Beezadhur v The Independent Commission against Corruption and another
| Jurisdiction | UK Non-devolved |
| Judge | Lord Carnwath,Lord Kerr |
| Judgment Date | 07 August 2014 |
| Neutral Citation | [2014] UKPC 27 |
| Date | 07 August 2014 |
| Docket Number | Appeal No 0083 of 2013 |
| Court | Privy Council |
[2014] UKPC 27
Privy Council
From The Supreme Court of Mauritius
Lady Hale
Lord Kerr
Lord Reed
Lord Carnwath
Lord Hodge
Appeal No 0083 of 2013
Appellant
Satyawan Kailash Trilochun Ashwina Pittea
(Instructed by Roshan Rajroop)
First Respondent
Kaushik Goburdhun Ms P Bissoonauthsing
(Instructed by Sultan Sohawon)
Second Respondent
Geoffrey Cox QC Rashid Ahmine Edward Risso-Gill
(Instructed by Royds Solicitors)
Heard on 9 and 10 July 2014
This is an appeal against the judgment of the Supreme Court (N. Devat J and D. Chan Kan Cheong J), of 28 June 2013, dismissing the appellant's appeal against conviction and sentence for five offences contrary to Sections 5(1) and 8 of the Financial and Anti-Money Laundering Act ('the 2002 Act"). Leave was granted by the Board on 29 October 2013. The appeal raises two issues:
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(i) On which party does the onus of proof lie regarding the application of exemptions under section 5(2) of the Act?
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(ii) What is meant by the words "lawful business activities" in the definition of "exempt transaction" in section 2 of that Act?
The 2002 Act took effect on 10 June 2002, replacing similar provisions in the Economic Crime and Anti-Money Laundering Act 2000. Section 5 of the Act (replacing section 20 of the 2000 Act), as amended, provides:
"5. Limitation of payment in cash
(1) Notwithstanding section 37 of the Bank of Mauritius Act 2004, but subject to subsection (2), any person who makes or accepts any payment in cash in excess of 500,000 rupees or an equivalent amount in foreign currency, or such amount as may be prescribed, shall commit an offence.
(2) Subsection (1) shall not apply to an exempt transaction."
"Exempt transaction" is defined by section 2:
" 'exempt transaction' means a transaction –
(a) between the Bank of Mauritius and any other person;
(b) between a bank and another bank;
(c) between a bank and a financial institution;
(d) between a bank or a financial institution and a customer where -
(i) the customer is, at the time the transaction takes place, an established customer of the bank or financial institution; and
(ii) the transaction consists of a deposit into, or withdrawal from, an account maintained by the Customer with the bank or financial institution, where the transaction does not exceed an amount that is commensurate with the lawful business activities of the customer; or
(e) between such other persons as may be prescribed;" (emphasis added)
The issue in this case turns on the construction of exemption (d), in particular the italicised words.
It is to be noted that since the Supreme Court decision in this case exemption (d) has been amended with effect from 12 December 2013 by the Economic and Financial Measures ( Miscellaneous Provisions) Act (Act 27 of 2013), in particular to omit the reference to "business" activities. It now reads:
"(d) between a bank or a financial institution and a customer where –
(i) the transaction does not exceed an amount that is commensurate with the lawful activities of the customer, and –
(A) the customer is, at the time the transaction takes place, an established customer of the bank or financial institution; and
(B) the transaction consists of a deposit into, or withdrawal from, an account of a customer with the bank or financial institution; or
(ii) the chief executive officer or chief operating officer of the bank or financial institution, as the case may be, personally approves the transaction in accordance with any guidelines, instructions or rules issued by a supervisory authority in relation to exempt transactions;…"
Mr Geoffrey Cox QC (for the State of Mauritius) invites the Board to consider the statute against its background of international pressure to combat economic crime and money laundering, including recommendations that cash transactions should be closely monitored and controlled.
The 2000 Act had been a response to such international criticism, including by the Financial Action Task Force (or FATF), a body set up in 1989 by the G7 countries to examine measures to combat money laundering. FATF had also drawn attention to the risks posed by large cash transactions in the economy. Its "Forty recommendations…on money-laundering" (in the 1990 and 1996 versions) had included:
"Countries should consider the feasibility and utility of a system where banks and other financial institutions and intermediaries would report all domestic and international currency transactions above a fixed amount, to a national central agency with a computerised data base, available to competent authorities for use in money laundering cases, subject to strict safeguards to ensure proper use of the information.
