FORFEITING THE PROCEEDS OF CORRUPTION A Seminar on Asset Forfeiture and Money Laundering for Member States of the Organization of American States ANTIGUA and BARBUDA MONEY LAUNDERING (PREVENTION) ACT 1996 AS AMENDED

1
FORFEITING THE PROCEEDS OF CORRUPTIONA Seminar
on Asset Forfeiture and Money Laundering for
Member States of the Organization of American
States ANTIGUA and BARBUDAMONEY
LAUNDERING (PREVENTION) ACT 1996 AS
AMENDEDCIVIL FORFEITUREREGIME May 2-5,
2006

• BY
• PAULA GILFORD
• LEGAL COUNSEL
• OFFICE OF NATIONAL DRUG AND MONEY LAUNDERING
  CONTROL POLICY

2

• Money laundering is a crime that is affecting the
  world hence the need to for countries to
  introduce new ways and means to deal with this
  global epidemic.
• The US Presidents Commission on Organized Crime
  as long ago as 1986, stated
• to be successful, an attack on organized crime
  in our mainstream economy cannot rely solely on
  the enforcement of federal criminal lawsThe
  Commission believes that a strategy aimed at the
  legitimate economic base of organized crime must
  build upon intervention measures as broad based
  as the nature of the threat posed by organized
  crime. A strategy in this area should also rely
  upon civil and regulatory measures tailored to
  the specific problems confronted. Anthony Kennedy

3

• It is based on this need to combat the growing
  trend of criminals seeking to hide the proceeds
  of their crime and the difficulty that is often
  encountered in the criminal process that Antigua
  and Barbuda has seen the need to introduce its
  civil forfeiture regime.
• Antigua and Barbuda has therefore made provision
  for non-conviction based forfeiture and the
  process of divesting a criminal of the proceeds
  of his crime by the introduction into the Money
  Laundering (Prevention) Act (MLPA), as amended
  sections 18B, 20A and 20B.

4

• Section 18B was inserted into the MLPA in April
  2001 with certain amendments being made to the
  section in December 2002.
• Sections 18B and 20A of the (MLPA) make provision
  for the forfeiture of the proceeds of some
  unlawful activity or instrumentality or the
  profits of someone who has engaged in a money
  laundering activity.

5

• Section 20A an 20B were inserted into the MLPA in
  December 2002.
• The procedure outlined by the section 20A and
  20B of the MLPA, allow for forfeiture of such
  unlawfully acquired assets by a simpler
  procedure, whereby the court can decide whether
  it is more probable than not that a person has
  engaged in money laundering activity.

6

• Section 18B allows for the forfeiture of the
  proceeds of some unlawful activity or an
  instrumentality of an offence.
• What is unique about the proceedings under these
  sections, is there is no need for
• criminal prosecution to be instituted before an
  application is made
• there to be a conviction and
• the institution or commencement of criminal
  proceedings cannot be used as a ground to stay
  these proceedings.

7

• The forfeiture/assessment proceedings can operate
  side by side with the criminal proceedings.
• The law also makes provision for the person to
  whom the property belongs to, to provide the
  necessary evidence to show that the property was
  not obtained due to some unlawful activity and/or
  is an instrumentality or that the person was not
  engaged in a money laundering activity.

8

• Section 20B of the MLPA also makes provision for
  a defendant to pay to the Crown an amount that is
  assessed by the Court.

9
NATURE OF PROCEEDINGS

• The proceedings under sections 18B, 20A and 20B
  are civil in nature.
• Therefore any question of fact to be decided by a
  court on an application made pursuant to either
  section 18B, 20A or 20B of the MLPA must be
  decided on the balance of probabilities.

10
WHO MAKES THE APPLICATION

• The Supervisory Authority is authorized under
  sections 18B, 20A and 20B of the MLPA to make an
  application for an order under section 18B, a
  civil forfeiture order or a civil proceeds
  assessment order respectively.
• Under section 18B the application is made in
  relation to any currency that is seized pursuant
  to section 18A (1) of the MLPA.

11

• The application under section 20A is made in
  relation to all or any of the interests in
  property that is the subject of the freeze
  order.
• The application under section 20B is made in
  relation to the value of the benefit a person has
  derived from money laundering activities.

