Case Study: Conviction Before Seizure?

Must a person be convicted under AMLA before their property is seized under the Act? This issue was dealt with in the case of Public Prosecutor v Habib Jewels Sdn Bhd. We will briefly discuss this case with you.

Brief facts of the case

This application arose from an investigation into the involvement of the former Prime Minister, Dato’ Sri Mohd Najib bin Tun Hj Abdul Razak (NR) in relation to the affairs of a government-owned corporate entity, 1Malaysia Development Bhd (1MDB) for money laundering crimes. In this regard:

1. The Public Prosecutor claimed that  there were many transactions involving the transfer of funds into the personal bank account of NR which funds were suspected to have been diverted from 1MDB, and the subsequent transfers to amongst other bank accounts of NR, and the payments out of these accounts in favour of various other parties;
2. Habib Jewels were amongst one of the parties who received such payments.

Premise on the above factors, the Public Prosecutor invoke section 56 (1) and Section 61 (2) of Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLA) for a forfeiture order against Habib Jewels for a sum of monies amounting to RM100,000.00 and all the accrued interest in one of Habib Jewel’s Bank account. 

Habib Jewel’s contention in regards to this matter

Habib Jewel (amongst others) contended that in order for the Public Prosecutor to invoke section 56 of the Act, the Public Prosecutor must first prove that Habib Jewel has somehow colluded or been involved (i.e. aiding and abetting in the offence of money laundering) in the wrongdoing of the NR.

The court’s decision and rationale

Even though the court dismissed the Public Prosecutor’s application for forfeiture (i.e. Habib Jewel successfully proved that its money derived from legitimate sources in the course of its business), the court nonetheless disagreed with Habib Jewel’s contention. 

The court, in coming to its decision, held that:

1. Section 56 of the Act is a civil forfeiture action (and not a criminal one), targeted at confiscating or forfeiting the property which the enforcement agency (in this context, the Public Prosecutor) contends to have been involved in certain criminal activity or in the context of the present application, being proceeds of unlawful activity. In a civil forfeiture action, it is not necessary that any person should be prosecuted for criminal activity. This is also consistent with the opening words of the provisions of section 56 of the Act which states that: 

“Subject to section 61, wherein respect of any property seized under this Act there is no prosecution or conviction for an offence under subsection 4(1) or a terrorism financing offence, the Public Prosecutor may, before the expiration of twelve months from the date of the seizure, or where there is a freezing order, twelve months from the date of the freezing, apply to a judge of the High Court for an order of forfeiture of that property if he is satisfied that…”

1. It is even irrelevant whether a person has colluded with any party who has first given the property to the accused in an AMLA suit. That is for the Public Prosecutor to consider instituting criminal charges for offences he deems have been committed. This applies even if NR is found not guilty, as section 56 of the Act focuses on whether he is still in control of the property to enable forfeiture. Effectively, this means that the public prosecutor may focus less on the culpability of a person but more on the status of the property applied to be forfeited.

On a side note, the court noted that under what circumstances a Public Prosecution must convict a person under AMLA before their property and be confiscated and forfeited by them. In its judgement, the court noted that this applies if the Public Prosecution is relying on section 55 (which the court dubbed as the criminal forfeiture provision) of the Act, which states that if a person is charged under Section 55 of the Act, the Public prosecutor can only confiscate and forfeit the properties involved in money laundering after securing a conviction against a person. 

In conclusion, it really depends on which section of the Act is the Public Prosecutor instituting against a person. If it’s section 56, then the answer would be in the negative i.e. a person need not be convicted before his property is seized. However, if it’s section 55, then yes, a person needs to be convicted before his property is seized.