The State Assets Recovery Act 2017 (Part I)

During the last week, there were two items making the international news headlines on the corruption front. First, the authorities in Nigeria seized US$43.4 million in cash during a raid on an apartment building in Lagos after a resident reported suspicious movement of bags in and out of the building. Investigators found the money in sealed plastic wrappers hidden in filing cabinets and panels in a wardrobe. The Nigerian President took swift action and suspended the head of the National Intelligence Agency for keeping unauthorised cash in a private home. He also ordered an investigation into the allegations of violations of law and due process against the Secretary to the Government of the Federation in the award of contracts, and directed that the official be suspended from office pending the outcome of an investigation into the matter.

Second, in a split decision (3-2), Pakistan’s Supreme Court ruled that there is insufficient evidence of corruption to remove the Prime Minister from office. It, however, ordered a further investigation into allegations contained in the “Panama Papers” of the Prime Minister’s family transferring money from their offshore companies in the British Virgin Islands to finance the purchase of properties in London. The family denied any wrongdoing and claimed that the wealth was acquired legally from investments in Qatar decades before the Prime Minister entered politics. However, critics have suggested that the offshore companies were used to launder illegally-obtained wealth or to avoid taxes. The Opposition leader, Imran Khan, former Test player and captain of the Pakistani team, demanded the immediate resignation of the Prime Minister because “he has lost moral authority to rule the country”.

Today, we begin an examination of the State Assets Recovery Act 2017 which was passed in the National Assembly last week.

Background and purpose

The Act establishes the State Assets Recovery Agency (SARA) in consonance with the United Nations Convention against Corruption (UNCAC) which was adopted by General Assembly Resolution No. 58/4 dated 31 October 2003. The Convention was brought into force at a signing ceremony in Mexico on 9 December 2003, subsequently designated International Anti-Corruption Day. Guyana acceded to the Convention some five years later in April 2008. Guyana also ratified the Inter-American Convention Against Corruption (IACAC) in December 2000.

UNCAC requires State Parties to the Convention to develop and implement or maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability. It specifically refers to the establishment of a body or bodies to promote effective practices aimed at preventing corruption. These bodies should be granted the necessary independence to carry out their functions effectively, free of undue influence. They should also be provided with adequate resources, specialized staffing and relevant training. In addition, State Parties are to evaluate periodically relevant legal instruments and administrative measures to determine their adequacy to fight and prevent corruption.

On the other hand, IACAC requires State Parties to take the necessary measures to establish under its laws as an offence a significant increase in the assets of a government official that he/she cannot reasonably explain in relation to the official’s lawful earnings during the performance of his/her functions.

The purpose of the SARA Act is to provide for the non-conviction based asset recovery for unlawful conduct and corrupt practices in relation to property and other assets owned by the State, or in which the State has an interest. This is to be undertaken by way of civil     proceedings in the High Court for a civil recovery order. The focus is on the property and not on the individual who holds or has an interest in the property.

The Act has seven parts, namely:

 

Part I     Preliminary

Part II    Establishment of SARA

Part III   Establishment of Recovery of State Assets Fund

Part IV  Civil recovery and preservation of State property obtained through unlawful conduct

Part V    Orders to assist investigation disclosure

Part VI  International cooperation

Part VII Miscellaneous

The preliminary part of the Act provides some useful definitions, including what constitutes “property”. It considers recoverable property to include “State property obtained through unlawful conduct involving a public official or any other person or any benefit obtained or derived in connection with a public official’s or any other person’s unlawful conduct in respect of State property”.

Part II – Establishment of SARA

Section 3 of the Act provides for the establishment of SARA and for the person holding the post of Director to be a corporation sole.

Appointment of Director and Deputy Director

The Act provides for the appointment of a Director and a Deputy Director by a simple majority of members of the National Assembly on the recommendation of the Parliamentary Committee on Appointments (PCA). The criteria for appointment are:

(a)          significant experience in management or skills in leading investigations into asset recovery;

(b)          possession of a degree in law, economics or finance from a recognized university;

(c)           ten years’ experience in a relevant field, five of which at a senior management level; and

(d)          such other requirements that may be determined by the PCA.

