July 28, 2016 Source

The draft State Assets Recovery Bill 2016 envisages non-conviction based, civil recoveries of property over $10m with a 12-year limitation period and wide powers will be available to the agency to be set up under the law to gather information.

According to an advertisement in today’s Stabroek News, a consultation on the bill will be held on August 11th at 9 am at the Pegasus Hotel. The draft bill is on the website of the Ministry of Legal Affairs at http://www.legalaffairs.gov.gy...covery_Bill_2016.pdf.

With the government having established a State Assets Recovery Unit (SARU) after entering office last year, there has been much talk of reclaiming of assets but little action as the Unit was not covered by legislation.

According to its explanatory memorandum, the Bill provides for the setting up of the State Assets Recovery Agency (SARA) whose main task will be the civil recovery of State property gotten through the “unlawful conduct of a public official or other person, or any benefit obtained in connection with that unlawful conduct”.

The bill said that it is crucial to note that the cause of action is in relation to the property and “not against the person who holds or has an interest in the property. Thus the person who holds the property, the subject of the intended recovery order, might not be the person who carried out the unlawful conduct, and a civil recovery order is not a conviction or a sentence.”

The civil standard of proof (the balance of probabilities) applies.

The bill says that to establish that property was obtained through unlawful conduct, it will not be necessary to prove the commission of a particular criminal offence, by a particular person, on a particular occasion.

“It will be sufficient to prove that the property was obtained through conduct of a particular type, e.g. corruption, bribery, fraud etc. This however, cannot be achieved solely on the basis that the person holding the property has insufficient identifiable lawful income to account for the extent of property he holds or has an interest in. Though the absence of any evidence from the person to explain the source of the property, or the giving of a false explanation, will allow the court to infer that the source was unlawful.”

SARA would be enabled to seek the recovery of property wherever in the world that property may be located. To ensure the maintenance of public confidence in the criminal justice system the SARA Director must, before undertaking civil recovery proceedings, consider whether the recovery of State property would be better secured by criminal proceedings.

The bill says that the Director and named members of SARA staff may exercise the powers of police, customs and immigration officers if so designated by the relevant Ministers, upon the Director’s request.

Mutual cooperation with the Director of Public Prosecutions (DPP) and Director of the Financial Intelligence Unit (FIU) is a requirement, and the Commissioner of Police, the bill says must provide such assistance as is requested by the Director.

Part III of the bill covers the establishment of a Recovery of State Assets fund, into which 25% of the value of recovered property will be assigned with the remaining 75% credited to the Consolidated Fund. This Fund is intended to make the SARA partially self-funding.

The Director is authorised to use the funds to commence actions under the Act, to make certain payments e.g. to pay experts to assist him in carrying out SARA functions.

Disclosure Order

Under Part IV of the Bill, to facilitate a civil recovery investigation, the Director may apply to the Court for the issuance of one or more of the following orders:  a Disclosure Order, Customer Information Order, Production Order, Search and Seizure Warrant or an Account Monitoring Order. However, the Director will cease to have access to those powers when proceedings for a recovery order commences in relation to the property in question or where a restraint order applies to the property.

Section 23 of the bill contains a list of persons who are obligated to disclose information upon request by, and to, the Director. These persons include the DPP, the heads of the FIU, the Serious Organised Crime Unit, the Integrity Commission, the Customs Anti-Narcotic Unit, the Guyana Revenue Authority, the Gold Board and the National Procurement and Tender Administration Board. The Governor of the Bank of Guyana is also on the list along with any police officer not below the rank of inspector appointed by the Commissioner of Police.

Where the Director considers that there is a risk that property may be dissipated, destroyed or taken from the jurisdiction, he will be able to apply to the High Court, without notice, for a restraint order, the bill says. For this order to be granted under this section, the Director must

satisfy the court that there are reasonable grounds to believe the property identified in the application has been obtained through unlawful conduct and a person claiming an interest in the property can apply to the Court to have the order varied or discharged on grounds set out in section 30.

If during the recovery proceedings a person establishes lawful ownership of the property concerned, the property may not be recovered; nor will property be recoverable from persons who are able to prove that they purchased it for full value, in good faith without notice of its unlawful origins, thereby protecting third parties able to claim an interest in the property, the bill says.

The main stage of the procedure, the bill said, is a hearing before the High Court, initiated as a civil action by summons supported by sworn evidence. The Director must serve the summons on the person whom he believes holds the recoverable property. The burden of proof is on the Director.

“If the Court finds, on the civil standard of the balance of probabilities, that the property was obtained through unlawful conduct, it will give judgment in favour of the Director. Judgment will take the form of a recovery order which vests the title to the property in the State, the bill stated.

The Director also has the freedom to agree a reduced sum in satisfaction of a civil recovery claim.

 Tax collection functions

The bill also says that if the Director, for any reason, decides civil recovery proceedings are not appropriate he/she “may assume the tax collection functions of the Commissioner-General in relation to a person’s income, profits or chargeable gains where there are reasonable grounds to suspect that they arise from that person or another person’s unlawful conduct. However, before doing so the Director must serve an appropriate Notice to that effect on the Commissioner-General. The

notice does not divest the Commissioner-General of the assumed tax function but he must cooperate with the Director”.

In addition to third party protections, the explanatory memorandum says that the Bill contains other safeguards to ensure fairness in civil recovery proceedings. Parties are permitted the same rights of appeal as in other High Court actions; victims of theft are granted protection and if an application for civil recovery is unsuccessful, the court will be able to award compensation for any financial loss suffered by the respondent as a result of the restraint order applying to his property.

There is a financial threshold of ten million Guyana dollars below which civil recovery may not be pursued; there is a 12-year limitation period on when civil recovery proceedings can be brought. The bill added that the  “Court has an overriding discretion not to make a civil recovery order if satisfied there would be a serious risk of injustice in doing so.”

Part V describes the five Orders available to the Director when undertaking a civil recovery investigation.  Disclosure orders empower an authorized officer to give notice in writing to any person requiring him or her to answer questions, to provide information or to produce documents with respect to any matter relevant to the investigation in relation to which the order is sought.

Customer information orders compel a financial institution covered by the application to provide any customer information it has relating to the person specified in the application on receipt of a written notice from an authorized officer asking for that information.

Production orders may be served on any person or institution, for example a financial institution, requiring the production of, or allowing access to, material within the time specified in the order; this might include documents such as bank statements.

Search and seizure warrants enable an authorized person to enter and search the premises specified in the application for the warrant, and seize and retain any material found there. A search and seizure warrant may be granted if a production order already made has not been complied with.

Account monitoring orders require a specified financial institution to provide account information on a specified account for a specified period, up to 90 days in the manner and at, or by, the times specified in the order. Account information is information relating to an account held at a financial institution. The bill said that this would most commonly be transaction details.

In respect of each order or warrant to be granted, there is a statutory requirement that there must be reasonable grounds for believing that the material or information is likely to be of substantial value (whether or not by itself) to the investigation, and that it is in the public interest that the material or information is obtained  or accessed.

Part VII contains provisions granting immunity to the Director, SARA staff, any person acting on behalf of SARA, an Asset Manager or any person appointed by the Court for any act done in good faith in the intended performance of any duty under the Act.