Offences

• Author: Robert Hubbard; Daniel Murphy; Fergus O'Donnell; Peter De Freitas
• Pages: 347-413

CHAPTER

SIX

OFFENCES

A.

Overview

of

Proceeds-of-Crime

Offences

There

are at

least

two

principal means

of

confronting profit-based crimes:

prosecuting

and

punishing

the

offenders,

and

taking away

the

profit through

forfeiture.

Recognition

of the

latter mechanism underlies

much

of

Canada's

anti-proceeds initiative

for

more than

a

decade. Chapters

2 and 3

described

the

seize-and-freeze provisions that preserve property

for

forfeiture

as

well

as

the

forfeiture remedy itself. This chapter

focuses

on the

more

typical

crimi-

nal

law

response

to

crime:

the

prohibition

and

punishment

of

acts

that

are

deemed criminal. Parliament

has

established

a

number

of

offences,

punish-

able

by

traditional criminal sanctions,

to

deter

and

punish those

who

possess

and

launder

the

proceeds

of

crime.

The

principal

offences

can be

summa-

rized

as:

Section

462.31

of the

Criminal

Code1

creates

a

broad prohibition against

laundering proceeds

of

crime.

Section

354

of the

Criminal

Code

prohibits being

in

possession

of

proceeds

of

crime.

Offences

contained

in

ancillary legislation encourage compliance

with

reporting

of

suspicious

and

other financial transactions. (See chapters

4

and 5.)

Anti-terrorism

offences

target those

"who

facilitate

terrorism through

the

use

of

property. (See Chapter

10.)

Here,

the

focus

is on the

first

two

offences

listed above.

In

discussing sections

462.31

and 354 of the

Criminal

Code,

this chapter also

discusses

some

of the

repealed provisions

of the

Controlled

Drugs

and

Substances

Act2

that were

aimed

at the

laundering

of

drug proceeds

but

have

now

been encompassed

by the

Criminal

Code.

1

Criminal

Code,

R.S.C.

1985,0.1-46.

2

Controlled

Drugs

and

Substances

Act,

S.C.

1996,0.19.

[347]

SIX:

OFFENCES

B.

Laundering

Proceeds

of

Crime

1)

The

2001 Organized-Crime Amendments Create

a

Single Offence

of

Laun-

dering

Proceeds

of

Crime

The

2001

organized-crime amendments repealed section

9 of the

Controlled

Drugs

and

Substances

Act

that

had

prohibited laundering

of the

proceeds

of

drug-related

offences,

as set out in

Chapter

2.3

Now the

precise criminal

origin

of the

tainted

assets

is

irrelevant: laundering

offences,

whether drug

related

or

otherwise,

are all

prosecuted under

the

single charging provision

of

section

462.31

of the

Criminal

Code'.4

(1)

Every

one

commits

an

offence

who

uses,

transfers

the

possession

of,

sends

or

delivers

to any

person

or

place, transports, transmits, alters, disposes

of or

otherwise

deals

with,5

in any

manner

and by any

means,

any

property

or any

proceeds

of any

property

with

intent

to

conceal

or

convert that property

or

those proceeds,

know-

ing or

believing that

all or a

part

of

that

property

or of

those proceeds

was

obtained

or

derived directly

or

indirectly

as a

result

of

(a)

the

commission

in

Canada

of a

designated

offence;

or

(b)

an act or

omission anywhere that,

if it had

occurred

in

Canada, would have

constituted

a

designated

offence.

The

offence

of

laundering proceeds

is a

hybrid

offence

that

is

punishable,

at

Crown

election,

as a

summary conviction

or

indictable matter. Subsection

462.31(2)

of

the

Criminal

Code

states:

(2)

Every

one who

commits

an

offence

under subsection

(i)

(a)

is

guilty

of an

indictable

offence

and

liable

to

imprisonment

for a

term

not

exceeding

ten

years;

or

(b)

is

guilty

of an

offence

punishable

on

summary conviction.

