering policies, such as banking and financial institutions, and investment and insurance services providers.

 

In cases of entities that are involved in money laundering acts (through the acts of individuals that have the power or authorisation to manage or make decisions on their behalf) and that are not covered institutions according to Law 4557/2018, prosecuting authorities must notify the competent regulating authority immediately if they decide to prosecute these entities, as well as notifying the competent regulatory authority the outcome of any judicial decisions.

Qualifying assets and transactions

Is there any limitation on the types of assets or transactions that can form the basis of a money laundering offence?

The criteria set by the law for prosecution of money laundering offences are not related to quantitative criteria (such as a monetary threshold rule). Prosecution is related to the characteristics of the act and its relation to a predicate offence; for example, the effort to conceal proceeds of fraud of lesser importance (misdemeanour) is equally prosecuted as a large-scale fraud and money laundering offence. Classification of money laundering is a combination of their seriousness and their characteristics. The fact that the list of predicate offences includes any offence that results in profit, gain or acquisition of assets enables the prosecuting authorities to deal with each case on the basis of its particulars (including the type of conduct, patterns of money or asset movement, etc).

Predicate offences

Generally, what constitute predicate offences?

The predicate offences of money laundering are stipulated in article 4 of Law 4557/2018, which contains an extensive list of offences covering all aspects of white-collar criminality. Moreover, a general provision is also included, according to which any offence punishable by law with a minimum of six months’ imprisonment constitutes a predicate offence provided that it has generated assets or profits; thus, the list in article 4 is non-exhaustive.

Defences

Are there any codified or common law defences to charges of money laundering?

Considering that there are no strict rules of evidence under Greek law and no provisions for strict criminal liability (regardless of the state of mind of a natural person or fault or misconduct in relation to a legal entity), there are no codified specific defences. As a matter of practice, the basic defence arguments against money laundering charges deal with the soundness of the charges in respect to the source of assets, money, etc, as well as the knowledge of the defendant in respect to the specific predicate offence (which resulted in the profit in question).

As regards the business or legal entity under review, its defence may be based on evidence that suggests negligence, not deliberate misconduct, as well as the absence of any profit, benefit or gain.

Resolutions and sanctions

What is the range of outcomes in criminal money laundering cases?

Plea agreements are not customary under Greek legislation. However, owing to a series of amendments to the Criminal Code (to comply with obligations from international treaties and other instruments) in recent years, there is a provision for immunity or leniency in respect to money laundering related to corruption acts. By virtue of article 263A of the Criminal Code, charges against a defendant for bribery, corruption or money laundering may be suspended if he or she gives evidence of corrupt acts committed by members of the government. If charges cannot be brought against government or Parliament members (eg, because of limitation), then the person offering evidence is eligible for a lesser penalty. The court may even decide to suspend execution of the penalty.

Sanctions for money laundering depend on the severity of the act, the person committing the act (natural or legal), the type of predicate offence and related circumstances. In principle, sanctions against natural persons are imprisonment and a fine, while for businesses or legal entities, it is a fine with or without additional measures (eg, suspension of activities). If the predicate offence is a misdemeanour, the perpetrator of the money laundering act is punishable with imprisonment for at least one year (and up to five years). If the predicate offence is a felony, the basic sanction against natural persons is imprisonment (ranging from one to six years) and a fine ranging from €20,000 to €1 million. If the act is committed by an employee of the covered institutions or the predicate offence is related to passive or active bribery of a judge, it is punishable by imprisonment for five to 15 years (even if the predicate offence is a misdemeanour) and a fine ranging from between €30,000 and €1.5 million. If the act is committed by a person committing the acts repeatedly or his or her acts are related to organised crime activities, it is punishable by imprisonment for at least 10 years, up to 15 years, and a fine ranging from €50,000 to €2 million.

Omissions of employees with covered institutions (to report) or filing of inaccurate information is a misdemeanour, punishable by imprisonment for up to two years.

However, according to the Criminal Code, sentences of up to three years may be suspended for first-time offenders.

Sanctions against businesses or entities are mainly fines (depending on the characteristics of the act) and may be divided into two different categories: covered institutions (eg, banking and finance institutions and companies listed in the stock exchange market) and other businesses.

For the first category (covered institutions), sanctions are stricter and are as follows:

  1. an administrative fine ranging from €50,000 up to €10 million, which is always applicable;
  2. suspension of activities temporarily or permanently;
  3. prohibition of certain activities to be performed by the company or the establishment of branches; and
  4. a ban from public tenders, subsidies, etc.

