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Published
Dec, 25 2025
Hanna Sianko
International Human Right Lawyer
Hanna Sianko

Financial Criminal Law: Types and Consequences

Financial criminal law (also known as white-collar criminal law) regulates non-violent illegal acts committed primarily for financial gain. As global markets become more integrated, the complexity of these crimes — and the severity of the sanctions used to combat them — has increased significantly.

Primary Types of Financial Crimes

Financial crimes often involve sophisticated schemes designed to conceal the origin of funds or manipulate market perceptions.

Money Laundering

This is the process of making “dirty” money (proceeds from criminal activity) appear “clean” or legal. It typically occurs in three distinct stages:

  1. Placement: Introducing illegal funds into the legitimate financial system (e.g., cash deposits).
  2. Layering: Distancing the money from its source through complex layers of financial transactions.
  3. Integration: Returning the laundered funds to the economy so they appear as legitimate business earnings.

Fraud

Fraud involves intentional deception to secure unfair or unlawful gain. Common forms include:

  • Securities Fraud: Manipulating the stock market or providing false information to investors.
  • Accounting Fraud: Falsifying financial statements to hide a company’s true financial health.
  • Wire/Mail Fraud: Using electronic communications or postal services to commit fraudulent acts.

Corruption and Bribery

This involves offering, giving, receiving, or soliciting something of value to influence the actions of an official or corporate representative. Key international regulations include the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act.

Insider Trading

Trading a public company’s stock or other securities (such as bonds or stock options) based on material, non-public information about the company. This undermines market integrity by creating an unfair advantage.

Tax Evasion

The illegal non-payment or underpayment of taxes. Unlike tax avoidance (which is legal optimization), evasion involves deliberate misrepresentation of affairs to tax authorities.

 

Economic Sanctions

Economic sanctions are commercial and financial penalties applied by countries or international organizations against targeted states, groups, or individuals for political, military, or social reasons.

Sanction Type Description
Comprehensive Broad restrictions on almost all commercial activity with a specific country (e.g., embargos).
Targeted (Smart) Focused on specific individuals, entities, or sectors (e.g., freezing assets of specific oligarchs).
Sectoral Restrictions on specific industries, such as energy, banking, or defense.
Secondary Sanctions Penalties imposed on non-targeted third parties (e.g., a foreign bank) for doing business with a sanctioned entity.

Key Regulators

  • OFAC (USA): The Office of Foreign Assets Control is the most influential global enforcer.
  • EU Sanctions Map: The European Union’s framework for restrictive measures.
  • UN Security Council: Implements sanctions that all UN member states are legally required to follow.

Consequences of Financial Crimes

The repercussions of engaging in financial crime or violating sanctions are multi-layered, affecting both individuals and corporations.

Legal and Criminal Penalties

  • Imprisonment: Significant prison sentences, often reaching 20+ years for major fraud or money laundering.
  • Asset Forfeiture: The government seizes property, cash, and investments derived from or used in the crime.
  • Monetary Fines: Fines often exceed the total profit made from the illegal activity, sometimes reaching billions of dollars for large institutions.

Administrative and Civil Consequences

  • Debarment: Being banned from participating in government contracts or bidding.
  • Loss of Licenses: Revocation of banking, trading, or professional licenses (e.g., CPA or legal bar).
  • Civil Litigation: Lawsuits from shareholders, victims, or business partners seeking damages.

Reputational and Operational Risks

  • De-risking: Banks may terminate relationships with entities perceived as “high risk,” effectively cutting them off from the global financial system.
  • Brand Damage: Long-term loss of consumer and investor trust, often leading to a permanent decline in market value.

The FATF: The Global Standard-Setter

The Financial Action Task Force (FATF) is an intergovernmental organization that develops policies to combat money laundering and the financing of terrorism and proliferation. While it is not a court and cannot arrest individuals, its “Recommendations” are the gold standard that almost every country in the world must follow to stay connected to the global economy.

How the FATF Operates:

  • The 40 Recommendations: This is a comprehensive framework of measures that countries should implement. They cover everything from the legal system and law enforcement to the oversight of the financial sector.
  • Mutual Evaluations: The FATF conducts peer reviews of each member country to see how well they are enforcing anti-money laundering (AML) laws. If a country’s laws exist only on paper but aren’t used in practice, the FATF will lower that country’s rating.

The “Black” and “Grey” Lists

The most powerful tool the FATF has is its ability to publicly name and shame jurisdictions with weak financial oversight.

  • The Grey List (Jurisdictions under Increased Monitoring): Countries on this list are actively working with the FATF to fix “strategic deficiencies.” Being on this list makes international trade more expensive and difficult for that country’s businesses.
  • The Black List (High-Risk Jurisdictions): Countries on this list (such as North Korea or Iran) are considered a threat to the global financial system. The FATF calls on all members to apply “counter-measures,” effectively cutting these countries off from international banking.

Why the FATF Matters to Individuals and Businesses

If the FATF gives a country a poor rating, banks around the world will immediately start “de-risking”—closing accounts or blocking transfers related to that country. For a business, this means that even if you aren’t a criminal, you may lose your ability to send or receive international payments simply because of where you are located.

Expert Defense in a High-Stakes Environment

Navigating the complexities of financial criminal law, FATF regulations, and international sanctions requires more than just general legal knowledge — it demands strategic expertise at the intersection of finance and global litigation. Whether you are facing an investigation into money laundering, dealing with frozen assets due to sanctions, or navigating a compliance crisis, the consequences of a single misstep can be life-altering.

Our legal team specializes in providing robust defense for individuals and corporations targeted by financial allegations. We understand the mechanics of the Egmont Group’s intelligence sharing and the nuances of international “blacklists.” We don’t just react to charges; we build proactive strategies to protect your assets, your freedom, and your reputation.

Don’t wait for a formal indictment to protect your future.

Get Expert Advice Today. If you are seeking professional legal protection against financial crime allegations or sanctions, contact our specialists for a confidential consultation. We will analyze your case and develop a comprehensive defense strategy tailored to your specific situation.

Our expertise extends beyond financial law to cover a broad spectrum of international legal challenges. We provide specialized assistance in the following areas: