Regulation on Management of Confiscated Assets related to Money Laundering and Financing of Terrorism

/in , , /by

On 10 August 2020, the Maldives Monetary Authority (“MMA”) published the Regulation on Management of Confiscated Assets related to Money Laundering and Financing of Terrorism (the “Regulation”)  which provides the procedures on dealing with confiscated funds and property under Section 64 of the Prevention of Money Laundering and Financing of Terrorism Act (Law Number 10/2014).

The Regulation addresses the following key areas:

  1. Management and safeguarding of confiscated funds and property by the relevant government institution.
  2. Disposal of confiscated property.
  3. Special procedures to ensure the protection of rights lawfully established in favour of third parties acting in good faith.

 
Management and Safeguarding of Confiscated Funds and Property

  1. Property and funds confiscated by the State must be maintained by the relevant government institution, and any proceeds arising from the confiscated funds or property must be deposited in a separate account opened with the MMA.
  2. The Regulation provides that banks that receive a court order petitioned by the State for the confiscation of such funds, must deduct that amount and deposit it in the specified account with the MMA. The same procedure shall apply to state institutions or other parties that may have funds to be confiscated by the State.

Disposal of Property

  1. The Regulation authorises the disposal of property that satisfy the following conditions:
    • Property which may be used to commit a criminal offence;
    • Possession of, maintaining, and utilising the property is an offence;
    • Counterfeit property;
    • Maintaining the property is a danger to the general public;
    • Maintaining the property could pose an environmental hazard.
  2. The Regulation also authorises the sale of confiscated property provided they are sold at a competitive price. If the value of the confiscated property exceeds MVR 100,000, the property must be sold via a competitive bidding process.

Third Party Rights

The Regulation provides that third parties that may have lawfully established rights in the confiscated funds or property, and acting in good faith, may enforce their rights on such funds or property provided they submit the matter to the court within 30 days from the date the relevant state institution publishes the court order for confiscation of such funds and property, in the Government Gazette.