Elements to Prove a Bona Fide Third Party Claim

EVALUATE ELEMENTS THAT NEED TO BE PROVED BY A BONA FIDE THIRD PARTY CLAIMANT WHO INTEND TO MAKE A CLAIM OF THE PROPERTY AND EXPLORE THE COURT PROCEDURES INVOLVED DURING THE HEARING OF THIRD PARTY CLAIMANT PROCESS

TABLE OF CONTENT

TOPIC          PAGES

Acknowledgement

Introduction

Chapter 1

1.0  The Elements of Bona Fide third-party claimant

Chapter 2

2.0  Case studies

2.1  PP V. Lau Kwai Thong

2.2  PP V. Raja Noor Asma Bt Raja Harun

2.3  PP V. Noor Ismahanum Mohd Ismail & Ors

Chapter 3

3.0  The court procedures involved during hearing third party claimant

Chapter 4

4.0  Suggestion

Conclusion

References

INTRODUCTION

Money laundering is one of the most difficult crimes to detect, investigate and prosecute because it processes involves various complex methods, techniques and mechanisms and if the offence of section 4(1) AMLATFA occur, it also involves the forfeiture of property. According to the Oxford Dictionary, forfeiture of property can be defined as to lose something or to have something taken away, usually because someone has done something wrong (Oxford Dictionary, n.d). The main objective of the forfeiture of property are to make sure the accused cannot enjoy the wealth that he gains from unlawful activities and to gives sentence toward who that obtain, used and hide the property that gain from unlawful activities. The definition of unlawful activity means any activity which is related directly or indirectly, to any serious offence or any foreign serious offence.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Essay Writing Service

 Forfeiture of property can be done whether with or without prosecution which it can be refer to section 55 and 56 of Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613). The investigation officer must seize the property of the accused. Then, Public Prosecutor must apply to high court judge for an order of forfeiture of the property. The application that apply by the Deputy public prosecutor to the court are being support by affidavit of Deputy Public Prosecutor, Investigation Officer and other witnesses. The court will forfeit the property if he satisfied the subject matter is related with the offences, terrorist property, the proceeds of an unlawful activity or the instrumentalities of an offence (MACC, n,d)

The definition of third party claimant is someone who intends to make a claim of an interest in property forfeited by the Court under Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613]. A third-party notice was gazetted under section 55, 56 and 61 to inform any bona fide third party with interest to be present in the court and to show cause as to why the properties cannot be forfeited to the government of Malaysia. The discussion is being made to discuss some elements that need to be proved by the bona fide third party who want to make a claim for the property based on three cases PP V. Lau Kwai Thong, PP V. Raja Noor Asma Bt Raja Harun and PP V. Noor Ismahanum Mohd Ismail & Ors and it also involves some court procedures during the hearing of third-party claimant process.

CHAPTER 1

1.0 THE ELEMENTS OF BONA FIDE THIRD-PARTY CLAIMANT

The element of Bona Fide third-party claimant is important to court decide whether the property can be forfeit and be given to government of Malaysia or to returned to the claimant. The court will only return the property to the Appellant when the court is satisfied that the Appellant has succeeded in fulfilling all requirements in the provisions of section 61 (4). Provision subsections 61(4)(a)-(e) shall be read conjunctively.

The courts must return the property to the appellant if he satisfied that the appellant if:

a)      The claimant has a legitimate legal interest in the property.

b)     No participation, collusion or involvement with respect to the offence under subsection 4(1) or Part IVA, or a terrorism financing offence which is the object of the proceedings can be imputed to the claimant.

c)      The claimant lacked knowledge and was not intentionally ignorant of the illegal use of the property, or if he had knowledge, did not freely consent to its illegal use.

d)     The claimant did not acquire any right in the property from a person proceeded against under circumstances that give rise to a reasonable inference that any right was transferred for the purpose of avoiding the eventual subsequent forfeiture of the property.

e)      The claimant did all that could reasonably be expected to prevent the illegal use of the property.

CHAPTER 2

2.0 ANALYSES OF CASE STUDIES

2.1  PP V. Lau Kwai Thong

The issue that need to be decided in the cases PP V. Lau Kwai Thong is about the respondent had bought the 10,000 units trust that amount RM 10,000.00 on 21.11.2006. RM 10,000.00 used to purchase the unit trusts had come from proceed of illegal activities through illegal sale of prepaid Celcom phone-call cards. Then, there has been a third-party claim made over it who incidentally his sister Lau Bee Fong. Therefore, it needs to be decided whether his sister Lau bee Fong is the Bona Fide third-party claimant and whether she fulfil the elements that need to be proved by a bona fide third-party claimant who intends to make a claim of an interest in property forfeited?

