The case regarding Philip De Figueiredo and the application by the Australian authorities to have him extradited to Australia has brought Jersey's Law on Extradition to the fore. De Figueiredo is fighting against the application of the Australian government to extradite him to Australia for offences allegedly committed against the tax authorities there. He has never been to Australia. All of the activities he undertook were from Switzerland. He was arrested in Jersey whilst on holiday. What the case shows is that those working in offshore financial centres must be extraordinarily careful to ensure that their activities cannot be construed as crimes against foreign tax authorities. A great many jurisdictions in this day and age will accept jurisdiction in their criminal courts if the effect of a person's conduct is felt within their borders. This includes Jersey which has become more pro-active in bringing foreign defendants whose actions have caused crimes in Jersey to the island to face trial.
The Jersey law on extradition is contained within the Extradition (Jersey) Law 2004 ("the Law") which is closely modelled on the English Extradition Act 2003. The Law is based on judicial surrender between States and mutual respect between democratic countries.
Under the Law a person can be extradited to a 'designated territory' i.e. a territory listed within the Schedule to the Law, in respect of alleged criminal conduct which occurred whether in a designated territory, Jersey or elsewhere. Designated territories are separated into two different categories under the Law:
- Schedule 1, Part 1 includes Australia, Russia, the USA, Hong Kong and most European countries.
- Schedule 1, Part 2 includes Mauritius, Monaco, Panama and Singapore. The key point is that for the Part 1 countries there will be no opportunity for the Jersey Court to test the evidence in Jersey or even see that evidence.
It should be noted that Jersey has not followed the UK exactly in its choice of category 1 and category 2 territories. The Russian Federation for example is only contained as a category 2 territory under the Extradition Act 2003 but is a category 1 territory under the Law.
Extradition hearings in Jersey are heard before a Magistrate and it is not permissible for the Magistrate to consider whether there is a case against a person requested by a category 1 territory. What this means is that all the Magistrate has is a description of the facts of the offence and the offending. This is usually set out in a statement or affidavit from a prosecution lawyer or policeman. The Magistrate does not actually get to even read any of the supporting evidence. The Magistrate only needs to be satisfied that an extradition request contains admissible evidence of the offence sufficient to establish a prima facie case against the person in respect of category 2 territories.
The fact that the Magistrate does not actually have the opportunity to consider the evidence as regards Schedule 1 territories is important and of concern. As well as the jurisdictions set out above Azerbaijan, Moldova and Ukraine are on the list of territories. How the Azerbaijan authorities, for example, might view aggressive offshore tax structuring is not certain.
A requested person can argue that their extradition is barred for the following reasons:
- The rule against double jeopardy i.e. the rule that a person cannot be prosecuted twice for the same offence.
- The extradition request is made for the purpose of prosecuting or punishing the person on account of the person's race, religion, nationality, ethnic origin, gender, sexual orientation or political opinions.
- If extradited the person might be prejudiced at trial, punished, detained or restricted on account of any of the reasons listed above. In the UK, a number of extradition requests from the Russian Federation have been defeated because the court has held that extradition is sought on the basis of political opinion and that the requested person will not receive a fair trial once extradited due to those opinions.
- It would be unjust or oppressive to extradite a person because of the passage of time since the extradition offence was allegedly committed.
- Hostage taking considerations.
De Figueiredo v Commonwealth of Australia
The Australian Federal Government is seeking the extradition of Jersey resident and chartered accountant, Mr Philip De Figueiredo, to face criminal prosecution in Australia. Mr De Figueiredo was employed by Strachans SA, an accountancy firm originally based in Jersey, but which subsequently relocated to Geneva. The alleged offences were committed from Switzerland but involved allegations of abuse of the Australian tax system. Mr De Figueiredo has been investigated by the Australian Taxation Office, Australian Federal Police and the Crime Commission as part of an investigation known as Operation Wickenby.
The Magistrate's Court ruled in November 2009 that all legal requirements for extradition had been satisfied and there was no legal bar to Mr De Figueiredo's extradition. On 23 December 2009 the Attorney General made an Order for extradition. Mr De Figueiredo appealed to the Royal Court against both decisions. He alleged that the Magistrate was wrong in holding that; (i) the conduct for which extradition was requested amounted to an extradition offence under the Law; (ii) it was not unjust or oppressive to extradite him; and (iii) the extradition was compatible with his ECHR rights.
The Royal Court dismissed Mr De Figueiredo's first ground of appeal finding that the Magistrate was correct in ruling that Mr De Figueiredo's conduct did amount to an extradition offence under the Law. For conduct to constitute an extradition offence under the Law it must occur in the designated territory i.e. Australia in this case. The Royal Court held that the conduct did take place in Australia irrespective of the fact that Mr De Figueiredo had never been there. The effect of his conduct was intentionally felt in Australia and some conduct actually did take place there i.e. the use of ATM cards to access repatriated monies.
An extradition offence must also constitute an offence under the laws of both Jersey and the designated territory punishable by at least 12 months imprisonment i.e. there must be dual criminality. There was dual criminality in this case as the alleged offences carried a punishment of at least 12 months in prison in both Jersey and Australia.
Mr De Figueiredo's second ground for appeal was rejected by the Royal Court as the Jurats held that it was not unjust or oppressive to extradite Mr De Figueiredo by reason of the passage of time since the extradition offences were allegedly committed by him.
Mr De Figueiredo's third ground of appeal that the extradition was incompatible with his ECHR rights to a fair trial and family life was also rejected by the Royal Court. The Royal Court agreed with the Magistrate that a fair trial is at the heart of the Australian judicial system and the right to a fair trial is a fundamental pillar upon which the Australian Criminal Justice system is based. It was also held that although his wife had various health problems and a fear of flying that would prevent her from visiting her husband in Australia this did not result in extradition being an unjustified or disproportionate interference with the right to respect for family life. The Royal Court were unable to say that the interference with family life will be exceptional or of the gravest effect or that this could be considered as the rarest of cases. A more exotic Jersey customary remedy called dolleance has been tried and failed.
The case of Mr Philip De Figueiredo and recent English case law has shown that extradition requests and orders, particularly from category 1 territories, are extremely difficult to challenge. Jersey businesses should be acutely aware that the international transactions they undertake may be deemed to be intentionally felt in one or more of the 112 territories able to seek extradition under the Law. All entities administered in Jersey or carrying out business within the island should ensure that their risk monitoring and compliance procedures are fully equipped to deal with the potential repercussions of the Law. It is very easy to say that a person should not commit crimes. It is equally easy to advise that a person should not become involved in systems which involve the evasion of tax. The area of risk comes when offshore structures are used to mitigate tax and overseas revenue authorities come to look closely at them.
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