Two years ago the King and Parliament enacted the Prevention of Organised Crime Act (POCA) of 2018. This Act came into effect on June 22 of the same year. It is only recently that the law has become a subject of much debate and controversy in and outside of parliament. The long title of POCA states that one of its objectives is the forfeiture of assets suspected to be proceeds of crime.
This objective has generated a lot of public debate so much that last month the House of Assembly passed a motion to suspend the operation of the law. The Government, through the Prime Minister, responded by cautioning that parliament had overstepped its boundaries and that POCA was to remain extant. Of course the Prime Minister was correct. This is because the House of Assembly has no power to suspend the operation of an Act of Parliament. Subsequent public commentary and debates about the law has been misinformed at best and mistaken at worse.
For example, POCA draws a distinction between criminal asset forfeiture and civil asset forfeiture, something that is not factored in most of the ensuing debates. Criminal asset forfeiture applies where there has been a prosecution and conviction of a crime. On the other hand, the application of civil asset forfeiture is not dependent on prosecution and conviction.
Worth noting, however, is that since the commencement of POCA it seems the civil asset forfeiture regime is used more than its criminal counterpart. It is for this reason that this contribution aims to provide a brief guide to the civil asset forfeiture regime of POCA. The contribution is confined to what I consider to be the most important aspects of the civil asset forfeiture regime. For starters, the civil asset forfeiture regime consists of two stages; the preservation of assets stage and the forfeiture of assets stage.
Preservation of Assets: The DPP’s application
The Director of Public Prosecutions (DPP) starts the process by applying to the High Court for an order preserving the property of a specified person or persons. The application is directed at the property and not at a person. The application is often made without notice to the person who has an interest in the property that is to be preserved. The application without notice is by far the most controversial part of POCA. Critics contend that applications without notice violate the rights of the property owner to be heard. However, applications without notice are not in and of themselves objectionable.
In fact, they are used where there is good reason to believe that giving notice will result in the person given notice destroying, concealing, selling or otherwise disposing of the property which is the subject of the application. Secondly, the relief obtained without notice (in circumstances where there are other people who have an interest in the relief) is temporal and not final.
The court will issue appropriate directions as to how all interested persons should be notified of its interim order and steps they need to take if the order is to be opposed. Thirdly, POCA does not say the DPP must approach the court without notice. It only gives him that option. The DPP has to give cogent reasons why he elected to proceed without notice. If the court is not satisfied with his reasons it can order him to serve (read notify) the person(s) with an interest in the property.
It is important to state that courts deal with applications without notice in other types of civil proceedings on a regular basis. The legal assumption being that courts are institutionally competent to prevent abuses of applications without notice. The DPP’s application for a preservation order will be successful only if he satisfies the court that on the face of it there are reasonable grounds to believe that the property he wants preserved is the proceeds of crime or was used to commit crime. This, in essence, means the quality of the evidence presented calls for an answer in rebuttal by the person with an interest in the property.
The preservation order means the person or persons with an interest in the property is prohibited from dealing in same. It is, in the final analysis, a freezing order. The freezing order is coupled with an order entitling the Police to seize the property.
The order has to be served on everyone who is known to have an interest in the preserved property. The order must also be published in the Government gazette. Publication in the Government gazette in my view is inadequate. Although POCA does not call for this, I do however feel that the DPP should consider publishing the preservation order in newspapers circulating in the Kingdom, the Government website and on the Government’s social media accounts. In this way, it will be more likely to alert people who have an interest in the preserved property of the existence of the order even when they have not been served.
The preservation of property order does not mean people with an interest in the preserved property have been charged with an offence. They do not face the prospect of being convicted, imprisoned or fined or both. This is because at this stage the process is civil, not criminal. The significance of this is that the fair trial rights guaranteed by section 21(2)-(15) of the Constitution are inapplicable. These fair trial rights apply to people who have been charged or convicted.
This, unfortunately, is where some commentators get it wrong. They contend that the preservation order violates fair trial rights, in particular section 21(5) of the Constitution. Section 21(5) protects the right not to be charged with or found guilty of an offence which was not an offence at the time it was committed. The argument is that the preserved property was acquired before 22 June 2018 and therefore by virtue of section 21(5) it cannot be frozen. Unfortunately, this argument is misplaced because section 21(5) only applies to charged or convicted persons.
Let me attempt to explain the process I have described so far with an example. Let us say Rhodes Njube Khumalo of Mkhitsini, Shiselweni, is in the public transport and logistics industries. He owns a fleet of buses and trucks. The Police and the DPP suspect that Khumalo’s buses and trucks were purchased with the proceeds of selling cannabis. The DPP will then apply to the high court (without notice to Khumalo) for an order preserving his five buses and two trucks.
