The Assets Recovery Agency (Jamaica) appealed (Privy Council Appeal No 0036 of 2014) from the decision of the Court of Appeal of Jamaica dismissing its appeal from the decision of the Judge refusing its ex parte application for a customer information order ('CIO’) pursuant to Articles 119-125 of the Proceeds of Crime Act 1007.
Outcome: The Court of Appeal was right to dismiss the Agency’s appeal against the refusal of the judge to make a CIO, because the flaws in the application meant that the statutory conditions for making the order had not been made out. For this reason the Board advised Her Majesty that the Agency’s further appeal ought to be dismissed. But the Board records that on the three points of general principle, the Court of Appeal ruling was in error. The correct approach is set out in the Significant features.
牙买加The relatively new Jamaican Proceeds of Crime Act 2007 contains in Part VI provision for specific evidence-gathering orders which may be made by a judge on the application of police and other investigators in defined circumstances. In the present case, the judge and the Court of Appeal have both refused an application by the Assets Recovery Agency for a customer information order (“CIO”) pursuant to sections 119-125. The Agency appeals to Her Majesty.
If granted, a CIO is directed to a financial institution, such as a bank, building society or investment manager. It requires the institution to divulge to the prosecution personal information about its customer, such as his name, address, taxpayer’s registration details and the like. Other related orders include account monitoring orders (section 126), which direct a financial institution to divulge the transactions on a customer’s account, disclosure orders (section 105), which require any named person to produce specified information or material to the investigator, and search and seizure orders (section 115), which may be made to reinforce a disclosure order which has not been obeyed.
These various orders may be applied for by police officers, customs officers, or officers of the Assets Recovery Agency in aid of specific investigations. Section 103 defines them. They are:
(i) a “forfeiture investigation”, which means an investigation into: “(a) whether a person has benefited from his criminal conduct; or (b) the extent and location of a person’s benefit from his criminal conduct;”
(ii) a “money-laundering investigation”, which is an investigation into: “whether a person has committed a money laundering offence;” and
(iii) a “civil recovery,” which means an investigation into:
(a) whether property is recoverable property or associated property;
(b) who holds the property; or
(c) the extent or whereabouts of the property.”
As the Court of Appeal rightly held, the present application and its affidavit evidence in support were deeply flawed. Amongst the principal defects were the following.
(i) There was a wholesale failure to distinguish between money laundering investigation and forfeiture investigation, but simply an assertion that the order was sought in aid of both, apparently without realising that different considerations apply to them.
(ii) Some 13 (or in two places 14) persons were listed as under investigation without any attempt being made in the case of most of them to say what they were suspected of doing. Of some, all that was said was that they were related to others on the list. One person listed in the application was not referred to at all in the affidavit in support.
(iii) Included in that list of persons whose details were sought was one who, according to the affidavit in support, could not have been within sections Page 12 119 and 121 because it was said that he was the innocent victim of some of the other named persons, rather than a suspected offender.
(iv) The assertions of suspected criminal behaviour, where made, included much which was said to have taken place before 30 May 2007, and thus which could not have been criminal conduct, and could not have generated criminal property, for the purposes of the Proceeds of Crime Act 2007 - see section 2(1).
(v) The affidavit in support included (at para 9) a recital of facts which might not involve any criminal offence at all, nor was any such possible offence suggested.
For these reasons the Court of Appeal was correct to dismiss the Agency’s appeal against the judge’s refusal to make the CIO sought. The defects are too extensive to warrant remitting the present application to the judge. Whether a fresh, and properly framed and supported, application could succeed must await adjudication if such an application is made.
It is to be noted that the present was a supplemental application against a single financial institution. An earlier application had been made against some 14 other institutions, and had been granted. The earlier application was not before either the Court of Appeal or the Board, but if the evidence in support was the same, it may well be that it suffered from similar defects and it is far from clear that it received the analysis which was called for.
