the legal challenges of criminal and civil asset forfeiture in south africa: a comparative analysis

THE LEGAL CHALLENGES OF CRIMINAL AND CIVILASSET FORFEITURE IN SOUTH AFRICA:A COMPARATIVE ANALYSIS

VINESH BASDEO ∗

I. INTRODUCTION

Asset forfeiture has emerged as the new ‘big idea’ for controlling criminalbehaviour in the twenty-first century. The benefits of asset forfeiture areindisputable. The power of law enforcement to combat organised criminal activityis greatly increased. This is of particular importance in South Africa, a countrydeeply troubled by organised crime. As one scholar observed: ‘South Africa’srising crime rate makes it one of the most disturbing and dangerous countries inthe world.’1

This article provides a legal description of asset forfeiture and focuses oncontemporary substantive legal provisions. It describes, compares and analysesSouth African domestic legal provisions with those from the United States ofAmerica. While these comparisons are intended to provide a more comprehensiveanalysis and effective understanding of asset forfeiture, they make the researchmore challenging because of differences in legal systems. Asset forfeiture lawis an integral part of criminal law enforcement in South Africa. This articleattempts to answer three questions. First, why is asset forfeiture important to lawenforcement? Second, what types of property are subject to forfeiture and in whatcircumstances? Third, how is forfeiture accomplished?

The deprivation of the proceeds of crime has been a feature of criminallaw for many years. The original purpose behind the confiscation of criminalassets at international level was the fight against organised crime,2 a featureof society described by the European Court of Human Rights as a ‘scourge’,

∗ BA(Hons), LLB, LLM, LLD, Senior Lecturer, College of Law, University of South Africa,former Assistant Director South African Police Service. This article is based on a doctoral thesissubmitted by the author for completion of the degree Doctor of Laws at the University of SouthAfrica.

1 J. Shereda, ‘The Internationalisation of the War on Drugs and its Potential for SuccessfullyAddressing Drug Trafficking and Related Crimes in South Africa’, 31 Washington Journal ofInternational Law (1997): 297.

2 Prevention of Organised Crime Act 121 of 1998.

African Journal of International and Comparative Law 21.3 (2013): 303–326Edinburgh University PressDOI: 10.3366/ajicl.2013.0066© Edinburgh University Press 2013www.euppublishing.com/ajicl

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so that the draconian powers which are a feature of confiscation regimes aroundthe world have been approved in circumstances which otherwise might havecaused governments considerable difficulties before the international humanrights tribunals.

In South Africa Chapter 5 of the Prevention of Organised Crime Act 121 of1998 (hereinafter referred to as the ‘POCA’ or the ‘Prevention of Organised CrimeAct’) applies to so-called ‘proceeds of unlawful activities’. The proceedings interms of Chapter 5 are civil, not criminal. The rules of evidence applicable in civilproceedings apply to proceedings on application for a confiscation order or a so-called restraint order. A confiscation order may be sought by the public prosecutorwhenever a defendant is convicted of an offence. The court can make furtherorders in its discretion to ensure the effectiveness and fairness of its confiscationorder. The question is whether the defendant benefited from the offences forwhich he or she has been convicted or from any criminal activity related to thoseoffences.

Chapter 6 of POCA provides for a civil remedy for the preservation andseizure, and forfeiture of property which is derived from unlawful activitiesor is concerned in the commission or suspected commission of an offence.POCA empowers the Director of Public Prosecutions in South Africa to takeproperty when, on a balance of probabilities, it appears that the property iseither the proceeds of crime, or was an instrumentality of an offence. By makingit easier for law enforcement to take the profit out of criminal activity, civilasset forfeiture provides a powerful weapon with which to combat sophisticatedcriminal activities such as organised crime, drug trafficking and organised fraudagainst government. Chapter 6 of POCA civil asset forfeiture is an innovationin terms of law enforcement approaches in South Africa. In embracing thismethod of forfeiture, South Africa has adopted a growing international trendthat allows for forfeiture of property associated with crime without the necessityof a criminal prosecution. The traditional approach to serious criminality hasbeen arrest, followed by the institution of criminal proceedings with a view toconviction and imprisonment. In recent years, such has been the wealth generatedfrom economic crime in particular, that a confiscation and forfeiture element hasbeen added to the criminal process in many jurisdictions. There is a global trend touse stand-alone civil proceedings as a means of recovering the proceeds of crimein the hope that they will be more effective than proceedings that are ancillary toand dependant on a criminal prosecution.

II. CRIMINAL ASSET FORFEITURE

A. In South Africa

The criminal forfeiture scheme set out in Chapter 5 of POCA is closely modelledon that found in the United States and United Kingdom’s Criminal Justice Act3

3 United Kingdom Criminal Justice Act 1998.

Legal Challenges of Criminal and Civil Asset Forfeiture 305

and South African courts draw assistance, and have cited with approval, fromjudgments of American and English courts in a number of cases.4

The scheme of criminal forfeiture in Chapter 5 of POCA embraces a three-stage process:

1. The restraint stage, which is aimed at preserving assets pending theconviction of an accused and the granting of a confiscation order.5

2. The confiscation stage, where an enquiry is made by the courtconvicting an accused of any benefit that he or she derived from any ofthe offences in respect of which he or she has been convicted or fromany related criminal activity. If successful, this stage of proceedingsmanifests in a confiscation order, which takes the form of a moneyjudgment against the defendant, and in terms of which he or she isrequired to pay a specific sum of money to the State.6 Unless the courtis able to determine the issue of confiscation on the basis of evidenceand proceedings of the trial,7 or on the basis of further oral evidence,8

it will direct the prosecutor and the defendant to deliver statementscontemplated in section 21 of POCA.

3. The realisation stage, which commences in the event of a defendantfailing to satisfy a confiscation order, and which in essence is aspecialised form of execution against affected property.9

1. The restraint stage

The restraint stage of criminal forfeiture proceedings involves the granting of arestraint order,10 which prohibits any person affected by the order from dealingin any manner with the property to which it applies.11 The restraint order isgranted over ‘realisable property’,12 which includes any property held by thedefendant concerned, as well as any property held by any third party who mayhave received affected gifts from the defendant.13 A ‘defendant’ is someoneagainst whom prosecution has been instituted irrespective of whether he or shehas been convicted. The definition of ‘defendant’ also includes a person that thecourt is satisfied is to be charged and in respect of whom it appears that thereare reasonable grounds for believing that a confiscation order may be made.14

4 See for example Shaik and Others v The State 2007 2 All SA 150 (SCA) 25, where the courtrelied on the decision in R v Simpson 2 CR App R (S) (1998) 111 on the issue of the possibilityof multiple restraint orders; and at para. 28, where the court relied on R v Smith [2002] 1 All ER367 (HC) in finding that ‘benefit’ means gross, as opposed to net benefit.

5 POCA, supra note 2, sections 26–9.6 Ibid., sections 18–24.7 Ibid., section 18(6)(a)(i).8 Ibid., section 18(6)(a)(ii).9 Ibid., section 26.

10 Only High Courts can grant restraint orders.11 POCA, supra note 2, section 26.12 Property referred to in ibid., section 14.13 Ibid., section 14.14 Ibid., section 25(1)(b).

