Draft Proceeds of Crime (Cash Seizure) (Jersey) Law 200-

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A decision made (20.09.07) to approve the draft Proceeds of Crime (Cash Seizure) (Jersey) Law 200- for lodging.

Decision Reference: MD-HA-2007-0065
Decision Summary Title :	Proceeds of Crime(Cash Seizure) (Jersey) Law, 200-		Date of Decision Summary:	14th September 2007
Decision Summary Author:	Heidi Sydor Executive Officer		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	public
Type of Report: Oral or Written?	written		Person Giving Oral Report:
Written Report Title :	Proceeds of Crime(Cash Seizure) (Jersey) Law 200-		Date of Written Report:	August 2007
Written Report Author:	Mr R Whitehead Principal Legal Advisor		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	public
Subject: Proceeds of Crime(Cash Seizure) (Jersey) Law 200-
Decision(s): The Minister approved the draft Proceeds of Crime (Cash Seizure) (Jersey) Law 200- for lodging ‘au Greffe’ for debate on the 6th November 2007.
Reason(s) for Decision: The draft Proceeds of Crime(Cash Seizure) (Jersey) Law 200- allows for the search, seizure, detention and forfeiture of cash. The draft Law will implement part of Special Recommendation IX of the Financial Action Task Force on Money Laundering.
Resource Implications: It is not possible to predict the resource implications of the proposed new Law with any accuracy, but a significant increase in resource requirements would seem unlikely. The situation will be monitored post implementation.
Action required: The Executive Officer, Home Affairs, to request the Greffier of the States to arrange for the draft Law to be lodged ‘au Greffe’ and to be taken into consideration by the States on 6th November 2007.
Signature:		Position: Minister for Home Affairs
Date Signed:		Date of Decision (If different from Date Signed):

Draft Proceeds of Crime (Cash Seizure) (Jersey) Law 200-

REPORT

Proceeds of Crime (Cash Seizure) ( Jersey ) Law, 200-

Introduction

1. The draft Law introduces new provisions allowing for the search, seizure, detention and forfeiture cash. The draft Law will repeal and replace the provisions on cash seizure currently contained in Articles 31-36 of the Drug Trafficking Offences (Jersey) Law, 1988 and Article 27 and Schedule 4 of the Terrorism (Jersey) Law, 2002 and provide a single legislative basis for the search, seizure, detention and civil forfeiture of cash suspected of representing the proceeds of crime or being intended for use in, or obtained in the course of unlawful (criminal) activity.

The Law has been drafted in furtherance of the States Strategic Plan 2006-2011, which tasks Home Affairs, at paragraph 3.2.6, with introducing civil asset recovery legislation to target local criminals by 2008. It is thought that the provisions of the draft Law will act as deterrent to those individuals who believe that crime pays and will also assist in upholding the reputation of the Island by providing a legal process through which cash that has been obtained as a result of criminal activity can be forfeited to the state.

3. The draft Law is intended to implement part of Special Recommendation IX of the Financial Action Task Force on Money Laundering. The remainder of the requirements in Special Recommendation IX, concerned with the physical cross-border transportation of currency and bearer negotiable instruments, will be implemented by the draft Customs and Excise (Amendment No. 5) (Jersey) Law 200-. Jersey will be assessed against the 40 Recommendations and 9 Special Recommendations of the FATF by the International Monetary Fund next year. Special Recommendation IX provides that competent authorities should have the power to stop or restrain cash (including currency or bearer negotiable instruments) that are suspected of being related to money laundering or terrorist financing. Jersey’s legislation currently fails to meet this element of Special Recommendation IX because police and customs officers do not have the power to stop or restrain cash suspected of being related to money laundering, only cash reasonably suspected of being the proceeds of drug trafficking when that cash is being imported to or exported from the Island and cash suspected of being related to terrorist financing. It is considered that the draft Law will also remedy operational difficulties currently being experienced by officers under the existing legislative provisions.

4. The draft Law will allow the forfeiture of cash so long as the Court is satisfied to the civil standard of proof, the balance of probabilities, that the cash is tainted. As is the case with the current legislative provisions, the provisions of the draft Law are exercisable regardless of whether any criminal proceedings for particular offences have or are taking place. The draft Law is therefore also one of the efforts taken in conjunction with the Law Officers’ Department to expand powers in relation to civil forfeiture in pursuance with the Criminal Justice Policy.

Problems experienced under the existing legislative provisions

Article 31(1) of the Drug trafficking Offences (Jersey) Law, 1988 states the following,

“31 Seizure and detention of drug trafficking money

(1) A police officer may seize and, in accordance with this Article, detain any money which is imported into or exported from Jersey if the police officer has reasonable grounds for suspecting that it directly or indirectly represents any person’s proceeds of, or is intended by any person for use in, drug trafficking.”

Operating under Article 31(1) of the Drug Trafficking Law, an officer who suspects that cash is the proceeds of drug trafficking can only seize that cash if the cash is being imported or exported into the Island. This effectively means that cash seizure can only take place at the ports where such a suspicion arises and not elsewhere in the Island because Article 31(1) only allows for the detention of cash being imported or exported into the Island.

