"Mauritius' Game-Changer: The First Recovery Order Under the Asset Recovery Act

The case Financial Intelligence Unit v Puttaroo (2023 SCJ 337) is a landmark decision by the Supreme Court of Mauritius, marking the first Recovery Order granted under Section 34 of the Asset Recovery Act (ARA).

The 2023 case Financial Intelligence Unit v Puttaroo (2023 SCJ 337) is significant for several key reasons, primarily as a pioneering application of Mauritius' Asset Recovery Act (ARA) in combating financial crimes associated with drug trafficking. Here's a breakdown of its importance:

1. First-Ever Recovery Order Under Section 34 of the ARA:

• This decision marks the inaugural instance where the Supreme Court of Mauritius granted a Recovery Order under Section 34 of the ARA, which empowers the Financial Intelligence Unit (FIU) to seek the vesting of assets deemed to be the proceeds of crime into the State.
• Enacted in 2011, the ARA provides a civil framework for asset recovery separate from criminal proceedings, but until this case, no such order had been successfully issued under this specific provision.
• This breakthrough establishes a practical pathway for the FIU to recover illicit assets, setting a foundational precedent for how the law is interpreted and applied in future cases.

2. Precedent on Proving Proceeds of Crime

The judgment clarifies critical legal principles in asset recovery:

• Standard of Proof: The court affirmed that such cases are decided on the "balance of probabilities" rather than the higher criminal standard of "beyond a reasonable doubt," drawing on international precedents like Gale & Anor v Serious Organised Crime Agency [2011 UKSC 49]. This lowers the evidentiary threshold for the FIU while still requiring robust evidence to be presented.

• Burden Shift: Once the FIU presents prima facie evidence of unlawful origins (e.g., disproportionate assets relative to declared income, frequent large cash deposits, and links to criminal convictions), the burden shifts to the respondent to prove the funds' legitimacy. In this instance, the respondent's failure to provide documentation (e.g., for claimed insurance payouts) was pivotal, reinforcing that unsubstantiated explanations won't suffice.

• Global Approach to Evidence: The court adopted a holistic evaluation of circumstantial evidence, including the respondent's drug trafficking conviction from 2008 (involving 2,890 grams of heroin), his watch-list status since 1995, and banking patterns inconsistent with his modest Rs 7,000 monthly income. This "global approach," inspired by cases like National Crime Agency v Wong [2016 EWHC 142], enables the inference of criminal ties without direct tracing, which is often challenging in money laundering scenarios.

These elements provide clear guidance for prosecutors, investigators, and courts, making it easier to target assets from organised crime without needing a fresh criminal trial.

3. Reinforcement of Civil Nature of Asset Recovery:

The ruling emphasises that ARA proceedings are civil and remedial, not punitive, aligning with European Court of Human Rights precedents, such as Walsh v UK [2006] ECHR 1154.

This distinction protects against double jeopardy claims and enables recovery even after criminal sentences are served, as seen here, where assets frozen since 2002 were finally vested in the State (totalling over Rs 2.9 million plus interest).

It underscores the ARA's role in depriving criminals of ill-got gains to deter future offences.

4. Broader Implications for Financial Crime Enforcement in Mauritius

• Deterrence and FIU Empowerment: As the first successful case, it bolsters the FIU's authority and signals Mauritius' commitment to anti-money laundering efforts, especially in drug-related crimes. This aligns with international standards (e.g., FATF recommendations) and could enhance Mauritius' global reputation post its 2020 removal from the FATF grey list.
• Policy and Legal Impact: It highlights gaps in record-keeping and the need for better financial transparency, potentially influencing amendments to the ARA or related laws. For instance, it demonstrates how pre-existing freezes (from 2002) can transition into permanent recovery under the 2011 Act.
• Public Interest and Justice: The court explicitly weighed the "interests of justice," finding the order appropriate given the evidence, which sets a benchmark for balancing individual rights against societal protection from crime proceeds.

In essence, this case isn't just a win for asset forfeiture—it's a blueprint for operationalising the ARA, likely inspiring more aggressive pursuits of criminal assets in Mauritius and serving as a persuasive authority in similar jurisdictions.

Case Summary

Parties:

• Applicant: Financial Intelligence Unit (FIU), acting as the Enforcement Authority under Section 9 of FIAMLA
• Respondent: Nooroodeen Ally Rehaz Puttaroo
• Co-Respondent: Bank One Ltd

Background

• In 2008, Puttaroo was convicted by the Court of Assizes for attempted possession of 2,890 grams of heroin for distribution.
• He was sentenced to 35 years' imprisonment with penal servitude.
• The conviction was upheld by the Court of Criminal Appeal in 2012.
• A Freezing Order had been issued in 2002 over his assets.

Assets Involved

The FIU sought to recover the following amounts held in various accounts with Bank One Ltd:

• Rs 614,083.15
• Rs 905,000
• Rs 1,250,000
• Rs 162,148.80

These were held in joint and individual accounts, including fixed deposits and savings accounts.

Court’s Findings:

• The Court applied the balance of probabilities standard.
• It found that:
• The respondent had no credible explanation for the origin of the funds.
• His declared income (Rs 7,000/month as an overseer) did not match the large cash deposits.
• He had been on the ADSU watchlist since 1995.
• The deposits ceased after his arrest, suggesting illicit origin.
• The respondent refused to explain the source of funds during police and court proceedings.

Outcome:

• The Court granted the Recovery Order.
• All listed sums were vested in the State.
• Bank One Ltd was ordered to transfer the funds to the Recovered Assets Fund at SBM Bank.
• The original Freezing Order was revoked.
• The Recovery Order was to be published in two daily newspapers, including L’Express.

Legal Significance:

• Confirms that a criminal conviction is not required for asset recovery under the ARA.
• Reinforces the principle that unexplained wealth can be deemed proceeds of crime.
• Sets precedent for civil recovery based on financial intelligence and circumstantial evidence.

Financial Intelligence Unit v puttaroo

• On 31st August 2023, the Supreme Court of Mauritius returned the first verdict of its kind in an application for a Recovery Order under Section 34 of the Asset Recovery Act, made by the FIU as enforcement authority.

• In 2008, the Respondent was found guilty before the court of Assizes of “attempt at possession of 2890 grams of heroin for the purpose of distribution”. The Court of Criminal Appeal maintained the judgment of the Court of Assizes.
• The Court considered all the relevant factors under the law and was satisfied that the applicant has proved its case on a balance of probabilities. The Court accordingly, declared that the sums in capital, interests and accessories as well as all monies held in the name of the respondent, either singly or jointly or otherwise, with Bank One Ltd  be vested in the State.
• Financial Intelligence Unit v Puttaroo

Source

https://www.fiumauritius.org/fiu/?p=4248

https://www.fiumauritius.org/fiu/wp-content/uploads/2023/09/financial-intelligence-unit-v-puttaroo-n-r-2023-scj-337.pdf