The court, having been satisfied that, on the face of it, there are reasonable grounds to believe the buses and trucks are proceeds of crime, then grants the freezing order and an ancillary order that the Police seize the buses and trucks. The DPP’s application and the subsequent order are served on Khumalo. The order is also published in the government gazette.
A financial institution, we will call it Shiselweni Board of Executors (Pty) Ltd (SBOE), had in fact lent money to Khumalo. Khumalo had even used two of the buses as security for the loan. SBOE, therefore, has an interest in the preserved property yet only got to know about the preservation through the publication in the gazette. From the DPP’s perspective, the preservation of property order entitles him to move to the next stage, that is, application for a forfeiture order.
The Rights of the Holder of Proprietary Interest
The person from whom the property was seized therefore has the right to give notice, accompanied by an affidavit, that he or she intends to oppose the DPP’s application for a forfeiture order. He or she must then state the basis of such opposition plus the nature and extent of his or her interest in the seized property. Where the property owner or one with interest on it was served with the preservation order the notice must be served on the DPP within 21 days of the date of service. Where the person with a proprietary interest was not served but became aware of the order because of its publication in the gazette, the notice must be served on the DPP within 21 days of the date of publication in the gazette.
Service of the notice and affidavit on the DPP is important to the holder of the proprietary interest because it entitles him or her to participate further in the proceedings.
The holder of a proprietary interest who has filed the above mentioned notice has the right to apply to the court for a variation of the preservation order. The court will grant the variation if it is satisfied that the operation of the preservation order prevents him or her from earning a living and that the hardship caused by the order outweighs the risk that the preserved property will be lost, destroyed, concealed or transferred.
A person affected by a preservation order who has filed the above mentioned notice also has the right to apply for a rescission of the order. Rescission will be granted if the preservation order was erroneously sought or erroneously granted in the absence of the party applying for rescission. Rescission may also be granted if the preservation order was made as a result of a mistake common to both the DPP and the person affected by the order.
FORFEITURE OF ASSETS
The preservation of property order is valid for 120 days. During the subsistence of the order, the DPP has to apply to the court for a forfeiture of all or any of the preserved property to the Government. If the DPP fails to apply for a forfeiture during the 120 days, the preservation order falls away and the preserved assets have to be returned to the person from whom they were taken.
In the event the DPP decides to apply for a forfeiture order, the person who filed the notice referred to above has a right to participate in the forfeiture proceedings. The person who filed the notice has a choice. He or she can either oppose the application for forfeiture or can apply for an order excluding his or her interest from any forfeiture order which the court may make. The election is important to the issue of onus of proof.
The person opposing is a respondent in the DPP’s application. The person applying for the exclusion of his or her interest from any forfeiture order is an applicant in that application and the DPP is the respondent. Say in our example above Khumalo decides to oppose the application for forfeiture of the preserved property. The DPP then becomes the applicant and Khumalo the respondent. Say SBOE applies for the exclusion of its security from the preservation order SBOE becomes the applicant in the exclusion application and the DPP respondent. I will not say more about the application for the exclusion of interest because at this stage of the development of POCA it has not yet captured the public’s imagination.
The court will grant an application for forfeiture of preserved property to the Government if it is satisfied that it is more probable than not that the property is the proceeds of crime or was used to commit an offence referred to in the Schedule. There are 38 offences mentioned in the Schedule. Some critics of POCA, including Member of Parliament for the Siphofaneni constituency, Mduduzi Simelane, have argued that the law requires the person with the proprietary interest to prove that the property is not the proceeds of crime. This is erroneous. The onus of proving that the preserved property is proceeds of crime or was used to commit an offence mentioned in the Schedule lies with the DPP. In our example, the DPP has to prove on a balance of probabilities that Khumalo’s buses and trucks are the proceeds of crime.
At this point, I must hasten to add that it is true that in other jurisdictions the civil asset forfeiture regime places the onus on proof on the person affected by a preservation order. In those jurisdictions the courts have said placing the onus of proof on the person affected by the preservation order is constitutional because he or she knows or ought to know how the preserved property was acquired.
In my opinion, much of the controversy surrounding the civil asset forfeiture regime of POCA is caused by viewing the regime through the lens of criminal law and procedure. Our regime is similar to regimes in other parts of the world where it has been tested on constitutional grounds and passed scrutiny. Civil and criminal proceedings are different and should not be conflated. Only last week did Thandi Hlophe, writing for this publication, made a similar error. She asserted that POCA allows the State to seize the property of those suspected of engaging in criminality and places an onus on the person whose property was seized to prove his or her innocence. There is no innocence to be proven. Civil asset forfeiture is aimed at property. There is no personal liability. Criminal proceedings are generally directed at a person and not at things. Civil asset forfeiture may be successfully invoked even where a person has been acquitted by the highest court in the land.
NB: Nguboyenja Khumalo is the pen name of a former High Court Judge. He occasionally writes for “Lingashoni” on legal matters.
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