• New bill expected to be gazetted in four months

Sri Lanka is on the brink of a major overhaul to its legal system with the proposal of a new bill on stolen asset recovery. 

The proposed legislation is aimed at combating economic crimes and addressing the issue of proceeds of crime in the country. 

The bill is currently being studied by a committee consisting of legal experts, officials from the Police Department, and representatives from the Ministry of Justice.

Justice Ministry Secretary Wasantha Perera said that the committee was headed by Supreme Court Judge Yasantha Kodagoda, along with several experts from the Ministry of Justice, lawyers, and officials from the Legal Draftsman’s Department and the Police Department. “The committee will be undertaking a comprehensive study of the matter and speaking to various stakeholders. There are donors who have informed us of their willingness to support and give technical assistance,” she shared. 

She said the ministry hoped to have the bill gazetted within four months.

“We have to first get policy approval from the Cabinet to bring in this new law and for that we have to prepare a concept paper and translate it into all three languages. This will take about a month. After approval, the bill will be formulated and sent to the Legal Draftsman’s Department for it to be officially drafted, following which it will be sent to the Attorney General’s Department for the constitutionality certificate. This will take another two months or so. Ultimately, it will take about four months for the bill to be gazetted,” she explained.

Deliberations ongoing

Former Director General of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) Sarath Jayamanne, PC who is also a part of the drafting committee, stated that the committee was currently deliberating on various aspects of the proposed bill and that it was yet to be officially named. 

“The proposed legislation deals with matters such as proceeds of crime and the recovery of stolen assets,” he said. 

Jayamanne explained that proceeds of crime could sometimes lead to criminal convictions, but in some countries, they opted for non-conviction based forfeiture. 

He elaborated: “This system is much easier because then the burden is not to prove beyond reasonable doubt; it is called civil forfeiture, where instead of going after a particular person or needing to have a conviction, the authorities can go after the property. If the property is illicitly obtained, then it can be confiscated.” 

Purpose and advantages of proposed law

According to Transparency International Sri Lanka (TISL) Deputy Executive Director Sankhitha Gunaratne, there is already a framework in place for the repatriation and management of assets. This framework was created by a multi-stakeholder group, including TISL, the Bar Association of Sri Lanka, and CIABOC, with expert assistance from the World Bank’s Stolen Asset Recovery Initiative.

“The purpose of the proposed law is to ensure that criminals are deprived of their ill-gained assets or proceeds of crime, to compensate victims of crime, to address economic crimes, and to set up an authority that would manage assets if recovered. Additionally, the proposed law would ensure law enforcement coordination in carrying out these kinds of investigations and provide new powers for law enforcement authorities, including for aspects of unexplained wealth orders and non-conviction based asset recoveries,” Gunaratne stated. 

Gunaratne explained that unexplained wealth orders were where law enforcement found that a person had assets beyond what could be explained and there was suspicion that there had been illegal activity leading to this unexplained wealth. 

“Ideally, they can subject such wealth to judicial review and require an explanation of such unexplained wealth. A non-conviction based asset recovery system is where the authorities can proceed or file a case against the property that is suspected of being proceeds of crime instead of pursuing the person.”

Gunaratne added that the advantage of this system was that even when it was not possible to link a person to an asset that was the proceeds of crime, one could still proceed against that property. Secondly, it did not need to be proven up to a standard of beyond reasonable doubt. 

“You can prove it on a preponderance of probability and confiscate such assets before a court of law,” he said.

The law abroad  

Gunaratne noted that the UK’s High Court could issue an unexplained wealth order only if the judge was satisfied that the person in question was likely an owner of suspicious wealth beyond their means and if all the following tests were met: the respondent was a politically exposed person or there were reasonable grounds to suspect that the respondent was or had been involved in serious crime, and the respondent’s known profession was insufficient to obtain the asset. 

In the UK, the value of the asset is greater than £ 50,000. Sri Lanka can also look to Nigeria’s recently passed Proceeds of Crime Act as an example. Gunaratne and other legal experts are currently studying how other countries have approached the issue of proceeds of crime.