Presentation on POCA Jamaica

THE CHALLENGES OF POCA:

PRIVATE RIGHTS VS. PUBLIC BENEFIT

Amina Maknoon

‘Where Crime Pays, Crime Stays’

Dr. Henley Morgan

Dr. Henley Morgan...

‘ The conviction rate for serious crime is in the region of 35 per cent, ranking Jamaica among the poorest performers in apprehending and putting criminals behind bars. We tolerate lawlessness and disorderly conduct as a normal way of life. When a crime boss dies, he is recognised with an extravagant funeral and more "bling" than would be accorded the most honourable man. But there is an even more sinister reason why Jamaica is the best place to be a criminal. In Jamaica crime pays and it pays big. In fact, it yields bigger pay days with less sweat and fewer risks than any other job or form of investment.’

The Jamaican Proceeds of Crime Act 2007 (hereinafter referred to as ‘POCA’) was approved by both houses of Parliament and assented to by the Governor General. It was gazetted on March 2, 2007 and came into effect on May 30, 2007, (‘the appointed day’).

Subsidiary Legislation The Proceeds of Crime

Regulations, 2007 (‘the POCA Regulations’)

The Proceeds of Crime (Money Laundering Prevention) Regulations 2007 (‘the POCA MLP Regulations’) were enacted. Both pieces of subsidiary legislation were gazetted and came into effect on March 29, 2007.

R v Rezvi [2002] 1 All ER 801, per Lord Steyn at page 808f

‘ It is a notorious fact that professional and habitual criminals frequently take steps to conceal their profits from crime. Effective but fair powers of confiscating the proceeds of crime are therefore essential.’

PUBLIC BENEFITIt is appropriate and morally correct to deprive individuals of their ill gotten gains, which would have been obtained at the expense of law abiding members of society (through petty crimes, murder, extortion, drug dealing, ponzi schemes), and to return those proceeds to the public purse where they could be used for the public good, such as providing further resources to fight crime

PUBLIC BENEFIT

To deter crimeTo purify ill gotten

gainsThe production of

revenue for the state

COST TO PRIVATE INTERESTSThe actual or potential invasion

of personal rights and liberties:

Reverse burden of proof Confiscation without

conviction – The Cash Seizure and Civil Recovery Provisions POCA and Offences under

Other Statutes Money Laundering and the

Challenge to LPP

DOES POCA CREATE A REVERSE BURDEN OF

PROOF?The Section 8 Assumptions

Section 8(2)- (a) any property transferred to

the defendant at any time after the relevant day was obtained by him-(i) as a result of his general criminal conduct; and(ii) at the earliest time from which the defendant appears to have held it;

REVERSE BURDEN OF PROOF

(b)any property held by the defendant at any time after the date of conviction was obtained by him-(i) as a result of his general criminal conduct; and (ii) at the earliest time from which the defendant appears to have held it;

(c) any expenditure incurred by the defendant at any time after the relevant day was met from property obtained by him as a result of his general criminal conduct; and

(d) for the purposes of valuing any property obtained, or assumed to have been obtained, by the defendant, he obtained the property free of any other interests in it.’


“The only way that an assumption can be displaced is if the assumption is shown to be incorrect or there would be a serious risk of injustice if the assumption were made.” (S8(3) POCA)

When applying the assumptions, the burden of proof is reversed.“the burden was on the defendant to show the source of the assets and expenditure and what proportion of his business was legitimate. Since he was unable to do so, he could not rebut the assumptions, and there was no foundation for any contention of a serious risk of injustice by the fact that to some unknown extent, some of his activities were legitimate.” (Steed v R [2011] EWCA Crim 75)


The defendant must account for his benefit and his available assets. In the case of Walbrook and Glasgow, [1994] 15 Cr App R (S) 783 the dicta was established that defendants must provide, “clear and cogent evidence” to disprove assumptions in confiscation cases, and that where their evidence stood alone, unsupported but for their own word, it was to be accorded minimal credibility.

Reverse Burden and Section 20(5) of the Constitution

Presumption of Innocence He who asserts must prove.....or does he? Savings Provision –

‘Provided that nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of this subsection to the extent that the law in question imposes upon any person charged as aforesaid the burden of proving particular facts.’

