Is there a maximum amount of time someone's funds can be confiscated for an AML investigation?
I.e. can someone's funds be indefinitely held, potentially causing financial hardship?
I'm asking in relation to the Zhong Tong affair. Just wondering when we'll hear news of if his funds are really from a friend.
It depends on the nature of the investigation and the jurisdiction involved. Where I live, if you continue to fail to adequately identify yourself to PayPal on request, they will eventually transfer your funds to one of the government's unclaimed money funds so you may never get them back (because to claim them from the unclaimed monies fund you'd still need to verify your identity).
In AML investigations, it's generally not sufficient to prove that the funds were given to you by someone else (people laundering money often route it through multiple other people in an attempt to legitimise it) - you also need to establish that the source of the funds was legitimate. There's not necessarily a bright line between where an internal AML investigation by a financial services provider ends and an external investigation by a regulator/financial intelligence unit begins. The suspicion is tied to a specific crime in this particular instance which makes any investigation different than it would be if the investigation was based on more generic factors.
It's also worth noting that Dominica repealed its existing AML legislation last year and replaced it with several new pieces of AML legislation (one of which allows for the immediate seizure of proceeds of crime). At this point, that legislation appears to remain substantially untested.
