Money laundering across borders: how these cases run
A laundering investigation almost never sits in a single country. Evidence is gathered in one state on a request from another, and freezing and confiscation orders now circulate between European Union member states with recognition close to automatic. The practical question is therefore not what the charge says but where, and in which country, the defence can actually act.
That has a consequence people learn expensively. The executing authority will not re-examine the merits of a decision taken elsewhere, because challenges to the substance belong in the state that issued it. Contesting a freezing order only where the money happens to be, without acting where the order was made, is the recurring error in this area.
Avv. Massimo Romano — Ordine degli Avvocati di Napoli n. 14553, patrocinante in Cassazione dal 23/10/2015 — Roma, Via Avicenna 97, 00146 · Milano, Via Giuseppe Pecchio 3, 20129 · Napoli, Corso Umberto I 237, 80138 — +39 335 669 3954
In brief
- Italian law separates handling, laundering, use of unlawful property and self-laundering, and the entity itself can be prosecuted alongside the individuals under the corporate liability regime.
- Self-laundering generates most of the cross-border work, because it allows the author of the underlying offence to be prosecuted again for what was done with the proceeds.
- The limit of self-laundering is written into the provision: the reinvestment must concretely obstruct identification of the criminal origin of the funds.
- Traceable transfers into accounts held in the person's own name generally obstruct nothing, which is where many of these charges can be attacked on the text itself.
- Confiscation is mandatory on conviction and can be ordered by equivalent value, so assets unconnected to the alleged conduct are reached as well.
- The European Investigation Order lets a state ask another to obtain bank records, hear a witness or search premises, on limited grounds of refusal and a short timetable.
- Mutual recognition means a freezing or confiscation order made in a member state is enforced in another with very limited review by the executing authority.
- Where the alleged offences affect the financial interests of the Union, the European Public Prosecutor's Office investigates directly across the participating states.
- A frozen account is normally tied to a calculation of the supposed profit, so testing how that figure was built is frequently the shortest route to releasing funds.
- Where a company is involved its defence is a separate exercise about systems rather than facts, prepared alongside the individual defences and not after them.
The Italian offences
| Offence | Conduct | Provision |
|---|---|---|
| Handling | Receiving property from an offence to make a profit | Art. 648 Criminal Code |
| Laundering | Substituting or transferring so as to obstruct identification | Art. 648-bis |
| Use of unlawful property | Employing it in economic activity | Art. 648-ter |
| Self-laundering | The author of the predicate offence reinvesting the proceeds | Art. 648-ter.1 |
| Entity liability | Proceedings against the company itself | Legislative Decree 231/2001 |
| Confiscation | Mandatory on conviction, including by equivalent | Art. 648-quater |
Self-laundering is the provision that generates most cross-border work, because it allows the person who committed the underlying offence to be prosecuted again for what they did with the proceeds. Its limit is written into the text: the reinvestment must concretely obstruct identification of the criminal origin. Traceable transfers into accounts in your own name generally do not.
How the material moves between countries
Three mechanisms do most of the work, and each has its own points of attack.
- The European Investigation Order. One state asks another to carry out an investigative measure — obtain bank records, hear a witness, search premises. The grounds for refusal are limited and the timetable is short.
- Mutual recognition of freezing and confiscation orders. An order made in one member state is enforced in another with very limited review by the executing authority.
- The European Public Prosecutor's Office, where the offences affect the financial interests of the Union: a single office investigating directly across participating states.
The consequence for the defence is structural. The executing authority will not re-examine the merits of the decision taken elsewhere: challenges to the substance belong in the issuing state. Contesting a freezing order only where the money is, without acting where the order was made, is the most common and most expensive error in this area.
Frozen accounts and the two clocks
An account frozen in a criminal investigation is normally tied to a calculation of the supposed profit. That calculation is the pressure point: it is very often overstated, and it fixes the ceiling of everything that follows, including confiscation by equivalent.
In Italy the deadline to apply for review of a seizure is ten days from execution. Where an order arrives from another state, there are two clocks running in two jurisdictions, and only coordinated action deals with both. The Italian side is described in financial crime investigations in Italy.
The company is a defendant too
Laundering and self-laundering are among the offences that trigger proceedings against the entity itself. The company's defence is about its organisation — whether a model capable of preventing offences of that type had been adopted and was actually working — and it is not the same defence as the individuals'. Keeping the two separate from the outset matters, because their interests diverge.