Reverse Burden and Section 20(5) of the Constitution

Sections 7A(2) and 22(7) of the Dangerous Drugs Act

R v Jonathan Outar and Rupert Senior (RMCA 47/97)

‘[the proviso] is an example of the foresight of those who framed the Constitution. The principle could have been developed by the courts as being a necessary implication if individual rights ought to be reconciled with the public interest, but it was made explicit in this proviso so as to put the matter beyond debate.’ (page 29)

McIntosh v Lord Advocate and another [2003] 1 A.C. 1078

‘The essence of drug trafficking is dealing or trading in drugs. People engage in this activity to make money, and it is notorious that they hide what they are doing. Direct proof of the proceeds is often difficult, if not impossible. The nature of the activity and the harm it does to the community provide a sufficient basis for the making of these assumptions. They serve the legitimate aim in the public interest of combating that activity. They do so in a way that is proportionate.’

CONFISCATION WITHOUT CONVICTION

Cash Seizure Civil Recovery


Cash SeizureSection 75 POCA - an authorised officer may seize any cash (minimum of $100,000) if he has reasonable grounds for suspecting that the cash is recoverable property or it is intended for use in unlawful conduct. That seized cash may be the subject of forfeiture order by a Resident Magistrate if he/she is satisfied that the cash or part thereof as the case may be is recoverable property or intended for use in unlawful conduct.

CONFISCATION WITHOUT CONVICTIONCivil Recovery Orders

Section 58 POCA provides that the Supreme Court may, upon the commencement of proceedings by the Assets Recovery Agency, make a civil recovery order if it is satisfied that any property is recoverable property – meaning property obtained through unlawful conduct.

CONFISCATION WITHOUT CONVICTIONCash Seizure and Civil

Recovery Orders Balance of probabilities (56(3) POCA) Proceedings have not been brought for a criminal

offence in connection with the property (for example where there are insufficient grounds for a prosecution, or the suspect is outside of the jurisdiction or has died (S56(2) POCA)

Where a defendant has been acquitted – (Director of the Assets Recovery Agency v Taher and Ors [2006] EWHC 3402 (Admin) per Collins J


Violation of Presumption of

Innocence?The Director of the Assets Recovery Agency v Walsh

[2004] NIQB 21, per Coghlin J Article 6(2) of the ECHR (presumption of innocence)

did not apply. all the available indicators point strongly to recovery

cases being classified as a form of civil proceedings:the Appellant is not charged with a crime; He is not liable to imprisonment or fine if the recovery action succeeds; There is no indictment and no verdict; The primary purpose of the legislation is restitutionary rather than penal’ [para 29]


Practical Objections Cash seizures successful J$100,000 threshold for cash seizure Section 72 searches of premises and

persons for cash which is recoverable property – Section 74 code of practice?

No civil recovery orders made so far but...

CONFISCATION WITHOUT CONVICTION Christopher ‘Dudus’ Coke pleaded guilty to one count of racketeering conspiracy and one count of conspiracy to commit assault with a dangerous weapon in aid of racketeering. US will be going after his assets under the Racketeer Influenced and Corrupt Organisations Act (RICO).

CONFISCATION WITHOUT CONVICTION The police say this is the house of Norris 'Deedo' Nembhard, 52, businessman of Cardiff Hall, near Runaway Bay, St. Ann, who had been extradited to the United States in July 2008, pleaded guilty to charges of conspiracy to import more than 5 kilograms of cocaine and more than1,000 kilograms of marijuana into the United States. Sentenced to 13 years in federal prison

POCA AND CONVICTIONS UNDER

OTHER STATUTES

Basso & Anor v R [2010] EWCA Crim 1119

Forfeiture of property used in or in connection with the offence concerned (s5(2)(c) POCA).

REPORTING REQUIREMENTS UNDER

POCA

Money LaunderingAttorneys and Legal Professional Privilege

Case against Robert George

http://youtu.be/Vt52Fbk5hrw

http://youtu.be/Vt52Fbk5hrw

MONEY LAUNDERING

An action which constitutes an offence under section 92 and 93 of POCA or an attempt, conspiracy or incitement to commit such an offence or aiding, abetting counselling or procuring the commission of such an offence. Sections 92 and 93 are applicable to any person including a financial institution or employee of a financial institution

MONEY LAUNDERING -SECTION 92(1)

A person commits an offence if he/ she: engages in a transaction which involves criminal property; conceals, disguises, disposes of or brings into Jamaica

any such property; or converts, transfers or removes any such property from

Jamaica

and the person knows or has reasonable grounds to believe, at the time he does any such act that the property is criminal property.


