A critique for the Private Sector Commission (PSC) of the proposed state assets recovery legislation has hammered it as an “extreme form” of asset forfeiture in which the presumption of innocence is reversed and called for it to be placed on hold.
The PSC is adamant that the State Assets Recovery Agency (SARA) Bill in its current form, “is flawed” and in a press release which accompanied the critique on Friday, it urged the Government to seriously re-examine it before it is put to the legislature.
“The Private Sector Commission wishes to reiterate its position that all assets belonging to the state, which were unlawfully acquired by any unauthorized beneficiary, must be returned to the state. The Private Sector Commission is, however, also strongly of the view that the curtailment of civil liberties and the erosion of investor confidence must not be the result of the process of such recovery”, the release said.
The PSC released a critique which is the end result of legal advice which the commission had sought, at the end of which several recommendations were made.
It has been recommended that further consideration of the draft Bill should be put on hold and policies should be articulated and objectives of what the Government seeks to achieve should be set; a small team, possessing and having access to relevant skills and expertise should be established to consider, how best to achieve the objectives.
It was also suggested that in the meanwhile the State can use existing mechanisms, including the Guyana Revenue Authority, the Double Taxation Treaties (Canada, UK and CARICOM) and the Tax Information Exchange Agreement with the USA, to pursue suspected acts of illicit enrichment misfeasance and other violations using both the civil and criminal avenues and that the overlapping functions between the State Assets Recovery Unit (SARU) and the Special Organised Crime Unit (SOCU) should be removed in order to make investigations more transparent and effective.
According to the critique, the principles of state asset recovery, compliance with the UN Convention against Corruption and reduction of crime are commendable but civil asset forfeiture, while used in an increasing number of jurisdictions, is more controversial and non-conviction based forfeiture often places the citizen at a severe disadvantage.
Using the Republic of Ireland as an example, it was explained that where the principle has been relatively successful based on that country’s peculiar circumstances, it is widely accepted that there has been a qualitative reduction of certain rights, including due process and compromising the presumption of innocence.
The question now being asked is whether this is a small price to pay for the reduction of crime.
Extreme form
“The model for the SARA Bill is an extreme form of asset forfeiture in which the presumption of innocence is at least, reversed. Normally, asset forfeiture legislation can be conviction based, distinguishing between (the) conviction based stream but separating indictable but not serious offences from and serious offences; (the) Civil stream, against a person suspected to have committed a serious offence within the past six years, or property suspected of being the proceeds of an indictable offence; and … against property acquired from unlawful conduct”, the critique stated.
It said that the statement that the proposed Bill is consistent with the UN Convention against Corruption is true to some extent but key recommendations in the Convention are not reflected in the Bill.
According to PSC, the proposed Bill is not only about State property. It was outlined that Clause 44 empowers the Director to include, as part of the civil recovery application, “property, other than State property”, discovered to have been obtained or derived, directly or indirectly, through unlawful conduct.
According to the critique, there was an absence of definitions.
“Despite featuring in the name, “state asset” is not defined in the Bill. There is no definition of “State property”, a term used liberally throughout the Bill; or “specified property” used in clause 18 which gives the Director the power to take action to recover State property”, it said.
The critique noted that it was stated that the Director can do “anything” considered appropriate to the discharge of his function. It was pointed out that his powers would be much wider than those of the Director of the Asset Recovery Agency under UK Proceeds of Crime Act.
“In the UK, the Director’s functions did not include the recovery of State Property derived from unlawful conduct.”, the critique said pointing out that effectively, the Director can assume functions of Commissioner-General, the Commissioner of Police as well as the Director of Public Prosecutions.
“Most frighteningly, the Director can actually contract out the power, functions, and duties conferred on him”, it was stated.
On the issue of the Funds of the agency, it was stated that the provision granting SARA 25% of its proceeds violates Article 216 of the Guyana Constitution and “Gives the agency a direct interest in the funds raised. In the USA, the Police use this as a main source of funds, a practice that is widely criticised as abused’.
According to the critique, the Bill is not only contentious but not workable without changes in the tax laws. It was stated that both Australia and the UK have found that this is what has to happen.
“Guyana’s tax administration is not similar to the legislation of most other countries that we have reviewed for purposes of this document. In Barba-dos, the Commissioner can object to a request for information”, it stated.
The PSC critique also raised issues with the appointments of the Director and the Deputy Director which will be done by a simple majority of the National Assembly on the recommendation of the Committee on Appointments.