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However if such a person is not charged within a reasonable period of time, thecourt must rescind the restraint order.15 The persons against whom restraint orderscan be granted in terms of Chapter 5 of POCA are accused persons or suspectswho are yet to be charged with a criminal offence.16

The National Director of Public Prosecution17 does not have to establisha threat of dissipation of property in order to obtain a restraint order.18 Theinherent purpose of a restraint order is to preserve property on the premise thatthere is a strong possibility that the property in question may be realised insatisfaction of a confiscation order.19 The restraint order ensures that propertyis preserved so that the property might in due course be realised in satisfactionof a confiscation order.20 The property which is restrained is held as securityagainst the confiscation order which is anticipated. This means that realisableproperty is not necessarily limited to property which is tainted by the allegedoffence. Property which was legitimately acquired by the defendant may alsobe restrained. The latter principle is also applicable to legitimate property of athird party who received an affected gift from a defendant, because such propertyis realisable property, and it may be subject to realisation in satisfaction of aconfiscation order granted against a defendant.21 A restraint order may be madeover property specified in the restraint order or over all realisable property of adefendant, irrespective of whether it is specified in the restraint order.22 Furtherit may also be made over property which will be transferred to the defendant inthe future.23 Thus, where a restraint order is appropriate, the NDPP may seek torestrain all of the defendant’s assets, including unknown assets, and furthermoremay request the court to order the defendant to reveal the whereabouts and allrelevant details of any unknown assets.24 Furthermore, even before a criminalprosecution has been instituted, the NDPP may apply for a restraint order. It isa jurisdictional requisite, however, that if the prosecution against the defendanthas not yet been instituted the court must be satisfied that the defendant is to becharged with an offence.25 The prosecution need not be imminent nor is a chargesheet a prerequisite for the latter jurisdictional requisite. The NDPP must set outhis case in such a manner that the defendant is fairly informed of the case that heor she is called upon to meet, but that does not mean that it must be presented inany particular form.26

15 Ibid., section 25(2).16 Ibid., section 25(1).17 Hereinafter ‘NDPP’.18 Phillips v NDPP 2003 (6) SCA 447.19 NDPP v Rautenbach and Others 2005 (4) SA (603) SCA 84.20 NDPP v Rebuzzi 2002 (1) SACR 122 (N) 128.21 POCA, supra note 2, section 32.22 Ibid., section 26(2).23 Ibid., section 26(2).24 Ibid., section 26(7).25 Ibid., section 25(1)(b)(i).26 NDPP v Rautenbach and Others, supra note 19.


Further it is a jurisdictional requirement that it must appear to the court thatthere are reasonable grounds for believing that a confiscation order ‘may’ bemade against the defendant.27 This means that a court considering an applicationfor a restraint order is required to assess what might occur in the future, that is,whether the criminal court may convict the defendant and whether it may find thatthe defendant benefited from the relevant criminal offences or criminal activitiesrelated thereto. There was uncertainty regarding what the standard of ‘reasonablegrounds for believing’ entailed. A restraint order can only be made once the NDPP‘has discharged the onus of showing a reasonable prospect of obtaining both aconviction in respect of some or all of the charges levied against the accusedperson and a subsequent confiscation order’.28 Where there are multiple charges,the NDPP will have to show that the defendant could derive a benefit from theoffences with which he or she is charged.29 The court making the restraint orderdoes not have to determine that the offences were probably committed. The courtneed only determine that there are reasonable grounds for believing that a courtmight find that they were.30 This is a ‘comparatively light onus of proof on theNDPP’.31 In NDPP v Kyriacou,32 it was held that the reasonable grounds forbelieving standard did not require the NDPP to factually prove that a confiscationorder will be made, and therefore there is no grounds for determining the existenceof reasonable grounds for the application of the principles and the onus that applyin ordinary motion proceedings. In NDPP v Rautenbach33 the court held that indetermining whether there are reasonable grounds for believing that a confiscationorder may be made, the court need only ask whether there is evidence that mightreasonably support a conviction and a consequent confiscation order, even if allthe evidence has not been brought before it, and whether that evidence mightreasonably be believed. This means that the latter will not be the case where theevidence sought to be relied upon proves unreliable. The above two judgmentsreveal that the reasonable grounds for believing standard is rather light whencompared with the standard that an applicant in ordinary motion court proceedingsis expected to meet.

Further it should be noted that, despite the jurisdictional requirements for arestraint order being satisfied, the court has the discretion to grant or to refuse arestraint order. In Rautenbach supra it has been maintained that a court should notthwart legislation by purporting to exercise its discretion by refusing to grant therestraint order. In Kyriacou supra, it has been held that there may, however, becircumstances where, despite all the jurisdictional requirements being satisfied,it would be improper for a court to grant a restraint order, as was the positionin this case, where the only benefit derived by the defendant was in the form

27 POCA, supra note 2, sections 25(1)(a)(ii) and 25(1)(b)(ii).28 NDPP v Tam and Others 2004 (1) SACR 126 (W) 129.29 Ibid.30 NDPP v Rautenbach and Others 2005 (1) SACR 530 (SCA) 27.31 NDPP v Mtungwa 2006 (1) SACR 122 (N) 128.32 NDPP v Kyriacou 2004 (1) SA 379 (SCA) 27.33 NDPP v Rautenbach 2005 (4) SA (603) (SCA) 33.

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of stolen goods which were subsequently returned to the lawful owners. Despitethe fact that the defendant would have benefited from the offence because thedefendant would have received the goods, although they were not retained, inthese circumstances it may be that a restraint order should not, in the properexercise of the court’s discretion, be granted.

Persons affected by a restraint order are deprived of property rights pertainingto property to which the restraint order applies. They are prohibited from dealingin any manner with the property. Further, the restraint order usually entails anorder directing the defendant and other affected persons to surrender their propertyto a curator bonis appointed under section 28 of POCA.

In Chapter 5 of POCA provisions are made for the protection of a defendant’srights. These include the right to anticipate the return day of the provisionalrestraint order on twenty-four hours’ notice and to oppose its confirmation;34 thedefendant may request the court to make provision for his or her reasonable legaland living expenses, subject to certain requirements;35 the defendant may applyfor an order varying the restraint order if the order will deprive him or her of themeans to provide for reasonable living expenses, or will cause undue hardship, andif such hardship outweighs the risk that the property will be lost or destroyed;36 adefendant may apply for variation or rescission of the order appointing a curatorbonis, or an order in respect of immovable property, at any time.37 A defendantmay also appeal against a restraint order.38

There are constitutional safeguards against arbitrary deprivation of propertyrights.39 The discretion granted to the court in granting restraint orders isquestionable. There are no tangible safeguards in POCA to ensure that the courtdoes not exercise a purely subjective discretion. The protection against arbitrarydeprivation of property rights requires that there should be a rational relationshipbetween means and ends. This implies that as far as criminal forfeiture isconcerned there must be a rational relationship between the purpose served bya restraint order and the effect of the order on individuals concerned (there shouldbe no arbitrary deprivation of property rights).

2. The confiscation stage

The confiscation stage of proceedings begins only after a defendant has beenconvicted. The term ‘confiscation’ is used in a broad sense. During theconfiscation stage the public prosecutor in the criminal case may apply to the courtto conduct what is generally referred to as a confiscation enquiry. The primarypurpose of the confiscation enquiry is to determine whether the defendant hasbenefited from any of the offences in respect of which he or she was convicted

34 POCA, supra note 2, section 26(3)(c).35 Ibid., section 26(6).36 Ibid., section 26(10).37 Ibid., sections 28(2) & 29(6).38 Phillips v NDPP, supra note 18.39 Constitution section 25(1): No one may be deprived of property except in terms of a law of

general application and no law may permit the arbitrary deprivation of property.


or from any criminal activity which the court finds to be sufficiently related tothose offences.40 This is determined according to the civil standard of a balanceof probabilities.41 Where the court conducting the confiscation enquiry finds thatthe defendant benefited, the court may make an order against the defendant forpayment to the State of any amount that it considers appropriate.42 This propelsthe second phase of the confiscation enquiry, which is directed at determiningwhether, and for what amount, a confiscation order should be made.43 Section18(2) indicates the amount the court may order the defendant to pay the State.