2)

Case

Law on the

Laundering

Offence

The

2001

organized-crime amendments substantially

simplify

the

offences

of

possession

and

laundering

of

proceeds

by

applying section

462.31

of the

Criminal

Code

to all

designated

offences,

including drug

offences,

as set out in

Chapter

2. The

2001

organized-crime amendments repealed sections

8 and 9

3

The

relevant provisions

of the

organized-crime

amendments—An

Act to

amend

the

Criminal

Code

(organized

crime

and law

enforcement)

and to

make

consequential

amendments

to

other

Acts,

S.C.

2001,

0.32

—

relating

to

drug proceeds

and

laundering

offences

came into

force

on

i

February 2002.

4

Ibid.

5

In R. v,

Daoust

2004

SCC 6, the

Supreme

Court

of

Canada held that

the

phrase

"or

otherwise deals

with"

is

inoperative because,

due to a

drafting

error,

it was

left

out of the

French version

of the

pro-

vision.

[348]

MONEY

LAUNDERING

AND

PROCEEDS

OF

CRIME

of the

Controlled

Drugs

and

Substances

Act,

which

had

mirrored

the

Criminal

Code

possession

and

laundering

offences,

where

the

proceeds related

to

drug

offences.

The

previous

case

law

established under

both

section

462.31

of the

Criminal

Code

and

section

9 of the

Controlled

Drugs

and

Substances

Act

remains

relevant. Section

9 of the

Controlled

Drugs

and

Substances

Act was

remarkably

similar

to

section

462.31

of the

Criminal

Code.

It

stated:

9.(i)

No

person

shall

use,

transfer

the

possession

of,

send

or

deliver

to any

person

or

place, transport, transmit, alter, dispose

of or

otherwise deal with,

in any

manner

or by any

means,

any

property

or any

proceeds

of any

property with intent

to

con-

ceal

or

convert that property

or

those proceeds

and

knowing

or

believing that

all

or

part

of

that property

or

those proceeds

was

obtained

by or

derived directly

or

indirectly

as a

result

of

(a)

the

commission

in

Canada

of an

offence

under this Part except subsection

4(i);

(b)

an act or

omission anywhere that,

if it had

occurred

in

Canada, would have

constituted

an

offence

referred

to in

paragraph

(a);

or

(c)

a

conspiracy

or an

attempt

to

commit, being

an

accessory

after

the

fact

in

relation

to, or any

counselling

in

relation

to, an

offence

referred

to in

paragraph

(a)

or an act or

omission

referred

to in

paragraph (b).

This provision

was

very broad

and

meant that dealing

with

the

proceeds

of

any

drug crime

was an

offence.

The

single exception

was

that simple posses-

sion

offences

under subsection

4(1)

of the

Controlled

Drugs

and

Substances

Act

were excluded

by

virtue

of

paragraph

9(1)

(a)

of the

Act.

Like

subsection

462.31(2)

of the

Criminal

Code,

subsection 9(2)

of the

Controlled

Drugs

and

Substances

Act

made

the

offence

a

hybrid

offence:

(2)

Every person

who

contravenes subsection

(i)

(a)

is

guilty

of an

indictable

offence

and

liable

to

imprisonment

for a

term

not

exceeding

ten

years;

or

(b)

is

guilty

of an

offence

punishable

on

summary conviction

and

liable

to a

fine

not

exceeding

two

thousand dollars

or to

imprisonment

for a

term

not

exceed-

ing

six

months,

or to

both.

In R. v. Tejani,6 the Court of Appeal for Ontario outlined the history and

broad sweep

of the

money-laundering sections added

to

Canadian criminal

law by the

Proceeds

of

Crime

Act:

Section

19.2

of the

Narcotic Control

Act and s.

462.31

of the

Criminal

Code

were

added

to

their

respective

statutes

on

January

i,

1989

by

Bill

C-6i,

commonly

referred

to as

6

(1999),

I3§

C.C.C.

(3d)

366

(Ont. C.A.)

[Tejani].

[349]