2014 Privy Council case on AML

Beezadhur (Appellant) v Independent Commission against Corruption and another (Respondents) [2014] UKPC 27

The Prevention of Corruption Act 2002, as amended is the main piece of legislation governing anti-money laundering in Mauritius and it aims, inter alia, at prohibiting the depositing of cash amounts above a specified limit except where it was “commensurate with the lawful business activities of the customer”. In that respect and as is decided in the present case, a customer could not claim that cash sums above the limit regularly deposited by him from his pension were deposits from his “business activities”.

The Privy Council so held (Lord Kerr of Tonaghmore JSC dissenting however), dismissing an appeal by Mr. Toolsy Beezadhur against the decision of the Supreme Court of Mauritius on 28 June 2013 to dismiss his appeal against his conviction and sentence on 24 November 2010 in the Intermediate Court of Mauritius for five offences contrary to sections 5(1) of the Financial and Anti-Money Laundering Act 2002.

The said Section 5(1), as it was then, prohibited the depositing of sums in banks in Mauritius above a specified amount unless, inter alia, it was an “exempt transaction” (which included, by section 2(d) of the Act, “where the transaction does not exceed an amount that is commensurate with the lawful business activities of the customer”). The Board further held, unanimously, that the burden had been on the appellant to bring himself within the exception.

Indeed, by virtue of section 10 of the Constitution of Mauritius, “ (2) Every person who is charged with a criminal offence— (a) shall be presumed to be innocent until he is proved or has pleaded guilty; … Nothing contained in or done under the authority of any law shall be held to be inconsistent with or in contravention of— (a) subsection (2)(a), to the extent that the law in question imposes upon any person charged with a criminal offence the burden of proving particular facts…”.

As LORD CARNWATH JSC, giving the judgment of the majority, duly stated, the 2002 Act had been enacted to combat economic crime and money laundering, including the close monitoring of cash transactions. The appellant had left Mauritius in 1959 to live in the United Kingdom, where he had been employed in the National Health Service. When he retired in 2004 he had deposited a lump sum, and then further sums from his monthly pension payments, in a bank in Mauritius on his regular visits there. In the Intermediate Court the magistrate had accepted that the money in question did not have a “tainted” origin and was merely the fruit of his savings. However, it was held that the Act did not require the prosecution to aver in the information that the money emanated from tainted origins and the appellant was found guilty as charged.

The defendant’s appeal to the Supreme Court had been dismissed because the court held that the burden had been on him to bring himself within exemption (d), which he had not sought to do, and that in any event the exemption was not applicable to his case since “business activities” meant activities which were money making or profit making: in short commercial activities and purposes.
Dealing first with the issue of construction, the appellant had argued that the word “business” was apt to describe a person’s regular occupation, profession or trade whether or not “commercial” in the sense used by the Supreme Court. In the same way, the appellant’s “business” was his occupation as a retired nurse, and all the impugned transactions were commensurate with his lawful activities in that occupation. The Board agreed that the Supreme Court’s interpretation might have been too narrow, in so far as it restricted the phrase to commercial or “money-making” activities, but there were no grounds for treating the occupation of a retired nurse as a business activity. To hold otherwise would deprive the word “business” of any meaning in the definition. The exemption was directed at businesses, typically in the retail trade, in which substantial cash transactions were a routine activity.

As to the burden of proof, section 10 of the Constitution of Mauritius gave expression to a fundamental rule of the common law, that the general burden of proof in criminal cases lay on the prosecution. That rule was subject to a well-established exception, the best known statement of which was in the judgment of Lawton LJ in R v Edwards [1975] QB 27, 39–40, in respect of offences arising under enactments which prohibited the doing of an act save in specified circumstances which, if they existed, were readily provable by the defendant as matters within his own knowledge or to which he had ready access. That clearly applied to a customers’ knowledge of his status as an established customer of a bank, of the nature and purpose of his own cash transactions, and of whether they were commensurate with his lawful activities in general.

In the present case, the structure and content of the statutory offence and of the specific exemptions were in the Board’s view clearly designed to bring into play the Edwards principle. The Supreme Court of Mauritius had been right to hold that, in accordance with section 10(11)(a), it was for the defendant to show that the transaction was within one of the exempt categories.
LORD KERR OF TONAGHMORE JSC delivered a judgment, dissenting on the construction issue but agreeing with the majority as to the burden of proof.