REPORT
Civil Asset Recovery (International Co-operation) ( Jersey ) Law 200-
1. In recent years there has been a growing trend in countries introducing domestic civil asset forfeiture (also known as civil asset recovery) schemes. Civil asset forfeiture is a civil action brought by the State seeking a court ruling that particular property held by the individual represents the proceeds of criminal conduct and should therefore be forfeited to the State. The Respondents are those who claim ownership of the questioned property. In jurisdictions that have adopted such proceedings the court is concerned with the status of the property as opposed to the guilt of its owner. Civil forfeiture schemes currently operate in a number of jurisdictions around the world including, at least, England and Wales, Scotland, Northern Ireland, Republic of Ireland, Switzerland, Italy, USA, Australia, South Africa and various Canadian Provinces. Civil forfeiture has been in use in the Republic of Ireland since 1996 as a result of the Irish Proceeds of Crime Act, 1996 and in the UK since 2002 by virtue of the Proceeds of Crime Act, 2002, enacted there.
2. The nature of organised crime itself is the main reason cited by Governments in justification of introducing civil forfeiture schemes. It is considered that organised crime heads use their resources to keep themselves distant from the crimes they are controlling and to mask the criminal origin of their assets, so that the assets appear legitimate. For these reasons some jurisdictions have found it increasingly difficult to carry out successful criminal investigations leading to the prosecution and conviction of such individuals. The result is perceived to be that finances derived from crime can be out of the reach of the law under criminal confiscation schemes (which require a conviction) and remain available to be used to finance further crime. In order to deprive criminals of their ill-gotten gains a number of jurisdictions have introduced legislative schemes providing for the forfeiture of proceeds of crime before their civil courts, using the civil standard of proof. This means that those jurisdictions do not need to attain a criminal conviction in order to have the proceeds of crime forfeited, but instead that the civil asset recovery agency has to prove on the balance of probabilities that the assets in question represent the proceeds of crime, or of unlawful conduct.
- Civil forfeiture of property is currently provided for in relation to the forfeiture of cash (but not property), without conviction, under the Terrorism (Jersey) Law, 2002. The Drug Trafficking Offences (Jersey) Law, 1988 also allows for the forfeiture of cash which has been imported into or exported from Jersey and which the Royal Court is satisfied directly or indirectly represents any person’s proceeds of, or is intended by any person for use in, drug trafficking. These provisions are to be repealed and replaced by the draft Proceeds of Crime (Cash Seizure) (Jersey) Law 200-, which, if adopted, will allow for the civil forfeiture of cash reasonably suspected of being used in, intended for use in, being the proceeds of, or connected to unlawful conduct. “Unlawful conduct” is defined as the commission of an offence against the law of Jersey or against the law of a country or territory that, if it had been committed in Jersey, would have been an offence against the law of Jersey. Furthermore, the draft Customs and Excise (Amendment No. 5) (Jersey) Law 200- includes provisions which enable a customs officer to detain cash where there is a possibility that it is to be used for money laundering or terrorist activities. The owner of the cash has 6 months to prove that this is not the case, after that period the cash is forfeited. This power is subject to a right to apply to the Minister for Home Affairs for the return of the cash and a right to review of a refusal by the Minister to return it by the Royal Court.
4. Jersey does not, however, have a domestic civil forfeiture regime that allows for the civil forfeiture of any property proved on the balance of probabilities to be the proceeds of crime or unlawful conduct, where a conviction has not been attained.
5. During the International Monetary Fund Assessment in 2008, Jersey will be assessed against the 40 Recommendations and 9 Special Recommendations of the Financial Action Task Force on Money Laundering. Recommendation 3 of the Financial Action Task Force on Money Laundering provides that:
“Countries may consider adopting measures that allow such proceeds or instrumentalities to be confiscated without requiring a criminal conviction, or which require an offender to demonstrate the lawful origin of the property alleged to be liable to confiscation, to the extent that such a requirement is consistent with the principles of their domestic law.”
6. In order to consider how best to take forward issues surrounding the civil forfeiture of property found to represent the proceeds of crime, the Civil Asset Recovery Working Group was established comprising of representatives of the Law Officers’ Department, the Joint Financial Crimes Unit and the Jersey Financial Services Commission. The Working Group was tasked with giving consideration to civil forfeiture measures and was asked to report back to me on its conclusions.
7. Having reviewed its recommendations, I have determined that, in accordance with the Law Drafting Programme, civil asset recovery should be approached in two phases. The first phase is the introduction of legislation to provide for the enforcement of external civil asset forfeiture orders in Jersey. Law Drafting time for this was allocated in the 2007 Law Drafting Programme. The second phase is the implementation of legislation to introduce a limited domestic civil forfeiture scheme in Jersey. Law drafting time has been set aside in the 2008 Programme for this legislation to be drafted.