“This is an executive function, and compromises the principle of separation of powers. The function of the Appointments Commit-tee of the National Assembly is to make appointments in respect of members of Commission established under the Constitution, not other bodies. That the National Assembly has been employed in such appointments before is not justification for its continuance”, it was stated.
The PSC also took issue with the nature of appointments as outlined in the draft Bill. It said that it makes the Director a “Corporation Sole”.
It was explained that “Corporations Sole have their origin in ecclesiastical law to allow property to move from one office holder to his or her successor. It applies, for example, to the Bishop of Georgetown and to the British Monarch. As a corporation sole, the Director is answerable to no one, although his actions will be subject to judicial review. His/her only reporting obligation is an annual report submitted through the subject Minister. Under the Public Corporations Act, a corporation may be a corporation sole, but not the person who heads it. Almost every corporation formed under the Public Corporations Act was a corporation aggregate”.
It was pointed out that while in opposition, the governing parties strongly opposed the Director of FIU as “an effective corporation sole and replaced it with a ten-member AML/CFT Authority and a further nine ex officio members”. It was stated that a deputy Corporation Sole seems a “conceptual impossibility”.
According to the critique, the Proceeds of Crime Act of the UK, the only other similar legislation making the Director a Corporation Sole, did not have a Deputy. “There is no deputy Monarch or Bishop”, it said.
It was stated that the Schedule to the Bill provides that the person appointed as Director or Deputy Director of SARA shall be a fit and proper person.
“There are no specifications of what constitutes “fit and proper” but one of the criteria must include independence and exclude “politically exposed persons” senior politicians and important political party officials. The application of this test would exclude Professor Clive Thomas, a co-leader of the Working People’s Alliance, a party in the ruling coalition”, it stated. Dr Thomas is presently the head of SARU.
The PSC critique was also critical of the role of the Ministers of Finance and Public Security as was outlined in the Bill.
It was stated that under the Guyana Revenue Act, the power to appoint revenue and customs officers vests in the Guyana Revenue Authority. Proposed provision is either an amendment by implication or disregards that Act. It posited that “it seems improper and legally impossible for a Minister to exercise a statutory power which Parliament has vested in the Governing Board of the GRA”.
“Similarly, the Minister responsible for public security is now being conferred with powers to designate the Director and other named officers of SARA as persons having the powers of police officers and immigration officers”, the critique.
It was noted that Parliament has conferred the power to appoint police officers and immigration officers on the Police Service Commission and the Commissioner of Police and that the objection in relation to the GRA also applies to this provision.
It said that “When all the powers and functions of the Director (summarised in Part 1) are taken as a whole, together with the status of corporation sole, the Director has more powers and is subject to fewer restrictions, than the Commissioner of Police, the Commissioner General and the Director of Public Prosecutions”.
In concluding it was stated that the proposed Bill seeks to achieve “far too many objectives: the reduction in crime, recovery of State Assets and the introduction of a system of civil asset forfeiture”. It was pointed out that the consequences of this are a “frightening array of overlapping laws, concentration of power, violation of the Constitution and constitutional principles, violation of the standing orders of the National Assembly, and a potential reduction of the civil liberties: due process and the presumption of innocence”.
It has also been concluded that imposing a lower burden of proof on the Director in a case involving confiscation of property, than in a criminal case, can put citizens in a serious disadvantage against the State and this could deprive him of the very funds he ought to need to prove his innocence.
“The Bill contains some striking similarities with the Proceeds of Crime Act 2002 of the UK, an Act that created the Asset Recovery Agency with a Director as a Corporation Sole. That Act has been a major failure and has been effectively abolished”, it said adding that the proposed piece of legislation “is seriously and conceptually flawed”.
Attorney General Basil Williams recently dismissed the PSC’s earlier criticisms as politicking.
“The provisions in the [legislation] are not pulled out from somebody’s back pocket. The position is…the last regime had signed on to the Convention against Corruption, as they had signed on to other conventions, and never implemented them. The international community now is demanding that if you want to be amongst the members of the community and be involved in the community, you gotta comply with all these conventions that you sign,” he said, while adding that the last government ignored the provisions of the convention.
“The Private Sector was specifically invited so the private sector must stop playing politics. We are using taxpayers’ money to hold these consultations. When we weren’t holding consultations they made a lot of noise. Now we are holding consultations, they are not attending,” Williams had said.
