10 things to know about the 'Unexplained Wealth' Bill
Several questions have been raised regarding the Civil Asset Recovery and Management and Unexplained Wealth Bill, which was passed in Parliament on Monday.
(Please note amendments were made at the sitting of Parliament on April 8, 2019; for the latest amendments see the Parliament channel on YouTube: https://youtu.be/mwR1DF1RhpQ).
The Bill seeks to address the issue of recoverable properties and assets obtained through criminal conduct.
Here are 10 things to know about the Bill:
1. The Bill outlines criminal property as any property gained through the use of criminal activity
Under the Bill, criminal property is defined as any property which ‘constitutes a benefit to a person from criminal conduct’, or ‘represents such benefit, in whole or in part and whether directly or indirectly including economic gains and funds or property converted or transformed into other property’ or
Any property which ‘the alleged offender knows or suspects constitutes or represents a benefit and for which it is immaterial who carried out the conduct or who benefitted from the conduct’.
2. Recoverable property includes any interest or profit made from criminal property
Section 4 of the act states that any criminal property ‘mixed with other property’ is also recoverable property.
“(4) Where recoverable property of a person is mixed with other property, whether the recoverable property is his property or belongs to another person, the portion of the mixed property which is attributable to the criminal property, terrorist property or instrumentality represents the property obtained through criminal conduct, a terrorist act or the instrumentality.”
This includes property used to increase funds in a bank account, property used for part payment to acquire assets, property used for restoration or improvement or land, property used to acquire additional land or ‘in such other manner so as to vest in another person an interest in the criminal property, terrorist property or instrumentality’.
Section 6 states: “(6) Where a person who has criminal property or terrorist property obtains further property consisting of profits accruing in respect of the criminal property or terrorist property, those profits may be recovered under this Act.”
Section 8 states: “(8) If a person grants an interest in recoverable property belonging to him, the interest is also to be treated as obtained through criminal conduct.”
3. The Bill is retroactive
The Bill can be applied to criminal property which was established before the legislation was enacted.
The Bill applies to ‘all recoverable property, irrespective of whether or not the criminal conduct relative to the recoverable property occurred before or after the coming into force of this Act’.
4. The Bill seeks to establish a Civil Asset Recovery and Management Agency
Under Section 8 of the Bill, an agency will be established known as the ‘Civil Asset Recovery and Management Agency’.
The agency will be responsible for the “recovery, management and disposal of criminal property, terrorist property or an instrumentality under this Act”.
The Agency shall comprise of a Civil Asset Trustee and two Deputy Civil Asset Trustees.
The Civil Asset Trustee and one of the Deputy Civil Asset Trustees will appointed by President on the advice of the Judicial and Legal Services Commission and must be attorneys with at least 10 years standing.
The second Deputy Civil Asset Trustee will be appointed based on the advice of the Prime Minister and the Opposition Leader.
In the event the Prime Minister and Leader of the Opposition cannot agree on the joint advice, the President shall appoint the second Deputy Trustee after consultation with the Prime Minister and Leader of the Opposition.
The Agency is subject to financial audit within three months of the end of each financial year (September 30), to be presented before Parliament (Section 25).
The Agency must also submit a report annually to Parliament within three months of the end of the calendar year (Section 26).
5. Recovered property will be managed by the Property Manager
Once ordered by the High Court, the Property Manager will have the powers of a receiver to
“Remove, take possession of, preserve, manage, modify, store, sell or otherwise dispose of; and deal with the property in any manner that he thinks appropriate and proper” (Section 6(a) to S6(h)).
6. The Agency can freeze/take possession of property once a Civil Asset Restriction Order of Civil Asset Forfeiture Order is issued by the Courts
Under Section 31 of the Bill, a criminal investigation must first be raised and would be sent to the office of the Director of Public Prosecutions (DPP), who would refer the matter to the Agency.
The Agency would then be able to apply to the High Court for a ‘Property Restriction Order’ to stop the person from dealing with the recoverable property until it is forfeit.
This would allow the Agency to seize the property for safekeeping.
