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The Legal Challenges of Criminal and Civil Asset Forfeiture in South Africa: A Comparative Analysis

Document Cited authorities 26 Cited in Related
Vincent
Published date01 October 2013
AuthorVinesh Basdeo
Pages303-326
Date01 October 2013
DOI10.3366/ajicl.2013.0066
INTRODUCTION

Asset forfeiture has emerged as the new ‘big idea’ for controlling criminal behaviour in the twenty-first century. The benefits of asset forfeiture are indisputable. The power of law enforcement to combat organised criminal activity is greatly increased. This is of particular importance in South Africa, a country deeply troubled by organised crime. As one scholar observed: ‘South Africa's rising crime rate makes it one of the most disturbing and dangerous countries in the world.’1

J. Shereda, ‘The Internationalisation of the War on Drugs and its Potential for Successfully Addressing Drug Trafficking and Related Crimes in South Africa’, 31 Washington Journal of International Law (1997): 297.

This article provides a legal description of asset forfeiture and focuses on contemporary substantive legal provisions. It describes, compares and analyses South African domestic legal provisions with those from the United States of America. While these comparisons are intended to provide a more comprehensive analysis and effective understanding of asset forfeiture, they make the research more challenging because of differences in legal systems. Asset forfeiture law is an integral part of criminal law enforcement in South Africa. This article attempts to answer three questions. First, why is asset forfeiture important to law enforcement? Second, what types of property are subject to forfeiture and in what circumstances? Third, how is forfeiture accomplished?

The deprivation of the proceeds of crime has been a feature of criminal law for many years. The original purpose behind the confiscation of criminal assets at international level was the fight against organised crime,2

Prevention of Organised Crime Act 121 of 1998.

a feature of society described by the European Court of Human Rights as a ‘scourge’, so that the draconian powers which are a feature of confiscation regimes around the world have been approved in circumstances which otherwise might have caused governments considerable difficulties before the international human rights tribunals

In South Africa Chapter 5 of the Prevention of Organised Crime Act 121 of 1998 (hereinafter referred to as the ‘POCA’ or the ‘Prevention of Organised Crime Act’) applies to so-called ‘proceeds of unlawful activities’. The proceedings in terms of Chapter 5 are civil, not criminal. The rules of evidence applicable in civil proceedings apply to proceedings on application for a confiscation order or a so-called restraint order. A confiscation order may be sought by the public prosecutor whenever a defendant is convicted of an offence. The court can make further orders in its discretion to ensure the effectiveness and fairness of its confiscation order. The question is whether the defendant benefited from the offences for which he or she has been convicted or from any criminal activity related to those offences.

Chapter 6 of POCA provides for a civil remedy for the preservation and seizure, and forfeiture of property which is derived from unlawful activities or is concerned in the commission or suspected commission of an offence. POCA empowers the Director of Public Prosecutions in South Africa to take property when, on a balance of probabilities, it appears that the property is either the proceeds of crime, or was an instrumentality of an offence. By making it easier for law enforcement to take the profit out of criminal activity, civil asset forfeiture provides a powerful weapon with which to combat sophisticated criminal activities such as organised crime, drug trafficking and organised fraud against government. Chapter 6 of POCA civil asset forfeiture is an innovation in terms of law enforcement approaches in South Africa. In embracing this method of forfeiture, South Africa has adopted a growing international trend that allows for forfeiture of property associated with crime without the necessity of a criminal prosecution. The traditional approach to serious criminality has been arrest, followed by the institution of criminal proceedings with a view to conviction and imprisonment. In recent years, such has been the wealth generated from economic crime in particular, that a confiscation and forfeiture element has been added to the criminal process in many jurisdictions. There is a global trend to use stand-alone civil proceedings as a means of recovering the proceeds of crime in the hope that they will be more effective than proceedings that are ancillary to and dependant on a criminal prosecution.

 CRIMINAL ASSET FORFEITURE In South Africa

The criminal forfeiture scheme set out in Chapter 5 of POCA is closely modelled on that found in the United States and United Kingdom's Criminal Justice Act3

United Kingdom Criminal Justice Act 1998.

and South African courts draw assistance, and have cited with approval, from judgments of American and English courts in a number of cases.4

See for example Shaik and Others v The State 2007 2 All SA 150 (SCA) 25, where the court relied on the decision in R v Simpson 2 CR App R (S) (1998) 111 on the issue of the possibility of multiple restraint orders; and at para. 28, where the court relied on R v Smith [2002] 1 All ER 367 (HC) in finding that ‘benefit’ means gross, as opposed to net benefit.

