International law enforcement activity against financial crime, bribery and corruption has never been more energetic. New regulatory provisions, criminal offences and law enforcement tools hove into view with increasing frequency. In the UK in the last few months alone we have seen the introduction of Unexplained Wealth Orders, a new offence of failing to prevent the facilitation of tax evasion, the creation of the National Economic Crime Centre, the appointment of an Anti-Corruption Champion and beefed up anti-money laundering powers for the NCA. Worldwide, the picture is similar; whether driven by countries with a strong adherence to the rule of law looking to protect businesses and the integrity of financial systems, or regimes emerging from periods of instability wanting to improve their geo-political standing and encourage foreign direct investment by upping their criminal enforcement game – or at least appearing to.
At the same time, adherence to human rights and the rule of law is on the wane – at least in some jurisdictions. International business people and HNWIs might find themselves on the wrong end of a politically motivated fraud, bribery or corruption investigation, initiated by a country with a dubious track record for fair trials, independent judges and human rights-compliant detention facilities. These two themes–rising enforcement but falling standards of justice – come together most starkly in the world of extradition. The UK, thanks to its world-renowned legal system, vigorous defence extradition bar and unimpeachable judiciary, is a popular place to resist extradition from. As a result, the UK courts have had to pass judgment on the criminal justice systems in many other jurisdictions and, increasingly, have found them wanting.
One by-product of the worldwide recession has been the chronic underfunding of prisons – never much of a vote winner even in times of plenty. The UK High Court has barred extradition in many cases because the conditions in the prison where the suspect would be held amounted to “inhuman and degrading treatment” and therefore in breach of Article 3 of the European Convention of Human Rights. The severity of the offence is irrelevant: the court will protect the human rights of alleged murderers, rapists and white collar criminals alike. The blacklisted countries include many in the European Union as well as Asia, Africa and South America. The courts focus not just on the state of the prison system as a whole, but on overcrowding, the allocation of personal space, hygiene, violence from other prisoners and guards and the availability of adequate healthcare, which is particularly important for suspects with medical needs.
Vincent Mallya, ex-head of United Spirits, Kingfisher Airlines and the Force India Formula One team, is currently fighting extradition from the UK to India. His lawyers are relying on two earlier precedents in which the court found that conditions in Indian prisons were so appalling that it would breach the human rights of the suspect to be extradited. The Indian authorities have countered this argument with an assurance that, whatever the conditions facing the general prison population, they can promiseMrMallyathat he will get his own special, human-rights-compliant, cell. The South African authorities gave a similar assurance to businessman Shrien Dewani so that he could be extradited to face trial for conspiracy to murder his wife, for which he was eventually acquitted. Such assurances have become prevalent in extradition cases, especially where the political and financial stakes are high. One senior judge has described the use of assurances to get around human rights arguments as “not merely normal, but indispensable in the operation of English extradition law”.
In fact, assurances have become so common-place that the new extradition battleground is about whether such assurances can be relied upon. How does a court monitor and enforce an assurance about how much personal space and time out of his cell a suspect will have after he is sent back? There is no mechanism to demand that a suspect is returned to the UK if he is mistreated following extradition, so what can the court do if the assurance is broken? Defence lawyers are arguing that some assurances – and some countries – simply should not be trusted. Russian prisons are notoriously overcrowded, violent and lacking in basic facilities. The Russian authorities routinely provide assurances that extradited suspects will only be detained in specific prisons that have been inspected and approved by independent experts, and that British consular staff will be able to monitor compliance. In one recent case the suspect, a Russian citizen, argued that the nearest Consulate was 1,500 miles from the prison that had been earmarked for him, and that there was evidence that the Russian authorities had hoodwinked the expert into reporting it was not over-crowded by transferring out half of the inmates the week before the inspection. Nevertheless, the High Court decided that there was insufficient evidence to displace the assumption that Russia would honour its diplomatic promises, and ordered extradition.
Extradition can be refused on the basis that the suspect will not receive a fair trial. This requires cogent evidence, not just that requesting State has a malfunctioning judicial system, but that the suspect, in particular, will be subject to a “flagrant denial of justice”. Such challenges are often brought against extradition from countries with weak or fragile democratic institutions, a track-record of political interference in the criminal process or recent regime change leading to the settling of scores. Sometimes the best evidence comes from the mouths of the political leaders themselves, who cannot resist pronouncing publicly on the obvious guilt and future punishment of the suspect. However, the threshold for a successful challenge is very high. The only two recent examples involve Russia, whose request to extradite businessman Georgy Shuppeon fraud charges was refused on the basis that President Putin was overtly and implacably hostile to his late father in law Boris Berezovksy, and Rwanda, who the court ruled would not be able to give a fair trial to five suspects accused of involvement in the 1994 genocide.
The precursor to a full-blown extradition request can often be a ‘Red Notice’ issued by INTERPOL. Contrary to popular myth, INTERPOL is not a cadre of super-cops with cross-border powers, but more like a large database with a small brain for the exchange of information between national police forces. Neither does it have a ‘most wanted’ list, but merely a register of people wanted for an assortment of crimes ranging from serious to trivial. A Red Notice is simply a notification, from one country to all the others, that a suspect has been accused or convicted of an offence and he is outside the jurisdiction. The threshold for issuing is low: the requesting State need do little more than assert that the suspect is under investigation. But the existence of a Red Notice does not mean that a suspect necessarily will be arrested, let alone extradited. Many countries, including the UK and US, will insist on a formal extradition request. If there is no Treaty that permits extradition, then it cannot take place irrespective of the Red Notice. However, there are still enough countries that will arrest on a Red Notice to make it a serious curb on a suspect’s ability to travel and conduct business. If the Red Notice is made public, then it may significantly limit access to banking and other financial services.
Some countries have been accused of abusing INTERPOL membership for political ends – issuing Red Notices merely to harass and disrupt those with whom they are displeased, rather than as a genuine law enforcement tool. Fortunately, INTERPOL is starting to wake up to this problem and many Red Notices have been challenged and removed on the basis that they are politically motivated or amount to a breach of the suspect’s human rights. Bill Browder, the founder of Hermitage Capital, has defeated five Russian requests to put him on the wanted list, most recently in October 2017. ZsoltHernadi, Chairman and CEO of the MOL Group, one of the largest companies in Central Europe, successfully argued in 2016 that a Red Notice issued by Croatia should be deleted.
Ultimately, all extradition cases require a court to balance the human rights of the suspect with the public interest in international co-operation to combat, deter and punish wrong-doing. Thankfully, for those jurisdictions who make criminal accusations for improper purposes, whose legal systems are opaque and vulnerable to political interference, and who detain people in abysmal conditions, the courts will still offer protection.
Global Banking & Finance Review
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