Probe reveals criminally acquired overseas assets of politicians, officials

When more proof is obtained, investigators say they will move for the confiscation of such assets

By Namini Wijedasa-Sunday, December 31, 2017

Some assets located overseas have been “provisionally identified” as being the proceeds of crimes committed by certain politically exposed persons (PEPs) of Sri Lankan origin, authoritative Government sources revealed this week. While they declined to say who these persons were, PEPs typically include politicians and bureaucrats.

These were the outcomes of investigations conducted by the CIABOC (Commission to Investigate Allegations of Bribery or Corruption), the FCID (Financial Crimes Investigation Division) and the CID (Criminal Investigation Department), they said. “As at this moment, a few assets have been provisionally identified as proceeds of crime committed by certain politically exposed persons (PEP) of Sri Lankan origin.”

In financial regulations, PEP describes someone entrusted with a prominent public function. They generally present a higher risk for potential involvement in bribery and corruption by virtue of their position and the influence that they may hold.

“We are working with local and overseas law enforcement agencies to develop proof of the committing of such predicate offences and proceeds of such crimes having being used to acquire these assets,” the sources said. A predicate offence is the criminal activity from which proceeds of a crime are derived. They are generally crimes underlying money laundering or terrorist finance activity.

“Once that is established, we can move for seizure and confiscation of such assets in terms of the laws of those countries,” they asserted. “If and when that happens, applications can be made to have the value of such assets returned to Sri Lanka. It’s a long drawn process.”

And it will be complex and time-consuming, the sources warned. “We are also saddled with a total lack of cooperation from the UAE,” they said. “We also have a lack of expertise at local investigation level and other resource constraints.”

“If assets are found overseas and we can track them back to individuals in Colombo, that will be valuable evidence to prosecute them for the predicate offence of corruption or for money laundering, which generally covers dealing in any manner with proceeds of crime and those derived out of such proceeds,” they explained.

Investigators have relied heavily on the Mutual Legal Assistance in Criminal Matters Act of 2005 as the basic domestic legal tool and the United Nations Convention against Corruption as the international legal instrument. “Political niceties between governments have also helped tremendously,” an informed source said.

Matters relating to proceeds of crime located overseas are coordinated with foreign law enforcement authorities by the Presidential Task Force for the Recovery of Stolen State Assets (START) of which the Executive Secretary is Additional Solicitor General Yasantha Kodagoda and Chairman is J.C. Weliamuna, PC. The Task Force includes the heads of the CIABOC, the FCID, the CID, the Financial Intelligence Unit, Customs and several Secretaries. It was established through a Cabinet decision in April 2015.

Meanwhile, a draft Proceeds of Crime Act is still being drawn up. “We are looking at both confiscation following conviction as well as non-conviction based seizure and confiscation schemes,” a senior legal source said. Domestic prosecutions for predicate offences committed in Sri Lanka will be in terms of existing law relating to bribery and corruption, Penal Code offences such as criminal breach of trust and cheating and the offence of money laundering.

“But the Proceeds of Crime Act, once enacted, will be used prospectively with regards to any proceeds found from the time the Act comes into operation,” the source said. “But it could relate to proceeds of predicate offences committed at any point of time, including in the past.”
Non-conviction based asset confiscation and conviction based (criminal) confiscation share the same objective of confiscation by the State of the proceeds and instrumentalities of crime, explains a Transparency International project. The main distinction between them is that criminal confiscation requires a criminal trial and conviction where non-conviction based asset confiscation does not.

Amendments to the CIABOC Act are also pending. A fundamental change that has been proposed is to widen the prosecutorial ambit of the Commission so that it can launch prosecutions into cases of money laundering where the predicate offence is bribery or corruption; and to also be able to prosecute for ancillary offences to bribery and corruption such as forgery, tendering forged documents and genuine ones, falsification of accounts, etc. The CIABOC Act has not been amended since its introduction in 1994.