The provisions in this area describe conduct that overlaps in practice, and the table sets out what distinguishes them.
| Offence | Conduct covered | Note |
|---|---|---|
| Handling | Receiving property derived from an offence in order to profit | The oldest and broadest of the group |
| Laundering | Substituting or transferring so as to obstruct identification | Committed by somebody other than the author |
| Use of unlawful property | Employing the property in economic activity | Covers conduct short of substitution |
| Self-laundering | The author of the offence reinvesting the proceeds | Requires that identification be concretely obstructed |
| Liability of the entity | Proceedings against the company itself | Its defence is about systems, not facts |
| Confiscation | Mandatory on conviction, including by equivalent value | Reaches assets unconnected with the conduct |
Where the defence has to be
These cases require counsel in each jurisdiction involved and someone holding the whole picture: a step taken in one country routinely determines what remains possible in another. That arrangement is described in how a correspondent case is run, and for instructing firms in the note for foreign law firms.
Frequently asked questions
Can Italy freeze an account held in another country?
Within the EU, freezing and confiscation orders circulate with recognition close to automatic, and the executing authority carries out only a limited review.
Where do I challenge a freezing order?
Challenges to the substance belong in the state that issued the order. Contesting it only where the money is held is the most common and most expensive error.
What is self-laundering?
Reinvesting the proceeds of your own offence in a way that concretely obstructs identification of their criminal origin. Traceable transfers into your own accounts generally do not meet that test.
Is my company prosecuted as well?
Laundering and self-laundering trigger proceedings against the entity itself, judged on its organisation rather than on the conduct of the individuals.
If an order has arrived
Establishing which state issued it, and where it can be challenged, is the first step and it is urgent. First contact is free and covered by professional privilege.
What a foreign freeze does to a life at home
When an account is frozen on the basis of an order from a foreign judge, the owner usually learns about it from the bank, not from a court. The effects spread quickly.
Business suffers earliest. A company that cannot reach its operating account cannot pay staff, suppliers or tax, and its customers, who may sit in several countries, begin to ask questions. A director may find that personal accounts are frozen too, because the authorities treat the person and the company as linked. Contracts with penalty clauses start to bite, and credit lines are withdrawn.
Property transactions stall. A purchase or a sale that depended on funds in the frozen account fails, and deposits may be lost. A mortgage lender who sees an order on a record will stop. For a family, the practical effect is that rent, school fees and living costs must be met from other sources, which may not exist.
Reputation travels with the order. Banks in different countries share concerns, and a person flagged by a bank may find that accounts elsewhere are restricted without explanation. Relatives who received transfers from the frozen account may be contacted. Advisers, such as accountants, lawyers and notaries, who handled the funds may be asked to explain themselves.
Travel is affected for people who are summoned or sought. A person may hear that an investigation exists only when they are stopped at a border. Practical steps include opening a new account that is not linked to the frozen account, keeping documentary proof of income, and speaking to a lawyer before the bank closes any more doors.
Material and orders move between states through distinct mechanisms, and the comparison below shows what each does and where it can be attacked.
| Mechanism | What it achieves | Where the defence acts |
|---|---|---|
| European Investigation Order | Has an investigative measure carried out in another state | Mainly in the issuing state, on limited grounds elsewhere |
| Mutual recognition of freezing orders | Enforces an order made elsewhere with minimal review | In the state that made the order, on the substance |
| Mutual recognition of confiscation orders | Executes a confiscation across borders | In the issuing state, and on execution questions locally |
| European Public Prosecutor's Office | Investigates directly across participating states | Before the courts designated in each participating state |
| Traditional mutual assistance with non-member states | Transfers material under treaty arrangements | On the lawfulness of the transfer and its basis |
Who is reading: directors, relatives, advisers and recipients
People arrive at this subject from different positions, and the law looks at each of them in a different way.
Some are owners and directors of companies that trade across borders. They sent or received payments from partners abroad, and a partner among them is now under investigation. The company's account is frozen, and the question is whether the director is a suspect, a witness or merely an unlucky counterparty.
Others are individuals who sent money home, bought property abroad or received a transfer from a friend. They did nothing unusual, yet the origin of the funds is being questioned. The charge in these cases depends on what they knew and on whether they took part in hiding the source.
A further group are advisers: accountants, advisers, notaries, agents and bankers, who processed transactions for a client and now face questions. They are not accused of the original offence but of helping to disguise the proceeds.
Relatives and employees are the last group. A spouse who holds a joint account, a parent who lent money, an employee who signed payments on instruction: they are drawn in because their names appear in bank records. For each of them the immediate need is to understand in what capacity they are involved, because that decides whether they can speak freely or must be careful.
What to assemble before the lawyer reads the file
Money cases are won on the paper that explains each movement of funds. Collect the following, and organise it by date.
