Italian Supreme Court: taking out an insurance policy may constitute Self-Money Laundering

It is well known that under Article 648 ter of the Italian Criminal Code, anyone who has committed or conspired to commit a non-negligent crime by employing, substituting, transferring in economic, financial, entrepreneurial or speculative activities, money, goods or other utilities originating from the commission of such crime, in such a way as to concretely hinder the identification of their criminal origin, is liable for “self-money laundering.” In other words, in the crime of self-money laundering, the person who commits this crime is also the perpetrator of the predicate crime (e.g., I commit a robbery and re-use the proceeds of my criminal activity in lawful activity, becoming responsible for money – laundering too).

On the subject of self-money laundering, the Supreme Court, Criminal Section, in Judgment 9923/2024, published on March 8, 2024, ruled that self-money laundering by re-use is triggered when an insurance policy is taken out by using sums originated from embezzlement. As part of these proceedings, it was rejected the defense’s line of argument that it was not self-money laundering because the insurance contract, by guaranteeing the preservation of the capital at maturity, could not qualify as an economic or financial activity.

The Supreme Court justified its position by pointing out that the crime of self-money laundering aims to freeze economic utilities from crime, preventing such utilities from being reintroduced into the production circuit, thus causing further benefit or profit.

In particular, the insurance contract was qualified as a financial product under Article 1(u) of the TUF (“Testo Unico Finanza”) because the policy taken out with the money from embezzlement guaranteed the defendant a guaranteed minimum return and a constant annual return.

The Supreme Court also pointed out that the traceability of the transaction was irrelevant since transferring sums of money from a crime into an insurance policy constitutes, in any case, conduct capable of hindering the identification of the criminal proceeds.

Of particular interest, finally, was the exclusion of the cause of non-punishment referred to in Article 648 ter 1 paragraph 5 (destination to the personal benefit of the contested conduct) because the policy provided that, in the event of death of the policyholder, the beneficiary would become the spouse.