MR CHAIRMAN, THE HONOURABLE MINISTER OF FINANCE, DISTINGUISHED INVITED GUESTS, ESTEEMED PANELLISTS, CONFERENCE AND WORKSHOP PARTICIPANTS, THE MEDIA, LADIES AND GENTLEMEN.
It is a truism that, Tax administrations, customs authorities, FIUs and other law enforcement agencies charged with combating tax and other financial crimes do not work in isolation. The cases they handle may very well end up in courts and this brings to sharp focus, the role of the judiciary.
The judiciary is the final dispute resolution body served with arbitrating on disputes between persons. In the context of IFFs and specifically money laundering, tax evasion and tax avoidance, the issues raised are complex, not only for the judiciary, but also for the tax administrations, customs authorities, FIUs and other law enforcement agencies.
Bearing in mind that ours is not a proactive institution, what then would be the role of the judiciary in dealing with tax and other financial crimes?
JURISDICTIONAL ISSUESTHE LEGAL FRAMEWORK
Of fundamental importance, is settling on the matter of the courts with jurisdiction to deal with tax and other financial crimes.
Financial and tax crimes are usually dealt with by one of the Divisions of the High Court.
The Financial Crimes Division is one of the divisions of the High Court so set up under Article 139(3) of the Constitution.
As the name suggests, the court deals with financial crimes under the Criminal Offences Act, 1960; e.g.; offences involving dishonesty (i.e. stealing, fraud, forgery, willfully causing financial loss to the state etc.)
The Court also has jurisdiction to deal with other economic crimes such as money laundering, cybercrime, terrorism and related matters (such as terrorist financing and tracing and orders relating to surveillance,).
Tax crimes (as well as the civil aspects of tax administration), and matters relating to the Financial Administration Act,2003 (Act 654) as amended are also within the mandate of the Financial Crimes Courts. The Financial Administration cases are matters which emanate from the Public Accounts Committee of Parliament.
The set-up of specialized Courts, the Financial and Economic Crimes being one such, facilitates expeditious trials for several reasons;
- The judges receive specialized training relevant to the areas of the law within which they operate as well as in case management, thus allowing for a better appreciation of the issues in such cases.
- The courts’ cause lists are not crowded with other cases, allowing for focus on the particular areas.
- The laws setting up the various agencies such as the FIC and EOCO also have provisions for pre-trial applications which facilitate investigations.
- Provision for post-judgment orders also facilitates seizure and forfeiture of illicit gains and proceeds of crime
- RELEVANT LAWS
Of particular importance to the operations of the Financial and Economic Crimes Division of the High Court are;
- Economic and Organised Crime Office Act 2010, Act 804
- Anti-Money Laundering Act 2008, Act 749
- Criminal Offences Act 1960, Act 29
- Criminal and Other Offences (Procedure) Act 1960, (Act 30)
- Anti-Terrorism Act 2008, Act 762
- Foreign Exchange Act 2006, Act 723
- Electronic Communications Act 2008, Act 775
- Electronic Transaction Act 2008, Act 772
- Human Trafficking Act 2009, Act 784
- Mutual Legal Assistance Act 2010, Act 807
- Financial Administration Act, 2003, Act 654
- Evidence Act, 1975, NRCD 323
- Courts Act, 1993 (Act 459)
- Internal Revenue Act, 2000 (Act 592 ) and its amendments
- Value Added Tax Act, 2013 (Act 870)
- Excise Duty Act, 2014 (Act 878)
- Income Tax Act, 2015 (Act 896)
- Customs Act, 2015 (Act 891)
- Revenue Administration Act (Act 925)
These laws are sufficiently clear and adequate as they are, to make a good start as far as the prosecution of tax and other financial crimes are concerned.
RULES OF EVIDENCE OF PARTICULAR INTEREST
Due to far-reaching decisions in the form of Rulings and Judgments of the Courts, new frontiers have been reached in recent years.
It is quite routine in the Financial and Economic Crimes Court to take evidence by the well-known means that we are all well aware of, i.e. oral testimony in open court, as well as by the use of modern technology under the Electronic Transactions Act, 2008 (Act 772), and by other means provided under the Mutual Legal Assistance Act, 2010 (Act 807) and other legislations. It must be borne in mind that most emergent crimes are transnational and as such, these decisions were made in order to facilitate trials despite whatever locations the witnesses may be found.
