I. Criminal Asset Recovery

1. Tracing

a) The Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law, 1991

The Criminal Justice (Fraud Investigation) (Bailiwick of Guernsey) Law, 1991 ("the Fraud Investigation Law") has proved a very effective tool in offering assistance to authorities in other jurisdictions. The Law gives power to HM Attorney General (within the Bailiwick of Guernsey known as HM Procureur) to require the production of documents and the provision of information in cases of serious or complex fraud.

Requirements to be met under the Law:

In exercising his powers there are two requirements which HM Attorney General must be satisfied are met:

• that there are reasonable grounds to suspect an offence involving "serious or complex fraud" has been committed; and
• that there is good reason for him to exercise his powers.

Use of the Fraud Investigation Law is not restricted to fraud cases arising in the Bailiwick or in the United Kingdom. It applies to any serious or complex cases being investigated anywhere in the world.

What is meant by "serious or complex"?

There is no definition in the Law. It should be emphasised, however, that a matter can be serious without being complex, and vice versa. Guernsey Law does not have a specific offence of "fraud". Instead, it has a large number individual criminal offences, all of which require proof of dishonest conduct, for example, theft, obtaining property by deception and false accounting. Ultimately whether a matter is serious or complex (or both) is a question of fact.

In determining whether a matter is serious HM Attorney General does not simply look at the amount of money involved. Obviously the more money that is involved the more likely it is that the matter will be considered serious but it is possible that a fraud involving less than £250,000 might be serious in certain circumstances for example, because it involves a serious breach of trust, or is a matter of substantial public concern.

In deciding whether a matter is complex account will obviously be taken of factors such as, the number of financial transactions involved to perpetrate or conceal the fraud, whether such transactions crossed national boundaries and, above all, the degree of sophistication in the commission of the offence.

Authorities when considering whether to make an application under the Fraud Investigation Law must remember that the matter under investigation need only be serious or complex - not both.

The assistance which can be provided under the Fraud Investigation Law:

The powers given to HM Attorney General are coercive and enable him to issue a serious or complex fraud notice to require:-

• any person within the Bailiwick (for example a bank, trust company or individual) to produce any relevant documents, including ones of a confidential nature. The only exception is if a document is covered by professional legal privilege in which case it need not be produced;
• any person (for example a bank officer or company director) to answer any relevant questions, including questions about confidential, but not legally privileged, matters.

When HM Attorney General has reasonable grounds for believing that a person would fail to comply with a notice issued under the Fraud Investigation Law or that service of a notice would seriously prejudice an investigation, he may apply to the Bailiff (Senior Judge) for a warrant to enter premises by force if necessary and to take possession of any documentation which appears to be relevant.

b) The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999

The Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 ("the Proceeds of Crime Law") allows Guernsey to provide assistance to other jurisdictions in connection with investigations concerning the proceeds of crime which are not connected with Drug Trafficking.

It is essential that requests under this Law do not relate to drugs related investigations. If drug trafficking is suspected then the application has be made under the Drug Trafficking (Bailiwick of Guernsey) Law (2000).

The Proceeds of Crime Law allows for information to be obtained by way of either the service of a production order or the execution of a warrant to search premises. The usual method is by way of a production order.

The conditions which need to be satisfied before assistance can be provided

Before assistance can be provided under the Proceeds of Crime Law the following conditions need to be satisfied  :

• that the criminal conduct under investigation would constitute an indictable offence under the law of the Bailiwick if it had taken place in Guernsey;
• that there are reasonable grounds for suspecting that a specified person has carried on or has benefited from criminal conduct;
• that there are reasonable grounds for suspecting that the material to which the application relates is likely to be of substantial value (whether by itself or together with other material) to the investigation for the purpose of which the application is made and that it does not consist of or include items subject to legal professional privilege; and
• that there are reasonable grounds for believing that it is in the public interest, having regard to the benefit likely to accrue to the investigation if the material is obtained, and to the circumstances under which the person in possession of the material holds it, that the material should be produced or that access to it should be given.

