Suggested activities

h Write down the answers, using the text:

1 What new professionals involved in money laundering are emerging?.........................................................

2 What do they sell to criminals?......................................................................................................................

3 Where are the traffickers' proceeds invested?.................................................................................................

4 What is the idea of the European Directive adopted in 1991?....................................................................

5 Is the Directive very effective?....................................................................................................................

i Make a plan of this text:

j Agree or disagree and support your point of view:

1 The phenomenon of white collar criminals is new to Europe.

2 Shell companies originate from the name of Royal Dutch/ Shell, a famous Anglo-Hollandic oil producing, processing and trading company.

3 Fiduciary contracts are quite legal.

4 The main aim of all those criminals is to hide profits and shelter proceeds from the tax collector.

Text 4

There are differences in the predicate offence in the criminal legislation of the members states. Some countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Sweden and the United Kingdom) include in the predicate offences all sort of crimes, following the provisions of the 1990 Strasbourg Convention; some others (Denmark and Greece) have a list with specific categories of crimes and the other countries (Luxembourg, Spain and Portugal) criminalise money laundering derived from drug trafficking offences only.

These differences among member states in the range of predicate offences to which money laundering legislation is linked, produce disparity in the prohibition of money laundering, legislations move towards the extension of the predicate crimes for the money laundering offence, including all categories of serious crimes, as recommended by Article 6, first paragraph, of the 1990 Strasbourg Convention, which obliges signatory states to criminalise the laundering of proceeds of «any criminal activity». Nevertheless, paragraph four of the same Article provides a clause of partial exemption to this provision: according to it, each signatory state is allowed to limit the predicate offences to a specific list of serious crimes (for instance, organised crime, drug trafficking, terrorism, etc.). The request for exemption should be eliminated. This would move financial and credit sectors of European countries to extend the reporting provisions to all suspected money laundering activities, independently of the typology of crimes. This development in the legislation will contribute to the improvement of the cooperation between financial institutions and law enforcement agencies.

There is recurring evidence in the country analysis of incressing shifts of suspected money laundering activities from regulated to unregulated sectors within the same state and between single member states. This trend is the result of the risk evaluation made by crime entrepreneurs; they obviously try to lower the risk of being detected.

The anti-money laundering preventive legislation of each member state must, therefore, be extended to eliminate the sectorial weaknesses. Measures will have to be studied to prevent certain sectors from remaining outside the field of the law and being possibly used for criminal purposes. It is necessary to pay attention to this extension. The risk of an overregulation is incumbent and appropriate measures should be studied for optimising the defence of the free market and the entrepreneurial activity from any unlawful actors, and the basic rules of free and equal competition characterising it.

§ Vocabulary notes

Words and Grammar

a Form nouns from the following verbs and translate them into Russian:

to prohibit.............................. to link........................................

to sign..................................... to extend..................................

to exempt................................ to recommend...........................

to range................................... to request..................................

b Write out the English equivalents from the text:

следуя статьям Конвенции........................................................................................

отдельные виды преступлений.................................................................................

торговля наркотиками...............................................................................................

статья 6, параграф 1....................................................................................................

включать пункт...........................................................................................................

определенный список серьезных преступлений......................................................

органы правопорядка..................................................................................................

с Match the English and Russian equivalents:

d Add as many nouns as you can which can be used with the following adjectives:

e Insert the correct articles wherever necessary:

f Choose the correct prepositions:

exemption from/of military service

exemption from/of this provision

to contribute in/to the improvement of the cooperation

differences of/in the predicate offences from/in the criminal legislation

to criminalise money laundering derived from/of drug trafficking

legislations move at/to the extension of the predicate crimes

as recommended by/on Article 6

g Write down sentences of your own with the following:

to limit the predicate offences

the request for exemption

to extend the reporting provisions

to produce disparity

to lower the risk

h Encircle the predicates, write down in what forms the verbs are used and translate the sentences into Russian:

1 The request for exemption should be eliminated modal verb “should” plus Infinitive in the Passive. Необходимо отменить все случаи обращений за получением освобождения от уплат пошлин (и налогов)...................................................................................................................................................................

2 These differences produce disparity in the prohibition of money laundering..................................................

3 This would move financial sectors of European countries to extend the reporting provisions..................................................................................................................................................................................

4 This trend is the result of the risk evaluation...................................................................................................

5 They obviously try to lower the risk of being detected....................................................................................

6 The legislation must therefore be extended to eliminate the sectorial weakness............................................

7 Measures will have to be studied to prevent certain sectors from remaining outside the field of the law.............................................................................................................................................................................