- ELECTRONIC EVIDENCE
Section 7(1) of the Electronic Transactions Act, 2008 (Act 772) provides; “the admissibility of an electronic record shall not be denied as evidence in legal proceedings except as provided in this Act”.
This aspect of the law is relevant in that a substantial part of the evidence adduced in the Financial and Economic Crimes Courts are electronic. These pieces of evidence may be videos from CCTV footage, emails etc. on VCD, DVD, flash drive etc.
Act 772 provides for matters relating to the weight to be attached to electronic evidence. The admissibility of such evidence, from the language of the Act, is not at all in issue, so long as it is relevant, but the weight to be attached to it is determinable by the integrity or otherwise of the evidence.
In assessing the evidential weight of an electronic record, the Court shall have regard to;
(a) the reliability of the manner in which the electronic record was generated, displayed, stored or communicated,
(b) the reliability of the manner in which the integrity of the information was maintained,
(c) the manner in which its originator was identified, and
(d) any other facts that the Court may consider relevant.
(See section 7(2) of Act 772.
TAKING EVIDENCE VIA VIDEO LINK OR VIDEO CONFERENCE IN CRIMINAL AND CIVIL TRIALS
Another form of electronic evidence, if it can be properly so-called, commonly utilized and allowed by the Financial Courts has to do with the mode of adducing evidence. It must be borne in mind that due to the fact of the transnational nature of financial crimes like cybercrime and other emerging crimes, the accused persons may be resident in Ghana, but the witnesses, made up of victims and investigators, may be resident abroad. The cost of transporting such witnesses from abroad might be prohibitive.
In the year 2013, the Financial Crimes Division Court held in the case of THE REPUBLIC V. MATHIAS APPIAH BILL (alias DELALI VETTEL; alias ROBERT SCOTT)(Suit No. FTRM /49/14) for the first time in our criminal jurisprudence, that evidence could be taken via video link once it is so directed by the Chief Justice. This is however a discretion not available to the Court in criminal cases except with the express permission of the Honourable Chief Justice under section 69 of the Courts Act, 1993 (Act 459).
This means that on a case by case basis, once an application is made and granted for an order to take evidence via video link, permission also ought to be granted by the Chief Justice, before evidence can be taken via video link in criminal matters. There is no gainsaying, however, that with the passage of the High Court (Civil Procedure) (Amendment) Rules, 2014 (C.I.87) there is no such requirement in civil actions.
This mode of evidence allows evidence to be obtained and cross-examination done via Skype or some other means via the Internet. There are a few problems with this method including the issue of time difference, resulting in the Court having to sit quite early or late, depending on which country the evidence is being taken from, and for long hours. There are also sometimes, connectivity issues; however, the advantages far outweigh the disadvantages. In a particular case for instance, the victim was resident in Melbourne, Australia, the investigating officer who had assisted at the Australian end of the investigation was, at the time of the trial, then on international duty in Kuala Lumpur, Malaysia, and the trial was ongoing here in Accra.
The entire trial, once the hearing commenced, took less than three months to complete. This is obviously far less expensive and less time consuming than the situation would have been if the Court had insisted that the witnesses be physically present.
This is clearly evidence of the will of a modern judiciary to assist in dealing with tax and other financial crimes.
- EVIDENCE OBTAINED OUTSIDE GHANA
Evidence Obtained outside Ghana is also admissible and routinely, a part of the evidence usually before the Court. These usually would be in the form of evidence by foreign investigative bodies such as the Federal Bureau of Investigation (FBI) of the US, sworn testimony before a Court in foreign bodies and so on underthe Mutual Legal Assistance Act, 2010.
These foreign records and documents may be admissible under the Act, in spite of non-compliance with the Evidence Act.
Section 71 of the Mutual Legal Assistance Act, 2010 (Act 807) provides that
(1) Despite a provision of the Evidence Act, 1975 (NRCD 323),
(a) A record or a copy of a record, or
(b) an affidavit, a certificate or other statement pertaining to the record made by a person who has custody or knowledge of the record which is sent to the Central Authority by a foreign State or foreign entity in accordance with a request of the Republic, is admissible in evidence in proceedings in the Republic irrespective of the fact that a statement contained in the record, copy, affidavit, certificate or other statement is hearsay or a statement of opinion.
