A key component of achieving true justice in corruption related matters is ensuring that individuals and corporations do not profit from their unlawful activities. South African law provides for the seizure of proceeds of unlawful or criminal activity.
In the judgment of Bobroff and Another v National Director of Public Prosecutions, the Supreme Court of Appeal ("SCA") had to decide whether the Pretoria High Court had jurisdiction to grant a forfeiture order in terms of the Prevention of Organised Crime Act, 1998 ("POCA") in respect of property situated outside of South Africa and belonging to persons who were resident in a foreign jurisdiction. The SCA held that POCA allowed the High Court to grant a forfeiture order in respect of the proceeds of crime irrespective of where it may be held.
There has been a number of orders granted in terms of POCA in cases involving high profile individuals in an attempt to stop corrupt individuals and companies from profiting from unlawful activities. This article provides an overview of the seizure of property obtained from unlawful or criminal activity.
Assets can only be seized once a High Court order has been obtained. Asset forfeiture proceedings are civil in nature and instituted in terms of POCA. POCA provides for the following types of orders:
- Restraint order
- Confiscation order
- Preservation order
- Forfeiture order
Restraint and confiscation orders are dependent on the prosecution and conviction of the accused. In order to obtain a restraint or confiscation order, the court must be satisfied that the accused benefited from their offence and the amount of the benefit must be established.
In terms of a restraint order, an accused's property can be seized or restrained before their conviction in order to ensure that the property is available at a later stage to satisfy a confiscation order that may be made if the accused is convicted.
Preservation and forfeiture orders do not depend on prosecution. However, some evidence of criminal activity is required and it has to be proved that the property is the proceeds of crime and/or an instrumentality of an offence.
When determining whether to grant a preservation order, a court will consider, among others, if there is a close enough link between the property and its criminal use to render it an instrumentality of the alleged offence.
Section 48 of POCA governs the forfeiture of assets under a preservation order. It provides, that if a preservation order is in force, an application can be made to a High Court for an order forfeiting to the State, all or any of the property that is subject to the preservation order.
Where the High Court makes a preservation of property order, the National Director must, as soon as possible, give notice of the order to all persons known to have an interest in the property and publish the order in the Government Gazette.
Section 39(3) of POCA provides that any person who has an interest in the property, which is subject to a preservation order, may apply for an order excluding their interest in the property concerned from the operation of the preservation order. Our courts have also held that "interest" is widely defined in POCA as "including any right" and this will, for example, allow a bank to maintain its rights in respect of the property, if it holds such property as security for a loan, that still needs to be repaid to the bank.
Our law enforcement agencies have options available to ensure that those involved in unlawful activities do not enjoy the profits of their unlawful conduct.
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.