In addition to specifying what the upper limit of a confiscation order may be,it lies with the discretion of the court to determine any appropriate amount belowthe upper limit. The discretion of the court at a confiscation enquiry is wide,44 andlargely depends on the facts of each case. The court must exercise its discretionrationally. The court must ensure and also be satisfied that the confiscation orderit makes is rationally connected to the purpose sought to be achieved by theconfiscation order.

The underlying purpose of a confiscation order is to ensure that criminalsdo not enjoy the fruits of their criminal conduct.45 The confiscation order isintended to be a deterrent against criminality and to deprive convicted personsof ill-gotten gains.46 It is further directed at removing from criminals the financialmeans of committing further crimes.47 The confiscation order is in addition to anypunishment the court may impose for an offence.48 A confiscation order whichhas the effect of being punishment is contrary to the law.49 The confiscation orderis aimed at confiscating benefits that have accrued to the defendant, regardless ofwhether he or she is still in possession of the proceeds in question.50 Where it isestablished that a material benefit has accrued, the defendant may be directed topay to the State the monetary equivalent of that benefit, even it means that suchpayment is realised from assets that the defendant has acquired legitimately.51

The court’s determination whether a confiscation order ought to be granted isnot affected by the fact that some of the defendant’s assets were acquired priorto the offence in question being committed and that those specific assets werenot acquired through unlawful activities.52 It has been held that the purpose ofa confiscation order is to ensure that a defendant disgorges the fruits of his or

40 POCA, supra note 2, section 18(1). See NDPP v Niemoller, unreported, Case No. A560/04,25 November 2004 (Witwatersrand Local Division).

41 POCA, ibid., section 18(1).42 Ibid., section 18(1).43 Ibid., section 18(2).44 Shabir Shaik and Others v The State (Case No. 248/06) [2006] ZASCA, 6 November 2006, para.

30.45 Shaik v S (Case No. CCT 86/06) [2008] ZACC 7.46 NDPP v Rebuzzi 2002 (2) SA 1 (SCA) 19.47 Shaik v S, supra note 45.48 Shaik v S, ibid.; POCA, supra note 2, section 18(1).49 Shaik v S, ibid.; POCA, ibid.; NDPP v Rautenbach and Others, supra note 30, para 61.50 NDPP v Rautenbach, ibid., para 52.51 Ibid.52 Ibid.

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her criminal actions, in addition to acting as a deterrent. Despite the fact thatthe deterrent purpose may have punitive consequences for a defendant, this willnot in itself render the confiscation order illegal or unjustifiable, in the sense ofbeing an arbitrary deprivation of property.53 In Shaik and Others v The State,54 thedefendants argued that a confiscation order in terms of which they were obliged todisgorge the value of both the dividends received from shares obtained by meansof a corrupt scheme, as well as the value of the shares, was disproportionatebecause it did not serve the rationale of a confiscation order. The dividends wereused to pay off the purchase price of the shares. The Supreme Court of Appeal(SCA) rejected this argument. The SCA held that insofar as there was a punitiveelement involved in such a confiscation order, it was subsidiary to the mainpurpose of the order, which effectively required the defendants to disgorge thegross proceeds of the illicitly acquired shares. In the same judgment, however,the court held that to order one of the defendants to pay an amount equivalentto the value of a separate transaction would be solely penal in nature and wouldonly serve to enrich the State, notwithstanding that from a mechanistic approach,the value of that transaction could be viewed as proceeds consequent of theunlawful activities. This amount was excluded from the confiscation order. Anappeal against the SCA’s judgment was rejected by the Constitutional Court.55 TheConstitutional Court held that the general deterrence of POCA was well served bythe confiscation order made by the trial court. The confiscation order was not‘disturbingly inappropriate’ and was therefore not disproportionate.

Section 19 of POCA provides for the determination of the value of the proceedsof unlawful activities. The court must for the purpose of the confiscation enquirydetermine the value of a defendant’s proceeds of unlawful activities which isthe: ‘sum of the values of the property, services, advantages, benefits or rewardsreceived, retained or derived by him or her at any time, . . . in connection with theunlawful activity carried on by him or her . . . ’.56 The definition of ‘proceeds ofunlawful activities’57 applies for purposes of both Chapter 6 civil forfeitures andconfiscation enquiries:

‘proceeds of unlawful activities’ means any property or any service,advantage, benefit or reward which was derived, received or retained,directly or indirectly, in the Republic or elsewhere, at any time beforeor after the commencement of this Act, in connection with or as aresult of any unlawful activity carried on by any person, and includesany property representing property so derived . . . 58

53 Shabir Shaik and Others v The State, supra note 44, para 30.54 Ibid.55 Shabir Shaik and Others v The State 2008 (5) SA 354 (CC).56 POCA, supra note 2, section 19.57 The definition of ‘proceeds of unlawful activities’ for the purposes of a confiscation enquiry

includes benefits received both directly and indirectly. In Shabir Shaik and Others v TheState, supra note 55, para. 24, it was held that the proceeds of the defendant’s unlawfulactivities included benefits derived by a shareholder of a company that was enriched throughthe shareholder’s criminal activities.

58 POCA, supra note 2, section 1.


This choice of language for purposes of criminal forfeiture is questionable asit borrows directly from the provisions of Chapter 6 civil forfeitures. In NDPPv Mtungwa,59 Hunt J maintained that the definition of ‘proceeds of unlawfulactivities’ was widely worded. He rejected the NDPP’s submission that sections18 and 22 of POCA become operational when the ‘unlawful activities’ are a causasine qua non of the benefits, maintaining rather that the court is constitutionallybound to apply the more stringent test, which is the causa causans test.

In Shaik and Others v The State,60 it was held that for the purposes of aconfiscation enquiry, the determination of the value of gross proceeds, rather thannet proceeds, is required. In NDPP v Rautenbach,61 it was held that the amountfor which a confiscation order may be made is restricted to the lesser of themonetary value of the proceeds of the offences or related criminal activity, orthe net value of the sum of the defendant’s property and certain defined gifts.In NDPP v Kyriacou,62 the court maintained that the fact that a defendant wasrelieved subsequently of a benefit received has no effect on the existence of thejurisdictional fact that is required for a court to exercise its discretion to make aconfiscation order. In Shaik and Others v The State,63 the court a quo held furtherthat a multiplicity of confiscation orders is justifiable where the benefit has passedthrough many hands, although a court may in such circumstances decide in itsdiscretion to phrase its order in such a manner that the recovery in its total effectwill be limited, even though the order is made against many defendants.