12
JURISDICTION

• Where an application is made pursuant to section
  18B, the application has to be made to the
  Magistrate.
• Where an application is made pursuant to either
  section 20A or 20B, the application has to be
  made to a Judge of the High Court.

13
AGAINST WHOM AN APPLICATION FOR FORFEITURE LIES

• Section 18B
• The application is made against a person from
  whom the currency was seized.
• The person need not be convicted of any offence,
  if it is alleged that the seized currency is an
  instrumentality of an offence.

14

• Section 20A
• The application is made against a person who has
  engaged in money laundering activity.
• For the purposes of this section a person is
  deemed to have engaged in a money laundering
  activity, if the person has done anything that
  at the time was a money laundering offence
• the person need not be charged for the money
  laundering offence
• if charged,
• has been tried
• has been tried and acquitted or
• has been convicted (even if the conviction has
  been quashed or set aside)

15

• If the application is made pursuant to section
  20B the application must be made against a person
  who has engaged in a money laundering activity
  from which a benefit was derived.

16
NOTICE OF APPLICATION

• Under sections 18B, 20A and 20B of the MLPA, the
  Supervisory Authority is required to give at
  least 14 days notice of an application for an
  order pursuant to section18A, a civil forfeiture
  order or a civil proceeds assessment order, to

17

• the person from whom the currency was seized or a
  defendant or
• any person he has reason to believe may have an
  interest in the seized currency or the property
  that is the subject of the application.

18

• Notice may be given by any one or more of the
  following methods
• personal service on the defendant
• service at the business address of counsel acting
  on behalf of the defendant
• service at the last known address or place of
  business of the defendant within the
  jurisdiction
• service upon the registered or principle office
  of the body corporate
• publication in the Gazette in Antigua and
  Barbuda or
• by effecting service upon him in a foreign
  jurisdiction by or through a foreign authority

19
BASIS ON WHICH THE APPLICATIONS ARE MADE

• The application under section 18B is made on the
  basis that the currency is
• the proceeds of some form of unlawful activity
  or
• an instrumentality of an offence
• There is no need for there to be a conviction of
  any offence.

20

• The application under section 20A is made on the
  basis that
• a freeze order is in force and
• the defendant has engaged in a money laundering
  activity.
• The application under section 20B is made on the
  basis that
• The defendant has engaged in a money laundering
  activity from which a benefit has derived.

21
WHAT FACTOR/S THE COURT MAY CONSIDER IN DECIDING
WHETHER OR NOT THE ORDER IS TO BE MADE (section
18B)

• Under section 18B, the court may consider
• the use ordinarily made, or intended to be made
  of the currency and
• the claim of any third party to an interest in
  the currency who shows to the satisfaction of the
  court that he was not involved or aware of any
  unlawful use or purpose with which the currency
  may have been associated

22

• The court must also be satisfied that the seized
  currency is
• the proceeds of some form of unlawful activity
  or
• An instrumentality of an offence, regardless
  whether the person has been convicted of any
  offence.

23
WHAT FACTOR/S THE COURT MUST/MAY CONSIDER IN
DECIDING WHETHER OR NOT TO MAKE THE ORDER
(section 20A)

• Section 20A of the MLPA allows the Court to
  presume that it is more probable than not that
  the personhad engaged in money laundering
  activity.
• Thus the Court starts with the presumption that a
  defendant against whom a freeze order was made
  has engaged in money laundering activity.
• The finding must be in relation to such money
  laundering activity a defendant engaged in not
  more than 6 years before the application for the
  civil forfeiture was made.

24

• Based on the above it is clear that the onus will
  be on a defendant or anyone else alleging a right
  of claim in the property, subjected to the freeze
  order, to satisfy the Court that he was not
  engaged in money laundering activity in the
  requisite period.
• The finding of the Court need not be based on the
  commission of a particular offence and can be
  based on the finding that some offence or other
  constituting a money laundering activity has been
  committed.
• This simply means that the court can grant the
  order, if it finds that a defendant committed an
  offence from which money was generated.

25
WHAT FACTOR/S THE COURT MUST/MAY CONSIDER IN
DECIDING WHETHER OR NOT TO MAKE THE ORDER
(section 20B)

• Section 20A of the MLPA allows the Court to
  presume that it is more probable than not that
  the personwas engaged in money laundering
  activity from which a benefit was derived.
• Thus the Court starts with the presumption that a
  defendant against whom a freeze order lies has
  engaged in money laundering activity from which
  he benefited.
• The finding must be in relation to such money
  laundering activity a defendant engaged in not
  more than 6 years before the application for the
  civil proceeds assessment was made.

