Describe the legal framework in relation to confiscation of the proceeds of crime, including how the benefit figure is calculated.
The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (the CDSA) provides for the confiscation of benefits derived from, and to combat, corruption, drug dealing and other serious crimes and for purposes connected herewith.
Under sections 6(1) and 7(1) of the CDSA, the court must, on the application of the Public Prosecutor, make a confiscation order against the defendant in respect of benefits derived by the defendant from ‘drug dealing offences’ or ‘serious offences’ if the court is satisfied that those benefits have been so derived.
The full lists of drug dealing offences and serious offences may be found in the First and Second Schedules of the CDSA respectively.
Pursuant to sections 10(1) and 11(1) of the CDSA, the benefits of drug dealing offences or serious offences are defined as:
any property (including income accruing from the property or interest) held by the [defendant] at any time. . . being property or interest disproportionate to the person’s known sources of income and the holding of which cannot be explained to the satisfaction of the court.
There is a similar regime for the confiscation of benefits of ‘organised crime activity’, which is defined in section 48 of the Organised Crimes Act 2015 (the Organised Crime Act). The framework for the confiscation of benefits derived from ‘organised crime activity’ is set out in sections 61 to 64 of the Organised Crime Act.
Criminal asset recovery – confiscation
Secondary proceeds
Is confiscation of secondary proceeds possible?
Yes. Section 22 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (the CDSA) provides that a court making a confiscation order has broad powers to make orders for the realisation of property for the satisfaction of the amount ordered to be confiscated under the confiscation order. As defined in section 2 of the CDSA, ‘realisable property’ includes ‘any property’ held by the defendant or any person to whom the defendant has, directly or indirectly, made a gift caught by sections 15(7) and 15(8) of the CDSA.
As there is not even a requirement that realisation can only be limited to primary or secondary proceeds of crime, it follows that confiscation of secondary proceeds is possible.
Third-party ownership
Is it possible to confiscate property acquired by a third party or close relatives?
Yes.
Expenses
Can the costs of tracing and confiscating assets be recovered by a relevant state agency?
With respect to costs of instituting proceedings under the CDSA for confiscation orders, these are ordinary civil proceedings and the courts may order costs against any party in the normal way (Centillion Environment & Recycling Ltd (formerly known as Citiraya Industries Ltd) v Public Prosecutor and others and another appeal [2012] SGCA 65 at paragraph 72).
There is no statutory provision that empowers an agency to recover the costs of tracing and confiscating assets.
Value-based confiscation
Is value-based confiscation allowed? If yes, how is the value assessment made?
Yes. Under section 2 of the CDSA, ‘realisable property’ (that is to say, property that pursuant to section 22 of the CDSA can be ordered to be realised for purposes of satisfying a confiscation order) comprises ‘any’ property held by the defendant, or ‘any’ property held by a person to whom the defendant has, directly or indirectly, made a gift caught by sections 15(6) and (7) of the CDSA. There is no requirement that ‘realisable property’ can only comprise the traceable proceeds of a crime.
Section 11(1) of the CDSA sets out the way in which the court must assess the value of the benefits that are derived from the relevant criminal conduct.
The High Court case of Public Prosecutor v Abdul Kahar bin Othman [2021] SGHC 23 provides a useful illustration of how this assessment is made.
Burden of proof
On whom is the burden of proof in a procedure to confiscate the proceeds of crime? Can the burden be reversed?
Under section 11(1)(a), the burden is on the Public Prosecutor, in the first instance, to show that the defendant held property or interest in property that is ‘disproportionate to the person’s known sources of income’.
If this is established, the burden shifts to the defendant to explain why he or she held such property or interest in property, ‘to the satisfaction of the court’.
Using confiscated property to settle claims
May confiscated property be used in satisfaction of civil claims for damages or compensation from a claim arising from the conviction?
No. Property, once confiscated, is forfeited to the state.
possible for a potential defendant to an application for a confiscation order to enter into negotiations with the Public Prosecutor, with a view to an amicably agreed disposition of benefits of criminal conduct that does not involve confiscation orders.
Under section 64 of the Organised Crime Act, the Public Prosecutor may enter into a formal settlement with any person as to any property or sum to be confiscated under that Act.
Confiscation of profits
Is it possible to recover the financial advantage or profit obtained through the commission of criminal offences?
Yes. Section 10(1) of the CDSA and section 62(2)(a) of the Organised Crime Act both provide that the benefits derived from relevant criminal conduct are to be assessed by reference to ‘any property or interest in any property (including income accruing from the property or interest)’.
The courts have interpreted the term ‘property or interest in any property’ broadly, to include moneys standing to the defendant’s credit in bank accounts (see, eg, Public Prosecutor v Abdul Kahar bin Othman [2021] SGHC 23 at paragraph 13(b)).
Non-conviction based forfeiture
Can the proceeds of crime be confiscated without a conviction? Describe how the system works and any legal challenges to in rem confiscation.
Yes. Sections 29 and 30 of the CDSA provide the framework for confiscation of benefits of criminal conduct, where a person has ‘absconded’.
Under section 31 of the CDSA, where a person subject to CDSA confiscation proceedings has died, the deceased person’s personal representatives or his or her estate’s beneficiaries would have the opportunity to contest those proceedings.
Under section 16 of the CDSA, a person who asserts an interest in property that is the subject of a confiscation order may apply to be heard by the court. Section 16(4) of the CDSA allows such an application to be made even after a confiscation order has been made.
Management of assets
After the seizure of the assets, how are they managed, and by whom? How does the managing authority deal with the hidden cost of management of the assets? Can the assets be utilised by the managing authority or a government agency as their own?
This section deals with assets seized pursuant to the police’s power of investigation under section 35 of the Criminal Procedure Code 2010 (the CPC).
The police normally take custody of physical things such as drug exhibits, electronic devices, cash or personal belongings.
With respect to moneys in bank accounts or shares in custodian accounts, the police normally issue an order, pursuant to section 35(2) of the CPC, prohibiting the relevant financial institution or relevant holder from allowing any dealings in such moneys.
With respect to real property, the police normally issue an order, pursuant to section 35(1) of the CPC, prohibiting the registered holder of the property from dealing with the property. The police will also cause to be lodged a caveat on the land titles registry against the property, such that any attempted dealing in the property (such as the entry of another conflicting caveat) would be notified to the police.
Where the police issue a disposal prohibiting order rather than seizing physical things, the costs of managing the asset remain with the holder of the asset.
Assets subject to a section 35 CPC seizure cannot simply be used by the government agency as their own.
Authors:Sophia Ng and Suang Wijaya