Predicate offence list

What a predicate offence actually is

A predicate offence is the crime that generates the proceeds someone then tries to launder. Without a predicate offence, there’s no dirty money to clean. Money laundering is, by definition, a crime that depends on another crime having happened first.

Drug trafficking is the classic example, and historically the one AML law was built around. The concept now spans a much wider range of criminal activity, from tax evasion to wildlife trafficking, which is exactly what FATF’s designated categories try to capture.

FATF’s 21 designated categories

FATF’s General Glossary sets out 21 designated categories of offences that, at minimum, countries are expected to treat as predicate offences to money laundering:

• Participation in an organised criminal group and racketeering
• Terrorism, including terrorist financing
• Trafficking in human beings and migrant smuggling
• Sexual exploitation, including sexual exploitation of children
• Illicit trafficking in narcotic drugs and psychotropic substances
• Illicit arms trafficking
• Illicit trafficking in stolen and other goods
• Corruption and bribery
• Fraud
• Counterfeiting currency
• Counterfeiting and piracy of products
• Environmental crime
• Murder, grievous bodily injury
• Kidnapping, illegal restraint and hostage-taking
• Robbery or theft
• Smuggling
• Tax crimes, related to direct and indirect taxes
• Extortion
• Forgery
• Piracy
• Insider trading and market manipulation

That’s a genuinely wide net. It reflects FATF’s core position, set out under Recommendation 3, that money laundering law should apply as broadly as possible, not just to a narrow set of obviously serious crimes.

Why the list isn’t exhaustive

The 21 categories are a floor, not a ceiling. FATF is explicit that this is a convenient categorisation for comparing countries, not a fixed, exhaustive list. Countries are free, and in many cases expected, to criminalise laundering tied to offences well outside these categories too.

The European Union’s Sixth Anti-Money Laundering Directive, for example, added cybercrime as an additional predicate offence category, something not explicitly named in FATF’s original 21.

The “all crimes” approach vs a defined list

Some jurisdictions don’t use a list at all. The UK’s Proceeds of Crime Act 2002 takes what’s often called an “all crimes” approach: criminal property is property that represents the proceeds of any criminal conduct, full stop, rather than a defined set of qualifying offences.

Other countries prefer a defined list precisely because it gives prosecutors and financial institutions a clearer, more predictable standard to work against. Both approaches trace back to the same FATF standard; they just implement the “as broad as possible” instruction differently.

Tax crimes: the most contested addition

Tax crimes are worth calling out specifically, because their inclusion was contested and relatively recent in AML history. FATF only formally added tax crimes to the designated categories as part of its 2012 standards revision, after years of debate about whether tax evasion should count as a money laundering predicate at all, separate from straightforward financial crime.

The addition matters in practice. It means proceeds of tax evasion, not just fraud or bribery, can now trigger money laundering reporting obligations in countries that implement it, which significantly widened the scope of what compliance teams need to watch for.

How the list affects what gets reported

For a compliance team, the predicate offence list isn’t academic. It shapes what a suspicious activity report actually needs to identify: not just that a transaction looks unusual, but what underlying criminal conduct it might connect to, even if that connection is only suspected rather than proven.

Firms don’t need to prove a specific predicate offence occurred before filing a SAR. Reasonable suspicion is enough. But understanding the range of offences that count helps analysts recognise patterns tied to less obvious predicate crimes, environmental crime or market manipulation, for instance, that a narrower mental model built only around drug trafficking would miss.

Predicate offences and international cooperation

The list also does quiet work in international cooperation. When one country asks another for help freezing or seizing assets, dual criminality, the requirement that the underlying conduct be a crime in both countries, is often part of the test. A shared reference list of predicate categories makes it easier for countries with different legal systems to agree that a given case actually qualifies.

That’s part of why FATF pushes for broad, consistent adoption of the categories, even though implementation still varies by country.

Where this shows up in a firm’s risk assessment

In a firm’s own risk assessment, the predicate offence list feeds directly into what typologies get built into transaction monitoring rules and what red flags investigators are trained to spot. A firm operating in a sector exposed to a specific predicate category, art dealers and cultural property trafficking, for instance, or extractives firms and environmental crime, should weight that category more heavily than a generic, one-size-fits-all rule set would.

Frequently asked questions

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