8. This draft Law is designed to address the first phase of the introduction of civil asset recovery by providing for the enforcement of external civil asset recovery orders in Jersey.
9. The Criminal Justice Policy provides that Home Affairs will, in conjunction with the Law Officers’ Department, investigate ways of expanding powers in relation to civil asset forfeiture with the aim of introducing, in the first instance by 2008, legislation to assist other jurisdictions to recover such assets. The draft Law will therefore achieve this aim. Furthermore, the States Strategic Plan 2006-2011 provides, at paragraph 1.8.7, for the introduction of powers to assist other jurisdictions pursuing civil confiscation of criminal proceeds by 2008. These powers are necessary because if they do not exist, the door would be open to criminals who are seeking to escape the effect of civil asset forfeiture orders abroad to do so by putting their ill-gotten gains in Jersey.
10. In summary, the draft Law provides for:
(i) the service of external civil asset recovery process in Jersey;
(ii) evidence sharing in relation to external civil asset recovery proceedings and investigations ;
(iii) the making of a property restraint order where it appears to the Court that external civil asset recovery proceedings relating to property in Jersey have been instituted in another jurisdiction but are not concluded or are to be instituted in another jurisdiction and that there are reasonable grounds for believing that an external civil asset recovery order may be made in the proceedings;
(iv) registration by the Royal Court of external civil asset recovery orders; and
(v) the recovery of property subject to an external civil asset recovery order registered with the Royal Court.
11. In an effort to assist in the recovery of the proceeds of crime held in Jersey, it is considered necessary to include provisions to enable evidence sharing with external civil asset recovery agencies. Jersey is currently unable to provide evidence to such agencies because Article 5 of the Criminal Justice (International Co-operation) Jersey Law, 2001 only allows for the provision of evidence and assistance in relation to criminal proceedings taking place in an overseas court. In the past this has meant that occasionally it has not been possible to accommodate requests for assistance received from the Assets Recovery Agency (now merged with the Serious Organised Crime Agency) in England and Wales, the Criminal Assets Bureau in Ireland and the U.S. Department of Justice. The draft Law enables the Attorney General to provide assistance to jurisdictions operating a civil forfeiture scheme in order to allow them to secure evidence for use in their civil forfeiture investigations or proceedings. Once civil forfeiture proceedings have taken place in that jurisdiction and a civil asset forfeiture order is made there, that order may then be registered by the Royal Court in Jersey and the money recovered by an application to the Royal Court by the Attorney General. It is envisaged that where money is likely to be recovered in Jersey under the provisions of the draft Law, that the Attorney General may enter into an agreement to share the proceeds of any assets recovered with the jurisdiction requesting assistance.
12. The draft Law also establishes a new Special Fund, for the purposes of Article 3 of the Public Finances (Jersey) Law, 2005, namely the Civil Asset Recovery Fund. It is intended that money recovered under an external civil asset recovery order registered with the Royal Court will be paid into this Fund. Money recovered under the Proceeds of Crime (Cash Seizure) (Jersey) Law 200- and any domestic civil forfeiture scheme will also be paid into this fund. It is necessary to create a new special fund because of the need to give effect to asset sharing agreements. In the absence of any discretion under the Public Finances Law to make payments not previously agreed in the Business Plan, the only way this can be effectively achieved is by the creation of a new special fund. The establishment of this Fund has been agreed with the Minister for Treasury and Resources.
13. The Minister shall apply monies in the Civil Asset Recovery Fund to -
(a) discharge Jersey’s obligations under any asset sharing agreement;
(b) pay to the Viscount –
(i) any amount required under Article 8(2), and
(ii) any amount required to be paid to the Viscount under any other enactment pursuant to which money recovered by any process is required to be paid into the Fund;
(c) meet the expenses reasonably incurred by the Minister in administering the Fund;
(d) meet the expenses reasonably incurred by the Attorney General in the discharge of his or her functions under –
(i) this Law, and
(ii) any other enactment pursuant to which money recovered by any process is required to be paid into the Fund.
14. At the end of each financial year, the Minister shall pay into the consolidated fund any amount of money standing in the Civil Asset Recovery Fund which has not been applied, or is not required to be applied, to discharge the obligations and expenses set out above.
Financial and Manpower Statement -
15. It is difficult to predict the impact of this legislation upon staffing requirements in the part of the Law Officers' Department that deals with mutual legal assistance requests (and, principally, that part of the Viscount's Department that deals with asset restraint and recovery issues) because at this stage there are not many countries with civil asset recovery regimes. The United Kingdom, the United States and Ireland are most likely to be seeking assistance in the short term but as international standards develop, it is likely that in the longer term there may be additional resources required. No immediate increases in staff on account of this legislation will be sought. If in the future such increases become necessary, the present intention is that these will be funded where appropriate from the Civil Assets Recovery Fund.
Human Rights
gov.je