Kirk Anderson, Legal Writer

A RECENT Privy Council decision, which highlights the challenge of enforcing anti-money laundering legislation, held that:

"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, if not impossible."

It was in this case that the Privy Council examined the European Convention on Human Rights in the context of legislation similar to our new Proceeds of Crime Act (POCA), and upheld the legal validity of placing the burden of proof, not on the Crown, as is usual in criminal cases, but on the person charged, to explain the source of his assets.

To strengthen the law in its fight against money laundering, the act provides that it is a crime to be involved in a transaction that involves 'criminal property'.

Details of the offence

Basically, criminal property is any benefit that is directly or indirectly derived from any person's criminal conduct, whether committed in Jamaica or anywhere in the world, as long as it would also be a crime here. The definition covers a wide group of persons who derive any type of benefit from either their own or some other person's criminal conduct.

It is also an offence under the act if the court finds that a person had reasonable grounds to believe that the subject of any transaction was criminal property at the time that the person was involved in the transaction, whether by concealing, disguising or transferring the property or moving that property in or out of Jamaica.

In the regulated financial sector, the act requires that a person should within 15 days or as soon as is reasonably practicable, disclose any information that is reasonably suspected to involve money laundering.

The disclosure should be made to the person designated in the financial institution to receive such complaints or to the chief technical director of the financial investigations division of the Ministry of Finance and Planning.

Enforcing authority

The 'regulated sector' predictably is also very widely defined to include banks, merchant banks, foreign exchange dealers, money transfer agencies, cambios, building societies, credit unions, real estate dealers and insurance companies.

The minister has the power to add, with the consent of Parliament, other entities that he may determine may be used to hide the proceeds of crime.

In addition to criminal proceedings under the act, civil proceedingsmay be initiated by an 'enforcing authority' or agency that has the power to make an application to the court to have property, other than cash, vested in it so that the property may be sold for the benefit of the agency.

However, the cash proceeds of a sale will be paid into the consolidated fund.

Note here, that because the proceedings are civil proceedings, rather than criminal, the standard of proof to be satisfied by the agency is the more achievable standard of proof on a 'balance of probabilities' that a breach of the act has occurred rather than the higher standard in criminal cases of 'beyond a reasonable doubt'.

But what of the case of a third party whose property is tied up in the courts for years as a result of a forfeiture order having been made in respect of his property? Not only will that innocent person, who may be a purchaser or a mortgagee, have to establish that he or she had no knowledge that the property was tainted or acquired through criminal activity, but some person may also incur significant legal expenses and loss of use and enjoyment of his property during the period that the matter is before the court.

Unfortunately, the act does not provide for compensation to an innocent party who has been deprived of this property, albeit temporarily.

Kirk Anderson is with the law firm DunnCox, Kingston. Email: kirk.anderson@dunncox.com.