Civil Recovery of Criminal Assets and Terrorist Property: Harare Scheme on Mutual Assistance and Draft Model Legislative Provisions

Author:Commonwealth Secretariat
Pages:177-193
SUMMARY

Introduction. Draft model law on civil recovery of criminal assets including terrorist property. Consideration by senior officials. Action by law ministers. Annex 1. Draft commonwealth model legislative provisions on the civil recovery of criminal assets including terrorist property. Division 1 - Interpretation. 1. Definitions. 2. General Provisions. Division 2 - Restraining Orders. 3.... (see full summary)

 
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Introduction
  1. At their Meeting in St. Vincent and the Grenadines in 2002, Law Ministers considered measures to enhance capacity regarding the seizure and forfeiture of criminal assets. They asked the Commonwealth Secretariat to provide model legislative provisions dealing with the seizure and forfeiture of terrorist assets and for civil forfeiture regimes.

  2. This paper and its Annex have been prepared in response to that mandate.

Draft model law on civil recovery of criminal assets including terrorist property
  1. Over the past several years, a number of international initiatives including penal law Conventions such as the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the United Nations Convention against Transnational Organised Crime and the work of the Financial Action Task Force (FATF), have led to the development and adoption by states of legislation to allow for the restraint and forfeiture of the proceeds and instrumentalities of crime. Recent initiatives relating to terrorism, in particular the Convention for the Suppression of the Financing of Terrorism, have led to an expansion of forfeiture laws to cover terrorist property.

  2. To date, much of the legislation adopted has provided for "conviction based" forfeiture where proceedings to forfeit assets are based on an underlying criminal conviction. Recently however, several states have also adopted laws that will permit "non-conviction based" or "civil recovery" of criminal assets as an additional tool to combat serious crime and the financing of terrorism. Under these regimes, the proceedings are generally in rem, brought against property as opposed to a person. Civil rules of procedure apply and forfeiture can be ordered on the basis of evidence to a standard of balance of probabilities.

  3. Several examples of such legislation can be found in Commonwealth jurisdictions such as Australia, Canada, South Africa and the United Kingdom, as well as in Ireland and the United States.

  4. Pursuant to the request of Law Ministers, the Secretariat has undertaken a project to develop a model law which countries considering the adoption of such legislation could use as a resource tool. To avoid duplication of effort and the waste of resources, it was decided to develop a draft model law in collaboration with the United Nations Office on Drugs and Crime (UNODC) in Vienna.

  5. In late September of 2003 an expert group meeting was held in Vienna to develop drafting instructions for a model law on civil forfeiture. Experts from Australia, Canada, Ireland, South Africa, the United Kingdom and the United States participated in the meeting along with officials from UNODC and the Commonwealth Secretariat. The Government of Canada agreed to provide the services of a legislative drafter to prepare the model law.

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  6. In January of 2004, the legislative drafter, in consultation with the Commonwealth Secretariat and UNODC prepared a draft of a chapter on civil asset forfeiture for inclusion in the existing UNODC Model Money-Laundering, Proceeds of Crime and Terrorist Financing Bill of 2003. This draft was adapted by the Commonwealth Secretariat into a stand alone Draft Commonwealth Model Law on the Civil Recovery of Criminal Assets including Terrorist Property (Annex 1).

Consideration by senior officials
  1. Senior Officials welcomed the work undertaken by the Commonwealth Secretariat in the preparation of a Draft Commonwealth Model Law on the Civil Recovery of Criminal Assets including Terrorist Property. It was noted that the Model Bill was drafted so as to give a broad scope to the legislative provisions, which could be reduced to meet the particular needs and constitutional obligations of each enacting country. The meeting gave a general welcome to the drafts, but as a number of delegations had indicated that they had technical amendments to propose it was agreed that the Commonwealth Secretariat would engage in discussions with those delegations with a view to preparing a revised draft for submission to Law Ministers. Those discussions were carried out in the margins of SOLM.

Action by law ministers
  1. The Draft Commonwealth Model Law on the Civil Recovery of Criminal Assets including Terrorist Property (Annex 1), incorporating amendments following the comments from SOLM, is now presented for consideration by Law Ministers.

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Annex 1 Draft commonwealth model legislative provisions on the civil recovery of criminal assets including terrorist property

[NOTE: Provisions in italics represent options that a State may wish to include in legislation]1

Division 1 - Interpretation
1. Definitions

(a) "currency" means the coin and paper money of [name of State] or of a foreign country that is designated as legal tender and which is customarily used and accepted as a medium of exchange in the country of issue, monetary instruments that may be exchanged for money (such as cheques, travellers' cheques, money orders, negotiable instruments in a form in which title thereto passes on delivery), jewellery, precious metals and precious stones. Where the context permits, currency includes currency in electronic form;

(b) "document" means a record of information kept in any form;

(c) "instrumentality of unlawful activity" means property

(i) used in or in connection with unlawful activity;

(ii) that facilitates or is otherwise concerned in unlawful activity;

(d) "interest" in relation to property means:

(i) a legal or equitable estate or interest in the property;

(ii) a right, power or privilege in connection with the property.

(e) "lawful owner" means a person who

(i) has an interest in the property which is the subject of the application,

(ii) has exercised reasonable care to ensure that the property is not terrorist property;

(iii) is not a member of a terrorist group.

(f) "legitimate owner" means, with respect to property that is proceeds of unlawful activity, a person who did not, directly or indirectly, acquire the property as a result of unlawful activity carried out by the person and who

(i) was the rightful owner of the property before the unlawful activity occurred and was deprived of the possession or control of the property by means of the unlawful activity; or

(ii) acquired the property for fair value after the unlawful activity occurred and did not know and could not reasonably have known at the time of the acquisition that the property was proceeds of unlawful activity;

(g) "place" means any physical location and includes land, water, vessels, buildings and premises

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(h) "proceeds of unlawful activity" means any property or economic advantage derived or realised, directly or indirectly, as a result of or in connection with a unlawful activity, irrespective of the identity of the offender and irrespective of whether committed before or after the commencement of this Act and includes, on a proportional basis, property into which any property derived or realised directly or indirectly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains derived or realised from such property at any time since the unlawful activity;

(i) "property" means any asset of every kind, whether corporeal or incorporeal, moveable or immovable, tangible or intangible, and includes legal documents or instruments in any form including electronic or digital evidencing title to, or interest in such assets, including but not limited to bank credits, travellers' cheques, bank cheques, money orders, shares, securities, bonds, drafts, letters of credit;

(j) "responsible owner" means, with respect to property that is an instrumentality of unlawful activity, a person with an interest in the property who has done all that can reasonably be done to prevent the property from being used to carry out unlawful activity, including

(i) promptly notifying appropriate law enforcement agencies whenever the person knows or ought to know that the...

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