Circular Letter No. (6) of 2019 Regarding the Investigation of Money Laundering Crimes

Circular Letter No. (6) of 2019
Regarding the Investigation of Money Laundering Crimes

Given the development and complexity of the crime of money laundering and its connection to several of the most dangerous crimes against society and its security—such as terrorism financing, drug trafficking, organized crime, corruption, and other economic crimes that yield substantial profits—it has become a source of severe harm to the country's national economy. In light of this, the need for an effective response to this phenomenon has grown.

In this context, Public Prosecutor Decision No. (2722) of 2019 was issued to establish a Money Laundering Prosecution, as part of the Public Prosecution's mission to protect society and defend its interests, and to achieve the highest degree of efficiency in investigating this type of crime, which is characterized by severity and complexity.

The legislator has regulated the provisions concerning the crime of money laundering, the means to combat it, and the application of those means to financial institutions, as well as owners of non-financial professions and businesses—under legally specified conditions—and has stipulated appropriate penalties for this crime in the Anti-Money Laundering Law issued by Law No. (80) of 2002 and its amendments.

In application of the provisions contained in that law, and to achieve the Public Prosecution's full role in implementing its provisions, and to activate the intended goal of establishing the Money Laundering Prosecution, the members of the Public Prosecution are required to observe and follow the following:

First: A person commits the crime of money laundering if they know that the proceeds (meaning the national currency, foreign currencies, securities, commercial papers, and any item of value, whether real or personal property, tangible or intangible, and all rights related to any of them, and legal documents and deeds indicating ownership or interest in those proceeds, in any form including digital or electronic) were obtained from a predicate crime (meaning any act constituting a felony or misdemeanor under Egyptian law, whether committed inside or outside the country, provided it is punishable in both jurisdictions) and intentionally commit any of the following:

1. Transferring or moving proceeds (meaning funds resulting or traceable, directly or indirectly, from the commission of any predicate crime) with the intent to conceal or disguise the nature, source, location, owner, or beneficiary of the property, or to alter its reality, or to prevent its discovery or hinder the apprehension of the perpetrator of the predicate crime.
2. Acquiring, possessing, using, managing, holding, exchanging, depositing, securing, investing, or manipulating the value of the proceeds, or concealing or disguising their true nature, source, location, method of disposal, movement, ownership, or related rights.

Second: The legislator penalizes the crime of money laundering or its attempt as a felony with a principal penalty of imprisonment for a term not exceeding seven years and a fine equal to twice the value of the proceeds involved in the crime, in addition to a mandatory supplementary penalty of confiscation of the seized proceeds, or an additional fine equal to their value in case they cannot be seized or have been transferred to a bona fide third party. (Article 14 of the Law).

Third: The legislator penalizes the following crimes:

1. Failure to report transactions suspected of constituting proceeds or involving money laundering or terrorism financing (Article 8 of the Law).
2. Failure to keep or retain records or documents of financial transactions (Article 9 of the Law).
3. Disclosing reporting, investigation, or examination procedures regarding suspicious transactions (Article 11 of the Law).
   With imprisonment and a fine not less than 100,000 Egyptian pounds and not exceeding 500,000 Egyptian pounds, or either of these penalties. (Article 15 of the Law).

Fourth: The legislator penalizes the person responsible for the actual management of a legal entity with the same penalties prescribed for acts committed in violation of this law, in cases where the crime is committed by a legal entity, provided that their knowledge of it is proven and the crime occurred due to their breach of professional duties. The legal entity itself shall be penalized with a fine not less than 100,000 Egyptian pounds and not exceeding 5 million Egyptian pounds, and shall be jointly liable for satisfying financial penalties and compensation awarded if the crime was committed by one of its employees in its name and for its benefit. The court must order the publication of the conviction judgment at the expense of the legal entity in two widely circulated daily newspapers, and may order the prohibition of the legal entity from conducting its activity for a specified period or the revocation of its license to conduct the activity. (Article 16 of the Law)