26

• The Court must also consider
• The value of any interest the defendant or anyone
  else acting on his behalf acquired as a result of
  the money laundering activity.
• The value of any service, benefit or advantage
  provided for the defendant or other person by his
  direction.
• The value of the defendants property before and
  after the money laundering activity.

27

• the defendants income and expenditure, during
  the period of 6 years before the making of the
  order.
• The Court is not allowed to make allowances for
• expenses incurred by the defendant in relation to
  the money laundering activity or
• the value of any proceeds derived as agent for
  someone else.

28
PROCEDURE ON APPLICATION FOR A FORFEITURE ORDER

• Sections 18B, 20A and 20B of the MLPA give any
  person who has been notified of the application
  for forfeiture to appear before that court and
  give evidence at the hearing of the application.
• The MLPA gives the court the power to make the
  forfeiture order
• In the absence of the person who was given notice
  of the hearing and failed to appear to give
  evidence.

29
WHAT MUST THE ORDER BE MADE IN RELATION TO

• Under section 18B the order can be made in
  relation to all or part of the seized currency.
• The legislation defines currency as cash or
  other bearer negotiable financial instruments.

30

• Under section 20A the order must be made in
  respect of specified interest in property.
• The MLPA does not define what is meant by
  specified interest in property.

31

• It is contended that the Court may have to
  determine the amount it considers to be the value
  of the property (other than money), that is
  subject to the civil forfeiture order, or
• Another approached that may be adopted is that
  the Court may have to determine the interest of
  the defendant subject to the interest of third
  parties.

32

• If the application is made in relation to section
  20B of the MLPA, the order must be made in
  relation to the value of benefit the Court
  assessed the defendant derived from the money
  laundering activity.

33
WHAT PROPERTY IS FORFEITED

• Under section 18B, the currency that is the
  subject of the order.
• Under section 20A The property that is specified
  in the civil forfeiture order.
• Under section 20B property is not forfeited, but
  the property that is specified in the order is
  deemed a debt that is to be paid by the defendant
  to the Crown.
• It is an offence if anyone deals with the
  property that is the subject of an order and that
  person may be subject to a fine not exceeding
  100,000 or 2 years imprisonment or both.

34
EFFECT OF AN ACQUITTAL OR SETTING ASIDE OF A
CONVICTION

• Under section 20A of the MLPA an acquittal or
  setting aside of a conviction does not affect the
  validity of a civil forfeiture order.
• Provided the civil forfeiture order was made,
  based on the same conduct that was made before or
  after the conviction was quashed or set aside.

35

• The same position is applicable under section 20B
  where a conviction is quashed or set aside,
  providing the civil proceeds assessment order was
  made based on the same money laundering activity.

36
IN WHOM IS THE FORFEITED PROPERTY VESTED

• Under section 18A the property vests in the
  Government of Antigua and Barbuda.
• Under sections 20A
• The property vests absolutely in the Crown at the
  time the civil forfeiture order is made.
• The Supervisory Authority has the power to take
  the property on behalf of the Crown.
• All funds are then paid into the Forfeiture Fund,
  with a deduction of 20 to deposited into the
  Consolidated Fund.

37

• Under section 20B property is a debt owed to the
  Crown and is recoverable as such.
• Death does not affect the civil proceeds order
  and where a person dies before such an order is
  made, the law presumes that the person died the
  day after the order was made.

38
PROTECTION OF THIRD PARTIES

• Under section 18B any party to an application for
  forfeiture can appeal to the High Court to have
  the matter reheard.
• This application must be made within 30 days of
  the order being made by a Magistrate.

39

• The MLPA makes provision for third parties who
  claim to have an interest in the property
  immediately before it was forfeited, pursuant to
  section 20A, to apply to the High Court to have
  the property so forfeited excluded from the
  order.
• The applicant must make the application within 60
  days of the civil forfeiture order.
• The Court has the power to grant leave to a third
  party outside of the 60 days, if the Court is
  satisfied that the delay is not due to the
  neglect of the third party.