What offences are classified as indictable offences?

All offences which are not classified as exclusively summary offences are indictable. There are very few summary offences and they are mostly minor public order or traffic offences.

How to make a request:

There are two ways in which a request under the Proceeds of Crime Law can be made, either by way of affidavit - the officer responsible for the investigation in the requesting state may apply for assistance by sending a sworn affidavit accompanied by an explanatory letter direct, or by way of Letter of Request.

The contents of the affidavit or letter of request:

The affidavit or letter of request asking for assistance should contain:-

(a) the identity of the person making the application and confirmation that he is authorised to make it;

(b) details of either:-

• the charges faced by the person who is the subject of the enquiry; or
• the changes which are likely to be laid;

(c) a description of the facts of the case. It is very important that enough information is given to satisfy the conditions which were mentioned earlier;

(d) exact details of the assistance required;

(e) where documents from a bank or other financial institution are sought, then the full name and address of the bank or other institution and any details about the account (including its number) and the type of documents required should be stated;

(f) if a warrant is believed to be necessary the exact reasons for that belief;

(g) the identity of any Magistrates, Prosecutors, Police or Customs Officers, who wish to be present when the information requested is obtained;

(h) if the request should be treated as urgent, precise reasons why Guernsey resources should be deployed urgently should be given; and

(i) if a person is to be interviewed it would be helpful for Guernsey to know whether the interview should be tape recorded.

Undertaking:

The affidavit or letter should either contain or be accompanied by an undertaking in the following form:-

"Undertaking

(name of case)

I (name and description) hereby UNDERTAKE that any information or material obtained in pursuance of an order under the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 in respect of (names of persons under investigation) shall only be used for the purposes of the investigation into the affairs of the above persons, or any prosecution arising therefrom, and shall not be disclosed, directly or indirectly, to any other person or agency without the written consent of Her Majesty's Attorney General for the Bailiwick of Guernsey.

Signature ..................

Date ................."

(The undertaking should be signed by a Senior Officer of the Investigating agency or, where appropriate, an examining Magistrate or the Prosecutor responsible for the conduct of the investigation or prosecution.)

Note: see below "Disclosure to a third party of information".

Warrants to search premises:

The usual way of obtaining evidence under the Proceeds of Crime Law is by the service of a production order. However, if for example there are reasonable grounds to suspect that the investigation might be seriously prejudiced by the service of a production order it is possible for an application to be made by a police officer (with the consent of HM Attorney General) to the Bailiff (Senior Judge) for a warrant to enter premises by force if necessary and to take possession of any documentation which appears to be relevant.

Procedure following receipt of a request:

A request will in Customs cases, be allocated to one of the investigation officers in Guernsey Customs and Excise Fraud and International Branch and in police cases to an officer of the Police Commercial Fraud External Affairs Department. The officer will prepare a draft application (referred to locally as "an information") to which will usually be attached the requesting state's investigating officer's affidavit or Letter of Request. The draft application will then be checked by a lawyer from the criminal team in the Chambers of the Law Officers of the Crown.

Once the document is complete it will be presented to HM Attorney General for consideration and signature, as it is a requirement that he consents to the application being made. If consent is obtained, the signed information will then be presented to the Bailiff (Senior Judge) by the officer who prepared the application and hopefully a production order or warrant will be granted. The officer will then make arrangements to serve the production order or execute the warrant.

Any material relevant to the enquiry obtained following the service of a production order or the execution of a warrant will be copied and the copies sent to the requesting state as soon as possible.

The provision of witness statements following service of an order under the Proceeds of Crime Law:

The Proceeds of Crime Law does not compel anyone who receives a production order to make a formal witness statement which can be used in evidence. However, many financial institutions in the Bailiwick, do allow their representatives to make statements in a form which would be admissible before the courts in the requesting state.