The law provides in this regard the provides that Based on Section 61 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613], Bona fide third-party claimant must fulfil and proved all elements in section 61(4) if they intend to make a claim of the property forfeited. The courts must return the property to the appellant if he satisfied all the elements provided in section 61(4)(a)-(e).

Based on the court finding, the claim that made by Lau bee Fong was not succeed. She cannot prove the that she has the legal right against law about that property even she had affirmed two affidavits and given oral testimony. During examination of oral testimony, she keeps repeated what she said in the affidavits. Her evidence has not on the balance of the probabilities because it clearly operated by the respondent. It is because she cannot recall when she gives the money to Lau Kwai Thong. Then, her statements are cannot be proved by any documents because there is no documentary evidence had been pointing out about handing over of the money.

Find Out How UKEssays.com Can Help You!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our academic writing services

Based on the above discussion, it can be said that this third-party claimant’s evidence did not fulfil all the specific elements that be stated under section 61(4)(a)-(e). The claimant must prove the balance of probabilities all the requirement under section 61(4). The section should be read conjunctively and not disjunctive. So, the court have forfeited RM10,000.00 for the account 387-27-05468-5 at the OUB Bank under name of Lau Kwai Thong to the Government of Malaysia.

2.2  PP V. Raja Noor Asma Bt Raja Harun

The issue that need to be decided in the cases PP V. Raja Noor Asma Bt. Raja Harun is about the respondent had been accused with 50 charges. There is about RM 8,000,000.00 had been seized from Fx Capital Company owned by the respondent. Then, there has been a third-party claim made over it which 700 investors in that company. Therefore, it needs to be decided whether the investors are the Bona Fide third-party claimant and whether they fulfil the elements that need to be proved by a bona fide third-party claimant who intends to make a claim of an interest in property forfeited?

The law provides in this regard the provides that Based on Section 61 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613], Bona fide third-party claimant must fulfil and proved all elements in section 61(4) if they intend to make a claim of the property forfeited. The courts must return the property to the appellant if he satisfied all the elements provided in section 61(4)(a)-(e).

Based on the court finding, the claim that made by 700 investors by using 8 representatives are succeed in order to claim RM 8,000,000.00. According to SCJ, the 8 representatives can prove that they have the legal right against law about that property based on the oral statement given and be supported by the relevant documents. Their evidence is on the balance of the probabilities because the SCJ have take into consideration all about the cases objectively before decided that they are the Bona fide third-party claimant. The court also make the decision based on the merit of the cases after hearing all witness statement and evaluate the credibility of the witness.

On the basis of the above discussion, it can be said that this third-party claimant’s evidence fulfils all the specific elements that be stated under section 61(4)(a)-(e). So, the court have decided to return the property which is RM 8,000,000.00 to the bona fide third-party claimant.

2.3  PP V. Noor Ismahanum Mohd Ismail & Ors

The issue that need to be decided in the cases of PP V. Noor Ismahanum Mohd Ismail & Ors is about the property value total RM 2,297,190.69 owned by Noor Ismahanum Mohd Ismail and Yong Thai Vun that have been seized by enforcement agencies. The notice to third parties was then gazetted in the Federal Government Gazette on the 17th June 2016. Then, there has been a third-party claim which Edward Chong Shaw Nyen & 14 ORS that want to claim the property. Modus operandi that accused used are by cheated the applicant by made them invested in the Gold Discovery Investment Scheme. Therefore, it needs to be decided whether Edward Chong Shaw Nyen & 14 ORS are the Bona Fide third-party claimant and whether they fulfil the elements that need to be proved by a bona fide third-party claimant who intends to make a claim of an interest in property forfeited?

The law provides in this regard the provides that Based on Section 61 Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613], Bona fide third-party claimant must fulfil and proved all elements in section 61(4) if they intend to make a claim of the property forfeited. The courts must return the property to the appellant if he satisfied all the elements provided in section 61(4)(a)-(e).

Based on the court finding, the claim that made by 15 applicants are not succeed in order to claim property value total RM 2,297,190.69. They cannot prove that they have a Bona Fide right on the Balance of Probabilities. Firstly, even the claimant was induced by respondent and have made the deposit payments, the claimant still has no legitimate legal interest in the property it is because they agreed that the invested money was part of an investment scheme that been carried out by the company. The subject matter of the respondent is related to offence and it cannot be said that the claimants to have a legitimate interest to that property. The requirement under S.61(4)(a) AMLATFA has not been satisfied.