The Court of Appeal was right to dismiss the Agency’s appeal against the refusal of the judge to make a CIO, because the flaws in the application meant that the statutory conditions for making the order had not been made out. For this reason the Board advised Her Majesty that the Agency’s further appeal ought to be dismissed. But the Board records that on the three points of general principle it discussed, the Court of Appeal ruling was in error. The correct approach is set out in the judgment.
Judicial Committee of the Privy Council Jamaica
Privy Council Appeal No 0036 of 2014
West Indian Reports
The Proceeds of Crime Act 2007 creates new substantive offences of money laundering. They are contained in sections 92-93. Under both sections, the offences created consist of doing specified acts (with the prescribed state of mind) in relation to “criminal property”. In turn, “criminal property” is defined in section 91(1)(a) as follows:
“91 (1) For the purposes of this Part –
(a) property is criminal property if it constitutes a person's benefit from criminal conduct or represents such a benefit, in whole or in part and whether directly or indirectly (and it is immaterial who carried out or benefitted from the conduct);”
This definition therefore depends in part on the meaning of the expression “criminal conduct”, for which one turns to section 2, where it is defined as follows:
“‘criminal conduct’ means conduct occurring on or after the 30th May, 2007, being conduct which –
(a) constitutes an offence in Jamaica;
(b) occurs outside of Jamaica and would constitute such an offence if the conduct occurred in Jamaica;”
There can be no doubt that this means that before a substantive offence of money laundering can be committed, there must have been an antecedent (or “predicate”) offence committed by someone, which generated the criminal property concerned. The antecedent offence might of course be one of several different types. Fraud, drug trafficking, smuggling and the management of prostitution are no doubt common kinds of offence which generate money benefits which fall within the definition of criminal property, but there are also many others. So, for a prosecution for a substantive money laundering offence to succeed, the Crown must prove that such an antecedent offence was committed by somebody. The House of Lords so held in relation to similar earlier English legislation in R v Montila [2004] UKHL 50; [2004] 1 WLR 3141.
It does not, however, follow that for a defendant to be convicted of a substantive offence of money laundering, there must have been a conviction for the antecedent offence. What has to be proved is that an antecedent offence was committed, not that a conviction followed. It may quite often happen that there has been no conviction, for example if the antecedent offender has died before he could be prosecuted, or has escaped to a place from which he cannot be extradited. A conviction is only one way of proving that an offence has been committed.
Moreover, it may often happen that a plain case of money laundering is revealed but it cannot be known exactly what the antecedent offence was. In other cases, there may be a plain case of money laundering but a mixture of antecedent offences.
Since that is the law in relation to proof of a substantive offence of money laundering, it follows a fortiori that the same applies when, at the stage of an application for a CIO in aid of a money laundering investigation, what has to be established is not that a defendant has committed a money laundering offence but that there are reasonable grounds for believing that a prospective defendant has done so. The Proceeds of Crime Act 2007 makes it clear in section 121(c) that a CIO may be made in order to assist the prosecution to find out whether a money laundering offence has been committed or not. It is designed to aid an enquiry into a possible offence. One necessary part of the enquiry into whether a money laundering offence has been committed may be to find out whether the antecedent offence has been committed. True it is that a money laundering offence cannot be committed unless the property handled was criminal property, and that it cannot be without an antecedent offence being committed by someone. But at the investigation stage, one may still be trying to find out whether the property is criminal property or not. It would be contrary to the wording of the statute to impose a requirement that there be proof that a particular, or any, antecedent offence has been committed, and even more so to impose a requirement not only that there should be proof of an antecedent offence but also a conviction of someone for it.
For these reasons, the Board is satisfied that the Court of Appeal fell into error insofar as it held that section 121(c) requires the existence of a conviction for the antecedent offence before an application for a CIO can be entertained in relation to a money laundering investigation.
These conclusions do not mean that these evidence-gathering orders, including a CIO, are available to the prosecution or Agency whenever they want them. The Act expressly makes them available only when the judge determines that they ought to be granted. The role of the judge is crucial.