Fifth: Criminal and civil liability shall not apply to anyone who, in good faith, fulfills the obligation to report to the Anti-Money Laundering and Counter-Terrorism Financing Unit regarding suspicious transactions subject to the provisions of this law, or provides information or data to the aforementioned Unit in violation of the rules imposed to ensure confidentiality, in accordance with the controls specified in the Executive Regulations. (Article 10 of the Law)

Sixth: In cases of multiple perpetrators in a money laundering crime, if one of them promptly reports to any competent authority the clues or investigation regarding the crime, and the other perpetrators commit it before any of these authorities first learn of it, or if they report it after it is known and their report leads to the apprehension of the remaining perpetrators or the proceeds involved in the crime, the court shall, if it deems these conditions met, exempt the reporting perpetrator from the principal penalty (imprisonment and fine prescribed in the first paragraph of Article 14 of the Law) without the mandatory supplementary penalty (confiscation of seized proceeds, or an additional fine equal to their value in case they cannot be seized or have been transferred to a bona fide third party, prescribed in the second paragraph of Article 14 of the Law).

In light of this, if one of the perpetrators reports as previously stated, the Public Prosecution shall continue to conduct investigations until its objectives are met, and refer the case to the competent court if the evidence is sufficient, considering that the defendant remains criminally liable for the crime, and that the determination of whether the conditions for penalty exemption are met falls within the court's authority.

Seventh: The legislator exempted the crime of money laundering from the scope of the second paragraph of Article 32 of the Penal Code, which stipulated that (if multiple crimes are committed for a single purpose and are so interrelated that they cannot be separated, they must be considered a single crime, and the most severe penalty for those crimes shall be imposed). This means that if the crime of money laundering is inextricably linked to other crimes, the defendant must be sentenced to the principal penalties prescribed for both the crime of money laundering and the crime to which it was linked.

Eighth: The Anti-Money Laundering and Counter-Terrorism Financing Unit at the Central Bank of Egypt was established by Presidential Decision No. 164 of 2002 and its amendments. The law defined its jurisdiction to receive reports regarding transactions suspected of constituting proceeds or involving money laundering or terrorism financing, investigate and examine them, and other related jurisdictions. (Articles 4 and 5 of the Law).
The Public Prosecution may avail itself of the aforementioned Unit, if the investigation requires it, in conducting financial inquiries regarding the incident under investigation.

Ninth: The Money Laundering Prosecution at each general prosecution office is exclusively competent to investigate the crimes stipulated in the Anti-Money Laundering Law and crimes inextricably linked to them. Cases shall be sent to the Financial and Commercial Affairs Prosecution at the Office of the Public Prosecutor upon completion of the investigation, accompanied by a legal opinion memorandum containing the facts, legal characterization, and recommended course of action, as set forth in Public Prosecutor Decision No. (2722) establishing the Money Laundering Prosecution, and as contained in Circular Letter No. (5) of 2015 issued by the Public Prosecutor. Reports and investigations received by prosecution offices regarding the Money Laundering Prosecution competent to investigate or complete the investigation must be forwarded, observing what was stated in paragraph (a) of point first of Circular Letter No. (5) of 2015 mentioned above.

Tenth: Care must be taken in investigating the crime of money laundering and establishing its elements, components, and evidence. To achieve this, the following must be observed:

1. Identify the predicate crime, the date of its commission, and whether a report was drawn up regarding it. In the first case, attach official copies of it, a statement on the outcome of the proceedings, determine the amount of proceeds generated from it, and the role of the defendant involved in the laundering.
2. Identify the laundering patterns employed by the defendant on the proceeds from the predicate crime, including the date, subject, parties, and amount of money involved in laundering for each pattern separately, and attach supporting documents.
3. Establish the criminal intent of the defendant, noting that the patterns of transferring and moving proceeds require, in addition to general criminal intent, a specific criminal intent, which is (to conceal or disguise the nature, source, location, owner, or beneficiary of the property, or to alter its reality, or to prevent its discovery or hinder the apprehension of the perpetrator of the predicate crime).
4. Note that although the predicate crime is a presumed condition for the crime of money laundering, it is an independent crime with its own elements and components.
5. The termination of the criminal prosecution due to the death of the defendant in a money laundering crime, before or after referral to the court, does not preclude the application of Article 208 bis "y" of the Code of Criminal Procedure, which is mandatory for this crime pursuant to Article 5 of the Anti-Money Laundering Law.
6. When conducting an investigation into a money laundering crime, the Public Prosecution shall, in addition to its legally prescribed jurisdiction, take the following measures:
   a. Take all precautionary measures stipulated in Article (208 bis "a") of the Code of Criminal Procedure—if evidence of the seriousness of the accusation exists—which consist of prohibiting the defendant, their spouse, or minor children from disposing of or managing their assets. This matter must be presented to the competent criminal court—the Economic Court—within the legal timeframe, requesting an order prohibiting disposal or management.
   In this regard, it is noted that the Public Prosecutor may, out of necessity or in urgent cases, temporarily order the prohibition of the defendant, their spouse, or minor children from disposing of or managing their assets, to be presented to the competent criminal court—the Economic Court—within the legal timeframe, requesting an order prohibiting disposal or management. b. Place the defendant on the list of persons prohibited from traveling and monitor arrivals to prevent escape.

c. The Public Prosecutor or a delegate among the First Public Prosecutors at minimum may order direct access to or obtaining of any data or information related to accounts, deposits, trusts, or safes at banks, or transactions related thereto, if necessary to uncover the truth in crimes stipulated in the Anti-Money Laundering Law (last paragraph of Article 8/9 of Law No. 88 of 2003 concerning the Central Bank).
In this regard, it is worth noting that the Public Prosecutor previously issued Decision No. 1203 of 2003, contained in Circular Letter No. (16) of 2003, delegating the First Public Prosecutor of the Cairo Court of Appeals Prosecution to directly order access to bank accounts and transactions.
Following the lifting of account confidentiality, if it becomes apparent that the defendant has bank accounts, deposits, trusts, and safes, the Public Prosecution may, if the investigation requires it, form a committee from the Supervision and Oversight Sector at the Central Bank to examine them, state the balance amounts, financial movements affecting them, parties dealing with them, and the amount of transfers and deposits made into or withdrawn from them, and the dates thereof, at all banks operating in the Arab Republic of Egypt, to determine whether the crime of money laundering has been established.

Eleventh: Economic Courts, in their first instance and appellate chambers, exclusively have subject-matter and territorial jurisdiction to hear criminal cases arising from the crimes stipulated in the Anti-Money Laundering Law. (Article 4 of Law No. 120 of 2008 concerning the Establishment of Economic Courts, as amended by Law No. 146 of 2019).

Twelfth: Attention must be paid to reviewing and studying judgments issued in crimes stipulated in the Anti-Money Laundering Law, and forwarding them to the Financial and Commercial Affairs Prosecution at the Office of the Public Prosecutor, accompanied by a legal opinion memorandum including a recommendation on whether to appeal the judgment.

Thirteenth: The Public Prosecution may order the execution of final criminal judgments issued by competent foreign judicial authorities regarding the confiscation of proceeds from money laundering and terrorism financing crimes or their returns, all in accordance with the rules and procedures contained in bilateral or multilateral treaties to which Egypt is a party.
Money Laundering Prosecutions and the Financial and Commercial Affairs Prosecution at the Office of the Public Prosecutor shall, as applicable, refer to the Office of International Cooperation and Execution of Judgments and Care of Prisoners at the Office of the Public Prosecutor regarding all matters related to international cooperation with foreign judicial authorities concerning crimes stipulated in this law, particularly mutual legal assistance and judicial letters rogatory, and the surrender of defendants and convicted persons, and the execution of criminal decisions and judgments issued by such authorities.

And God is the Best of Planners.

Issued on 19/12/2019

"The Public Prosecutor"
Advisor /
(Hamada El-Sawy)