Section 20 of POCA provides for the amounts which might be realised atthe time of making a confiscation order against a defendant. Section 20(1) ofPOCA allows the court the discretion to allow or disallow claims. The obligationssubtracted in terms of section 20(1) are those which have ‘priority and which thecourt may recognise for this purpose’. An assessment of the facts surroundingalleged priority in relation to an asset in the defendant’s estate will guide the courtin deciding whether to have that asset forfeited. Section 30(5) POCA providesfor possible steps that may be taken by creditors of the defendant. Any of thedefendant’s expenses in connection with an asset and with regard to which thecourt finds some form of ‘priority’ may be deducted by the court when it makes aconfiscation order. Section 18(2) POCA clearly provides that a confiscation orderis not limited to a net amount. A confiscation order can be made in respect of anyproperty which falls within the ambit of the broader definition of ‘property’.64

As soon as it is established that a material benefit was derived, the fact thatsome of the assets to be confiscated or restrained were acquired by the defendantbefore the offence was committed is irrelevant.65 The confiscation and restraint

59 NDPP v Mtungwa, supra note 31.60 Shabir Shaik and Others v The State, supra note 44, para. 28.61 NDPP v Rautenbach and Others, supra note 19, para. 27.62 NDPP v Kyriacou, supra note 32, para. 12.63 Shabir Shaik and Others v The State, supra note 44, para. 25.64 Shaik v S, supra note 45, para. 60.65 NDPP v Rautenbach and Others, supra note 19, para. 52.

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orders enable the confiscation of the defendant’s assets whether lawfully acquiredor not.66

3. The realisation stage

This stage is initiated when a defendant fails to satisfy a confiscation order, andwhich in essence is a specialised form of execution against affected property.67

An application for realisation of property takes place after a confiscation orderhas been granted. The objective of such an application is to obtain a court orderdirecting any person who holds realisable property to hand such property to thecurator bonis. Realisable property is defined as follows:

(1) . . . the following property shall be realisable . . . namely–(a) any property held by the defendant concerned; and(b) any property held by a person to whom that defendant has directlyor indirectly made any affected gift.(2) Property shall not be realisable property if a declaration offorfeiture is in force in respect thereof.68

The court order empowers the curator bonis to obtain property which is notincluded in the confiscation order. Where a curator bonis has not been appointedwhen an application for a realisation order serves before the court, the courthearing the application makes that appointment.69 A realisation of property orderbroadens the application of the confiscation order.

4. Presumptions relevant to Chapter 5 of POCA

Section 22 of POCA contains presumptions regarding proceeds of crime. In termsof section 22(1) of POCA, if it is found that the defendant at the date of theinstitution of the prosecution or the date on which the restraint order is made,did not have legitimate sources of income sufficient to justify the interests inthe property, the court must accept this fact as prima facie proof that the interestformed part of any benefit derived from offences or criminal activity as stipulatedin section 18(1) of POCA. The court must further take cognisance of the fullperiod of seven years preceding the date on which the prosecution was institutedor that on which the restraint order was made. The court ought to take cognisanceof the fact that the defendant did not have legitimate sources of income during thisseven-year period in order to provide prima facie evidence that such interests formpart of the benefit derived from criminal activity; however, there is no provision inPOCA for a presumption referring to a period shorter than seven years. In NDPP vKyriacou,70 it was maintained in the minority judgment that section 22(1) applieswhen the court does not know whether the defendant has derived any benefits

66 NDPP v Mcasa and Another 2000 (1) SACR 263 (Tk) 96.67 POCA, supra note 2, sections 30–6.68 Ibid., section 14.69 Ibid., section 30(2)(a).70 NDPP v Kyriacou, supra note 32, para. 41.


from the offence. It was further maintained in Kyriacou that if the NDPP intendedthe application of the presumptions, it ought to allege that the defendant did nothave sufficient legitimate sources of income to justify the interests in the propertythe defendant holds and provide evidence in this regard. Where the NDPP doesnot dispute the explanation provided by the defendant, the NDPP cannot rely onthe presumption. In Kyriacou supra in terms of the minority judgment, it wasalso maintained that section 22(3) only applies if the court is unable to determinethe value of the defendant’s proceeds of unlawful activity. Section 22(3) requiresthe court to apply certain prima facie evidentiary presumptions for purposes ofdetermining the value of the defendant’s proceeds. Once it is established that thedefendant has benefited, it is presumed that all property held by the defendant atthe time of his or her conviction or in the seven years prior to the institution of theprosecution, as well as all expenditure incurred during that period, was derivedfrom, or met out of the proceeds of the defendant’s unlawful activities. Thesepresumptions are directed at placing an evidentiary burden on the defendant torebut them. If the defendant is unable to do so, then the value of the properties heldand expenditure incurred will be included in the value of the proceeds from thedefendant’s unlawful activities. Thus far there has been no constitutional challengeto these presumptions and no pronouncement thereon by either the ConstitutionalCourt or the Supreme Court of Appeal.71 In NDPP v Phillips and Others,72 thepresumptions were found to be ‘unobjectionable’.

B. In the US

Asset forfeiture law is an integral part of criminal law enforcement in the UnitedStates. The following reasons are advanced for including forfeiture of assetsas part of criminal law enforcement. Primarily, law enforcement agents andthe courts do not only want to arrest the offender and sentence him or her toimprisonment for a period of time, but also to remove the instruments of crimefrom circulation, either by the offender himself or herself or by members ofhis or her organisation. Second, in any case where the crime involves innocentvictims, such as fraud and property-related crimes, asset forfeiture is the mosteffective means of recovering property that may be used to compensate thevictims. Restoration of property to victims in white-collar cases is the primarypriority of law enforcement when it comes to disbursing forfeited property,73 andmuch time and effort is exerted in such cases to ensure that the offender’s assetsare preserved pending trial. Third, asset forfeiture takes the profit out of crime.

Asset forfeiture laws in the United States were developed over a long periodof time. They were not written in generic terms. There is neither a common lawof forfeiture nor a single provision authorising forfeiture in all cases. Different

71 Ibid., para. 15.72 NDPP v Phillips and Others 2002 (4) SA 60 (W) 51.73 18 U.S.C. 981(e)(6), authorises the government to use forfeited property to pay restitution, in

civil forfeiture cases, to victims of crime. The same is applicable for criminal forfeiture, U.S.C.853(i).

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forfeiture provisions were enacted at different times for different offences, withthe result that what can be forfeited varies greatly from one offence to another.There is no coherence in the process. For certain crimes, law enforcement canconfiscate only the proceeds of the offence itself,74 or only the instrumentalitiesused to commit the offence.75 Then, there are other broader statutes, which permitthe forfeiture of any property ‘involved’ in an offence,76 or property that provides acriminal with economic power over a criminal organisation, whether that propertywas involved in the offence or not.77 Ultimately, there is one statute which permitslaw enforcement to confiscate virtually everything which the wrongdoer owns.78

In the United States, Rule 32.2 of the Federal Rules of Criminal Procedureand various statutes govern the criminal forfeiture process. To initiate acriminal forfeiture action, the prosecutor must give the defendant notice of thegovernment’s intention to forfeit his or her property by including a forfeitureallegation in the indictment.79 The case then proceeds to trial in the normal mannerapplicable to any criminal case, except that if the property is not already ingovernment custody, the government may apply for a pre-trial restraining orderto preserve the property pending the conclusion of the criminal trial.80 Duringthe trial no mention is made of the forfeiture, until and unless the defendantis convicted. Once the defendant is convicted, however, the court will hearadditional evidence, arguments and instructions on the forfeiture and will return aspecial verdict finding, by a preponderance of evidence, that the government hasestablished the required connection between the property and the crime.81 Thismeans that the court must determine that the property in question was in fact theproceeds of the offence, constituted facilitating property or the property involvedin the offence, or had whatever other relationship to the offence that the applicableforfeiture statute calls for. The court enters a preliminary order of forfeiture, oncethe finding is made, which is made final and included in the judgment of the courtat sentencing.82 The court is not concerned with ownership of property at this stageof the case. The latter issue is not litigated until and unless a third party conteststhe forfeiture on ownership grounds in the post-trial ancillary proceeding.83

