Civil Recovery of International Criminal Property - So far so good

Posted on July 04, 2017
Written by Matthew Jowitt

Jersey’s long –running bid to recover Nigerian government corruption money from Island financial institutions received a boost last week when a Court of Appeal judge refused leave to the corporate holder of stolen money to pursue an appeal against a civil freezing order to the Privy Council in London.

Doraville Properties Corporation – a front for Mohammed Abacha, son of the late Nigerian kleptocrat General Sani Abacha, held in excess of US$200 million on deposit in Deutsche Bank International Ltd in Jersey until those assets were restrained at the request of the US Department of Justice on the grounds that they had been embezzled from the Nigerian public purse and laundered through the US banking system before finding their way to Jersey. 

The decision underlines the robustness of Jersey’s Civil Asset Recovery (International Co-operation) Law 2007 in enabling foreign law enforcers, through the Island’s Attorney General, to freeze and ultimately confiscate assets in Jersey in the absence of any criminal prosecution and conviction.

Unlike Proceeds of Crime legislation which, in the field of trans-border conduct at least, requires proof that property is tainted by crime applying the criminal law both of the foreign country and of Jersey, (known as the ‘dual criminality test’), the 2007 Law requires only that the target property is the proceeds of a crime under the law of the foreign state – provided always that a competent court of that foreign state has ‘found’ that the assets are ‘tainted property’ pursuant to its own criminal law.

This single criminality test means, in theory at least, that assets in the Island which cannot be said to be the proceeds of any crime known to Jersey law can still be frozen and confiscated using the civil route under the 2007 law. Examples of this might be in confiscating the proceeds of people trafficking or slavery.

Such considerations did not feature, however, in Doraville’s challenge to the restraint order, since there could be no question but that stealing from the public purse is as much a crime in Jersey as it is in the USA, or indeed Nigeria.

Instead, Doraville mounted its challenge to the legality of the restraint order on the basis that the judgment in a US Federal Court that the Jersey assets were ‘tainted property’ was not sufficient to amount to a ‘finding’ that the property was tainted for the purposes of the 2007 Law because Doraville had not appeared in the US proceedings and the US judgment had thus been entered in default without testing the evidence.

That argument found no favour either with the Royal Court at first instance, or the Court of Appeal , both of which had no hesitation in finding that a default judgment in a foreign court necessarily involved a ‘finding’ of fact applying normal jurisprudential principles, even if evidence had not been adduced and tested.  The Jersey court was entitled to accept a foreign default judgment on its face, and give effect to it under the 2007 Law.

Doraville’s latest attempt to impugn those decisions lay in its application for leave to appeal to the Privy Council – asserting that the question of whether a default judgment could amount to a ‘finding’ for the purposes of the 2007 Law was a point of law of general public importance.

The Court of Appeal had earlier observed that the 2007 Law was intended to give effect to Jersey’s international obligations to afford the fullest measure of assistance to foreign states in tracing and confiscating criminal property. In refusing Doraville’s request for leave, the Court observed shortly that it disclosed no point of law of general public importance.

The leave judgment can be found here:-

https://www.jerseylaw.je/judgments/unreported/PDFs/%5B2017%5DJCA099.pdf

Matthew Jowitt acted for the Attorney General in the Doraville litigation. Matthew can be contacted at: mjowitt@ardentchambers.com or 01534 481809     

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