[2022] KEHC 11829 (KLR)

Asset Recovery Agency v Bala (Anti-Corruption and Economic Crimes Civil Suit E005 of 2021) [2022] KEHC 11829 (KLR) (Commercial and Tax) (21 July 2022) (Judgment)

Neutral citation: [2022] KEHC 11829 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Anti-Corruption and Economic Crimes Civil Suit E005 of 2021

EN Maina, J

July 21, 2022

Between

Asset Recovery Agency

Applicant

and

Muazu Bala

Respondent

Judgment

1. By its Originating Motion dated March 16, 2021, the Assets Recovery Agency seeks forfeiture orders in respect of the following statutory instruments: -i.Usd 880,000 (eight Hundred And Eighty Thousand Us Dollars)ii.60,000 Euros (sixty Thousand Euros)The said funds are the subject of a preservation order issued by this court on December 8, 2020 in ACEC Misc Appln No E035 of 2020.

2. The application is premised on the grounds on its face, the supporting affidavit and further affidavit of the Applicant’s Investigating Officer S/SGT Fredrick Muriuki, sworn on March 16, 2021 and January 25, 2022 respectively. The gist of the affidavits is that the Respondent, a holder of Nigerian passport no A50562915 who had disembarked from a Kenya airways Flight No KQ 535 from Lagos Nigeria was intercepted at the central screen area within Jomo Kenyatta International Airport while on transit to Dubai via Kenya Airways flight no KQ 310. That he was found with hand luggage containing 880000 USD, 60000 USD and 63000 Naira in cash; translating to approximately Kshs 100,000,000. Upon enquiry as to the purpose of carrying so much money the respondent allegedly stated that the cash was his and that he was heading to Dubai for business. The applicant deemed that response suspicious as there are financial systems, institutions and/or licensed couriers in both the Federal Republic of Nigeria and the United Arab Emirates through which the respondent could transfer money. Moreover, at the time of the Respondent’s interception, he did not avail proof of a declaration of the cash from Nigeria, the country of origin nor did the documentation he had in his possession support the source, purpose or movement of the monies.

3. According to the Applicant two interviews were conducted to ascertain the above. The first being with the Respondent on December 4, 2020 in which he stated that the monies were given to him by unnamed persons to buy gold, memory cards and mobile phones; that the monies belonged to his boss in Dubai, one Alhaji who carries cash because the dollar exchange is high in Dubai; that he had declared the money in Nigeria and was not given a receipt but the same was only captured in the system and interestingly, he could not remember his boss’s mobile number. According to the Applicant the second interviewee, one Nwachukwu Chikezie Augustine, on the other hand stated that he works with Abyad Global Venture Jewellery at Ikeja Lagos State and that the money belonged to their boss, one Alhaj-Lawal Awulu who was in Dubai at the time. He stated that the Respondent was just a carrier for the money.

4. The deponent stated that on December 11, 2020, Kenya Airways surrendered custody of the seized money to the Central Bank of Kenya in the presence of the Respondent’s legal representative. He stated that the documents relied on by the Respondent namely custom clearance forms, his passport, currency declaration acknowledgement from Dubai as well as a declaration letter from Shah Jewellery Trading LLC were suspicious and that they could have been manufactured as an afterthought reason being that they are digital images that do not conform to Section 78A (3) of the Evidence Act. The deponent contended that the manner in which the integrity of the documents was maintained and the manner in which the originator of the images was identified was not reliable.

5. The Agency maintained that the purported declaration that the Respondent was coming from Nairobi and not Nigeria while he was in fact coming from Nigeria was a scheme designed to deceive and reduce queries from Dubai authorities in an effort to conceal or disguise the source, location and movement of the funds as Nigeria is ranked higher than Kenya internationally in respect of money laundering and illicit financing. The deponent described as illegible the purported customs declaration in which the Respondent declared that he was heading to Dubai and that the forex had been obtained from “Zenith or Zurich” bank.

6. The Agency further contended that it is an offence under Sections 3, 4, 7, 12 and 16 of the Proceeds of Crime and Anti-money Laundering Act for a person to convey a monetary instrument in excess of 10,000 USD and that Sections 12(3) and (4); 82 and 90 of the Act empower this court to forfeit any monetary instrument which is reasonably suspected to be tainted property.