In the United States, criminal forfeiture is part of the sentence in a criminalcase,84 and is a punitive act against the defendant. In the United States, criminalforfeiture is regarded as an in personam action against the defendant and not

74 18 U.S.C. 981(a)(1)(C).75 18 U.S.C. 470gg.76 18 U.S.C. 981(a)(1)(A) & 982(a)(1) authorise civil and criminal forfeiture, respectively, of all

property involved in a money laundering offence.77 18 U.S.C. 1963(a)(2) authorises forfeiture of any property giving a defendant a source of

influence over a racketeering enterprise.78 18 U.S.C. 981(a)(1)(G) authorises forfeiture of all assets of a person engaged in terrorism.79 Federal Rules of Criminal Procedure, Rule 32.2(a).80 21 U.S.C. 853(e).81 Federal Rules of Criminal Procedure, Rule 32.2(b).82 Ibid.83 Ibid., Rule 32.2(b)&(c).84 Libretti v United States 516 U.S. 29.


an in rem action against property involved in an offence.85 The in personamnature of criminal forfeiture has important consequences. The court in a criminalforfeiture case can order the defendant to pay a money judgment or to forfeitsubstitute assets if the ‘forfeitable property’ has been dissipated or cannot betraced.86 The in personam nature of criminal forfeiture means further that onlyproperty belonging to the defendant can be forfeited in a criminal case.87 Thelatter is not strictly true. If the government establishes a connection betweenthe property and the offence by a preponderance of evidence, any property, forexample the proceeds of the offence or property used to facilitate it, may beincluded in the forfeiture order.88 The defendant’s ownership of the property isirrelevant, at the time the order of forfeiture is entered into.89 Property may beforfeited even if the defendant has no legal interest in the property. Examples ofsuch property are contraband, the proceeds of a drug sale and money launderedby the defendant for a third party. In order to protect the property rights of thirdparties, there must be a procedure to ensure that the property subject to forfeiturein a criminal case does not belong to a third party. This procedure is called the‘ancillary proceeding’ and is conducted by the court after the criminal trial isconcluded.90

III. CIVIL FORFEITURE

A. In South Africa

Chapter 6 of POCA embodies an attempt by South Africa to police and curborganised crime in particular. POCA is aimed at supplementing criminal remediesin appropriate cases and not merely as a more convenient substitute.91 Centralto its effectiveness is the power it gives the State to confiscate property thatrepresents the proceeds of unlawful activity or which is used as an instrumentof such activity. POCA contemplates three types of asset forfeiture, namely, theforfeiture of instrumentalities of offences, the forfeiture of unlawful activities(proceeds forfeiture) and forfeiture of property held by a person who is convictedof a criminal offence (criminal forfeiture). Both instrumentality forfeiture andproceeds forfeiture are civil forfeitures in that no conviction is necessary. It needonly be shown on a balance of probabilities that the property is an instrument orthe proceeds of an offence.

85 United States v Vampire Nation 451 F.3d 189 (3d Cir. 2006). A criminal forfeiture order is ajudgment in personam against the defendant. This distinguishes the forfeiture judgment in acriminal case from the in rem judgment in a civil forfeiture case.

86 Austin v United States 509 U.S. 602 (1993).87 United States v Nava 404 F.3d 1119 (9th Cir. 2005) 1124.88 De Almeida v United States 459 F.3d 377 2006 WL 2106603 (2nd Cir. 2006).89 Ibid. Further, see Federal Rules of Criminal Procedure, Rule 32.2(b)(2), which provides that the

preliminary order of forfeiture must direct the forfeiture of specific property, without regard toany third party’s interest in all or part of it.

90 United States v Totaro 345 F.3d 989 (8th Cir. 2003) 993.91 NDPP v Van Staden and Others 2007 (1) SACR 338 (SCA), para. 7.

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Civil forfeiture under Chapter 6 of POCA involves a two-stage process:

1. A preservation stage, which is characterised by the granting of apreservation of property order in terms of section 38(1) of POCA(hereinafter ‘preservation order’).

2. A forfeiture stage, which is characterised by the granting of a finalorder in terms of which the property concerned is forfeited to theState.

1. The preservation stage

Section 38(1) of POCA allows the NDPP to apply to a High Court for apreservation order, which, similar to a restraint order, prohibits any person fromdealing in any manner with the property concerned. Only a High Court can granta preservation order. The application is almost without exception brought ex partebefore the duty judge.92 Almost invariably the application is made ex parte,requesting the matter to be heard in chambers, although the property is at that stagepractically without exception in police custody.93 The registrar sends the file to theduty judge, who determines the time for the hearing and notifies the NDPP’s localrepresentative indicated in the notice of motion. The NDPP is expressly given thepower to proceed ex parte, or without notice, to any affected person in applyingfor a preservation order. While the NDPP has a similar power under the criminalforfeiture process, section 38 of POCA does not make express provision for thecourt to grant a provisional preservation order. Conversely, Chapter 5 of POCAexpressly provides that although the NDPP may apply ex parte for a restraintorder, the court may grant such an order in a provisional form, with a return dayupon which the confirmation of the order may be opposed. The provisions ofsection 38(1) and the distinction between them and the comparable provisionsof Chapter 5 of POCA initiated a constitutional challenge to the section, basedon an alleged infringement of the right of access to the court.94 The High Courtfound that section 38 of POCA was unconstitutional because it required the NDPPto proceed without notice to interested parties in every case, and additionally, inthat courts could not under section 38 of POCA grant a provisional preservationorder with a return day, which would allow interested parties to oppose thepreservation order. The Constitutional Court interpreted section 38 of POCAas being consistent with the constitution. The Constitutional Court found thatalthough the NDPP was entitled to apply in every case for a preservation orderwithout notice, the principle of audi alteram partem was not excluded. This meantthat in considering applications for preservation orders, courts can still apply theprinciples relating to provisional orders and return days.

92 NDPP V Braun and Another 2007 (1) SACR 326 (C), para. 22.93 P. Kruger, Organised Crime and Proceeds of Crime Law in South Africa, LexisNexis (2008),

p. 100.94 The relevant judgments are: Mohamed NO and Others v NDPP and Another 2002 (4) 366 (W);

NDPP v Mohamed NO and Others 2002 (4) SA 843 (CC); Mohamed NO and Others v NDPPand Another 2003 (1) SACR 286 (W); and NDPP and Another v Mohamed NO and Others 2003(4) SA 1 (CC).


In terms of section 38(2) of POCA, the court shall make a preservation orderif there are ‘reasonable grounds to believe’ (the grounds giving rise to the beliefmust be reasonable and the belief must be objectively rational95) that the propertyconcerned is either an instrumentality of a Schedule 1 offence, or is the proceedsof unlawful activity.96 These are the jurisdictional requirements for the grantingof a preservation order and the NDPP is not required to satisfy the court that aforfeiture order will be made subsequently.97 The Supreme Court of Appeal hasmaintained that, even though the jurisdictional requirements are satisfied, a courtis entitled to refuse to grant a preservation order where it is clear to the courton evidence presented in papers before it that it would be unconstitutional for aforfeiture order to be made eventually.98

Once a preservation order is granted, notice of the preservation order mustbe given to all persons known to the NDPP to have an interest in the propertyconcerned.99 The NDPP is also required to give notice of a forfeiture applicationto all persons who entered an appearance of an intention to oppose after receivingnotice of the preservation order.100 Such persons are entitled to appear and opposethe forfeiture application or to apply for an order excluding their interest in theproperty from the operation of the forfeiture order.101

Generally, opposition to civil forfeiture under Chapter 6 of POCA is raised atthe forfeiture stage of proceedings; however, it is possible for a person affectedby a preservation order to raise a challenge to the preservation order, either in theform of an appeal102 or in the form of an application for a variation or rescissionon the grounds provided for in Chapter 6 of POCA.103

The purpose of a preservation order is to preserve the property that is intendedto be made subject to a forfeiture order. A preservation order remains in force fora period of 90 days after the date on which it was published in the GovernmentGazette.104 In Levy v NDPP105 the court set aside an application for a forfeitureorder as an irregular proceeding in terms of Rule 30 of the Uniform Rules ofthe High Court when no application forfeiture order was made within the 90-dayperiod.

