Money laundering is often discussed in the context of how international organisations like the Organisation of Economic Co-operation and Development deal with such issues. But money laundering affects not just governments and international bodies, but every citizen of Bermuda.

Money laundering is the action by which a criminal disguises the proceeds of his criminal activity so that he is able to use them without being linked to the original crime. Quite often it simply involves a thief taking the goods he has stolen and selling them to someone in order to get cash which he can spend.

We tend to think of money launderers as the people who help major criminals to disguise the large amounts of money that they have but which they cannot explain, so as to let them use it.

In foreign countries this may allow them to evade income tax.

Indeed, the notorious American gangster Al Capone was eventually arrested and imprisoned for income tax evasion, not for any of the murders or other major crimes that he committed or had committed for him.

In Bermuda, we might think of money laundering as being a means by which the funds generated through the drug trade are put into circulation and in some cases, used to buy more drugs.

Our legislature passed laws, first in 1989 and again in 1997 in an attempt to combat the drug business. Under those laws, government can at the end of a successful drug prosecution, seize all of the funds and property amassed by the drug dealer over his period of drug selling.

Most importantly, the legislation provides for a Confiscation Order, by which the judge at the conclusion of a criminal trial for drug dealing, can make an order at the request of the Prosecution, confiscating the proceeds of that drug dealing.

A regime for taking evidence and taking into account earnings and property owned was worked out and the judge is to arrive at a monetary figure, for which he makes the Confiscation Order.

A series of offences have been created in order to prevent criminals from hiding their money so that it cannot be confiscated.

A criminal can neither deal with his own proceeds of crime nor can others assist him to hide them. To do so would be to commit one of the money laundering offences.

The law also provides that money laundering is considered as a drug trafficking offence. So, if anyone assists a money launderer in the commission of his crime of hiding the money or other proceeds of criminal conduct he, too, is liable to the confiscation of his assets.

Consequently, anyone who knows or suspects that another person is engaged in the drug trade and assists that person to hide the proceeds of their crime, is liable to a double penalty.

They are not only subject to the extremely high criminal penalties (the most serious drug trafficking offences carry a penalty of 20 years imprisonment), but all their property obtained during the previous six years may be liable to confiscation by the government.

It is vital, if you suspect that someone is committing a drug trafficking offence, that you avoid being used by them nor do you assist them to hide or convert the proceeds of their crime so that they can utilise them.

This has implications for storekeepers who may be accepting large cash payments in return for valuable items, knowing or suspecting that the cash was obtained by means of drug trafficking.

It is also important for people who accept new household appliances from their young out of work relatives (something we see in one of the anti-drug commercials).

There was recently an example, reported in this newspaper, of a Confiscation Order affecting someone other than the offender.

In 1997 and 1999, the money laundering provisions were extended to all crimes that can be tried in the Supreme Court by a judge and jury. This change, means that it is not just drug money of which a person should be careful.

*** Attorney Barrie Meade, QC, is the Compliance Officer at Appleby Spurling & Kempe. Copies of Mr. Meade's columns can be obtained on the Appleby Spurling & Kempe web site at www.ask.bm.

*** This column should not be used as a substitute for professional legal advice.

Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.