Countries should further encourage in general the development of modern and secure techniques of money management, including increased use of checks, payment cards, direct deposit of salary checks, and book entry recording of securities, as a means to encourage the replacement of cash transfers."
The Bill on which the 2000 Act and later the 2002 Act were based was itself the result of detailed consideration over a number of years with expert advice from overseas, including a report from Professor Norton of London University in 1998. His report included a detailed review of the draft Bill (section IV A), of which he commented:
"The draft Anti-Money Laundering and Economic Crime Bill legislation represents an excellent effort to underlie the development of a framework to protect the bank and non-bank financial systems from systemic invasion and corruption by domestic and international criminal organisations."
His review of the provisions relating to cash transactions, including the exemptions (section IV B 2(a), made no specific comment on the wording of the exemption now in issue, but he spoke more generally of the need for flexibility –
"… to ensure that the exempt transactions provision is not abused, but nonetheless sets forth 'bright line tests' to identify particular institutions where money laundering operations are highly unlikely or nonexistent…"
The general purpose of the Act was later described by the Supreme Court in Abongo v The State [2009] SCJ 81, cited in part in Meeajun v State [2011] SCJ 141, para 26:
"[The 2002 Act was meant] essentially for the purpose of combating money laundering offences which had the potential of adversely affecting the social and economic set up, both at national and international level to such an extent that they may constitute serious threats not only to the financial system but also to national security, the rule of law and the democratic roots of society. By enacting sections 5,6 and 8 of the Act, the policy of the legislator was clearly designed to achieve the compelling objective of safeguarding the national and international financial system against any disruptive intrusion which may be caused by the perpetrators of certain criminal activities…"
The appellant does not challenge the general objectives of the legislation, but questions whether they require an unduly narrow reading of the exemption in issue in this case. That view gains some support from the added flexibility introduced by the amendment in 2013, as noted above, made apparently in response to the Supreme Court decision in this case.
The appellant gave unchallenged evidence as to the background and circumstances of the payments.
He had left Mauritius in 1959 for the United Kingdom, where he still lives. He was employed there in the National Health Service, and in 1962 married a nurse working in the same service. When they both retired in 2004, they obtained a total lump sum of £ 80,000. Since then, he has been receiving a monthly pension of £2,000 and his wife of £ 1,500. He has been coming to Mauritius regularly since 1995 and on each visit, he brought his "pocket money" in cash.
The money in question all came from his savings and pension and those of his wife, all of which were initially deposited into his joint bank account with his wife in the United Kingdom. The purpose of the money was to provide for retirement in Mauritius and he intended to invest that money in Mauritius. He has other deposits in financial institutions in Mauritius, paid for initially by cheques drawn on the State Bank of Mauritius. He owns a house in Mauritius.
Of the specific cash transactions which were the subject of the charges his evidence was:
(i) On the 14 June 2002 he made a cash deposit of Rs 600,000 into his State Bank of Mauritius account;
(ii) On the 12 February 2003, he withdrew 90,000 Euros, representing Rs 2,708,820. This withdrawal funded the purchase of a property in Spain.
(iii) On the 11 January 2006, he made a cash deposit of Rs 500,000 into his State Bank of Mauritius account.
(iv) On the 17 January 2006, he made a cash deposit of Rs 500,000 into his State Bank of Mauritius account.
(v) On the 10 January 2007, he made a cash deposit of Rs 820,000 into his State Bank of Mauritius account. He initially changed £7,500 at Shibani Finance Co. Ltd, obtaining Rs 495,750 and added the difference of Rs 324,250 before depositing the total into his bank account.
In the intermediate court, the magistrate accepted that the money in question did not have a "tainted" origin, but was the fruit of his savings. However, he held that the Act did not require the prosecution to aver in the information that the money emanated from tainted origins. The appellant did not at that stage argue that the transactions were "exempt" under section 5(2). The magistrate found the appellant guilty as charged and sentenced him to pay a fine of Rs 10,000 under each of the five counts, and costs of Rs...
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