Sunday Times 2
Drug trafficking: A case for confiscation of assets
Throughout last year and also in the first month of this year, large quantities of heroin and cocaine were detected by the Police Narcotics Bureau in a coordinated exercise involving the Special Task Force, the Sri Lanka Navy and other law enforcement agencies.
Several people, including foreigners, have been arrested, questioned and remanded for further judicial proceedings. Usually, during investigations, the names of several well-known drug financiers and drug smugglers emerge. Most of those named by the suspects are said to be operating from foreign countries. Some are carrying out their drug business while in prison. Those who are operating from overseas are known to law enforcement agencies, especially the PNB. None of these drug kingpins has been indicted in courts for their ties with those who have been arrested for drug-related offences.
The financiers
These drug kingpins have their families, properties and assets in Sri Lanka, though some of their properties may have been transferred to their kith and kin. They also have several bank accounts. Money is withdrawn and transferred to friends or relatives.
According to a recent news item, a fugitive former diplomat is said to have had deposited money to the tune of several millions in local bank accounts operated in the names of his brothers and sisters. It was reported that large sums of money had been transferred out of Sri Lanka to an account in Dubai. Similarly, notorious drug traffickers who have amassed wealth may have transferred their wealth out of the country to some of their friends or relatives living overseas.
Assets
It is laudable that the IGP has instructed the CID to probe how the main drug dealer in the Beruwela heroin detection case amassed his wealth. It may be recalled that the PNB, with the help of the Navy, STF and foreign intelligence agencies, was able to detect a large quantity of heroin in the sea off Beruwela. The boat in which the narcotics were found belonged to a Sri Lankan. The boat owner being a wealthy person, the Police Chief’s instruction to the CID to probe how he had earned his money is in order.
Offence of money laundering
Narcotic drug deals are connected to money laundering: Any person who engages directly or indirectly in any transaction in relation to any property which is derived or realised directly or indirectly from any unlawful activity or from the profits of any unlawful activity, receives, possesses, conceals, disposes of, or brings into Sri Lanka, transfers out of Sri Lanka, or invests in Sri Lanka, any property which is derived or realised, directly or indirectly, from any unlawful activity or from the proceeds of any unlawful activity, knowing or having reason to believe that such property is derived or realised, directly or indirectly from any unlawful activity or from the proceeds of any unlawful activity, shall be guilty of the offence of money laundering.
Money Laundering Act
In 2006, Parliament passed the “Prevention of Money Laundering – Act No.5 Of 2006” to prohibit money laundering; to take necessary measures to combat and prevent money laundering; and to provide for matters connected therewith or incidental thereto.
In this Act, in part II under the sub heading “Freezing and Forfeiture of Assets in relation to the Offence of Money Laundering” Section 7 (1) says: “A Police Officer not below the rank of Superintendent of Police or in the absence of such an Officer an Assistant Superintendent of Police may, where there are reasonable grounds to believe that any person is involved in any activity relating to the offence of money laundering and it is necessary for preventing further acts being committed in relation to such offence, issue an order (hereinafter referred to as a “Freezing Order” ), prohibiting any transaction in relation to any account, property or investment which may have been used or which may be intended to be used in connection with such offence.
The Freezing Order obtained under subsection (1) shall be issued on –
The person who is believed to be involved in the prohibited activity; and
On any other person or institution who or which may be required to give effect to such Order.”
Having made the initial Freezing Order, the SP, or the ASP is expected to go before the High Court within seven days of this Order, and make an application to the High Court seeking confirmation of the Freezing Order. This Freezing Order by the courts will be in force for about one year, allowing the Police to file indictment against the suspect for the offence of money laundering in respect of the bank account, property or investment which is subject to the Freezing Order.
Investigations into the offence of money laundering are a complicated and intricate process where the Investigating Officers should be well trained and knowledgeable in tracing the assets to prove that the properties and wealth acquired and in possession of the offender had not been acquired by earnings from a legitimate business but by illegal activities or drug trafficking. Though this is a complicated and intricate process, police officers trained probing the assets, the ncome and the expenditure of a particular person could easily come to the conclusion that the wealth has been acquired by drug trafficking, if they examine the suspects’ bank accounts and the value of their moveable and immoveable properties.
To indict the suspects and obtain a court order to seize their properties frozen by the Freezing Order, the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) and the Inland Revenue Department, too, can help the investigators in providing information, especially during the one year period of freezing of assets.
Hit them where it hurts
Financiers and smugglers of dangerous drugs are elusive and do not easily come out into the open in the drug trafficking operation. Most of the people who are arrested are the users, the peddlers and the intermediaries. To rope in the financiers and smugglers, the only tool available to the Police is to freeze and subsequently through the court seize the properties of such well noted persons whose income has been accrued by illegal activities such as drug trafficking. Let the Police establish a unit and equip it with well-trained investigators to go after those who are conducting the smuggling activities either from abroad or from our prisons.
(The writer is a retired Deputy Inspector General of Police.)