Shock and dismay: that was the reaction of my clients when they were served with papers, outlining the intention of the Prosecutor to forfeit their monies (close to RM2 million) without prosecution.
It may seem anathema to common sense for a forfeiture of assets to take place without prosecution. After all, if one hasn’t committed an offence, what is the justification for the forfeiture?
The statutory framework
The parochial beadle’s emphatic declaration that “the law is an ass” may never be more apt than when one considers the lengths to which the legislative empowers and enables civil forfeiture. This is true not just for Malaysia. The United Kingdom, Australia and the United States all have civil forfeiture laws.
A claim for civil forfeiture begins with a report. Upon the same being lodged, the investigative body (usually the police or the MACC, in the Malaysian context) would then undertake an investigation.
If, at the close of the investigation, there is insufficient material to charge a person for a crime, the investigative body may still be at liberty to suggest civil forfeiture. The decision will then lie with the Prosecutor.
AMLATFA 2001 and the MACC Act 2009
AMLATFA 2001
The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (abbreviated, thankfully, to AMLATFA) is one piece of legislation governing civil forfeiture.
Section 46 AMLATFA specifies as follows:
Forfeiture of property where there is no prosecution
56. (1) Subject to section 61, where in respect of any property seized under this Act there is no prosecution or conviction for an offence under subsection 4(1) or a terrorism financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the seizure, or where there is a freezing order, twelve months from the date of the freezing, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that such property is—
(a) the subject-matter or evidence relating to the commission of such offence;
(b) terrorist property;
(c) the proceeds of an unlawful activity; or
(d) the instrumentalities of an offence.
(2) The judge to whom an application is made under subsection (1) shall make an order for the forfeiture of the property if he is satisfied—
(a) that the property is—
(i) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;
(ii) terrorist property;
(iii) the proceeds of an unlawful activity; or
(iv) the instrumentalities of an offence; and
(b) that there is no purchaser in good faith for valuable consideration in respect of the property.
(3) Any property that has been seized and in respect of which no application is made under subsection (1) shall, at the expiration of twelve months from the date of its seizure, be released to the person from whom it was seized.
(4) In determining whether the property is—
(a) the subject-matter or evidence relating to the commission of an offence under subsection 4(1) or a terrorism financing offence;
(b) terrorist property;
(c) the proceeds of an unlawful activity; or
(d) the instrumentalities of an offence, the court shall apply the standard of proof required in civil proceedings.
MACC Act 2009
The MACC Act 2009 also provides for a similar provision:
Forfeiture of property where there is no prosecution for an Offence
41. (1) Where in respect of any property seized under this Act there is no prosecution or conviction for an offence under this Act, the Public Prosecutor may, before the expiration of eighteen months from the date of the seizure, apply to a Sessions Court Judge for an order of forfeiture of that property if he is satisfied that such property had been obtained as a result of or in connection with an offence under this Act.
(2) The Judge to whom an application is made under subsection (1) shall cause to be published a notice in the Gazette calling upon any person who claims to have an interest in the property to attend before the Court on a date specified in the notice, to show cause as to why the property should not be forfeited.
(3) Where the Judge to whom an application is made under subsection (1) is satisfied—
(a) that the property is the subject matter of or was used in the commission of an offence under this Act; and
(b) there is no purchase in good faith for valuable consideration in respect of the property,
he shall make an order for the forfeiture of the property.
(4) Property in respect of which no application is made under subsection (1) shall, at the expiration of eighteen months from the date of its seizure, be released to the person from whom it was seized.
Time-frames
In its infinite wisdom, Parliament decreed that any application for civil forfeiture under AMLATFA must be brought within 12 months from the date the property is seized. AMLATFA forfeitures necessitate an application before the High Court.
In contrast, civil forfeiture under the MACC Act has an 18-month time frame. The application must be filed in the Sessions Court.
Compliance with these time periods is absolute. Straying outside would constitute grounds for raising a peremptory challenge (PP v Dragcom [2013] 5 MLJ 594).
Procedural law for civil forfeiture applications
Applications for civil forfeiture sit in a legal grey area. They are neither criminal, nor are they civil in nature (similar to habeas corpus applications, see the Supreme Court in Ng Hong Choon v Timbalan Menteri Hal Ehwal Dalam Negeri [1994] 3 MLJ 285).
The proceedings are based solely on affidavit evidence and they begin with a Notice of Motion (setting-out the forfeiture orders which the Prosecutor seeks), coupled with an affidavit in support. The Respondent (whose assets have been frozen) will then be required to file an affidavit in reply. The Prosecution will close the affidavits and submissions will then be heard.
This procedure cannot be substituted for the trial process. In PP v Kuala Dimensi [2018] MYCA 209, the Court of Appeal emphasised as follows:
[130] The learned Judge state that it is preferable (lebih baik) for an application under section 56 of the Act to be determined in a full trial rather than be based on affidavit evidence and that since the application is a criminal application, the affidavits filed by the Applicant/PP has to be sworn and affirmed before a Magistrate or Registrar as provided under section 424 of the CPC.
…
[134] On this issue, we are of the view that the learned Judge has erred since affidavit evidence may be used in an application under section 56 of the AMLATFA as it has been a common practice and accepted as the proper mode of procedure.
Is it constitutional?
An argument was taken in PP v Thong Kian Oon [2012] MLJU 637 that applications for civil forfeiture without prosecution are unconstitutional. The learned Judge dismissed the submission but did note that “[9] Since the provisions of the Act are penal and are designed to take away existing legal rights to property, it requires the provisions of the law are strictly adhered to Section 56 of the Act.”
In-line with this, there is an absolute requirement for the Prosecution to adhere closely and strictly to the strictures of the Act.
What is the standard of proof?
AMLATFA specifies, pursuant to Section 56(4)(d), that it is a civil standard of proof. The MACC Act 2009 is silent on this point but from case law, one is able to glean that it is a civil standard of proof.
What does one do if one is served?
If one is served with papers for civil forfeiture, the first thing to do would be to not panic. A calm head keeps an even keel.
The second thing to do would be to consult your solicitor. Set an appointment and ensure that your documentation is in-order. Experience with drafting affidavits would certainly be a boon.
One must keep in mind the parameters that have to be proven by the Prosecutor, which are contained in Section 56(3) AMLATFA and Section 41(3) of the MACC Act 2009, respectively. If the affidavit is able to prove, on a balance of probabilities, that these circumstances do not exist, then one’s reply to the Prosecutor ought to be insurmountable.
The outcome of my matter
What happened to mine clients, you may ask?
I had great pleasure in conveying (to employ a pugilist’s parlance) a Total Knock-Out to the Prosecution’s application. The learned Judge dismissed their application outright.
The prosecution filed 2 motions for stay on Certificates of Urgency (before the Sessions Court and High Court).
Affidavits were prepared and filed on an urgent basis (and believe you me, the midnight oil was burnt). Both were promptly despatched with and I am very glad to note that my Clients were able to withdraw their monies (after close to 2 years of delay).
Dealing with the banks (and their unctuous, fawning servility to investigative bodies) was another story in and of itself. Despite this, I am very glad to have accompanied my Clients and to have concluded their 2-year saga.
They certainly felt like a (2) million dollars.
GAVIN JAYAPAL
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