Money laundering is a general term used to describe the process of concealing the financial proceeds of crime in such a way that they appear to have been obtained legally and is a criminal activity that can be linked to the undermining of the rule of law and democracy.
The issue of preventing and punishing money laundering and terrorist financing is regulated by various laws, which have been amended many times and which also incorporate directives, regulations or recommendations of EU institutions. The main basic legislation is composed of: Law 2331/1995, as amended and now in force, law 3691/2008, as amended and in force, Law 4557/2018, as amended and in force (by Laws 4734/2020, 4816/2021, and 4920/2022, among others).
Law 4734/2020 amended various points of Law 4557/2018. Among the amended provisions was article 4 of Law 4557/2018 which defines the basic offences constituting money laundering. A series of “legal technical improvements” were submitted at the time the law was to be voted on, one of which rewords paragraph iii of article 4 (see p. 45 of the Parliament’s minutes) amending the requirement of a ‘minimum’ prison sentence penalty to crimes from which a financial benefit arises to define money laundering offences, to a simple reference to a prison sentence, without the ‘minimum’. This is therefore a substantial change which was not included in the draft law that was introduced for voting in the Parliament.
An amendment that essentially changes the content of the provision rather than constituting a formal correction or an amendment of some obscurity of the law violates the Rules of Procedure of the Parliament (article 104 par. 5) and the Methodology Manual (see, among others, pages 70 and 78) for the permissible content of legal improvements/corrections.
Furthermore, regarding the content of the changes, stating in the law that a basic offence constituting money laundering is defined by an offence from which a financial benefit arises and is punishable by a prison sentence, (without the inclusion of the minimum provision) effectively limits the scope of the law to misdemeanours. In other words, with the chosen wording, the felony form of financial crimes, such as fraud and embezzlement, are not expressly provided for in article 4 (as article 4 was in force at that time).
This, however, contradicts preceding legislation, as well as the corresponding European directives, leading to the conclusion that the legislator effectively made a mistake, which is supported by the subsequent events.
Just a few days later, on 14th October 2020, an irrelevant last minute amendment was submitted to a law incorporating EU Directive 2019/904 on plastic products into domestic legislation. The amendment became article 27 of Law 4736/2020, and amends paragraph (ii) of Article 4 of Law 4557/2018 (A’ 139) (which had just been amended by Article 3 of Law 4734/2020 (A΄ 196)) This new amendment clarifies that the “basic offences” defined by Law 4557/2018 include all offences from which a financial benefit arises and which are punishable by a minimum prison sentence, therefore effectively changing the wording back to its original form. According to the regulatory impact analysis, the provision was deemed necessary to remove any possible doubt that the scope of the said provision includes all offences resulting in financial benefit and entailing a custodial sentence. The long-term goal of the provision was to enhance legal certainty and to prevent the provision in question being interpreted as applicable only to misdemeanour offences.
The subsequent correction then, of the “mistake” that took place in the passing of Law 4734/2020 proves in practice the consequences that not applying the rules of good legislation can have. The fact that this “mistake” took place in a provision regulating criminal legislation also creates additional concerns.
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