The Response 7. In his replying affidavit sworn on May 17, 2022, the respondent vehemently opposed the Agency’s application and dismissed the same as being full of innuendos, unsupported by cogent evidence and based on hearsay so as to justify the Respondent’s actions against his person. The respondent averred that the investigations in respect of his passport yielded nothing suspicious on his travel history and contended that the money in question which he genuinely transacted in Nigerian banks is his property. He emphasized that there is no law that bars an individual from carrying money in cash as long as it is declared at the points of entry and exit. That the mode of transmitting cash is an individual’s choice based on convenience.

8. The deponent stated that he declared the subject funds at Murtala Muhammed International Airport in Nigeria and that he availed documentation demonstrating the same to the requisite authorities when he was intercepted. He avers that he presented a Customs Clearance from Lagos, Currency-Declaration Acknowledgement from Dubai and a letter from Shah Jewellery Trading LLC. The respondent decried the Agency’s failure to confirm from Lagos whether the documents he presented were genuine or not; that the Agency’s allegation that he did not produce the documents is false given that they have described the forms as “illegible” in their Affidavit in support of the application. The Respondent denied participating in any interview and contended that the purported transcripts presented by the Agency do not meet the threshold of a confession nor is there any evidence demonstrating that he participated in any interview process.

9. The Respondent deposed further that from the record at the Chief Magistrate’s Court at Jomo Kenyatta International Airport it is evident that the authorities were intent on letting him go immediately and were not interested in getting any clarification from him on the source and destination of the money in question. That the Agency has not established any link between the seized funds and money laundering with averments thereto being mere allegations and baseless suspicion. With regard to the second interviewee the Respondent states that the interview is hearsay. He stated that he was in Nairobi for a connecting flight hence there is nothing irregular in the declaration letter stating that he was coming from Nairobi, Kenya where he was to board his connecting flight.

10. The respondent asserted that there being no reasonable grounds that the seized funds were to be used in the commission of a crime, and no offence having been disclosed the Agency’s case does not meet the threshold set out in Sections 81, 90 and 92 of the Proceeds of Crime and Money Laundering Act; that moreover, Sections 3, 4, 7, 12 and 16 as read with the relevant schedule do not apply to a non-Kenyan on a connecting flight to another destination. Therefore, the Agency is not entitled to the forfeiture orders sought.

The submissions of the Applicant 11. The application was canvassed by way of written submissions. In his submissions dated March 30, 2022, Mr Githinji, learned Counsel for the Applicant framed the sole issue for determination as being whether the seized funds should be forfeited to the Government of Kenya. He placed reliance on Article 40(6) of the Constitution and submitted that property rights do not extend to unlawfully acquired property. He submitted that Section 92(1) of the Proceeds of Crime and Anti-money Laundering Act provides that he High Court shall make a forfeiture order if it finds on a balance of probabilities that the property concerned is proceeds of crime or it has been used or is intended for use in the commission of an offence.

12. Counsel submitted that the standard of proof is on a balance of probabilities and that proof of commission of a specific criminal offence need not be alleged. Counsel stated that all that needs to be established is that the matters alleged constituted unlawful conduct; that the purpose of confiscation orders is to deprive a perpetrator of ill gotten gains. To buttress this point Counsel cited the following cases: Director of Assets Recovery and Others, Republic vs Green & Others (2005) EWHC 3168

ARA vs Audrene Samantha Rowe & Others Civil Division Claim No. 2012 HCV 02120

Abdulrahman Mahmoud Sheikh & 6 Others vs Republic & 6 Others (2016)eKLR

Schabir Schaik & Others vs State Case CCT 86/06(2008) ZACC 7

13. Counsel further submitted that the subject funds are proceeds of crime as defined in Section 2 of the Proceeds of Crime and Anti-Money Laundering Act and that their conveyance was in contravention of Section 12 of the Act; that the respondent and Mr. Nwachukwu Chikezie Augustine gave conflicting information on the origin of the funds and weighed against the purported declaration in Nigeria and the letter from Shah Jewellery Trading, the owner of the funds could not be ascertained. Counsel stated that the Respondent was not a licensed cash in transit operator yet he was carrying cash in bulk as opposed to transferring it electronically hence there are reasonable grounds to believe that the funds are proceeds of crime. Counsel contended that the Respondent was a mule/carrier contracted to carry monetary instruments in execution of a money laundering scheme. Counsel urged this court to grant the orders sought.