Secondly, the applicant stated in their affidavit that the scheme had licenses from authorities to operate the scheme legally, but actually the seized deposited money is for repayment earlier scheme which has been decided by the session court. So, the claimants are indirectly participated and involve in the scheme. For that reason, the requirement under S.61(4)(b) AMLATFA has not been satisfied.

Thirdly, the applicants never make a check with authorities such as Bank Negara about the scheme. Before this, the public are being advised not to believe about the scheme that promising unreasonably high return and profits such as this Gold Discovery Investment Scheme. So, they failed to prove the element of section 61(4)(c) by saying that they have lack of knowledge, not intentionally ignorant of the illegal use of the property or if they had knowledge did not freely consent to its illegal use.

Next, all claimants failed to prove the element of section 61(4)(d). They said that they have no control of the paid and invested movement monies from one account to other account in the scheme. There is no doubt that the claimants have no longer control over the monies that they have deposited as they intentionally blinded themselves by not inquiring further about the scheme which they can do that in the first place.

Lastly, before paying the deposits, they did not act to prevent the illegal use of money, did not verify the background and existence of the business. So, the Third-Party Claimants have also failed to satisfy the requirements of section 61 (4) (e).

The court discharged all claimant application and forfeited the property value total RM 2,297,190.69 to the Government of Malaysia such stated in subsection 56(2) after analysing the evidence and affidavits because Third Party Claimants have failed on a balance of probabilities to prove that they were Bona Fide third parties under section 61 of AMLATFA. 

CHAPTER 3

3.0 THE COURT PROCEDURES INVOLVED DURING HEARING THIRD PARTY CLAIMANT

Based on the section 61, there is no provided about the procedure and there is no obstacle against law about the procedure that can be admissible by courts during hearing third party claimant about the property that been gazette. In Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613] act, it does not contain any procedure on the claim by the third-party. Even there is no specific procedure provided in the acts, but the court still has jurisdiction to manage a case via procedure made by itself. The proceedings under the rules of court 2012 which are includes criminal or semi-criminal proceedings. Therefore, the hearing of the application was a proceeding within the meaning of Rules of Court (ROC). The court use the discretionary power to decide their own procedures. The Rules of Court 2012 defines the word attend as any person by using electronic, mechanical or other means permitted by courts. Usually the claim by using representative are applied for civil cases because the burden of proof in civil cases are based on section 61 AMLA which known as balance of probabilities.

Based on the cases PP V. Lau Kwai Tong, the procedure that have been made by the court are by giving notice which known as gazette notification to any party which want to stake his claim over the property of RM10,000.00 of unit trust at United Overseas Bank. Next, the court will hear the statement and affidavit that be given by the third party. Then, the court will consider the reason why the court should not forfeit the property based on section 61(4)(a)-(e). Next, after all procedures is follow, the court will decide whether need to be forfeit or not. For this case, the court forfeit the RM10,000 to the Government of Malaysia because the third party failed to prove that she is the bona fide third-party claimant.

Next, based on the cases of PP V. Raja Noor Asma Binti Raja Harun stated that the proceeding is a semi-criminal which the third party made application for claiming the properties. This application can be made because of the criminal happen against the respondent. The court procedures that been used by SCJ are by gazette one notice toward third-party claimant toward the property which is cash money about RM8 Million on the date that have been set. Next, agreed by SCJ to called eight witness to give statements as representative of investors. The decision of SCJ about the court procedure are by using the definition as any person attend by other means permitted by court. All 700 investors that made the claimant was considered had be present in court. This procedure agreed by all parties because the procedure is legal and right and the process does not cause any injustice toward all parties. Then, SCJ made the decision after hearing the statement of eight witness by referring section 61 AMLA. For this case, the third-party claimant successful proved that they have the right on that property and court have decided to return the property which is RM 8,000,000.00 to the Bona fide third-party claimant.

Then, for the cases PP V. Noor Ismahanum Mohd Ismail & Ors, the Public Prosecutor applied for an order of forfeiture subject to third party proceeding by way of Notice of Motion made under section 61. The court after considering all affidavits and submissions by both parties allowed applicant’s application to cause a Notice to Third Parties to be published in the Gazette. A notice to third parties was then gazetted in the Federal Government Gazette on the 17th June 2016 in accordance to subsection 61(2) of Act 613. After analysing the evidence as a whole and having considered all the affidavits and submissions by the third-party claimant, therefore the court dismissed claimants’ application because they did not prove all elements in subsection 61(4)(a)-(e) and the property valued RM 2,297,190.69 is be forfeited to the Government of Malaysia as specified in subsection 56(2) of the Act.