If the recipient of the order declines to make a formal witness statement and his evidence is subsequently required for the purposes of proceedings before the requesting state's court, if the individual concerned declines an invitation to travel to give evidence, it is possible for his evidence to be taken under oath using the provisions of the Criminal Justice (International Co-operation) (Bailiwick of Guernsey) Law (2001).

Disclosure to a third party of information:

If for any reason a requesting state wants to make available to a third party some or all of the material which has been obtained in the Bailiwick, the written permission of HM Attorney General must first  be obtained. It must be clearly stated what material is to be passed on, to whom, and for what purpose. If the release of the material is authorised then the third party will need to provide their own separate undertaking as to the use to which they intend to put the material and that it will not be disclosed further without the consent of HM Attorney General.

2. Freezing

The Royal Court has the power to issue Restraint Orders prohibiting the removal from the Bailiwick of money or any other thing which is believed to be or represent the proceeds of crime.

The Court has the power to make a Restraint Order when either proceedings have been instituted against a person in a designated country and they have not been concluded and there is reasonable cause to believe the person has benefited from drug trafficking or other criminal conduct; or where proceedings are to be instituted against a person in a designated country and that there are reasonable grounds for believing that a confiscation order will be made during those proceedings.

The countries designated under the Drug Trafficking Law are listed in Annexe I and those under the Proceeds of Crime Law in Annexe II.

However, before the Royal Court will consider making a Restraint Order prior to a person being charged it must be satisfied that first, the person is definitely going to be charged with an offence and second, that the person will be charged within a relatively short period of time.

In cases where the proceeds are believed to be from drug trafficking, application for a Restraint Order can be made under the Drug Trafficking (Bailiwick of Guernsey) Law (2000) ("the Drug Trafficking Law"). Where the proceeds are from other types of crime the application is made under the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law (1999) ("the Proceeds of Crime Law").

The Court may issue a Restraint Order that prohibits any person from dealing with any realisable property subject to such conditions and exceptions as may be specified in the order. A Restraint Order may apply to all realisable property held by a specified person, whether the property is described in the order or not, and to realisable property held by a specified person, being property transferred to him after the making of an order.

Where a Restraint Order has been made, a police officer or Her Majesty's Sheriff may seize any realisable property for the purpose of preventing its removal from the Bailiwick.

Where the Court has made a Restraint Order, it may at any time appoint Her Majesty's Sheriff as a receiver with power to take possession of any realisable property, and, in accordance with the Court's directions, to manage or otherwise deal with any property in respect of which he is appointed, subject to such exceptions and conditions as may be specified by the Court.The Court may also direct any person having possession of property, in respect of which Her Majesty's Sheriff is appointed as receiver, to give possession of it to Her Majesty's Sheriff.

Dealing with property held by any person includes where a debt is owed to that person by making a payment to any person in reduction of the amount of the debt and also removing the property from the Bailiwick.

To apply for a Restraint Order a designated country should send a Letter of Request in English that contains the following information :

(a) the identity of the person making the application and confirmation that he is authorised to make it;

(b) a statement as to whether the application for a Restraint Order is under the Drug Trafficking Law or the Proceeds of Crime Law;

(c) details of either:-

• the charges which the person who is the subject of the enquiry, faces; or
• any charges which are going to be laid and an indication as to when the suspect will be charged;

(d) a description of the facts of the case;

(e) details of the property which is believed to be the proceeds of either drug trafficking or other crime. This information should also include details of how it is believed the property came to be in the Bailiwick;

(f) details of the believed whereabouts of the property in the Bailiwick. Where the application relates to money held in bank accounts, details of the name and address of the bank and bank account numbers;

(g) confirmation that it is likely a confiscation order will be made during the proceedings in the requesting state and that a request will be made for the Royal Court to enforce the confiscation order; and

(h) if a Restraint Order has been issued by a court in the requesting state this fact should be mentioned and a copy of it attached to the Letter of Request. If the order is not in English, a translation should be provided.