§ Suggested activities

i Translate the sentences from the text which speak about:

• possible overregulation

• defence of the free market

• the 1990 Strasbourg Convention

• the differences in the predicate offence in the criminal legislation of the European Union countries

j Make a plan of this text and compose a title of the whole text.

Text 5

If too many obligations are posed upon a specific sector or in a specific country, there is a risk of creating serious distortions among different sectors in a single member state or geopolitical distortions in a specific area of the European region because they increase costs and time devoted to the controls. The resources allocated for anti-money laundering controls would not directly be invested in the production cycle of goods or services and would be perceived as an added fixed cost in respect of other competitors who do not have to sustain those same obligations.

In this direction, Article 13 of the Directive provides for the creation of a Contact Committee, whose main task is to facilitate the coordination and harmonisation of implementing measures between member states, including action regarding the extension of obligations to additional unregulated professions and undertakings. Actually, the Contact Committee is examining the possibility of creating for all European Union member states a common list of professions and categories of undertakings to be covered. In doing so, many problems arise: first of all, there is the consideration that money laundering can be carried out through virtually any kind of business. However, this does not mean that the provisions of the Directive should be applied to all kind of professions and undertakings, regardless of the real risk involved. Any decision in this regard should keep the balance between the obligations and duties to be imposed and the real risk of money laundering. Secondly, it is important to understand the modus operandi of internal control systems and supervisory authorities for each profession. For this reason, the specific obligations to be applied to each profession and the appropriate system to enforce them should be carefully considered.

Certain geographical areas remain scarcely regulated or not regulated at all, and some offshore financial centres are in the European continent or in territories somehow linked to European Union member states. Most offshore banks are subsidiaries or branches of banks headquartered in European Union member countries. Further extension of regulatory provisions also to these subsidiaries or geographic areas should, of course, contribute to enhancing the effectiveness of these obligations and distribute among more actors the economic costs of these preventive policies. The non-compliance to these obligations by external countries or by institutions should be turned into an economic disadvantage, providing sanctions for the institutions or into economic barriers and fiscal disincentives for the countries.

Vocabulary notes

Words and Grammar

a Match the English and Russian equivalents:

b Choose the antonyms from the box:

different......... indifferent......... internal................................

direct......................................... appropriate..........................

regualted.................................. careful....................................

real........................................... serious.....................................

с Form the nouns with negative meaning (using prefixes dis-, поп-, im-) from the following nouns:

advantage... – disadvantage.......

incentive................................. possibility...................................

compliance........................... balance........................................

observance........................... regard.........................................

d Make a few short sentences with the following words:

to control – control –. They control the situation. The control is very sivere........................................

to service – service..................................................................................................................................

to cover – cover.......................................................................................................................................

to balance – balance...............................................................................................................................

to cost – cost.............................................................................................................................................

e Make a few short sentences with the following word combinations:

f Encircle the Past Participles and translate the following into Russian:

time devoted to the controls время, отводимое на проверку.....................................................................

the resources allocated for anti-money laundering controls............................................................................

the real risk involved........................................................................................................................................

territories somehow linked to European Union member states.......................................................................

branches of banks headquartered in European Union member countries.......................................................

g Underline the ing-form, write down what parts of sentence they are and translate the sentences into Russian:

1 There is a risk of creating serious distortions. ..(attr.) Существует риск получения серьезных искажений...............................................................................................................................................................

2 Their main task is to facilitate the harmonisation of implementing measures between member states...........

3 They examine the possibility of creating for all European member states a common list of professions........

4 It should contribute to enhancing the effectiveness of these obligations.........................................................

5 In doing so many problems arise.....................................................................................................................

h Underline the Infinitives, explain the use or omission (пропуск) of the particle to and translate the following into Russian:

They do not have to sustain those same obligations. Они не должны выполнять все эти обязательства........................................................................................................................................................

1 The main task is to facilitate coordination of measures.

2 They plan to create a list of professions and categories to be covered.

3 Money laundering can be carried out through virtually any kind of business.

4 Any decision should keep the balance between the obligations and duties to be imposed and the real risk of money laundering.

5 It is important to understand the modus operandi of internal control systems.

6 The specific obligations to be applied to each profession should be carefully considered.

§ Suggested activities

i Make a plan of the text and compose a title of the whole text.

j Sum up what the text says about Article 13 of the European Money Laundering Directive of 1991.

k Say what you know about:

§ offshore zones

§ money laundering in such zones

l Work in pairs.

Discuss with your group-mate one or another recent piece of news concerning economic activities in offshore zones.