Service of the application for forfeiture is necessary in order to render thepreservation order still pending as contemplated in section 40(a) of POCA.

95 NDPP v Van Stander and Others 2008 (1) SACR 116 (E), para. 13.96 Ibid.; POCA, supra note 2, section 38(2). Since 2004, a preservation order (and a forfeiture

order) may also be made in respect of property associated with terrorist and related activities.This approach of Chapter 6 of POCA is yet to be tested in practice.

97 NDPP v Van Staden and Others, ibid., para. 9.98 Ibid.99 POCA, supra note 2, section 39(1).

100 Ibid., sections 48(2)&(3).101 Ibid., section 48(4).102 Singh v NDPP, unreported, case no. 268/06. The Supreme Court of Appeal maintained that a

preservation of property order was appealable.103 POCA, supra note 2, section 47 provides the grounds upon which an application for rescission

or variation may be granted.104 Ibid., section 40.105 Levy v NDPP 2002 (1) SACR 162 (W), para. 7.

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The outcome of forfeiture proceedings in terms of section 35 of the CriminalProcedure Act106 after conviction does not serve as any standard for a preservationorder in terms of section 48 of POCA.107 In NDPP v Swart the court set out anumber of fundamental differences between section 35 of the Criminal ProcedureAct and section 48 of POCA: section 35 of the Criminal Procedure Act entails acriminal process, while section 48 of POCA as prescribed by section 37 of POCAis civil in nature; forfeiture in terms of the Criminal Procedure Act is dependentupon a conviction, while a conviction is not a sine qua non for a forfeiture interms of POCA. In terms of POCA, it is only necessary to establish on a balanceof probabilities that the property concerned is an instrumentality of an offence oris derived from the proceeds of unlawful activities; and the State cannot appealagainst a refusal to grant a forfeiture order in terms of the Criminal ProcedureAct. There is no apparent reason why an appeal would not lie, as in any other civilproceedings, in an application brought in terms of section 48 of POCA.

2. The forfeiture stage

Although a different standard is applied, the jurisdictional requirements for thegranting of a forfeiture order are essentially the same as those for a preservationorder. In terms of section 50(1) of POCA, for the purposes of a forfeiture order thecourt must be satisfied on a balance of probabilities that the property concerned isan instrumentality of a Schedule 1 offence, or that it is the proceeds of unlawfulactivities, or that the property is associated with terrorist and related activities.

The meaning of ‘instrumentality of an offence’ has been the subject of debate.In NDPP v RO Cook Properties (Pty) Ltd108 the Supreme Court of Appeal heldthat giving the definition its literal meaning could result in arbitrary deprivationsof property in contravention of the safeguards afforded in terms of section 25of the constitution.109 Forfeitures that do not rationally advance the interrelatedpurposes of Chapter 6 of POCA are unconstitutional.110 The court maintained thatthe latter purposes included inter alia: removing incentives for crime, deterringpersons from using or allowing their property to be used in crime, eliminatingor incapacitating some of the means by which crime may be committed, andadvancing the ends of justice by depriving those involved in crime of the propertyconcerned.111 The court took cognisance of the fact that the second and fourth ofthese purposes have a penal element, contrary to the provisions of Chapter 6 ofPOCA, which are remedial in nature.112 Further the court also took cognisanceof the fact that persons with an interest in affected property were only providedwith limited protection in terms of the ‘innocent owner’ provisions of section 52

106 Criminal Procedure Act 51 of 1977.107 NDPP v Swart 2005 (2) SACR 186 (SE) 191.108 NDPP v RO Cook Properties (Pty) Ltd [2004] 2 All SA 491 (SCA), para.15.109 Act 108 of 1996.110 NDPP v RO Cook Properties (Pty) Ltd, supra note 107, para. 29.111 Ibid., para. 18.112 Ibid., para. 17.


of POCA.113 The court on the basis of the above-mentioned reasons maintainedthat a narrow interpretation of the definition of ‘instrumentality’ was needed inorder to ensure that it meets constitutional standards. The court concluded that theproperty must play a reasonably direct role in the commission of the offence.114

The property should in a substantial sense facilitate the offence.In order to avoid section 50(1) not surviving constitutional scrutiny, the courts

have determined that a proportionality enquiry must be undertaken in every casein which it is established that property is an instrumentality in order to ensure thatthere is rational connection between the forfeiture of the particular instrumentalityconcerned and the purposes sought to be advanced by such forfeiture. This is aconstitutional imperative.115 The proportionality enquiry is aimed at determiningwhether the granting of a forfeiture order would amount to arbitrary deprivation ofproperty in contravention of section 25 of the constitution.116 The proportionalityenquiry determines the severity of interference with individual rights to propertyagainst the extent to which the property was used for the purposes of committingthe offence, taking into account the nature of the offence.117 Strictly speaking,proportionality should only be relevant to instrumentality, because regardingproceeds it will be difficult to find that making a forfeiture order would bedisproportionate in relation to allowing the respondent to keep the proceeds ofcrime.118 When considering proportionality, it is important to determine howclosely or how remotely the offence in question was connected to the mainpurpose of POCA.119 In Prophet v NDPP120 the Constitutional Court identifieda number of factors that must be considered when undertaking a proportionalityenquiry. These factors include: whether the property is integral to the commissionof the offence; whether the forfeiture would prevent the further commission ofthe offence and the social consequences of the offence; whether the innocentowner defence would be available to the owner; the nature and use of the property;and the effect on the respondent of the forfeiture. In Mohunram supra, all threejudgments were in agreement that the proportionality assessment is a legal oneand that the NDPP bears the onus in each case of establishing the proportionalityof the forfeiture sought.

As regards unlawful activities, the court may grant a forfeiture order if itfinds on a balance of probabilities that the property is the proceeds of unlawfulactivities.121 ‘Unlawful activity’ is defined in section 1 of POCA as ‘conductwhich constitutes a crime or which contravenes any law’. The court must considerproportionality, and it may refuse to make a forfeiture order or it may make one

113 Ibid., para. 24.114 Ibid., para. 32.115 Mohunram v NDPP 2007 (4) SA 222 (CC), para.130.116 Ibid., para. 56.117 Prophet v NDPP 2005 (2) SACR 670 (SCA), para. 47.118 Kruger Organised Crime and Proceeds of Crime Law in South Africa 2008, 118.119 NDPP v Geyser [2008] ZASCA 15 (25 March 2008), para. 20.120 Prophet v NDPP 2006 (2) SACR 525 (CC), para. 58.121 POCA, supra note 2, section 50(1).

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in relation to only some of the items claimed by the NDPP if the situation sodemands. The NDPP must establish that an unlawful activity has been committedby the respondent, and that the property was derived, received or retained, directlyor indirectly, in connection with or as a result of any unlawful activity carried onby the respondent.122 The onus of showing that forfeiture is justified rests on theNDPP.123

Section 57 of POCA is aimed at ensuring that the curator bonis acts underinstructions of the Criminal Assets Recovery Committee established in terms ofsection 65 of POCA. The court retains its supervisory role over the curator bonis.

