Court Satisfaction: The Burden of Proving Legitimate Wealth

In a significant development, the court has emphasized that the burden of proving that wealth is lawfully obtained lies with the respondent or individual against whom an order is sought.

The New Approach

According to sources, this means that individuals whose assets are subject to scrutiny will need to provide satisfactory explanations for how they acquired their wealth. For example:

• A middle-ranking civil servant who owns a $1 million house and a Rolls Royce on a yearly salary of $30,000 would be required to demonstrate that the assets were obtained through legitimate sources such as an inheritance or remitted funds from family overseas.

If the explanation is deemed unsatisfactory, the court can then make an order declaring that the assets are unexplained wealth and therefore forfeited to the State. This move aims to remove the benefit of crime and deter potential money launderers.

Detection is Key

Detection is a vital component of any successful anti-money laundering regime. It can occur at various stages of money laundering activity, including:

• Placement: The initial act of placing illegal funds into the financial system.
• Layering: The process of disguising the source of the funds through complex transactions and accounts.
• Integration: The final stage where the laundered funds are integrated into the legitimate economy.

In Fiji, cases have shown that once money has reached the final stage of integration into the system, there is little chance of recovering the proceeds of crime as they become virtually untraceable.

Advances in Technology

With advances in technology, there has been a shift away from fraudulent cheques to internet hacking frauds. This means that by the time fraud is detected, the money is often long gone.

Obligations and Due Diligence

Bankers, wire transfer dealers, foreign exchange dealers, and accountants must have a clear understanding of their obligations under the Financial Transactions Reporting Act and exercise due diligence to prevent money laundering. Early detection is crucial for recovering stolen funds and preventing perpetrators from leaving the jurisdiction.

A Call to Action

Companies and directors must be aware of the law and appreciate that their company can fall victim to money launderers without proper supervision. Implementing proper controls and scrutinizing transactions carefully can help maintain business integrity.

As members of the public, it is essential to remain vigilant against sophisticated scams that trick people into acting as money mules. By being aware of these schemes and exercising caution, we can prevent ourselves from becoming unwitting accomplices in money laundering activities.