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FinCrime Institute
Category: Predicate Offenses

Predicate Crime

Also known as: Predicate Offence, Predicate Offense
Simply put

A predicate crime is the underlying criminal activity that generates illicit proceeds which may then be laundered. In an anti-money laundering context, the predicate offence is the original wrongdoing, such as fraud, drug trafficking, or corruption, from which the 'dirty' money originates. Money laundering is generally treated as a separate offence that depends on the existence of this earlier predicate crime.

Formal definition

In AML terminology, a predicate offence is the criminal conduct that produces proceeds capable of being laundered, and it forms the necessary basis on which a money laundering charge is constructed. It should be noted that the concept can carry different meanings across contexts: in the broader criminal law of the United States, a 'predicate crime' may also refer to an offence that is a component of, or a lesser offence included within, a larger crime, which is distinct from its specialized AML usage. The scope of which offences qualify as predicate crimes for money laundering purposes varies by jurisdiction and by the applicable legal instrument, some regimes designate specific listed offences while others adopt an all-crimes approach, so practitioners should confirm the precise set of qualifying predicate offences against the governing law or regulation in the relevant jurisdiction.

Why it matters

The predicate crime concept is foundational to how money laundering is charged and investigated, because in most regimes money laundering is not a standalone wrong but an offence that depends on the existence of proceeds generated by some earlier criminal conduct. Without an identifiable predicate, such as fraud, drug trafficking, or corruption, the analytical link between illicit funds and the act of disguising their origin can be difficult to establish. Understanding which offences qualify as predicates in a given jurisdiction therefore shapes both the scope of criminal liability and the investigative priorities of financial intelligence and law enforcement.

The practical significance is heightened by the fact that jurisdictions do not treat the universe of predicate offences uniformly. Some legal instruments designate a specific list of qualifying offences, while others adopt an all-crimes approach under which any offence generating proceeds can serve as a predicate. This divergence matters for cross-border cases, where conduct that constitutes a predicate offence in one jurisdiction may not be treated identically in another, potentially affecting mutual legal assistance, extradition, and the framing of charges. Practitioners should confirm the precise set of qualifying predicate offences against the governing law or regulation in the relevant jurisdiction rather than assuming a common global standard.

Who it's relevant to

Financial Intelligence Analysts and Investigators
Analysts and investigators use the predicate crime concept to connect suspicious financial activity to underlying criminal conduct. Identifying a plausible predicate offence helps frame the movement of illicit funds, for example, through money mules, and supports the analytical narrative in investigations, though a suspicion or an identified predicate does not by itself establish wrongdoing.
AML Compliance Officers
Compliance officers must understand which offences qualify as predicate crimes under the law applicable to their institution, as this informs risk assessments, transaction monitoring scenarios, and the framing of suspicious activity or suspicious transaction reporting. Because the qualifying set of offences varies by jurisdiction and legal instrument, officers should confirm scope against the governing regulation rather than assuming uniformity.
Legal and Prosecution Professionals
Lawyers and prosecutors rely on the predicate offence as the basis on which money laundering charges are generally built, and must distinguish its specialized AML meaning from the broader US criminal-law usage referring to a lesser included offence. The precise evidentiary requirements concerning the predicate depend on the applicable legal framework.
Cross-Border and Policy Practitioners
Those working across jurisdictions need to account for divergence between listed-offence and all-crimes approaches, since differences in how predicate offences are defined can affect cooperation, charging decisions, and the treatment of the same conduct in different legal systems.

Inside Predicate Crime

Underlying Criminal Offence
A predicate crime is the underlying criminal offence that generates the proceeds which are subsequently laundered. Money laundering is generally treated as a distinct, secondary offence that depends on the existence of criminally derived property from this prior conduct.
Designated Categories of Offences
The FATF Recommendations identify a set of designated categories of offences (such as trafficking, corruption, fraud, and others) that jurisdictions are expected to include as predicates for money laundering. These are standards rather than binding law, and the precise catalogue of predicate offences is transposed differently in national legislation.
All-Crimes vs. Threshold Approaches
Jurisdictions typically define the scope of predicate offences using either an 'all-crimes' approach (any criminal offence can serve as a predicate) or a threshold/list-based approach (only offences above a certain seriousness, penalty level, or on a specified list qualify). The applicable approach depends on the specific regime and should be confirmed against local law.
Proceeds of Crime
The predicate offence must produce proceeds, property or economic benefit derived directly or indirectly from the criminal conduct. Money laundering offences generally concern the handling, conversion, concealment, or transfer of such proceeds.
Foreign Predicate Conduct (Dual Criminality)
In many jurisdictions, conduct occurring abroad can constitute a predicate offence for domestic money laundering purposes, often subject to dual criminality (the conduct being an offence in both jurisdictions). The exact treatment varies by regime.
Relationship to the Money Laundering Charge
In some regimes a conviction for the predicate offence is not required to prosecute money laundering; it may be sufficient to establish that property derived from criminal conduct of a specified type. Whether a separate predicate conviction is necessary is a matter of the applicable criminal law.

Common questions

Answers to the questions practitioners most commonly ask about Predicate Crime.