The procedure following the receipt of a letter of request:

The Letter of Request will be examined by a member of the criminal team in the Chambers of the Law Officers of the Crown and, provided it is in order, the Letter is then passed to either the Police Commercial Fraud and External Affairs Department or the Customs and Excise Fraud and International Branch so that an affidavit can be prepared by one of their officers. Whilst the affidavit is being prepared a member of the criminal team in the Chambers of the Law Officers of the Crown will draw up the necessary application and draft Restraint Order which will be required by the Royal Court.

Once all the paperwork is in order an application will be made in private to the Bailiff (Senior Judge). If the application is successful, the court document evidencing the Restraint Order will be issued immediately after the court hearing by the office of the Clerk to the Royal Court (HM Greffier).

The Restraint Order will immediately be served on the person, bank or other institution which holds the money or other property which is the subject of the Restraint Order. The order will be accompanied by a brief notice of explanation to the person holding the assets.

The Law Officers' Department will then send the requesting state a copy of the Restraint Order together with a notice of explanation for the defendant or potential defendant for that state to serve upon the defendant.

Variation of Restraint Orders:

Any person whether it be HM Attorney General, the defendant or the person holding the restrained assets may make an application to the Royal Court for the Restraint Order to be varied. The defendant may make an application if, for example, it is believed that the Restraint Order was made improperly.

HM Attorney-General or the person holding the assets may ask for a variation to release money to cover any reasonable expenses incurred in, for example, administering the assets which are the subject of the Restraint Order.

The discharge of the Restraint Order:

The Restraint Order will be discharged by the Royal Court if:-

(a) the defendant in the requesting state jurisdiction is found not guilty;

(b) the defendant consents to the repatriation to the requesting state of the assets which are subject to the Restraint Order;

(c) a confiscation order made in the requesting state is enforced in the Bailiwick; or

(d) if a Restraint Order has been obtained prior to the person being charged in the requesting state and no charge is laid within a reasonable period of time.

3. Confiscation/Forfeiture

Where a defendant appears before the Royal Court to be sentenced in respect of one or more offences, then, if Her Majesty's Procureur in writing asks the Court to make a confiscation order, the Court has to firstly determine whether the defendant has benefited from his criminal conduct.

Under Guernsey Law, a person has benefited from criminal conduct if he has obtained property as a result of or in connection with his or any other person's criminal conduct; and if he has derived a pecuniary advantage as a result of or in connection with criminal conduct, he is to be treated as if he had obtained instead a sum of money equal to the value of the pecuniary advantage.

Where the Court decides that the defendant has so benefited, it then has to determine the amount to be recovered from the defendant prior to sentencing or otherwise dealing with him. A Court will then order the defendant to pay that amount.

The standard of proof as to whether an offender has benefited from his criminal conduct and in what amount is that applicable in civil proceedings.

Where the Court is satisfied that a victim of any relevant criminal conduct has instituted, or intends to institute, civil proceedings against the defendant in respect of loss, injury or damage sustained in connection with that conduct, the Court shall have a power, instead of a duty, to make a Confiscation Order.

Enforcement of foreign Confiscation Orders:

If a court in another jurisdiction makes a confiscation order relating to the proceeds of drug trafficking or any other crime it is possible for the Royal Court to enforce the order against any assets which are held in the Bailiwick by or on behalf of the defendant. The Laws which make this possible are the Drug Trafficking (Bailiwick of Guernsey) Law, 2000 ("the Drug Trafficking Law") and the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 ("the Proceeds of Crime Law").

Jurisdictions which can apply for the enforcement of a confiscation order:

Guernsey can receive applications for the enforcement of confiscation orders from jurisdictions which are designated by secondary legislation under the Drug Trafficking or the Proceeds of Crime Laws.

The countries designated under the Drug Trafficking Law are listed in Annexe I and those under the Proceeds of Crime Law in Annexe II.

Requests for the enforcement of confiscation orders:

An application for the enforcement under either the Drug Trafficking or Proceeds of Crime Laws of a confiscation order made in another jurisdiction should be made by Letter of Request and sent to the HM Attorney General.