- LIFESTYLE EVIDENCE
Lifestyle evidence is considered by the authorities to be a type of circumstantial evidence which can be regarded relevant and admissible in certain cases. An example is given at page 268 of the book; ‘Essentials Of The Ghana Law Of Evidence’ by the learned author S.A Brobbey, thus “…Where a person with no known or visible means of earning income commands a great deal of wealth by owning, for instance, five houses in the city, … and a physical cash of five million Euros found by the police in his house when he was searched, the investigator may sometimes assume that his lifestyle provides some evidence on his criminal activities or some involvement in some shady deals……”
Lifestyle evidence is especially relevant in money-laundering and drug cases in which the accused may be alleged to be in possession of pecuniary resources or a property for which the accused cannot account, and which is disproportionate to the accused person's known sources of income. This matter will be dealt with in greater detail in succeeding paragraphs.
RECENT TRENDS AND EMERGENT CRIMES
An increasing number of cases involve the offence of money-laundering. What is the definition of money laundering?
It was once argued before the Court that money laundering has to do with proceeds of offences involving the trade in narcotic drugs, illegal arms trading, and terrorist financing.
This is a misconception held by many.
Those, though, are not the only predicate offences of Money Laundering.
Section 1 of Act 749 states;
- Money Laundering contrary to s.1 of the Anti- Money Laundering Act, 2008 (Act 749).
- (1) A person commits an offence of money laundering if the person knows or ought to have known that property is or forms part of the proceeds of unlawful activity and the person
(a) Converts, conceals, disguises or transfers the property.
(b) Conceals or disguises the unlawful origin of the property or
(c) Acquires, uses or takes possession of the property.
(2) For the purpose of this Act, unlawful activity means conduct which constitutes a serious offence, financing of a terrorist act or contravening of a law which occurs after the commencement of this Act whether the conduct occurs in this country or elsewhere.
There is no question that for a charge of money laundering to be proven, the first step to be taken by the prosecution must be the proof of a predicate offence. A predicate offence is one which the Act defines as a serious offence. By the application of the Act, it is any offence which carries a term of imprisonment of not less than twelve months.(See Section 51 of Act 749 which defines serious offence as;
"Serious offence" means an offence for which the maximum penalty is death or imprisonment for a period of not less than twelve months)
It can therefore be deduced from the given definition that, any offence, including tax evasion may be a predicate offence of money laundering.
BURDEN OF PROOF IN CERTAIN CASES
Section 46(2) (a) and (b) of the Anti- Money Laundering Act, 2008 (Act 749) states;
(2) In a trial for an offence under this Act, the accused person may be presumed to have unlawfully obtained pecuniary resources or property in the absence of evidence to the contrary if the accused person,
(a) is in possession of pecuniary resources or a property for which the accused cannot account and which is disproportionate to the accused person's known sources of income, or
(b) Had at the time of the alleged offence obtained access to personal pecuniary resources or property for which the accused cannot satisfactorily account.
From the manner in which the above is couched, it appears that the burden of proof in the trial of a money- laundering case, in certain circumstances, may be on the accused person to prove that pecuniary resources or property he may be in possession of,was lawfully obtained. Of course, the prosecution will have the duty of establishing a prima facie case of pecuniary resources or property in excess of, or disproportionate to the accused person’s known sources of income.
Lifestyle evidence may be useful in such cases.
CIVIL APPLICATIONS / PRE-TRIAL MATTERS
Certain civil applications may be brought prior to the commencement of trial pending investigations.These form the bulk of the applications from the Financial Intelligence Centre (FIC) and the Economic and Organised Crime Office (EOCO), and are brought under;
- Economic and Organised Crime Office Act 2010, Act 804
- Anti-Money Laundering Act 2008, Act 749 and
- Anti-Terrorism Act 2008, Act 762
The Institutions with jurisdiction to bring such orders are the EOCO and the FIC. Per their respective legislations, these institutions may direct accountable institutions such as banks to freeze transactions or accounts of their customers upon reasonable suspicion that a serious offence has been committed pending investigations. The accountable institutions are also required by law to file suspicious transaction reports where grounds exist for such.
Once these freezing orders are given by the heads of these institutions, they are to confirm same at the Court.
In the case of the FIC, the confirmation shall be done within seven days, whilst the EOCO has a limit of fourteen days to confirm their freezing orders. The Court, in all cases, ought to have reasonable grounds for suspicion that a serious offence has been committed in order to grant the application.
