Regulation on Management of Confiscated Funds and Properties Related to Money Laundering and Financing of Terrorism

REGULATION ON MANAGEMENT OF CONFISCATED FUNDS AND PROPERTIES RELATED TO MONEY LAUNDERING AND FINANCING OF TERRORISM Regulation No: 2020/R-61 Unofficial Translation (Effective 10 August 2020)

REGULATION ON MANAGEMENT OF CONFISCATED FUNDS AND PROPERTIES RELATED TO MONEY LAUNDERING AND FINANCING OF TERRORISM
CHAPTER ONE
INTRODUCTION
Introduction and
Title

1. (a) This Regulation prescribes the policy and the manner in
   which the properties confiscated by the state pursuant to Law No. 10/2014 (Prevention of Money Laundering and Financing of Terrorism Act) will be dealt with (b) This Regulation is issued pursuant to section 64(c) and 75(a)(3) of Law No. 10/2014 (Prevention of Money Laundering and Financing of Terrorism Act). (c) This Regulation shall be cited as the “Regulation on Management of Confiscated Funds and Properties Related to Money Laundering and Financing of Terrorism” (d) This Regulation shall come into effect from the date of its publication in the Government Gazette.
   CHAPTER TWO
   MANAGEMENT OF CONFISCATED FUNDS AND PROPERTIES Confiscated Funds 2. (a) Confiscated Funds shall be held in the custody of the Relevant Authority. (b) The Relevant Authority shall open an account at Maldives Monetary Authority to deposit Confiscated Funds and revenue generated from Confiscated Properties. Withdrawals from this account may only be made in accordance with the instructions from the Relevant Authority. (c) If the confiscated funds is held in a bank account, upon submission of the confiscation order to the bank by the Relevant Authority, the bank shall transfer such funds to the account stated in subsection (b) of this section.

(d) If the funds for which a court order is issued is held in the custody of a state institution or any other party, upon submission of the court order to the party by the Relevant Authority, such party shall deposit the funds to the account stated in subsection (b) of this section. Management of Confiscated Properties
3. (a) Confiscated Properties shall be held in the custody of the
Relevant Authority. Except for properties subject to destruction under section 4, Confiscated properties shall be managed in an appropriate manner, and in a manner such that the value of the properties does not depreciate to an unreasonable level, until such properties is sold in accordance to this Regulation, Confiscated Properties shall also be managed in a manner such that benefits can be derived from them. (b) Notwithstanding subsection (a) of this section, the Relevant Authority may assign the management of Confiscated Properties to another party with the approval of the Ministry of Finance. Such Assignment shall be made under an agreement between the two parties, which shall stipulate the following:
(1) Complete details of the assigned properties; (2) Responsibility of the assignee in managing and maintaining the properties. (c) The Confiscated Properties shall be valued upon custody of the properties by the state. The Relevant Authority may have the property valued by an expert valuer if the Relevant Authority, based on the nature of the properties, is of the view that the valuation should be carried out by an expert. Destruction of Properties
4. (a) Notwithstanding any other section of this Regulation, the
following Confiscated Properties may be destructed. (1) Property that is likely to be used to commit a further crime or an unlawful activity; (2) Any property that is illegal to possess or own or use; (3) Counterfeit property; (4) Property that is a threat to public safety; (5) Property that causes environmental damage.

(b) The Confiscated Properties shall be destructed in a manner that does not cause damage to the environment or causes the least damage to the environment. Sale and Lease of Confiscated Properties
5. The Relevant Authority has the discretion to sell or lease
Confiscated Properties in accordance to this Regulation. Sale of Confiscated Properties
6. (a) Confiscated Properties shall be sold in a manner which
attains competitive pricing
(b) If the confiscated properties are securities including share, the securities shall be sold as early as possible at a reasonable price. (c) Except from confiscated securities, Confiscated properties exceeding the value above MVR 100,000 (One hundred thousand Maldivian Rufiyaa) shall be sold through public auction. (d) The reserve price (minimum selling price) of the assets shall be determined for the sale of the properties under subsection (c) of this section. An opinion of an appropriate valuer shall be sought when determining the reserve price. Revenue generated by Sale or Lease of Confiscated Properties
7. Revenue generated by sale or lease of Confiscated Properties shall
be deposited to the account stated in section 2 (b).
CHAPTER THREE
THIRD PARTY RIGHTS
Third Party Rights 8. (a) Within 2 (two) days from the date of court order for confiscation of funds or properties, the Relevant Authority shall publish the court order in the Government Gazette for a period of 2 (two) weeks, to allow ‘third parties acting in good faith’ who have a right over the Confiscated Funds or Properties, to file a claim in court. Such parties may file a claim in court within 30 (thirty) days from the date of such publication. (b) A party may only be considered as a “third party acting in good faith” if the Party :

(1) is not an accomplice or an abettor to the offence related to the properties or funds, and had attempted to prevent the offence if he had the knowledge; (2) is not implicated in any other related offence; (3) has legitimate interest in the confiscated funds or properties; (4) does not have the knowledge that the confiscated funds or properties is proceeds of the crime; (5) The party shall not have prior knowledge that the Confiscated Properties or Funds had been used illegally or misappropriated. And if privy to such knowledge, the party shall have attempted to prevent the occurrence of such an act; (6) The party acquired the properties or funds in lieu of reasonable payment or by means permitted by law.
CHAPTER FOUR
RECORD KEEPING
Record Keeping 9. (a) Relevant Authorities shall prepare and maintain records and accounts of Confiscated Properties and Funds. (b) Relevant Authorities shall prepare and maintain an inventory of the Confiscated Properties. This inventory shall at a minimum include the following information in regard to each property. (1) Details of the property; (2) Value of the Confiscated property. This is inclusive of the initial value of the properties after confiscation, and if valued again, the change in value of the property; (3) Details of the assignment of the Confiscated Property to another party for management, if any; (4) Location of the property; (5) The decision on the sale of the property, manner in which the sale is being conducted, whether the property is sold and the sale price of the property;

(6) Details pertaining to leased property, if any; (7) Property destructed if any, and information on the method of destruction. (c) Within a maximum of 4 (four) months after the end of each year, the management of the Confiscated Properties shall be audited by an external auditor after which, the audit report shall be published by the Relevant Authority. Annual Report 10. Before the end of March each year, the Relevant Authorities shall prepare and publish an annual report on matters related to management of Confiscated Properties during the preceding year. This annual report shall include the details of the properties confiscated during that year, details of the properties that are destroyed and sold, and details of the properties assigned to another party for management. Definitions 11. In this regulation, unless the context requires otherwise or unless defined below, the words and phrases used in this regulation shall mean have the meaning given in the Act. “Relevant Authority” means the authority applying for a court order to Confiscate properties or funds under Law No. 10/2014 (Prevention of Money Laundering and Financing of Terrorism Act). “Confiscated Properties” or “Confiscated Funds” means the properties and funds subject to permanent deprivation by the state under Section 62 of the Law No. 10/2014 (Prevention of Money Laundering and Financing of Terrorism Act).