Is money laundering itself a predicate crime?
No. A predicate crime is the underlying criminal offence that generates the proceeds subsequently laundered, whereas money laundering is a separate offence concerned with dealing in those proceeds. The two are distinct offences: the predicate offence produces the criminal property, and the laundering offence involves concealing, converting, transferring, or otherwise handling it. That said, jurisdictions differ on whether a person can be convicted of laundering the proceeds of their own predicate offence (so-called self-laundering), and on whether the predicate offence must be separately proven. Exact treatment should be confirmed against the applicable criminal law and AML regime.
Is the list of predicate crimes the same in every country?
No. There is no single universal list of predicate offences. The FATF Recommendations set a standard, recommending that countries apply money laundering offences to a designated range of serious offences, whether by reference to all offences, a threshold based on penalty or seriousness, or a defined list of categories, but the FATF Recommendations are standards, not binding law. How each jurisdiction implements the scope of predicate offences varies. For example, some regimes treat virtually any indictable or serious offence as capable of being a predicate crime, while others rely on enumerated categories. The precise scope should be confirmed against the criminal law and AML legislation of the relevant jurisdiction.
How do predicate offences affect the way we categorise suspicious activity in a SAR or STR?
The concept of a predicate offence can inform how an analyst frames the suspected underlying criminality when documenting a suspicious activity report or suspicious transaction report, but reporting obligations generally do not require the reporter to establish or prove that a specific predicate offence occurred. In many jurisdictions the threshold for filing is suspicion or reasonable grounds to suspect, not proof. Where a reporting form invites selection of a suspected offence type, that selection is an indicator to assist the receiving financial intelligence unit, not a legal determination. Filing does not establish that any predicate crime has been committed.
Does our AML program need to identify the specific predicate offence before treating funds as suspicious?
Generally, no. Detection and escalation under a risk-based program typically turn on identifying indicators of suspicion, not on pinpointing a particular predicate offence. Requiring staff to prove or specify an underlying crime before escalating can create an inappropriately high internal threshold and may conflict with the suspicion-based standard that applies in many jurisdictions. The identification of a possible predicate offence, where feasible, may strengthen an internal analysis, but it is generally treated as supporting context rather than a precondition for internal reporting. Confirm the applicable reporting threshold against the relevant regulation.
How does the scope of predicate offences influence risk assessment and typology work?
The categories of offences treated as predicate crimes in a given jurisdiction can inform how an institution scopes its risk assessment, designs transaction monitoring scenarios, and frames typologies relevant to its customer base and geographies. Because the scope of predicate offences varies by jurisdiction, an institution operating across multiple regimes may need to account for offences that qualify in some locations but not others. Typologies associated with particular predicate offences are illustrative aids to detection, not exhaustive lists and not proof of criminality; they should be treated as one input into a broader risk-based approach.
When a predicate offence is committed abroad, how should that affect our handling of the funds?
Many regimes address conduct that would constitute a predicate offence if it occurred domestically, and some apply dual-criminality or equivalent tests to conduct occurring in another country. This means that proceeds derived from criminal conduct abroad may still fall within the scope of domestic money laundering offences, subject to how the relevant jurisdiction treats foreign predicate conduct. Because the treatment of foreign predicate offences differs across regimes, including whether the conduct must be criminal in both jurisdictions, the specific position should be confirmed against the applicable law before drawing operational conclusions about handling or reporting such funds.

Common misconceptions

A person must first be convicted of the predicate crime before money laundering can be established.
In many jurisdictions a prior or separate conviction for the predicate offence is not required; prosecutors may instead need to prove that the property derived from criminal conduct of a relevant type. The precise evidentiary standard is a criminal-law matter that varies by regime and should be confirmed against applicable law.
The list of predicate offences is uniform across all countries because of the FATF Recommendations.
The FATF Recommendations set international standards, not binding law, and identify designated categories of offences that countries are expected to cover. National transposition differs, some regimes use an all-crimes approach while others use threshold or list-based approaches, so the actual scope of predicate offences varies by jurisdiction.
Only serious organized crime, such as drug trafficking, can be a predicate offence.
Depending on the jurisdiction's approach, a broad range of offences, including fraud, corruption, and others within the designated categories, or in all-crimes regimes potentially any offence, may serve as predicates. The applicable range depends on whether the regime adopts an all-crimes or threshold/list-based model.

Best practices

Confirm whether your operating jurisdiction uses an all-crimes or a threshold/list-based approach to predicate offences, and document how this shapes the scope of your money laundering risk assessment.
Do not assume the FATF designated categories are directly binding; verify how predicate offences are actually defined in the applicable national legislation before relying on them operationally.
When conduct or counterparties involve other jurisdictions, consider whether foreign predicate offences and dual-criminality requirements affect the analysis, and confirm the treatment under local law.
Frame suspicious activity assessments around indicators that property may derive from criminal conduct, rather than concluding that a specific predicate offence has been proven, a filing or alert does not establish wrongdoing.
Coordinate with legal counsel on whether a separate predicate conviction is required in your regime, as this affects both investigation strategy and internal escalation decisions.
Confirm any specific thresholds, penalty levels, or offence lists against the current text of the applicable regulation rather than relying on generalized or remembered values.