Prosecutors and law enforcement agencies in the Cayman Islands have access to a range of investigative tools under the Proceeds of Crime Act (2020 Revision) (“POCA”), Part VI.
Such powers include production orders, search and seizure warrants, disclosure orders, customer information orders and account monitoring orders.
This short guide, which forms part of McGrath Tonner’s financial crime and anti-money laundering series, focusses on search and seizure warrants only. Readers may also wish to refer to McGrath Tonner’s separate client advisory on production orders.
Search and seizure warrants
Law enforcement can apply to the Cayman Islands Grand Court for a search and seizure warrant under sections 155 – 159 of POCA in support of three types of investigation:
a) a criminal money laundering investigation;
b) a confiscation investigation; and/or
c) a civil recovery investigation
(section 146).
A search and seizure warrant is a warrant authorising an appropriate person to enter and search premises specified and to seize and retain material found therein which is likely to be of substantial value (whether or not by itself) to the investigation in question.
An appropriate person is a constable or a customs officer or a person employed in the Financial Reporting Authority for the purpose of receiving reports under POCA (section 156 (4)).
A judge may, on an application made by an appropriate officer, issue a search and seizure warrant to enter and search premises and seize and retain material where:
a) a production order made in relation to material has not been complied with and there are reasonable grounds for believing that the material is on the premises specified; or
b) section 157 is satisfied (see immediately below).
A search and seizure warrant may be applied for, notwithstanding the fact that no production order has been made, where (section 157):
a) the requirements for granting a production order under section 150 are satisfied; and
b) it is not practicable to communicate with any person against whom a production order could be made or would be required to comply with an order to gain entry to the premises; or
the investigation might be seriously prejudiced unless an appropriate person can secure immediate access to the specified material.
An application for an order will ordinarily be made ex parte to a judge in chambers (section 159(1)). As with a production order, the officer making the application will normally be assisted by a prosecution advocate from the Office of the Director of Public Prosecutions.
In contrast to the English Criminal Procedure Rules, the Cayman Islands Criminal Procedure Rules do not contain guidance on the process by which an application may be made or resisted. Some practical assistance may be derived by referring to Rule 47.32 of the English CPR and the Code of Practice Issued Under the Proceeds of Crime Act 2002. There is also a body of local and English case law governing such applications however such detail is beyond the scope of this note.
Unlike a production order (where a period of 7 days is usually given for compliance), the subject of the search and seizure warrant will often have no notice of the warrant prior to its execution. This makes it difficult, and in some circumstances impossible, to prevent the execution of the warrant at an inter partes hearing. It may, however, still be feasible to stop the search and seizure, or at the very least stop the inspection of the seized documents post-seizure, particularly if Cayman legal counsel is already retained and/or informal advance notice of the order has been received and/or defensive steps are taken expeditiously.
A search and seizure warrant does not confer the right to seize privileged material (section 158) and, if such material is intentionally or inadvertently seized, the subject should waste no time in raising its concerns with the appropriate officer and, if necessary, instructing counsel to seek the necessary protection from the Court.
As ever, it is important to remember that it is a criminal offence to prejudice an investigation (section 147). Care should be taken in responding to a search and seizure order. Causing or permitting interference with a confiscation investigation, money laundering investigation or civil recovery investigation renders one liable to prosecution and, upon conviction on indictment, imprisonment for a term of five years or to a fine, or to both.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.