CHAPTER 4

4.0  SUGGESTION

After analysis about the element of third-party claimant, it found that AMLATFA is the best guideline for the court in order to forfeit that property or return to the Bona Fide third-party claimants but some suggestion need to be mention because there is some implication of the Asset forfeiture system such as encroachment of human rights and rights to property. Rahman (2008) suggested that Section 61 places a heavy and unjust burden on the third party. All the requirements of Section 61 of the said Act must be reviewed to ensure that claims by bona fide third parties are not prejudiced and abused by this forfeiture law (Rahman, 2008).

The case of PP v Lau Kwai Thong (2009) illustrated such prejudice to bona fide third parties. This particular case indicates that it is quite difficult for the third party who claims to have any interest in the property to show that he acted in good faith since all the requirements provided under subsection 61(4) (a) -(e) of the AMALTFA 2001 must be conjunctively fulfilled (Zaiton, 2017)

The respondent agreed that the law did not diminish the rights of the third party to apply for the property. However, findings revealed that third parties have encountered some difficulties in satisfying the Courts during the forfeiture hearing namely fulfilling all the five requirements under Section 61(4) the said Act (Zaiton, 2017)

CONCLUSION

 Money laundering is not a new phenomenon and has existed for centuries. It is the process by which criminals try to disguise the true origins of the proceeds of crimes. Money laundering involves conversion of property into another form of assets, concealment of the true ownership of the property and finally the creation of apparent legitimacy of the ownership of the property. As a conclusion, it can be concluded that there are 5 subsections based on 61(4) that need to be proved conjunctively by the third-party claimant to claim the property that have been seized from the enforcement agencies because to make sure the accused cannot enjoy the wealth that he gains from unlawful activities.

Based on the three cases that have been discuss above, it is clear that in exercising their rights under section 61 of AMLATFA, the courts will decide whether to return the property or forfeit the property. The court will return the property to the appellant if he satisfied all the elements provided in section 61(4)(a)-(e). Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 [Act 613] provides the law enforcement officials with more effective tools than before for confiscating proceeds from any serious crimes in Malaysia. The burden of proof is on the third parties to show that they are lawfully entitled to the property. This is to ensure that the interest of Bona fide third party is well protected.

REFERENCES

1. Oxford Dictionaries | English. (n.d.). forfeit | Definition of forfeit in English by Oxford Dictionaries. [online] Available at: https://en.oxforddictionaries.com/definition/forfeit [Accessed 31 Jan. 2019].
2. Sprm.gov.my. (2019). Malaysian Anti-Corruption Commission (MACC) – AKTA PENCEGAHAN PENGUBAHAN WANG HARAM DAN PENCEGAHAN PEMBIAYAAN KEGANASAN 2001. [online] Available at: https://www.sprm.gov.my/index.php/en/maca/korporat/department-info/197-perundangan-anti-rasuah/693-anti-money-laundering-and-anti-terrorism-financing-act-2001-amlatfa [Accessed 31 Jan. 2019].
3. PP V. Lau Kwai Thong, (2009) Dalam Negeri Selangor Darul Ehsan, Criminal Case No 440-20-2008 (High Court Shah Alam)
4. PP V. Raja Noor Asma Bt Raja Harun (2013) 5 CLJ 656, Appeal Criminal Case No 42(0)-58 Year 2011 (High Court Kuala Lumpur)
5. PP V. Noor Ismahanum (2017), Criminal Trial No: BKI-44-1/1-2015 (In the High Court in Sabah and Sarawak at Kota Kinabalu)
6. Anti- Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613). (2017). Cheras, Kuala Lumpur: Internationlal Law Book services.Dzulkifli Ahmad, (2009) Deputy Public Prosecutor, The Mechanics of Anti-Money Laundering and Anti-Terrorism Financing Act 2001
7. Azlizawati Lazim, (n,d), Pengenalan Kepada Undangundang Pelucuthakan Harta Di Malaysia, Cawangan Pelucuthakan Harta Dan Pengesanan Aset Bahagian Siasatan Ibu Pejabat SPRM
8. Hazmi Saad, (n,d), Pengenalan Kepada ALMATFA 2001 dan kaitan dengan pelucuthakan harta kes rasuah, Ibu Pejabat SPRM.
9. Rahman, A. A. (2008).  An Analysis of the Malaysian Anti-Money Laundering Laws and Their Impact on Banking Institutions (Doctoral dissertation, University of Western Australia), 66-101.