A freezing order shall prohibit the respondent or another person from
disposing of or dealing with the property or a part of the property or
interest in the property that is specified in the order, except in a manner
specified in the order.
DURATION OF A FREEZING ORDER
Under Act 749 as amended by Act 874, an order freezing a transaction or account is valid for twelve months where it is obtained to facilitate investigations.
In THE REPUBLIC V. HIGH COURT, FINANCIAL DIVISION, ACCRA EX PARTE; XENON INVESTMENT CO LTD, FIC (Interested Party) Civil Motion No. J5/46/2015 dated 22nd March, 2016.), the Supreme Court held that the High Court has no jurisdiction to keep an account frozen beyond one year to facilitate investigations. The statute also does not provide for extension of the one year.
In the case of the EOCO, on the other hand, their statute allows for an extension of the duration of the order freezing a transaction or account. Where the holder of the account is charged with a serious offence, or is on trial, and the freezing order is in force, then even if the twelve-month period lapses, the order would still be in force.
WHY HAVE A FINANCIAL CRIMES COURT?
There are well-known advantages for having specialised courts. Speed is one such advantage. In the case of the Financial Crimes Courts, apart from the expedition of trials, there is also the very distinct advantage of provisions in the legal framework within which they work, allowing for seizure and forfeiture of proceeds of crime after conviction, outright without the complicated processes of civil execution as pertains in the Criminal and Other Offences Procedure Act, 1960 (Act 30).
There is no denying the fact then, that there has been a significant improvement in recent years as far as the enforcement of financial crimes generally is concerned.
These improvements may be attributable to an increased number of prosecutions. However, there is also no question that being such new areas of the law, the judiciary has also greatly assisted in interpreting the law in a purposive manner, so as to achieve the reasons for the passage of these new legislations, i.e. identifying and recovering proceeds of crime and punishing perpetrators.
For instance, in just one case, THE REPUBLIC VRS. GODWIN AMEGBE & ORS, (Suit No FTRM 12/15),some accused persons, having been arraigned before the Financial Crimes Court took advantage of Section 35 of the Courts Act, 1993, Act 459. After a guilty plea and conviction, and in the case of one accused person, a full trial, restitution and fines, the Court was able to recover One million, one hundred and five thousand, eight hundred and seventy-nine cedis, forty-one pesewas (GH₵ 1, 105, 879.41).
Information made available from the Finance Section of the Law Court Complex, Accra, indicates that from 27th November, 2015 to 15th June, 2016, court fines from the two Financial Courts in Accra,yielded four hundred and forty- three thousand, nine hundred and thirty cedis,
sixty-three pesewas (GH₵443,930.63).
There is, however, more room for improvement.
How can tax administrations, customs authorities, financial intelligence units and other law enforcement agencies better prepare cases for judicial review or criminal prosecution?
Excellent record keeping and ensuring admissibility of evidence are of utmost importance. In the case of electronic evidence, for instance, there must be no room to question the authenticity of the electronic record. One must not only have a focus of presenting evidence to the court, but the evidence must have enough weight to discharge the evidential burden.
There must be no rush to present cases in court, unless the investigation is complete and the evidence is of sufficient quality and quantity to succeed.
It has been customary in some of the cases being tried to find documents and other pieces of evidence that are out-dated and obviously procured while the trials are ongoing or for witnesses to say, in the course of trial that investigations are still ongoing regarding certain aspects of the case. Clearly then, in such circumstances, the investigations would be incomplete and the trial premature.
This is most often the cause of the failure of some of the financial crime cases. On the whole however, it must be admitted that in spite of the teething problems, progress is being made and the rate of success is much higher than it was three years ago.
To conclude, we expect the tax administrations, customs authorities, financial intelligence units and other law enforcement agencies in the area of financial crime to ensure that all lose ends are properly tied before the commencement of trials, whether civil or criminal. This is because being a neutral arbiter; the Judiciary cannot give preferential treatment to any party. We have made the human resource and the facilities available, however, to help tax administrations, customs authorities, financial intelligence units and other law enforcement agencies in the area of financial crime achieve their mandates expeditiously.
Mr. Chairman, Distinguished Ladies and Gentlemen, I thank you for your rapt attention.
May God bless us all.