The BVI courts have again stepped in to ensure that proper thought and process is applied to requests made by foreign governmental bodies. Following a key decision in 2017 on monitoring requests pursuant to tax information exchange agreements, the BVI High Court carefully considered requests made by Russia to gather evidence into alleged criminal conduct. On examination of the motives behind the requests, the court issued an injunction against the transfer of documents and ultimately required reconsideration of the decision.
Magnum Investment Trading Corporation & Niteroi Limited v the Attorney General of the Virgin Islands is the first case of its kind to successfully challenge the exercise of the attorney general's powers under the Criminal Justice (International Cooperation) Act. The BVI High Court's decision means that the attorney general, being the competent authority to handle international requests for information made under the act, is required to do more than rubber stamp the requests received.
The Investigative Committee of the Russian Federation requested that the BVI attorney general obtain evidence to assist the committee's alleged criminal investigations. The request was made for the production of confidential information held by the registered agent of the claimants. Exercising his powers under the Criminal Justice (International Cooperation) Act, the attorney general:
- organised for a search warrant to be issued by the magistrate for the search of the companies' registered agent's premises;
- seized the companies' confidential records; and
- arranged for the records to be transmitted to Russia through diplomatic channels.
The claimants objected to the seizure of confidential documents and to such documents being transmitted to Russia. However, the attorney general failed to take these representations into account, believing that the legislation contemplated an automatic transmission of the documents once obtained by him pursuant to the request. As such, he ignored the representations and held that he had no duty to investigate before complying with the request. On application, the claimants obtained an interim injunction, which had the effect of aborting the delivery to Russia while an application for judicial review was determined.
The claimants produced substantial evidence that the requests from Russia had been issued for improper purposes and formed part of an unlawful campaign by Russian entities and authorities against the claimants and connected entities. The claimants held a substantial interest in one of Russia's most successful mineral fertiliser production companies. Evidence from recent years showed that the claimants had been subjected to various corporate raids involving the corrupt exploitation of criminal, regulatory and international mutual assistance regimes. It appeared that the purpose of these raids was to place pressure on the entities being raided as a means of controlling them.
The BVI High Court ordered the attorney general to reconsider his decision to transmit the documents to Russia – this time taking into account the representations and evidence provided by the claimants. By failing to consider such information, the attorney general had failed to process whether there were compelling reasons not to act on the request. Going forwards, where a request is made and credible or plausible doubts are raised, the attorney general will need to do more depending on the circumstances. In this case, 'more' meant taking into account the claimants' representations and being satisfied with the lawfulness of the request (ie, that the request was fair and reasonable).
The BVI courts have again showed their willingness to ensure that treaties are properly regulated and tests rigorously applied before confidential documents are handed over by authorities across borders.
For further information on this topic please contact Andrew Thorp, Jonathan Addo or Aki Corsoni-Husain at Harneys' Tortola office by telephone (+1 284 494 2233) or email ([email protected], [email protected] or [email protected]). Alternatively, contact Vicky Lord at Harneys' Hong Kong office by telephone (+852 5806 7800) or email ([email protected]). The Harneys website can be accessed at www.harneys.com.
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