The submissions of the Respondent 14. In the submissions dated May 17, 2022 Learned Counsel for the Respondent cited the constitutional safeguard of the right to property guaranteed under Article 40 of the Constitution and submitted that dispossession ought to be justified and should take place only after due process as was held in the case of Hellen Wachuka Njoroge vs the Attorney General (2016) eKLR. Counsel stated that all the requisite documents in support of the Respondent’s right to travel with the funds to Dubai via Nairobi were duly availed on demand and that the Applicant was guilty of material nondisclosure for denying this yet they have attached the said documents to the Originating Motion.

15. On the issue of forfeiture Counsel for the respondent cited Sections 82 and 92 of the Proceeds of Crime and Anti-Money Laundering Act to support his submission that the applicant has not proved on a balance of probabilities that the subject funds are proceeds of crime subject to forfeiture by the State. Counsel also cited the case of Assets Recovery Agency vs Lilian Wanja Muthoni T/A Sahara Consultants and 2 Others Application No. 49/2018 where the court granted forfeiture orders where reasonable grounds were established. On the standard of proof Counsel relied on the provisions of Section 107 of the Evidence Act and the case of Mbuthia Macharia vs Annah Mutua Ndwiga & Another(2017) eKLR.

Analysis and Determination 16. There is no dispute that on or about December 8, 2020 the Respondent was found in possession of USD 880,000 and 60,000 Euros at the Jomo Kenyatta International Airport. There is also no dispute that the Respondent, a Nigerian National, had just disembarked from a Kenya Airways Flight No KQ535 from Lagos Nigeria meaning that he had travelled with the cash from Nigeria. There is also no dispute that on December 8, 2020 the Assets Recovery Agency/Applicant sought and obtained an order for preservation of the said cash on the ground that the money was suspected to be proceeds of crime. The issue now for determination is whether the said funds are liable for forfeiture to the State.

17. This court’s jurisdiction to make forfeiture orders stems from Section 92 (1) of the Proceeds of Crime and Anti-money Laundering Act which provides:-“92(1) Making of forfeiture order(1)The High Court shall, subject to section 94, make an order applied for under section 90(1) if it finds on a balance of probabilities that the property concerned—(a)has been used or is intended for use in the commission of an offence; or(b)is proceeds of crime. ...”

18. Section 2 of the Proceeds of Crime aond Anti-Money Laundering Act defines ‘proceeds of crime’ as follows:“Proceeds of crime” means any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed” (Emphasis mine)

19. The onus of proof which though on a balance of probabilities lies upon the Assets Recovery Agency/Applicant. It is only once the Applicant has discharged the legal burden that the evidential burden shifts to the Respondent. This is as was held in the case of Assets Recovery Agency Vs Fisher, Rohan & Miller, Delores Supreme Court of Jamaica, Claim No 2007 HCV 003259 that:-“…. Even though these proceedings are quasi-criminal in nature there is an evidential burden of proof on the Defendant. It is incumbent upon them to demonstrate evidentially how they lawfully came into possession of the assets seized..…”

20. It is also trite that to succeed, the Applicant need not prove the commission of a specific crime. In the case ofAssets Recovery Agency vs Pamela Aboo: EACC Interested party [2018] eKLR the court stated:-“63. Forfeiture proceedings are Civil in nature and that is why the standard of proof is on a balance of probabilities. See section 92(1) of Proceeds of Crime and Anti-Money Laundering Act. In the case of Director of Assets Recovery and Others, Republic vs Green & Others [2005] EWHC 3168 the court stated as follows:In civil proceedings for recovery under part 5 of the Act the Director need not allege the commission of any specific criminal offence but must set out the matter that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.” (Emphasis mine)In the case of ARA & Others v Audrene Samantha Rowe & OthersCivil Division claim No 2012 HCV 02120 it was likewise held that:-“....that in deciding whether the matters alleged constituted unlawful conduct when a civil recovery order is being made is to be decided on a balance of probability. Civil recovery proceedings are directed at the seizure of property and not the convicting of any individual and thus there was no reason to apply the criminal standard of proof...”

