Prosecutors and law enforcement agencies in the Cayman Islands have access to a range of investigative tools under the Proceeds of Crime Act (2020 Revision) (“POCA”), Part VI.
Such powers include production orders, search and seizure warrants, disclosure orders, customer information orders and account monitoring orders.
This short guide, which forms part of McGrath Tonner's financial crime and anti-money laundering series, focusses on account monitoring orders.
Account monitoring orders
Law enforcement in the Cayman Islands can apply to the Grand Court for an account monitoring order under sections 173 - 178 of POCA in support of three types of investigation:
- a criminal money laundering investigation;
- a confiscation investigation; and/or
- a civil recovery investigation
(section 146 and 173).
Before granting an account monitoring order, a Grand Court judge must be satisfied that the following requirements are fulfilled (section 174):
- in the case of a confiscation investigation, there are reasonable grounds for suspecting that the person specified in the application has benefitted from that person's criminal conduct;
- in the case of a civil recovery investigation, there are
reasonable grounds for suspecting that:
- the property specified in the application is recoverable property or associated property; and
- the person specified in the application holds all or some of the property;
- in the case of a money laundering investigation, there are reasonable grounds for suspecting that the person specified in the application has committed a money laundering offence;
- in the case of any investigation, there are reasonable grounds for believing that account information which may be provided in compliance with the order is likely to be of substantial value (whether or not by itself) to the investigation for the purposes of which the order is sought; or
- in the case of any investigation, there are reasonable grounds for believing that it is in the public interest for the account information to be provided having regard to the benefit likely to accrue to the investigation if the information is obtained.
An account monitoring order may be made for a duration of not more than 90 days (section 173 (6)).
As a general rule, account monitoring orders cannot be used as evidence against the providing financial institution in criminal proceedings (section 175) however there are certain statutory exceptions.
An application for an account monitoring order may be made ex parte to a judge in chambers (section 176). The officer making the application will normally be assisted by a prosecution advocate from the Office of the Director of Public Prosecutions.
In contrast to the English Criminal Procedure Rules, the Cayman Islands Criminal Procedure Rules do not contain guidance on the process by which an application may be made or resisted. Some practical assistance may be derived by referring to the English CPR 47.22 and the Code of Practice Issued Under the Proceeds of Crime Act 2002. There is also a body of local and English case law governing such applications however such detail is beyond the scope of this note.
Any application to discharge or vary the account monitoring order may be made to the court by the person who applied for the order or by any person affected by the order (section 178(2)).
Therefore, there exists an opportunity for an affected person to apply to court for relief prior to, or after, the implementation of the account monitoring order. Challenges to the order may be brought, inter alia, on procedural grounds (failure of the applicant to comply with its duty of full and frank disclosure at the ex parte hearing), in relation to the limits of the court's powers (for example, jurisdictional issues) and/or on the merits (challenging the existence of “reasonable grounds”).
It is important to note that it is a criminal offence to interfere with, or permit interference with, a confiscation investigation, money laundering investigation or civil recovery investigation. Offenders are liable upon conviction on indictment to imprisonment for a term of five years or to a fine, or to both.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.