- The freezing order, the seizure notice or the bank's letter, with the date, the name of the issuing authority and the envelope or email in which it came.
- Bank statements for every account involved, in the original format, covering the period of the transactions in question.
- Contracts, invoices and delivery documents that explain why each payment was made, with the names of the parties.
- Records of the source of the funds: salary, sale of property, inheritance, loan, business income, each with the supporting document.
- Company records: accounts, minutes, powers of attorney, lists of signatories and the identity of beneficial owners.
- Correspondence with banks, advisers and counterparties about the transactions, especially messages that show what was said about their purpose.
- Tax returns and declarations in each country involved, which show that income and assets were reported.
- Passport, residence documents and any permit or licence needed for the business concerned.
Keep all of it away from the premises that may be searched, and give copies to the lawyer only. If you are not sure where something is held, write down which bank, which adviser or which office is likely to have it; the lawyer can then request it in the proper form. A list of missing items is as useful as a pile of documents, because it shows the lawyer where the gaps in the story are.
Decisions that arise when an order arrives
Several choices come up in the early days, and each has a price.
Where to challenge the order. An order made in a state and recognised in another can often be contested in the state that issued it, in the state that executes it, or in both, and the grounds differ. A challenge in the wrong place wastes time and may fix an argument you wanted to keep. The lawyer must identify the forum and the deadline before anything is filed.
Whether to explain the origin of the funds now. A clear, documented explanation can persuade an authority to release money. It can also commit you to a version that later proves to be wrong in a detail, and it may travel to the other country. A short note prepared by the lawyer, with the documents attached, is usually safer than an account in your own words.
Whether to cooperate with a foreign request for information. If a bank or a company is asked by a foreign authority for records, you may be asked to consent. Consent speeds matters and signals openness, but it also gives access to everything, not only what concerns the case. The lawyer should read the request before you sign.
Whether to retain lawyers in several countries. This adds cost, but a case run from home alone often fails to reach the place where the decision is taken.
What to leave alone when funds are frozen
Fear of losing money produces moves that make things worse. The following are worth avoiding.
- Do not move money out of other accounts to a new place. Transfers after an order are read as an attempt to hide funds, and they can bring new charges.
- Do not ask relatives or friends to hold money for you. Their accounts can be frozen too, and they may be questioned.
- Do not restructure the company, change directors or transfer shares in a hurry. Changes made after an order look like concealment.
- Do not backdate or create documents to explain old payments. A false invoice turns a manageable inquiry into a serious matter.
- Do not discuss the case with counterparties by message. Messages are collected, and they may reach the authority.
- Do not ignore a request from a bank for information. Silence is often treated as a refusal to cooperate and leads to further restrictions.
- Do not pay anybody who offers to unfreeze the account for a fee. Such offers are not genuine, and some are traps.
Doing nothing for a short while, while the lawyer reads the order, is a decision, and usually a sound choice. Staff at banks and fiduciary firms often ask customers to sign forms in the days after a freeze; read each form, and send it to the lawyer before signing.
A freeze is lifted by showing where the money came from, and the table sets out what to assemble, who holds it and what it answers.
| Record | Who holds it | What it answers |
|---|---|---|
| Account statements covering the whole period | The banks involved, in each country | Where the funds actually came from and went |
| Contracts, invoices and settlement documents | The counterparties and their advisers | The economic reason for each movement |
| Tax returns and company accounts | The accountant and the tax authority | That the sums were declared and are consistent with known activity |
| The calculation underlying the alleged profit | The file, once the defence obtains it | How the frozen figure was built, and on what assumptions |
| The order itself and the request behind it | The issuing and executing authorities | Which state must be addressed, and on what grounds |
| Correspondence with banks and compliance staff | The person and the institutions | What was disclosed at the time, and to whom |
Questions for the lawyer on a cross-border money file
The usual question is when the money will be released. Better questions go to the structure of the case.
- Which offence is alleged, and is it laundering, handling or self-laundering, or a different charge?
- Which offence is said to have produced the money, and is there evidence that it happened?
- Which country issued the order, which executed it, and which has the case?
- Where can the order be challenged, by what deadline, and on what grounds?
- What do the authorities say I knew, and what documents show what I actually knew?
- Is the company also under investigation, and does its position differ from mine?
- Can part of the frozen money be released for living costs or wages?
- What do I need from banks and advisers abroad, and how do I obtain it in a form that will be accepted?
Honest answers are often conditional. A lawyer who says what depends on facts not yet known is more reliable than a lawyer who is certain. Ask also whether the lawyer works with colleagues in the other countries involved, how the lawyer will keep a common account of the facts across them, and who will pay translators and local counsel. In cross-border files the answer to the last question is often the difference between a plan that can be carried out and a plan that remains on paper.