The Bill says the Agency will have the power to:
(a) “remove, take possession of and preserve, store or manage criminal property, terrorist property or instrumentality for the length of time or the term it determines proper and in accordance with the Civil Asset Restriction Order or Civil Asset Forfeiture Order”
“(b) to comply with the terms of any order to which the property is subject, including an order to comply with environmental, industrial, labour or property standards or to pay taxes, utility charges or other charges;”
“(c) to incur expenditure for the purpose of -
(i) acquiring any part of the criminal property or any
interest in it, which is not vested in it; and
(ii) discharging any liabilities, or extinguishing any
rights to which the criminal property is subject;”
(d) to manage criminal property including -
(i) selling or otherwise disposing of assets comprising the criminal property which are perishable or which ought to be disposed of before their value diminishes;
(ii) where the criminal property comprises assets of a trade or business, carrying on or arranging for another to carry on, the trade or business; and
(iii) incurring capital expenditure in respect of the criminal property;
(e) to sell criminal property or any part of it or interest in it;
(f) to start, carry on or defend any legal proceedings in respect of the criminal property;
(g) to make arrangements for the insurance of the criminal property;
(h) to destroy criminal property that has little value, particularly in relation to the cost of storage;
(i) to destroy contraband or criminal property that is inherently dangerous;
(j) to donate property for humanitarian purposes if it cannot be sold, despite reasonable efforts, after a year;
(k) to share information with, and receive information from, law enforcement authorities; and
(l) for the purpose or in connection with the exercise of any of its functions to –
(i) hold property;
(ii) enter into contracts;
(iii) sue and be sued;
(iv) employ agents;
(v) execute a power of authority, deed or other instrument; and
(vi) power to do any other act which is necessary.”
7. There are conditions under which property cannot be recovered
The Bill states that recoverable property ceases to be recoverable under the following conditions:
“(a) if it is vested, forfeited or otherwise disposed of, under this Act;
(b) if pursuant to a judgment in civil proceedings, the defendant makes payment to the claimant or the claimant otherwise obtains property from the defendant;
(c) if the claim of the claimant is based on the criminal conduct of the defendant;
(d) if civil proceedings have commenced and the property obtained by the claimant would be recoverable property;
(e) if the property is the subject of proceedings in the High Court for which a trustee has been appointed; or
(f) while a forfeiture applies to the recoverable property, whether made under this Act or any other written law.”
Additionally, the Bill says where a person is able to ‘satisfy the Court’ that they obtained the recoverable property ‘in good faith for value without notice that it was recoverable property’, the property ceases to be recoverable.
8. A Property Restriction Order may be set aside to allow for living expenses
Section 35 of the Bill states that the Property Restriction Order may be set aside to allow the property owner to meet his ‘reasonable living expenses (S35(3)(a)) or reasonable legal expenses (S35(3)(c))
Reasonable living expenses are defined as mortgage or rent payments, allowances for food, medicine and medical treatment, any payments due as a result of an order of the High Court, provision for the reasonable living expenses of dependents including educational expenses and provision for taxes, insurance premiums and public utilities.
Under Section 43(1) the person to whom the property belongs also may make an application to the High Court for compensation (within three months of the decision) if the Court finds that the property is not recoverable.
9. An investigation can be raised regarding unexplained wealth
Under Section "58.(1) Where the Chairman of the Board of Inland Revenue, a Customs and Excise officer or a police officer attached to the branch of the Police Service responsible for financial investigations (hereinafter referred to as “the applicant”) reasonably suspects that-
(a) the total wealth of the respondent exceeds the value of his lawfully obtained wealth; and (b) the property is owned by the respondent or is under his effective control".
An application can be filed to the High Court requiring the person in question to "file a declaration and answer questions as required in relation to his assets".
Where the High Court "is satisfied that there are reasonable grounds to suspect that the total wealth of the respondent exceeds the value of his wealth that was lawfully obtained, it may make a Preliminary Unexplained Wealth Order, requiring the respondent to file a declaration and appear before the High Court to answer questions relative to his assets for the High Court to decide whether to make an Unexplained Wealth Order."
After this, a notice of the making of the Order shall be served on the respondent.
In proceedings under this section, the burden of proving the wealth of the respondent is lawfully acquired lies on the respondent.
If an Unexplained Wealth Order is made after the death of a respondent, the Order is exercisable against the estate of the respondent.
The Bill also allows for the Attorney General to enter into agreements with foreign states for the seizure of property or assets outside of Trinidad and Tobago.
Additionally, Clause 74 of the Bill requires members of the Agency, employees and every person concerned with the administration of the proposed Act (including experts engaged by the Agency) to treat documents, information or other matters as secret and confidential, except where disclosures are made by the Agency or any other person pursuant to the provisions of the proposed Act or Regulations.
There is a penalty for a breach of confidentiality on summary conviction of up to $100,000 or imprisonment for three years, and on indictment to a fine of $150,000 and up to five years jail time.
10. The respondent can apply for the order to be discharged
62. (1) Where the High Court makes a Preliminary Unexplained Wealth Order under section 61, the respondent may, within twenty-eight days of notice of the order under section 61(2), apply to the High Court for the order to be left aside or discharged.
Where an application is made under this section, the High Court may order an inter partes hearing date within fourteen days.
Where an application has been made to revoke a Preliminary Unexplained Wealth Order, the High Court may revoke the order if it is satisfied that there are no grounds on which the order could be maintained.
There will be a Committee of the Whole of the House to examine the bill in full detail.
For more information check the following link: http://www.ttparliament.org/documents/2810.pdf
Access the Bill in its entirety here: https://bit.ly/2Im03Ux