Hayle Abdi Badre v Court of Florence, Italy

Hearing date: 26 February 2014

(A) Introduction

This is an appeal by Mr Hayle Abdi Badre ("the Appellant") from an order dated 19 December 2013 of District Judge Zani, sitting at the Westminster Magistrates' Court, whereby the learned District Judge ordered the extradition of the Appellant to Italy, pursuant to section 21(3) of the Extradition Act 2003 ("the Act").

The extradition order was made in enforcement of a European Arrest Warrant ("EAW") of 22 May 2013, issued by the Court of Florence in Italy ("the Respondent"). The warrant sought the Appellant's extradition to face one charge of unauthorised financial activity contrary to Article 132 of the Legislative Decree 385/1993 and Article 4 of Law No.146/2006. The initial description of the alleged offence set out in the EAW was that the Appellant had,

"organise[d] and manage[d] unauthorised criminal activity as a financial intermediary for the public collection and the transfer of huge amounts of financial flows to agencies not authorised by the Italian Monetary Authorities".

It is alleged that the offence was committed between 2 September 2011 and July 2012.

The District Judge rejected submissions by the Appellant that (1) the EAW failed to supply the information required by section 2(4) of the Act; (2) the offence charged was not an "extradition offence", within the meaning of sections 10 and 64 of the Act, because it failed to satisfy the dual criminality test; (3) that proceedings were an abuse of process, because, by virtue of "registration" under UK legislation, the Appellant's company was lawfully providing services in Italy; and (4) the return of the Appellant to Italy would constitute a breach of the Appellant's rights under Article 3 of the European Convention on Human Rights, in view of the prevailing prison conditions in Italy (see Torreggiani v Italy (2013) App. 43517, 8 January 2013). At the hearing before us, Mr Summers for the Appellant abandoned ground (3) and I will say no more about it.

For the Appellant, Mr Summers argues that the judge was wrong to reject the submissions which he made, giving rise to grounds (1), (2) and (4) above, and adds a further ground, namely that District Judge Bayne had erred, in her decision of 23 May 2013 at the initial hearing, in finding that there was a sufficient certificate issued by the designated authority in this country in respect of the EAW within the meaning of section 2(7) of the Act. On this additional point, there was brief discussion in argument as to whether an appeal lay in respect of District Judge Bayne's decision on the present appeal from District Judge Zani's order. However, Miss Hinton for the Respondent did not argue that this ground was not open to the Appellant and the point was, therefore, argued before us on its merits.

(B) Background Facts

The Appellant operated, through a company called Sahal Express Limited ("Sahal"), a "payment services" business, enabling the transmission or payment of funds from a payer in one country to a recipient in another country by a system known as "hawalla". The expert evidence before the judge showed this to be a system of payments, developed largely by those of the Muslim faith, in pursuit of the tradition forbidding the receipt of interest on money. The payer provides money to a "hawaladar" in country A. The "hawaladar" provides a credit to a correspondent "hawaladar" in the country B who pays the intended recipient in that country. There is no transfer of money, in a traditional banking sense, and no record of the full transaction is maintained. The system works by way of a mutual off-setting of debts between payer and payee. The precise details of the system do not, however, matter for present purposes.

The legal context of the offence alleged is the EU Directive on Payment Services 2007/64/EC, implemented in this country by the Payment Services Regulations 2009 and in Italy by the Legislative Decree mentioned above. The Directive provides that member states shall require undertakings intending to provide payment services to obtain "authorisation" from a relevant authority before commencing to provide such services (Article 10). However, the Directive (by Article 26) enables member states to waive the criteria for "authorisation" in respect of certain undertakings with a limited average total payment transactions in any month of €3 million, subject however to a requirement of "registration" of those undertakings in the register provided for in Article 13 of the Directive.

The UK has taken advantage of the "waiver" provisions of Article 26 of the Directive to enable what our Regulations call a "small payment institution" to "register" without seeking full "authorisation". Sahal was such an institution at the relevant times and was registered in the relevant register. Italy has not adopted the waiver provisions and all undertakings operating a payment services business must seek full authorisation. "Authorisation" involves a more formal and rigorous process of scrutiny than "registration". However, it appears that the Appellant, through Sahal, is said to have conducted payment transactions in part in or through Italy, without the appropriate "authorisation" under the Directive and the Italian implementing legislation. In the context of the argument on "dual criminality", however, the Respondent seeks to cast the net wider than the Payment Services Directive in identifying the parallel criminal conduct in this country, so as to include offences under the Money Laundering legislation.

The further particulars of the alleged offence, as set out in the EAW, include the following details,

"….the suspect is the manager of the company named Sahal Express Ltd, having its headquarters in London, carrying out this activity also through, the system of collection of funds and financial flows typical of the Islamic finance known as "hawala", having branches in more countries.

This company is not entitled to operate in Italy, as financial intermediary, as it lacks the required authorization from the competent national monetary and financial authorities.

Abdi Badre Hayle, managing Sahal Express Ltd, acted in complicity with Mohamed Geddi Bashir and other co-defendants of Somali origin, as the aforementioned Geddi Bashir had been delegated by Abdi in the area of Florence and other places in Italy to manage agencies for the transfer of funds at international level using the system and the business name of Sahal Express, and Abdi Badre came periodically to Italy and in particular to Florence to coordinate the activity of the persons acting under his control and management.

In such a way, Abdi Badre Hayle operated as Sahal Express Ltd also in Italy, even though the company lacked completely the necessary authorizations required by Italian Monetary and Financial Authorities, in particular those granted by the Bank of Italy, a conduct which amounts to the offence of unauthorized financial activity in that not duly authorized and regulated according to the law.

This conduct amounts to the offence provided for in article 132 of Legislative Decree 385\1983 as explained above."

The particulars go on to record the potential vice in the offence alleged, which is said to lie in an ability here to escape from the scrutiny of the financial regulators, thus facilitating terrorism or illegal immigration of persons of Somali origin. The EAW does concede, however, that "no real connection of the defendant and his accomplices with Islamic terrorist groups operating in Somalia could be traced".

(C) The Grounds of Appeal

I will take these in turn, beginning, however, with the additional point raised as to the adequacy of the certificate under section 2 of the Act issued in the present case.

The Certificate

The point here is that the certificate issued by the Serious Organised Crime Agency ("SOCA") is not subscribed with a physical signature in ink, but with an electronic signature in the form "GW (200820)". There is no other dispute about the content of the certificate. It is accepted that in all other respects the document produced is a proper certificate.

Section 2(7) and (8) provide as follows:

"2(7) The designated authority may issue a certificate under this section if it believes that the authority which issued the Part 1 warrant has the function of issuing arrest warrants in the category 1 territory.

(8) A certificate under this section must certify that the authority which issued the Part 1 warrant has the function of issuing arrest warrants in the category 1 territory."

Mr Summers submits that the provision of a proper certificate under section 2 of the Act is a precursor to the validity of the warrant and the subsequent jurisdiction of the court. When a certificate is issued the requested person may be lawfully arrested: see section 3(2) of the Act. The powers of the court, Mr Summers submits, follow on from such an arrest. If the arrest cannot be shown to be lawful the court has no jurisdiction. Mr Summers argues that the process of certification requires the designated authority to scrutinise the warrant to determine that it has been issued by an...