B. In the US

Asset forfeiture has an ancient tradition in the United States dating back to Englishcommon law.124 All of the early statutes allowed the government to forfeit propertyby filing a civil suit against the property itself, rather than by filing an action, civilor criminal, against the property owner. The approach was that the property itselfwas the offender and could be named as the defendant in rem in a civil case.125

This was a matter of necessity and convenience. Approaching a case as an actionagainst property meant that the role of the owner in the commission of the offencewas irrelevant.

Today in the United States it is said that the property is the subject offorfeiture not because the property itself did something wrong, but because itwas the ‘instrumentality’ of the offence.126 A dramatic expansion of forfeiturelaws occurred in 1978 and 1984 when the United States Congress amended thedrug forfeiture statutes, initially to allow the proceeds of the offence, and then topermit the forfeiture of property used to facilitate it.127 The notion of forfeiting theproceeds of crime was a new concept, and forfeiting facilitating property meantthat government could confiscate not only the instrument used to commit theoffence, but also any property that made the crime easier to commit or harderto detect.128 By the 1990s, civil forfeiture authority had not only been extendedto cover proceeds and facilitating property, but had also been extended to mostfederal crimes. Until today there is no single over-arching legislation authorisingforfeiture in all federal cases, but there is forfeiture authority for almost all seriousoffences. The legal fiction that the property itself had done something wrong, or

122 POCA, supra note 2, section 50(1)(b) read with the definition of ‘proceeds of unlawful activities’in POCA, section 1.

123 Mohunram and Another v NDPP and Others 2007 (2) SACR 145 (CC), para. 131.124 Austin v United States, supra note 85, 611.125 The Palmyra, 25 U.S. (12 Wheat) 1827 14 ‘the thing is here primarily considered as the offender,

or rather the offense is attached primarily to the thing . . . ’. Thus the proceeding in rem standsindependent of, and wholly unaffected by any criminal proceeding in personam.

126 United States v Bajakajian 524 U.S. 321 (1998) 340.127 21 U.S.C. 881(a)(6) (enacted 1978) (authorising the forfeiture of the proceeds of a drug offence);

21 U.S.C. 881(a)(7) (enacted 1984) (authorising forfeiture of real property used or intended tobe used to commit or to facilitate the commission of a drug related offence).

128 United States v Schifferli 895 F.2d 987 (4th Circuit 1990) 336.


even that it was the instrument by which the crime was committed, has givenway to the more modern approaches of in rem forfeiture. Proceedings in rem arestructures that allow the government to quiet title to criminally tainted propertyin a single proceeding in which all interested persons are required to file claimscontesting the forfeiture at one time.129 Civil forfeiture is entirely independent ofand unaffected by any criminal proceeding, and the role of the property ownerin the commission of the offence is irrelevant.130 The government only needs toprove by a preponderance of evidence that the property was derived from, used tocommit or used to facilitate the commission of a criminal offence.131

In the United States, civil forfeiture is not part of a criminal case. A civilforfeiture does not depend upon a criminal conviction, and a forfeiture action maytherefore be filed before indictment, after indictment or if there is no indictment atall.132 Essentially, when the government commences an in rem forfeiture action, itis implying that the property was derived from or was used to commit a criminaloffence, and that for law enforcement and legislative reasons, the property oughtto be confiscated. Civil forfeiture actions are procedurally similar to other civilactions. The government as plaintiff files a verified complaint alleging that therelevant property is subject to forfeiture in terms of the applicable forfeiturestatute, and that claimants are required to file claims to the relevant property andto answer the forfeiture complaint within a specified period of time.133 The casethen moves forward through civil discovery, motion procedures and trial. A trialby jury is guaranteed by the seventh Amendment if the claimant has standingand asserts the right to a jury at the trial.134 The government bears the onus ofestablishing by a preponderance of evidence that the property is forfeitable.135

If the government establishes a link between the property and the offence, thecase is not necessarily over. In order to protect the interests of innocent propertyowners who had no knowledge that their property was being used for an unlawfulpurpose, or who took all reasonable steps under the circumstances to stop it, the‘uniform innocent owner defence’ was enacted.136 In terms of the latter statute, aperson contesting the forfeiture must establish his or her ownership interests andhis or her innocence by a preponderance of evidence. If the government eventuallyestablishes that the property is forfeitable, and no claimant is able to prove theelements of the innocent owner defence, the court will enter judgment for thegovernment and title to the property will pass to the United States.

Asset forfeiture has come under considerable opposition from Americans whoconsider themselves guardians of individual liberties. Dissatisfaction with civilasset forfeiture was so great in 1998 and 1999 that the Civil Asset Forfeiture

129 United States v Bajakajian, supra note 125, 421.130 United States v One Assortment of 89 Firearms 465 U.S. 354 (1984) 366.131 United States v Ahmad 213 F.3d 805.132 United States v Cherry 330 F.3d 658 (4th Circuit 2003) 666.133 18 U.S.C. 983.134 United States v One Lincoln Navigator 328 F.3d 1011 (8th Circuit 2003) 1014.135 18 U.S.C. 983(c).136 18 U.S.C. 983(d).

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Reform Act of 2000 passed in Congress by a landslide. Though the protectionsof the Civil Asset Forfeiture Reform Act have quelled some of the oppositionto civil asset forfeiture, significant dissatisfaction remains.137 American courtshave upheld civil asset forfeiture against countless objections using an age-oldtheory termed the rem fiction.138 Under such a legal theory, property may beforfeited without a showing of culpability of the owner and, in extreme cases,without notifying the owner. The supreme folly of the rem fiction, however, isthe paradox that has resulted from two relatively recent cases, Austin v UnitedStates139 and Bennis v Michigan.140 Austin held that the Excessive Fines Clauseof the constitution limits civil asset forfeiture, while Bennis held that an innocentowner defence to civil asset forfeiture is not required by the constitution. Fromthese findings it can be concluded that an innocent owner, that is, one who bydefinition has committed no knowing or wilfully blind wrong, and who mustforfeit his or her property, is not excessively fined. This conclusion presentsa paradox, however, because penalising an innocent person would seem to bethe quintessential excessive fine.141 It is this core paradox that prompted JusticeStevens in his Bennis dissent to write: ‘our recent decision in [Austin] compelsreversal’.142 The divergent results of the court in Austin and Bennis are attributableto its reliance on a variety of doctrinal techniques in Austin and an almost exclusivereliance on the in rem fiction. The in rem fiction has led to a legitimacy problem forcivil forfeiture. On the face of it the fiction is alarming, and it has been criticised bythe Supreme Court, and has led to an unsightly paradox in the canon of Americancase law.

IV. CONCLUSION

POCA provides for two sets of mechanisms for the forfeiture of benefits of crimeto the State. The first of these mechanisms is contained in Chapter 5 of POCA(sections 12–36) and Chapter 6 (sections 37–62). Chapter 5 applies to so-called‘proceeds of unlawful activities’.