This has in the past meant that police and customs officers have been unable to seize large amounts of cash elsewhere in the Island even when they have been suspicious that the cash could in fact be the proceeds of drug trafficking because the cash was not at the time being imported to or exported from the Island.

To give an example, imagine a police officer comes across £100,000 in the backseat of a car whilst carrying out a routine road check. The police officer then asks the driver of the car why he has that amount of money is in his backseat. The driver is unable to offer a legitimate explanation and the officer has reason to suspect that the money in the boot is the proceeds of drug trafficking. Currently the police officer is unable to seize the cash because the current remit of Article 31(1) is such that he has no power to do so. This is unless of course there is some other evidence of an offence, in which case the cash could be seized as evidence of that offence.

Furthermore, if the officer in question suspects that money has resulted from some other criminal activity, other than drug trafficking, then the officer currently has no statutory power under which to seize the money. This is because there are currently no provisions concerned with cash seizure and detention in the Proceeds of Crime (Jersey) Law, 1999.

The Law Officers’ have advised that no deficiency currently exists between Special Recommendation IX and the cash seizure, detention and forfeiture provisions relating to terrorist financing, currently contained in Article 27 and Schedule 4 of the Terrorism (Jersey) Law, 2002.

The need for a separate standalone law

11. Because of the adequacy of the provisions contained in the Terrorism (Jersey) Law, 2002, consideration was given to inserting separate and sufficient cash seizure, detention and forfeiture provisions in the existing Drug Trafficking Offences (Jersey) Law, 1989 and the Proceeds of Crime (Jersey) Law, 1991, and leaving the current provisions in the Terrorism (Jersey) Law, 2002 as they stand, as opposed to implementing a separate cash seizure Law. It was thought, however, that further difficulties could be experienced by the authorities if that approach were taken and also that individuals may seek to play one piece of legislation off against another so as to avoid the forfeiture of the cash in question.

Those potential difficulties are best illustrated by reference to the example set out above. Assuming a police officer finds £100,000 in the backseat of a car, that there is no legitimate explanation for the cash given by the driver of the vehicle and that provisions have been implemented under both the Proceeds of Crime and Drug Trafficking Laws, the police officer is then faced with having to reach a view as to whether the cash represents the proceeds of drug trafficking or the proceeds of some other crime. If the officer is faced with silence on the part of the car driver, the question arises as to what evidence will be admissible to prove the reasonable grounds for suspicion that the money represents either the proceeds of drug trafficking or the proceeds of crime. It is obviously important for the officer to know under which statutory provisions he is proceeding. At this stage the officer may suspect the money is the proceeds of some criminal conduct but he may not know whether that conduct relates to drug trafficking or some other crime. By having a standalone cash seizure law this potential problem is removed because it removes the requirement for the police to make a decision as to whether to seize the cash under the drug trafficking provisions or the proceeds of crime provisions at a stage when the evidence may be such that an officer cannot confidently make that distinction.

Secondly it is thought that difficulties could arise in relation to the civil forfeiture of cash. Under the existing legislation civil forfeiture of cash can take place regardless of whether any criminal proceedings for particular offences have or are taking place. The same is true under the draft Law. If such civil proceedings were brought, with separate provisions in place under the Drug Trafficking, Proceeds of Crime or Terrorism Laws, it would be essential to identify under which statute the forfeiture of cash is taking place. It may be difficult for the police to prove even to the civil standard that the cash represents either the proceeds of crime or the proceeds of drug trafficking. Instead the draft Law provides that the Royal Court shall, on the application of the Attorney General, make a forfeiture order forfeiting cash which has already been detained, if the Court is satisfied, on the balance of probabilities, that the cash is “tainted cash”. “Tainted cash” is defined in the draft Law as “tainted property”, with “tainted property” being defined as property that is –

(a) used in, or intended to be used in, unlawful conduct; or

(b) obtained in the course of, from the proceeds of, or in connection with, unlawful conduct.

If the individual in whose possession the cash was found is able to satisfy the court that the cash which has been seized and detained is actually from a legitimate source then no such order would be made by the Court.

Application of forfeited cash

Article 9(4) of the draft Law provides that any cash that is forfeited under the Law shall be paid into a special fund, within the meaning of the Public Finances (Jersey) Law 2005, as designated by an Order made by the Minister for Treasury and Resources.

It has been agreed with the Minister for Treasury and Resources that the money forfeited under this Law will go into a new special fund to be established under the Civil Asset Recovery (International Co-operation) (Jersey) Law 200-. That fund being the Civil Asset Recovery Fund. Essentially forfeited cash will be directed into that Fund and at the end of the year any money retained in that Fund will be transferred to the Consolidated Fund and will accordingly form part of the States’ budgetary process for the following year. It is not possible to expressly refer to the Civil Asset Recovery Fund in the draft Law because the Civil Asset Recovery (International Co-operation) (Jersey) Law 200- under which the new special fund is to be established has not yet been passed by the States.

Financial/manpower statement

It is not possible to predict the resource implications of the proposed new Law with any accuracy, but a significant increase in resource requirements would seem unlikely. The situation will be monitored post implementation.

European Convention on Human Rights – for Home Affairs