The scheme of criminal forfeiture in Chapter 5 of POCA embraces a three-stage process:

The restraint stage, which is aimed at preserving assets pending the conviction of an accused and the granting of a confiscation order.5

POCA, supra note 2, sections 26–9.

The confiscation stage, where an enquiry is made by the court convicting an accused of any benefit that he or she derived from any of the offences in respect of which he or she has been convicted or from any related criminal activity. If successful, this stage of proceedings manifests in a confiscation order, which takes the form of a money judgment against the defendant, and in terms of which he or she is required to pay a specific sum of money to the State.6

Ibid., sections 18–24.

Unless the court is able to determine the issue of confiscation on the basis of evidence and proceedings of the trial,7

Ibid., section 18(6)(a)(i).

 or on the basis of further oral evidence,8

Ibid., section 18(6)(a)(ii).

 it will direct the prosecutor and the defendant to deliver statements contemplated in section 21 of POCA.

The realisation stage, which commences in the event of a defendant failing to satisfy a confiscation order, and which in essence is a specialised form of execution against affected property.9

Ibid., section 26.

 The restraint stage

The restraint stage of criminal forfeiture proceedings involves the granting of a restraint order,10

Only High Courts can grant restraint orders.

which prohibits any person affected by the order from dealing in any manner with the property to which it applies.11

POCA, supra note 2, section 26.

 The restraint order is granted over ‘realisable property’,12

Property referred to in ibid., section 14.

 which includes any property held by the defendant concerned, as well as any property held by any third party who may have received affected gifts from the defendant.13

Ibid., section 14.

 A ‘defendant’ is someone against whom prosecution has been instituted irrespective of whether he or she has been convicted. The definition of ‘defendant’ also includes a person that the court is satisfied is to be charged and in respect of whom it appears that there are reasonable grounds for believing that a confiscation order may be made.14

Ibid., section 25(1)(b).

 However if such a person is not charged within a reasonable period of time, the court must rescind the restraint order.15

Ibid., section 25(2).

 The persons against whom restraint orders can be granted in terms of Chapter 5 of POCA are accused persons or suspects who are yet to be charged with a criminal offence.16

Ibid., section 25(1).

The National Director of Public Prosecution17

Hereinafter ‘NDPP’.

does not have to establish a threat of dissipation of property in order to obtain a restraint order.18

Phillips v NDPP 2003 (6) SCA 447.

 The inherent purpose of a restraint order is to preserve property on the premise that there is a strong possibility that the property in question may be realised in satisfaction of a confiscation order.19

NDPP v Rautenbach and Others 2005 (4) SA (603) SCA 84.

 The restraint order ensures that property is preserved so that the property might in due course be realised in satisfaction of a confiscation order.20

NDPP v Rebuzzi 2002 (1) SACR 122 (N) 128.

 The property which is restrained is held as security against the confiscation order which is anticipated. This means that realisable property is not necessarily limited to property which is tainted by the alleged offence. Property which was legitimately acquired by the defendant may also be restrained. The latter principle is also applicable to legitimate property of a third party who received an affected gift from a defendant, because such property is realisable property, and it may be subject to realisation in satisfaction of a confiscation order granted against a defendant.21

POCA, supra note 2, section 32.

 A restraint order may be made over property specified in the restraint order or over all realisable property of a defendant, irrespective of whether it is specified in the restraint order.22

Ibid., section 26(2).

 Further it may also be made over property which will be transferred to the defendant in the future.23

Ibid., section 26(2).

 Thus, where a restraint order is appropriate, the NDPP may seek to restrain all of the defendant's assets, including unknown assets, and furthermore may request the court to order the defendant to reveal the whereabouts and all relevant details of any unknown assets.24

Ibid., section 26(7).

 Furthermore, even before a criminal prosecution has been instituted, the NDPP may apply for a restraint order. It is a jurisdictional requisite, however, that if the prosecution against the...

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