‘ a person commits an offence if that person enters into or becomes concerned in an arrangement that the person knows or has reasonable grounds to believe facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person’


‘a person commits an offence if that person acquires, uses or has possession of criminal property and the person knows or has reasonable grounds to believe that the property is criminal property’

DEFENCES TO SECTION 92 AND 93 OFFENCES

If, before doing any such act as described in those sections, the person makes an authorised disclosure and receives the appropriate consent to act, or acted in good faith in exercise of an enforcement function under POCA, or in the case of section 93 he acquired the property bona fide and without notice

TIPPING OFFSection 97 of POCA creates the offence of ‘Tipping Off’ –

disclosing information to any person about an authorised disclosure or an actual or impending money laundering investigation, which is likely to prejudice such an investigation .

POCA - THE REGULATED SECTOR

New concept of the ‘regulated sector’ which includes both financial institutions and designated non-financial institutions

PROPOSED CHANGES TO POCA:DESIGNATED NON FINANCIAL

BUSINESSES AND PROFESSIONS (DNFBP)The FATF has recommended that the following

businesses and professions should be so designated: Casinos (including internet casinos) Real Estate Agents Dealers in precious metals Dealers in precious stones Lawyers, notaries, other independent legal

professions and accountants Trust and Company Service Providers

ATTORNEYS-AT-LAW

The Recommendations prescribe that legal professionals should be subject to obligations regarding customer identification; record-keeping; suspicious transaction reporting, employee screening procedures and internal systems to facilitate STRs when, on behalf of a client, they engage in a financial transaction in relation to the following activities:

ATTORNEYS-AT-LAW

Buying or selling of real estate; Managing of clients money, securities or assets; Management of bank, savings or securities accounts; Organisation of contributions for the creation,

operation or management of companies; Creation, operation or management of legal persons

or arrangements, and buying and selling of business entities

SECTIONS 94 AND 95Section 94 – Non disclosure of a suspicious transaction by a person in the regulated sector.

Section 95 - Non disclosure of a suspicious transaction by a nominated officer

SECTION 94(2)A person commits an offence if: that person knows or believes, or has reasonable grounds for

knowing or believing, that another person has engaged in a transaction that could constitute or be related to money laundering;

the information or matter on which the knowledge or belief is based or which gives reasonable grounds for such knowledge or belief, came to him in the course of a business in the regulated sector; and

the person does not make the required disclosure as soon as is reasonably practicable, and in any event within fifteen days, after the information or other matter comes to him.

SECTION 95(1)A nominated officer commits an offence if: the nominated officer knows or believes, or has reasonable

grounds for knowing or believing, that another person has engaged in a transaction that could constitute or be related to money laundering;

the information or matter on which the knowledge or belief is based or which gives reasonable grounds for such knowledge or belief, came to the nominated officer in consequence of a disclosure made under section 94; and

the nominated officer fails without reasonable excuse to make the required disclosure as soon as is reasonably practicable, and in any event within fifteen days, after the information or other matter comes to him.

Required disclosuresFor the purposes of making a required disclosure, persons in the course of business in the regulated sector must pay special attention to : Complex unusual or large business transactions by that

customer; and Unusual patterns of transactions, whether completed or not,

which appear to be inconsistent with the normal transactions carried out by that customer

Required Disclosure is to the nominated officer or the designated authority

Nominated Officer is a person nominated by the business to receive disclosures

SAVINGS PROVISIONS FOR LEGAL

PROFESSIONAL PRIVILEGESection 93(3) (MONEY LAUNDERING OFFENCE):

‘An Attorney-at-Law shall not be taken to engage inmoney laundering to the extent that he receives bona fide fees for legal representation’

94(5)(b)(NON DISCLOSURE BY PERSON IN REGULATED SECTOR): ‘A person does not commit an offence under

this section (s94)if he is an attorney-at-law and the information or other matter came to him in privileged circumstances’

PRIVILEGED CIRCUMSTANCES Section 94(8):

Information or other matter comes to an Attorney-at-Law inprivileged circumstances if it is communicated or given to him – by, or by a representative of a client of his in connection with

the giving by the Attorney-at-Law of legal advice to the client;

by, or by a representative of, a person seeking legal advice from the Attorney-at-Law; or

by a person in connection with legal proceedings or contemplated legal proceedings

Provided that this subsection does not apply to information or other matter that is communicated or given with the intention of furthering a criminal purpose.

