Predicate Offence

A predicate offence is a smaller crime in a large-scale criminal activity, such as money laundering or organised crime, which is often treated as a component of a bigger, complex scheme. It’s often used to describe crimes like money laundering and terrorism financing. It’s the crime that creates the illegal money used in further laundering activities.

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In other words, in the context of anti-money laundering (AML) compliance, a predicate offence is a crime that uses dirty or illegal money, such as funds that criminals gain through drug sales or human trafficking. Criminals then try to hide this money and make it look legitimate through various money laundering tactics.

Frequently asked questions

What are the Common Predicate Offences Examples?

Common predicate offence examples include cases of:

Tax evasion
Corruption
Drug trafficking
Human trafficking
Fraud (various financial scams, such as investment fraud)

According to the Financial Action Task Force (FATF), there are other types of illicit activities, such as environmental crime (including criminal harvesting, extraction, or trafficking of natural resources and waste) or organised crime, such as racketeering, which is linked to criminal groups that often engage in a variety of predicate offences.

What is the Link Between a Predicate Offence and a Suspicious Activity Report (SAR)?

Why Do Predicate Offences Matter to Compliance?

How Do Predicate Offences Affect Customer Due Diligence (CDD)?