In this first instalment of Patrick Laure’s new legal column, he begins with a compelling real-world case—one that reveals just how unexpectedly the machinery of the law can turn…

While I was poring over a civil case involving a restaurant owner who felt cheated by a landlord who refused to accept that his rent should not be increased, I received a call, passed on by word of mouth, and met a potential future client.

She introduced herself as a woman overwhelmed by events and explained that while she was talking to the police, the authorities responsible for such matters, she had been the subject of a confiscation, followed by a search, of a sum of money that she had voluntarily declared in advance to those same judicial authorities.

I waited with eager curiosity to hear the rest of her story, as the charming gentleness she exuded contrasted so starkly with the hardship, she seemed to have experienced.

Continuing her story, she explained that her circumstances had forced her to dip into the nest egg that her late father had left her, “to be used only in case of hardship, my daughter,” he had expressly asked her on his deathbed.

It was a large sum of cash, and as the banknotes that made up this old “nest egg” were no longer legal tender, she had to go to Switzerland to exchange them, a modus operandi suggested by her long-standing banker in Switzerland, which the police were aware of.

In order to carry out the cross-border money transfer, she had taken steps to find out about the procedure, in complete transparency and in accordance with the laws and customs in such cases.

Having previously communicated by email all the necessary information for her request to declare a cross-border money transfer, in accordance with the rules, an appointment was made for a specific date.

When she arrived at the police station on the agreed date, her money was confiscated and her Cartier watch was removed from her frail wrist and also confiscated. This was followed by a search of her home “in flagrante delicto”, under the apparent legitimate action of the police, because when asked at the police station: “Do you still have any cash?“, she naturally replied, “Yes, I still have three times that amount, as you are well aware.”

While civil cases are often about money, criminal cases are about something else entirely: morality.  After hearing her intriguing story, I felt compelled to defend her, noblesse oblige.

She was clearly the subject of police action, the promptness of which, combined with her diligence and transparency in making appointments, could only be interpreted as zeal on the part of the Judicial Police.

At first glance, this zeal appeared to be nothing more than a calm application of the law on money laundering. Nevertheless, this haste was in keeping with the ‘modern times’ of our society, further highlighted by the announced chronicle of the Principality of Monaco’s inclusion on the FATF (Financial Action Task Force) grey list in June 2024.

However, it turned out that the nest egg did not need to be laundered, as it had been kept under mothballs and was as clean as ever, and would remain so forever.

In the context of the fight against money laundering, terrorist financing and weapons of mass destruction (known as AML/CFT/WMD laws), the judicial authorities, including magistrates and the judicial police, are empowered to exercise this sovereign power on behalf of the State, under the impetus of and in compliance with the standards established by the FATF, European Directives, and under the supervision of MONEYVAL (I).

This fight also applies under the implementation of the concept of “suspicious transaction reporting”, which some might consider to be profiling, if the promptness to search a private individual’s home proved to be a gross error of excessive zeal.

In this case, its application is the responsibility of all traders, orchestrated by the transfer of sovereign power from the state to its citizens, who become “subjects” if they have the misfortune of handling capital in the course of their profession, which, apart from bankers, is not the essence of their activity.

And since traders, professionals and salespeople of all kinds naturally handle capital, the list of “subjects” is long (II).

Thus, the majority of a country’s economic actors are “subjects”, with the exception of employees and civil servants, but when it comes to the fight against money laundering, in which economic actors are taxpayers, the story begins with a Suspicious Transaction Report. And if there is one profession that should be exempt from involvement in this fight, it is the legal profession (III).

I – The fight against money laundering, from standard to law.

• Origins

The term “money laundering” has its origins in the fight led by one of the finest detectives in the judicial police, Eliot Ness. In pursuit of Al Capone, he finally cornered his sworn enemy, his raison d’être, on evidence of a money crime, which is rather paradoxical given that in our imagination, Al Capone is the cigar in his mouth but above all the machine gun in his arm.

Eliot Ness was clearly focused on the cigar in the mouth of public enemy number one, which is normal, as it makes him look more like a banker than a criminal. Al Capone should have thought about that: smoking is deadly.

Al Capone was caught on the basis of a tax adjustment; he invested money from his illegal alcohol sales during Prohibition, in neighbourhood laundries. The expression has stuck.

History repeats itself, they say, and we can read in the Nice-Matin newspaper of 15 November this year, “These ‘washing machines’ that launder drug money“. We learn that laundromats are still in the news, as are pizzerias, but they are not alone. A number of small businesses are involved in reusing drug money to set up businesses.

The paradox is that in this case it is the business that is targeted, while the “subjects”, Eliot Ness in the making, or Josh Randall in the making, are traders, which is not the same thing as the business itself… It’s complicated (see below).

In 1970, the United States was one of the first nations to adopt legislation against money laundering by establishing the Bank Secrecy Act (BSA).

This law required American financial institutions to keep certain transaction records and report those they considered suspicious to the authorities. Banking secrecy was no more, and it took Switzerland 30 years to comply and resign itself to this. Clearly, neutrality in war is not a blank cheque when it comes to trade wars.

Patrick LAURE
Secrétaire Particulier
+33 6 35 45 27 02
laurepatrick@wanadoo.fr

**The information provided in this article is for general informational purposes only and does not constitute legal advice. It is not intended to create an attorney-client relationship. Laws and regulations vary by jurisdiction and may change over time. Readers should consult a qualified legal professional for advice specific to their situation. The author and publisher are not responsible for any actions taken based on this information.