The terms and conditions of appointment of the Director and the Deputy Director, including their tenure of office, are to be determined by the PCA. Appointment is for a period of not less than three years and not more than five years, renewable.

SARA’s functions

The key functions of SARA are to:

(a)          investigate into whether property or interest in property constitutes State property obtained through the unlawful conduct of a public official or other person;

(b)          trace and identify property, whether situated in Guyana or in a foreign country or territory, suspected to be State property obtained from the unlawful conduct of a public official or other person;

(c)           take appropriate measures, consistent with the Act to deprive or deny any person of property believed to be State property, as may be appropriate;

(d)          institute and conduct proceedings in the Court for the recovery or protection of State property, or for the freezing of proceeds of corrupt or unlawful conduct or related offences, or the payment of compensation and disciplinary measures in relation to State property; and

(e)          raise public awareness on the dangers of corruption and enlist public support in combatting corruption and other crimes, especially in relation to public offices and State property.

SARA’s functions are to be discharged by the Director in a way that he/she considers is best calculated to contribute to the reduction of crime and the recovery of State property derived from unlawful conduct. In discharging his/her functions, the Director shall consider whether the recovery of State property may be better secured by means of criminal investigations and criminal proceedings.

Annual plan

The Director shall prepare an annual plan, including an estimate of revenues and expenditures, setting out how SARA intends to discharge its functions. The plan is to be prepared at least three months before the beginning of the financial year and shall include:

(a)          objectives for the financial year;

(b)          any strategic plan for the financial year, whether or not relating to its objectives;

(c)           priorities for the financial year;

(d)          financial resources expected to be available for the financial year; and

(e)          the proposed allocation of those resources.

A copy of the annual plan is to be tabled in the National Assembly by the Minister of Legal Affairs.

Designating officials as customs, police and immigration officers

The Director may request the Minister of Finance to instruct the Commissioner-General to designate in writing the Director and other named officers of SARA as persons having the powers of a revenue and customs officer, consistent with Section 3 of the Customs Act. Similarly, the Director may request the Minister of Public Security to instruct the Commissioner of Police to designate in writing the Director and other named officers of SARA as persons having the powers of a police officer and an immigration officer, consistent with Part IV of the Police Act and Section 4 of the Immigration Act respectively.

Cooperation and collaboration

Persons who have functions relating to the investigation or prosecution of offences are required to cooperate with SARA in the discharge of its functions. SARA may also cooperate and collaborate with other State organs/agencies, and any foreign government or international or regional organization in the prevention and investigation of loss and recovery of State property, including mutual cooperation with the Director of Public Prosecutions (DPP) and the Financial Intelligence Unit. The DPP and the Commissioner of Police shall, as soon as practicable, inform SARA of any criminal investigation or criminal proceeding involving State property which may become subject to forfeiture, confiscation or civil recovery. Similarly, as soon as practicable, SARA shall inform the DPP and the Commissioner of Police when commencing a civil recovery investigation.

SARA may enter into an agreement with any Government Ministry or Department, Public Authority or statutory body in Guyana for the collection, use or disclosure of information, including personal information. It may also conduct any appropriate investigation in conjunction either with the police or with any other person who is, in the opinion of the Director, a proper person to be concerned with it. SARA may also request and obtain professional and technical assistance or advice from such persons or organisations, whether local or foreign, as it considers appropriate.

Annual report

As soon as possible after the end of each financial year, the Director is required to prepare an annual report setting out how the Agency has discharged its responsibilities. The report (to be laid in the National Assembly by the Minister of Legal Affairs) is to include:

(a)          the Director’s annual plan for the financial year;

(b)          costs associated with the administration of the funds under SARA’s control, including costs of external audits;

(c)           amounts credited to those funds; and

(d)          assessment of the extent to which SARA has discharged its functions.

Code of Conduct and Code of Practice

All staff members of SARA are required to comply with the Code of Conduct prescribed in Schedule II of the Integrity Commission Act. In addition, the Director shall prepare a code of practice for the discharge of the functions of the Director, staff of SARA and accredited financial investigators. The code of practice is to be laid in the National Assembly. A person who fails to comply with the code of practice may be subject to disciplinary action.

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