 

Measures (2), (3) and (4) may be imposed for a period of one month to two years. Sanctions are imposed by the competent authorities as classified in article 6 and can be imposed consecutively or concurrently.

If the legal entity is a covered institution, the penalties are imposed by virtue of a decision by the competent regulatory authority. In all other cases the fine is imposed by a decision of the Supervisor of the Financial and Economic Crime Unit. All of the above-mentioned sanctions apply to cases where acts of money laundering were committed in favour of the legal entity or for the purposes of gaining profits by a natural person with the power to represent the company or who has a managing or supervising role or is responsible for the company’s internal audits.

Regulatory authorities (depending on the legal entity) may also impose administrative fines for non-compliance to administrative regulations (eg, non-compliance with the legal framework for corporate governance) in the above range. These fines are different and independent from the fines in the context of criminal proceedings.

If the above-mentioned natural persons fail to supervise or effectively control lower-ranking employees of an entity, thus enabling them to engage in money laundering acts resulting in profit-gaining for the legal entity, sanctions against the legal entity are (accumulatively or alternatively) an administrative fine ranging from €10,000 to €5 million and the above-mentioned measures (2) to (4) for up to one year. 

Forfeiture

Describe any related asset freezing, forfeiture, disgorgement and victim compensation laws.

Asset freezing and asset confiscation are provided for by law. Asset freezing can take place even at the earliest stages of information gathering from the Hellenic FIU. The head of the FIU may freeze assets by issuing an order. If an ordinary investigation (for money laundering) is conducted by an investigating judge, in agreement with the prosecutor, he or she issues a freezing order to secure assets that may be the proceeds of the crime or that have originated from proceeds of crime. The interested party may appeal against the order to the competent judicial council. The head of the FIU and the investigator may freeze all types of assets (bank accounts, bank deposit boxes, bonds, invested money, real estate, etc) and may prohibit the liquidation of assets or any change of status.

In the case of a guilty verdict, all frozen assets derived directly or indirectly from the commission of an offence, or acquired directly or indirectly out of the proceeds of such offences, or the means that were used or were going to be used for committing such offences will be confiscated. If there is no legal reason to return these to the victim of the crime or to their owner according to article 373, paragraphs 3 and 4 of the Code of Criminal Procedure, they will be confiscated as a result of the court’s sentence. Confiscation is imposed even if the assets or means belong to a third person, provided that the person was aware that these assets are likely to originate from an offence and that the reason of their transfer to this third person was to hinder future confiscation.

Where the assets or proceeds no longer exist, have not been found or cannot be seized, assets of equal value (as at the time of the court sentence) will be seized and confiscated. Their value is determined by the court. The court may also impose a pecuniary penalty up to the value of those assets or proceeds if it rules that no additional assets can be confiscated or the value of the existing assets falls short. In the case that these assets have been ‘mixed’ with lawfully obtained assets, confiscation will extend only to the value of the assets that derived from the offence. Confiscation of assets is not enforced when it is deemed a disproportionate measure (ie, it is highly likely that it will cause serious and irreparable damage to the defendant’s livelihood or that of his or her family).

Limitation periods on money laundering prosecutions

What are the limitation periods governing money laundering prosecutions?

Money laundering prosecution is governed by the general rules of the Criminal Code as regards limitation periods. If the act is a misdemeanour, the prosecutor must indict the defendant within five years of committing the act or, if it is a felony, within 15 years. After these time limits, there can be no prosecution for the offence of money laundering. The time limitation of predicate offences is not relevant to the prosecution of a money laundering offence, that is, prosecution of such an offence may be initiated even if the predicate offence (eg, bribery) has been time-barred. This is not unusual as money laundering acts do not necessarily stop at the time the predicate offence is committed but may continue for a substantial period of time (eg, successive asset transfers or transformation to other types of property).

Extraterritorial reach of money laundering law

Do the money laundering laws applicable in your jurisdiction have extraterritorial reach?

Anti-money laundering laws cover institutions and individuals who are located or are active in Greece. However, in cases where the predicate offence was committed abroad, and its profits were laundered in Greece, Greek anti-money laundering laws are applicable provided that the principle of dual criminality applies in respect of the predicate offence. Greek citizens will also be prosecuted for acts of money laundering committed abroad provided that dual criminality applies (ie, the act of money laundering constitutes an offence and is punishable both in Greece and abroad).