DEFENCE TO TIPPING OFF An attorney-at-law does not commit the offence of

tipping off if the disclosure is made by him: to, or to a representative of a client of his in

connection with the giving by the Attorney-at-Law of legal advice to the client;

to a person in connection with legal proceedings or contemplated legal proceedings

Provided that a disclosure is not made with the intention of furthering a criminal purpose. (s97(3))

INTENTION OF FURTHERING A

CRIMINAL PURPOSEThe proviso that the disclosure is not made with the intention of furthering a criminal purpose confirms the principle outlined in the House of Lords case of Francis and Francis v Central Criminal Court [1988] 3 All ER 775.

SEARCH AND SEIZURE WARRANTS UNDER

POCAA search and seizure warrant under POCA is a document authorising an appropriate person to enter and search premises and to seize and retain any information or material found which is likely to be of substantial value (S115(3))

Section 117 provides that a search and seizure warrant does not confer the right to seize any information or material that a person would be able to refuse to produce on the grounds of legal professional privilege in proceedings in the Supreme Court

LPP and Search and Seizure

Jambar and Others v The Attorney General and DPP SCCA Nos 96,102, and 108/2003

ex p Popely (1999) STC 1016 ex p Tamosius (1999) STC 1077 ex p Bramley [2000] 1 ALL ER 411

FATF RECOMMENDATIONS AND

LPPThe FATF Recommendations expressly recognise the paramount role of legal professional privilege and therefore do not require that the obligations to make suspicious transaction reporting override this principle. Also FATF recognises that there is no need for a blanket designation when it comes to attorneys but rather a designation that captures specifically attorneys when they are carrying out the above mentioned activities.

LPP AND REPORTING REQUIREMENTS

Where does Legal Professional Privilege endand the reporting requirements under POCA begin?

LPP AND ‘BECOMING CONCERNED IN AN ARRRANGMENT...’Section 92(1) ‘engages in a transaction’

ORSection 92(2) of POCA which states,

‘a person commits an offence if that person enters into or becomes concerned in an arrangement that the person knows or has reasonable grounds to believe facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person’

BOWMAN V FELSBowman v Fels [2005] EWCA Civ 226

Treated with section 328 of the Proceeds of Crime Act 2002 (which is analogous to section 92(2) of POCA Section 328 is not intended to cover or affect the ordinary course of litigation by legal professionals, including any step taken by them in litigation from the issue of proceedings, the securing of injunctive relief up to its final disposal by judgement.

BOWMAN V FELS There was nothing in the language of section 328 to

suggest that Parliament intended to override such privilege and that it would require much clearer language before a parliamentary intention could be gleaned to the effect that a party’s solicitor is obliged, in breach of his implied duty to the court, and in breach of the duty of confidence that he owes to his client as the litigation solicitor, to disclose to a third party a suspicion that he may have that documents disclosed under compulsion by the other party raise an issue under section 328.

Disclosure of Client Details‘Whilst it was important that that the court, as far as possible should respect an express condition of confidentiality subject to which a client had provided his contact details to solicitors, there was a clear distinction between LPP which was absolute and the right to protection of confidential information which was capable of being overridden by other considerations. In the instant case the balance fell in favour of ordering disclosure of the contact details.’ See JSC BTA Bank v Solodchenko [2011] EWHC 2163 (Ch)

Failure to Disclose

R v Jonathan Michael Duff [2003] 1 Cr. App. R. (S.) 88

The appellant actually pleaded guilty to the two counts and was given a custodial sentence. His appeal was on the question of whether a custodial sentence was justified as well as the length of the sentence which was six months.

LPP and In House Lawyers

Akzo Nobel Chemicals Ltd v European Commission [2010] 5 CMLR 19

‘the exchange had to be connected to the client’s rights of defence and had to emanate from independent lawyers who were not bound to the client by an employment relationship.’

Resources and Costs of ComplianceReg 5(1) of the POCA Money Laundering Regulations: thefollowing programmes should be implemented:

Procedures to ensure high standards of integrity of employees;

System of evaluating personal employment and financial history of employees;

Training of employees on a continuing basis as to their responsibilities under POCA and Regulations

Arrangements for an independent audit to ensure that the above is done

Firms will have to appoint a nominated officer. Designation of a competent authority - General Legal Council?

Parting Thoughts Where does Legal Professional Privilege

end and the reporting requirements under POCA begin – Need for clarity.

Who will be the competent authority in respect of the legal profession?

What are the costs of implementation and who will bear them?

POCA – development of local jurisprudence

Thank you

Education

Presentation on POCA Jamaica