21. It is clear from the above cases that the onus lies upon the Applicant to prove that there is reasonable suspicion that the funds found in the Respondent’s possession are proceeds of crime. Once that burden is discharged the evidential burden shifts to the Respondent to explain the source of the funds. However, the Agency need not prove the commission of a specific criminal offence. It is sufficient if it proves a particular kind(s) of unlawful conduct by which the finds were acquired.

22. Having carefully considered the material placed before me, my finding is that the Applicant has not discharged the burden placed upon it by law to prove that the funds were proceeds of crime or were to be used in the commission of an offence. Firstly, conveying such an amount of money, perse is not an offence. Indeed Section 12 only requires that the conveyance of such money to or from Kenya be first reported to a person authorised by the regulations for that purpose and Section 12(3) makes it an offence not to do so. It is however instructive that this was not money being conveyed into or out of Kenya but money which was on transit to Dubai from Nigeria. The Respondent explained that the money was for trade purposes in Dubai; that he was a trader in gold and mobile phones. He produced letters from a Jeweller which was not rebutted by the Assets Recovery Agency/Applicant and which in my view offered a plausible explanation for having such huge sums of money. The Applicant had three months to investigate the allegations by the Respondent but it seemingly did not do so. It instead chose to rely on the very same grounds it relied upon to obtain the preservation order. In one of the Applicant’s documents reference is made to heroine but there is no evidence at all to demonstrate that the Respondent was a drug trafficker. It is also instructive that the Respondent had indeed made the requisite declaration when exiting Nigeria. He would therefore have complied with Section 12 of the Proceeds of Crime and Anti-Money Laundering Act even was the money being brought to Kenya.

23. Section 12(5A) can only be invoked in the event that a “false declaration” was made or if there was failure to disclose. No evidence was led to demonstrate that the declaration from the country of origin was investigated and found to be false. Further, the essential elements under Section 12(5C) were also not proved. It provides as follows:“(5C) The information provided under subsection (5B) shall be used by the appropriate authorities when—(a)the subsequent declaration by the same person exceeds the prescribed threshold specified in the Fourth Schedule; or(b)there is false declaration; or(c)there is suspicion of the commission of any other offence.”

24. Moreover, since the money originated from and was declared at the point of exit in Lagos the only requirement was its declaration at its point of entry in Dubai. The Federal Republic of Nigeria and the United Arab Emirates both have customs and immigration authorities which formulate the requisite policies and regulations for entry and exit into and out of their respective jurisdictions. The only case which I found relevant to this issue is the case of Oussama El Dakkak, Intercontinental SARL vs Administration des Douanes et des Droits Indirects Case C-17/16 where the Court of Justice of the European Union held that any person who disembarks from an aircraft coming from a non-European Union State in an airport in the territory of a Member State and waits in the international transit area of that airport before boarding another aircraft heading to another non- European Union State, must be regarded as having entered the European Union and being subject to the obligation to declare. This is in accordance with the European Union law, Article 3(1) of Regulation No 1889/2005. However, in our context, no similar provision is alleged to exist as would warrant this court to find that the Respondent offended the law.

25. In this case, there was no complaint or request from the Federal Republic of Nigeria or the United Arab Emirates nor has the Agency liaised with authorities in the said countries to ascertain the authenticity or otherwise of the Respondent’s documents. The Agency’s case that the documents are not genuine must therefore fail. As the Agency has also not demonstrated that the funds are proceeds of crime or that there was unlawful conduct involved in its acquisition this court cannot find in its favour.

Conclusion 26. In light of the foregoing I find that the Originating Motion dated March 16, 2021 lacks merit and it is dismissed. The seized funds should be released to the Respondent forthwith. It is so ordered.

SIGNED, DATED AND DELIVERED VIRTUALLY THIS 21ST DAY OF JULY, 2022. E N MAINAJUDGE