Orders that travel between countries
Within the European Union, freezing and confiscation orders circulate with recognition close to automatic. A judge in a state issues the order, the executing state accepts it, and the bank acts. The person affected sees only the final step, and may not realise how much has happened elsewhere.
The consequence is that the defence has to operate in several places. The state that issued the order decides the merits: whether there is an offence and whether the funds come from it. The state that executes the order decides limited points, such as whether the order is in proper form. A challenge in the executing state alone may achieve little; a challenge in the issuing state alone may arrive too late to save a business. The lawyers in the states must agree who files what and when.
Evidence moves by request between authorities, and the defence has less control over that flow. Documents arrive in other languages, and translations may be unfinished. The defence should ask for certified translations and should check them against the originals. Time differences, national holidays and different working days slow communication, and urgent matters should always be confirmed in writing.
The consulate of your country can confirm identity and provide certified copies but cannot enter into the case. If you hold accounts in several countries, ask each bank for a record of what it has received from authorities, as this shows what the investigators have seen. Statements made in Italy will be compared with those made abroad, so coordinate before speaking.
Words on freezing orders and bank letters
The documents use Italian terms that are simple after they are explained.
- Riciclaggio is laundering: replacing or moving money or assets from an offence so as to obstruct the identification of their origin, by a person who took no part in that offence.
- Autoriciclaggio is self-laundering: reinvesting the proceeds of an offence you committed in a way that hides where they came from.
- Reato presupposto is the underlying offence that is said to have produced the money, and which must be shown to exist.
- Provenienza delittuosa means that the money or asset comes from an offence.
- Sequestro is seizure or freezing, the order that takes money or property out of your control during the investigation.
- Confisca is confiscation, the permanent loss of money or property ordered at the end of a case.
- Responsabilità dell'ente is the liability of a company or other body, which can face its own sanctions beside the person.
- Rogatoria is a request from an authority in a country to an authority in another for evidence or help.
If another term appears, send a photograph to the lawyer before taking any step, since an automated translation may mislead you. Some of the words overlap: a freeze during the investigation is not a confiscation, which comes only at the end of a case, and the documents often use both words in the same paragraph. Check which of them the order uses, because the right to challenge and the deadline depend on it.
How the studio handles cross-border money files
The studio begins with the order. You send a photograph or PDF of it, with the bank's letter and the envelope, and a lawyer reads it the same day to establish which authority issued it, in which country, and what deadline applies. A call, which can be held in English, follows.
A written letter of instruction sets out the work and the fees, and a power of attorney lets the lawyer act. The lawyer then maps the case: the offences alleged, the countries involved, the places in which the order can be challenged, and the evidence that will be needed. Where a company is involved, the studio explains how its position relates to that of its directors, and whether separate representation is advisable.
The studio works with lawyers in other countries, selected for the places where the decision will be taken, and keeps a common account of the facts for all of them. It helps assemble the documents that show the source of the funds, arranges translations, and prepares requests to release money for living costs and wages. Offices in Rome, Milan and Naples allow meetings in person to look through records, and urgent matters, such as a search or an order served on a bank, are handled at any hour. The studio does not promise that funds will be released, and will say when a step may do more harm than good. It reports in plain language after each stage.
About the lawyer
People write to this office from places where Italian is not spoken, and often with documents they cannot read. That is the starting point of the work rather than an obstacle to it. Avv. Massimo Romano practises criminal law and appears before the Court of Cassation; alongside ordinary Italian proceedings he deals with surrender requests, extradition, and the situation of foreign nationals facing charges in Italy. Send or read out what you have: a notice, a receipt from a search, the name of the prison, a lawyer's letter in another language. He will tell you what the document is and what it obliges you to do. The call is followed by a written note setting out what the office can take on, how the file will be handled between Rome, Milan and Naples, and who in the family will be kept informed. Those conversations are held in English whenever that is what the family needs.
Write on WhatsApp or call. Have ready the identity details of the person concerned and a photograph of every page you have received, in whatever language it is written.
Avv. Massimo Romano — criminal defence lawyer, admitted to the Italian Court of Cassation
Iscritto all'Ordine degli Avvocati di Napoli n. 14553 | Patrocinante in Cassazione dal 23/10/2015
Roma, Via Avicenna 97, 00146 · Milano, Via Giuseppe Pecchio 3, 20129 · Napoli, Corso Umberto I 237, 80138
+39 335 669 3954 · WhatsApp