Overturning the presumption of innocence in the fight against money laundering

‘In dubio pro reo’ – when in doubt, for the accused. According to Daniel Thelesklaf, who until June of this year was the Swiss government’s top anti-money laundering official, this maxim should be changed in cases of suspected money laundering in Switzerland. He believes that the country’s arsenal of measures to combat money laundering requires an effective instrument to stop criminals in their tracks. The Swiss authorities are currently only able to seize a tiny fraction of the funds flagged by banks as suspicious. This is because without proof, Swiss public prosecutors are unable to pursue money laundering cases, which are then dropped.

Reversing the burden of proof could remedy this situation. Suspects in money laundering probes conducted by the Swiss authorities would be forced to prove that their assets were obtained legally. This change to anti-money laundering legislation is necessary, it is argued, because Switzerland is reliant on legal assistance from other countries to help it seize dirty money. The corruption scandal involving Venezuela’s national oil company Petróleos de Venezuela SA (PDVSA) shows how this reliance can jeopardise the chances of a successful investigation. Countries and even their judiciaries are often implicated in the cases themselves and thus have no interest in handing over evidence. As a result, money laundering convictions generally involve small-scale cases, while the big-time offenders frequently get off scot-free.

Attack on the rule of law or effective instrument?

In the case of the Venezuelan corruption scandal, reversing the burden of proof would have given investigators the tools they needed to uncover the illegal enrichment of senior officials and freeze their assets. Critics argue, however, that a change of this kind could have dangerous implications for the rule of law. With other offences, for example, you can’t just sidestep difficulties gathering evidence by reversing the burden of proof. No-one has to prove that they did not steal their own bicycle or did not earn more than they said they did in 2020. A shift from the presumption of innocence to the presumption of guilt would mean that anyone who comes under suspicion is in essence automatically classed as a criminal unless they are able to actively prove their innocence.

However, there is no suggestion that all ordinary citizens would have to prove to the government that they acquired their money legally. The rule would apply to complex cases where, say, one individual transfers funds to more than 50 countries through 100 different companies. In such cases the burden of proof would be reversed and the individual would have to prove that their funds were obtained legally. One note of caution, though – there are some company structures on this scale that are perfectly legal.

Developing the right strategy for the future

The fact is that investigations into money laundering are inherently difficult; this is a complex crime that inevitably leads back to a prior offence and generally also has a cross-border dimension. What’s more, every time that the arsenal of measures to combat money laundering is expanded, money launderers find new ways to feed the proceeds of drug and human trafficking, corruption and other illegal activity into the legal financial and economic system. Reversing the burden of proof could be one approach, but one that has to be properly thought through and scrutinised to ensure compatibility with the principles of the rule of law.

If Swiss public prosecutors are in future able to fight money laundering cases by reversing the burden of proof, the risks associated with a presumption of guilt should not be ignored.