40

• A person who was given notice of the
• proceedings for the freeze order and
• making of the freeze order cannot make such an
  application unless
• given leave to apply in this instance, if the
  Court is satisfied that the failure to apply was
  not due to the neglect of the applicant.
• A person making such an application must give a
  written notice with the grounds of the
  application to the Supervisory Authority or any
  person believed to have an interest in the
  property, immediately before it was forfeited.

41
WHEN CAN THE CROWN BEGIN DEALING WITH SUCH
PROPERTY

• The Crown can begin dealing with the property
• Within 30 days after the order for forfeiture has
  been made. (18B)
• At the end of 60 days when the property is
  forfeited to the Crown, if no application is made
  by a person who claims to have had an interest in
  the property immediately before it was forfeited.
  (section 21)

42
QUESTIONS?

• ASSETS FORFEITED!
• MISSION ACCOMPLISHED!

43

• Section 18B there is no requirement for there to
  be a freeze order to have seized currency
  forfeited.
• Section 20A (1) MLPA states, if a freeze order
  is in force under Part IV, the Supervisory
  Authority may apply to the High Court for a civil
  forfeiture order forfeiting to the Crown all or
  any of the interests in property that are subject
  to the freeze order when the forfeiture order
  takes effect.

44
DEFINITIONS

• Proceeds in relation to an offence, means any
  property that is derived or realized, directly or
  indirectly by any person from the commission of
  the offence.
• Unlawful activity means-act or omission that
  constitutes an offence against a law in force in
  Antigua and Barbuda or against a law in a foreign
  country that would, if it was committed in
  Antigua and Barbuda, be an offence against a law
  of Antigua and Barbuda.

45

• Instrumentality means property that is used in
  connection with or is intended to be used in any
  manner in or in connection with the commission
  of-
• A money laundering offence or
• An offence against subsection 18(1) or subsection
  18(4) of this Act.
• A money laundering activity.

46

• Money Laundering Activity is defined as
• anything done by the person that at the time was
  a money laundering offence whether or not the
  person has been charged with the offence and, if
  charged
• has been tried or
• has been tried and acquitted or
• has been convicted (even if the conviction has
  been quashed or set aside).

47
Part IV Freezing and Forfeiting of Assets in
Relation to Money Laundering

• An application to freeze property of a defendant
  is made pursuant to section 19 Part IV of the
  MLPA
• Pursuant to section 19 of the Act the Supervisory
  Authority can apply ex parte to the High Court to
  freeze the assets of a defendant on the basis
  that
• he has been convicted of a money laundering
  offence or
• He has been, or is about to be charged with a
  money laundering offence or
• Is suspected of having engaged in money
  laundering activity.
• The freeze order will affect any property which
  there is a reasonable suspicion that the
  defendant has an interest in.

48

• Money Laundering offence is defined as
• Money laundering
• Aiding, abetting, counseling, procuring or
  conspiring to commit money laundering
• Opening account in a false name
• Failing to report
• Importing or exporting a controlled drug
• Producing or supplying a controlled drug
• Possession of a controlled drug
• Failing to report the loss or theft of a
  controlled drug
• Cultivation of a controlled drug.
• Offence against any foreign law, specified by the
  regulations or any foreign law whether or not it
  is specified by the regulation which if it was
  committed in Antigua and Barbuda would be an
  offence

49
MONEY LAUNDERING ACTIVITY Part IV Freezing and
Forfeiting of Assets in Relation to Money
Laundering Contd

• Property in which the defendant has an interest
  includes
• Any property that is, subject to the effective
  control of the defendant on the day the
  application is made in respect of an offence or
  money laundering activity
• Any property that was the subject of a gift from
  the defendant to another
• Applicable to any gift given within 6 years
  before the application was made

50

• Property is subject to the effective control of
  the defendant whether or not the person has
• A right, power or privilege in connection with
  the property
• A legal or equitable estate or interest in the
  property or

51

• Regards may be had to the following when
  considering whether property is subject to the
  effective control or there are reasonable grounds
  to suspect that the property or an interest in
  property is subject to the effective control of a
  person
• Shareholdings in debentures over or directorship
  in a company that has an interest, whether direct
  or indirect, in the property
• A trust that has a relationship to the property
  and
• Family, domestic or business relationship between
  persons having an interest in property, or any of
  the above arrangement.
• NOTE
• The court can lift the corporate veil of any
  company in order to determine whether it is
  subject to the effective control of a person.