It is very important that the request is made under the correct piece of Guernsey legislation.

The contents of the Letter of Request:

The Letter of Request should contain the following:-

(a) details of the person making the request and confirmation that he is authorised to make it;

(b) a statement as to whether the request is under the Drug Trafficking or the Proceeds of Crime Laws;

(c) details of the offences for which the defendant was convicted and the sentence and confiscation order imposed. A copy of the confiscation order (together with a translation, if it is not in English), should be attached to the Letter of Request;

(d) a statement of the facts of the case;

(e) details of the property subject to the confiscation order which is believed to be in the Bailiwick. If money is held by a bank or other financial institution details of the name and address should be given together with account numbers if known; and

(f) confirmation that the sentence and/or confiscation order are not subject to appeal proceedings in the requesting state.

Procedure following the receipt of the letter of request:

A member of the criminal team of the Chambers of the Law Officers of the Crown, if satisfied that the request is in order, will apply to have the confiscation order registered by the Royal Court. Before this is done however notice has to be provided to all interested parties, which will include service of the notice upon the person or institution holding property in the Bailiwick. The country applying for the enforcement will have to serve notice of the intention to make the application on the defendant.

Once the order has been registered by the Royal Court it may appoint Her Majesty's Sheriff (an official responsible for enforcing Court orders) as a receiver. HM Sheriff will then go about realising all the property which is capable of being realised. Money which is in bank accounts will be transferred into an account in HM Sheriff's name, other assets, for example houses, jewellery and motor cars will be sold at the highest possible price.

Once all the defendant's assets in the Bailiwick have been realized, HM Sheriff will tell the authority which made the request for enforcement of a confiscation order how much money he has in his possession. If the amount is in excess of the sum ordered by the confiscation order in the requested state, HM Sheriff will pay the balance to the defendant.

The sharing of the proceeds following the enforcement of a confiscation order:

Guernsey Law makes no provision for the sharing of property realised following the enforcement of a confiscation order made in another jurisdiction. However, the authorities in Guernsey are prepared on receipt of a formal request to enter into negotiations to share the money obtained by HM Sheriff if the sum involved is high.

Enforcement of forfeiture orders:

Where a request is for the enforcement of a forfeiture order an application will be made to register the order with the Royal Court. Prior to this occurring, all interested parties have to be notified. Once the order is registered, an application will be made for the forfeiture of the property. It will then be dealt with in accordance with directions given by the Royal Court. It is very likely that the Court will direct HM Sheriff (an official responsible for enforcing court orders) to arrange for the sale of the asset.

Sharing of assets or proceeds of sale following forfeiture of an instrumentality:

Under Guernsey's legislation there is no requirement that a forfeited instrumentality or the proceeds of its sale should be returned to the jurisdiction which made the request for its forfeiture. However, in cases where a very valuable asset is involved the authorities in Guernsey, on receipt of a formal request, are willing to enter into discussions with a foreign state with a view to either the instrumentality being returned to the requesting state intact or for the sharing of the proceeds of sale.

4. Repatriation

When a person has been charged with an offence and either has pleaded guilty or intends to plead guilty, if some of the proceeds of his crimes are in other jurisdictions it is not unknown for a defendant to want to assist the authorities by arranging for the repatriation of the proceeds. If a defendant in the requesting state has managed to lodge some proceeds of his crimes in the Bailiwick, the members of the criminal team in the Chambers of the Law Officers of the Crown can give what assistance they can in negotiations with financial institutions, lawyers etc., with the aim of repatriating the proceeds of crime to that jurisdiction.

In the event of substantial assets being repatriated, HM Attorney General may in appropriate cases approach the relevant authority in the requesting state to enquire whether there is any possibility of the Bailiwick receiving a share of the repatriated assets.

II. Civil Law Suits

It is possible to recover assets using the civil law in the Bailiwick of Guernsey, but this will necessitate the use of private firms of lawyers and will be expensive. However, the use of the civil route has proved an effective method in freezing and seizing assets.