The South African constitution aims at creating a fair and just society, a societyin which crime does not pay. The confiscation of the proceeds of crime hasemerged as the new ‘big idea’ for controlling criminal behaviour in the twenty-firstcentury. POCA is the mechanism by means of which this idea is to be delivered.Although some of the methods of confiscation contained in POCA have theirroots in previous legislation, POCA’s aim of creating a hierarchal regime of assetrecovery marks a radical change in South African criminal and procedural law.It poses a challenge to the criminal justice system. POCA is by far the most

137 http://www.fear.org (accessed 21 November 2010).138 Austin v United States, supra note 85, 615. ‘The fiction that “the thing is primarily considered

offender,” has a venerable history in our case law.’139 Ibid.140 Bennis v Michigan 516 U.S. 442 (1996).141 Austin v United States, supra note 85, 628.142 Bennis v Michigan, supra note 139.


significant step in the diminishing distinction between criminal and civil law thathas become a staple characteristic of modern crime control strategy.

In South Africa, POCA embodies an aggressive parliamentary stance againsta rapid growth of organised crime and criminal gang activities nationally andinternationally. POCA fortifies law enforcement through several mechanisms.Civil asset forfeiture minimises the government showing required to confiscatetainted assets. POCA provides for a civil remedy for the preservation and seizure,and forfeiture of property which is derived from unlawful activities or is concernedin the commission or suspected commission of an offence. POCA enables theNational Director of Public Prosecutions in South Africa to take property whenon a balance of probabilities, it appears that the property is either the proceeds ofunlawful activities, or was an instrumentality of an offence. The civil forfeiture ofproperty focuses on the origin of the property. It is a proprietary remedy whichattaches to the property. It is not dependant on the person who holds the propertyhaving been convicted or, more specifically, having committed any offence.POCA’s civil forfeiture provisions lie between the polar opposites represented bythe US forfeiture regime. POCA creates new possibilities for the prevention anddetection of crime.

POCA is a complex piece of legislation. There are numerous issues arising outof both criminal forfeiture under Chapter 5 of POCA and civil forfeiture underChapter 6 of POCA that have not been resolved and many more that have not yetbeen raised. The full depths of asset forfeiture law in South Africa have yet to bechartered.

In South Africa, POCA contemplates three types of asset forfeiture, namely,the forfeiture of instrumentalities of offences, the forfeiture of unlawful activities(proceeds forfeiture) and forfeiture of property held by a person who is convictedof a criminal offence (criminal forfeiture). Instrumentality forfeiture and proceedsforfeiture are civil forfeitures in that no conviction is necessary. It need only beestablished that the property is an instrument of or the proceeds of an offence.Despite the extraordinary range and nature of orders that may be made underPOCA, the Act is silent on the position and protection of third parties, for examplea bank that has granted finance to a person or entity whose property is restrained,and that the bank, as security for the loan has registered mortgage bonds oversuch person’s immovable property. Often a mortgage bond would provide cessionto the bank of any rentals in the event of the mortgagor’s default.

POCA embodies a serious attempt to police and curb organised crime.Although POCA has spent over a decade on the statute books, the constitutionalramifications of its asset forfeiture provisions are still emerging. Two recentConstitutional Court cases have explored the tension between the robust assetforfeiture mechanisms provided for by POCA and the need to avoid arbitrarydeprivations of property.143

143 Simon Prophet v National Director Public Prosecutions 2006 (2) SACR 525 (CC), andMohunram v NDPP, supra note 114.

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From a constitutional perspective, cognisance ought to be taken of thefollowing aspects, relating to asset forfeiture in terms of POCA:

The in rem fiction raises legitimacy concerns and can lead to problems forcivil asset forfeiture. The fiction is alarming on its face, has been criticisedinternationally and can lead to an unsightly paradox in the canon of South Africancase law. Since South Africa does not have a binding tradition of forfeiture, theSouth African Constitutional Court should down play down the in rem fiction andfocus instead on doctrinal arguments that illuminate POCA’s constitutionality.

The constitution states that ‘no law may permit arbitrary deprivation ofproperty’.144 There is very little South African jurisprudence expounding theconcept of arbitrariness. The High Court has addressed arbitrariness in thedomain of warrants for search and seizure. In Deutschmann NO v Commissionerfor the Revenue Service,145 the State, after an ex parte proceeding, issued awarrant to seize property believed to represent the proceeds of tax fraud. Theconstitutionality of the issuance of the warrant was questioned. The ownersobjected on the ground of arbitrariness and the court maintained that:

The provisions in terms of which the warrant was sought andobtained in both matters do anything but permit arbitrary deprivationof property – these provisions require an application supported byinformation supplied under oath and the exercise of discretion by ajudge. The judge who authorises the warrant does not thereby affectthe property or the rights to such property vesting in an individual.Any party remains free, in terms of the statute, to establish hisentitlement and claim delivery.146

Thus the three pillars enumerated by the court were an informative application,discretionary judicial authorisation and an opportunity to establish entitlement. InPOCA, deprivation is achieved only after an application and exercise of judicialdiscretion.147 The opportunity to establish entitlement is left with the owner onthe basis of an innocent owner defence proceeding. On the basis of the aboveanalysis, under the South African judiciary’s conception of arbitrariness, POCAwould probably pass constitutional muster with relative ease.

The deprivation of property in terms of POCA’s civil asset forfeiture provisionsis questionable, in that it is applied by the NDPP and his or her staff, who derivetheir authority from the same legal system that articulates the offences for whichthe forfeiture proceeding is initiated.

The presumption of innocence probably poses the most serious constitutionalchallenge to civil forfeiture in terms of POCA. In S v Zuma,148 the ConstitutionalCourt explicitly set out the parameters of presumption of innocence protection:‘the presumption of innocence is derived from the century old principle of English

144 Section 25.145 Deutschmann NO v Commissioner for the Revenue Service 2000 (2) SA 106 124 (E).146 Ibid.147 POCA, supra note 2, section 38(1).148 S v Zuma 1995 (2) SA 642 (CC) 656.


law, . . . it is always for the prosecution to prove the guilt of the accused person,and . . . the proof must be proof beyond a reasonable doubt.’

In Zuma the court adopted a two-pronged approach:

1. The presumption of innocence is infringed whenever the accused isliable to be convicted despite the existence of a reasonable doubt.

2. If by the provisions of a statutory presumption an accused is requiredto establish, that is to say, to prove or disprove, on a balance ofprobabilities either an element of an offence or an excuse, thenit contravenes section 11(d).149 Such a provision would permit aconviction in spite of reasonable doubt.150

In terms of POCA, the State need only prove its case on a balance ofprobabilities. This appears to violate approach (1) above because a reasonabledoubt can exist regardless of the balance of probabilities standard having beingmet. The innocent owner defence is not an adequate prophylactic because theinnocent owner defence violates approach (2) above. It requires the defendant toestablish an excuse on a balance of probabilities. This is too high a standard. Itmay permit conviction despite a reasonable doubt. Although the presumption ofinnocence as formulated in Zuma does not disqualify the burden shift entailedin POCA per se, it does, however, discredit the balance of probabilities standardadvanced by POCA.

Notwithstanding constitutional assurances as to the primacy of criminal lawand procedures, the new system of civil asset forfeiture under POCA gives riseto a number of scenarios which have the potential to raise concerns about abuse.Section 35(3)(m) of the constitution advances what amounts to a double jeopardyprovision. In the context of civil asset forfeiture, the logical interpretation ofthis provision is that a second trial may not follow, since the first trial (if onlynominally civil) would be preclusive. The State would have to combine thePOCA proceedings with the underlying criminal proceedings and engage in asingle unified litigation. If POCA was punitive, a body of constitutional rightsfor the accused would follow, effectively eviscerating POCA. Accommodating ameaningful right to counsel and requiring a prosecution in conjunction with thecivil case would entail increased administrative and related costs, while presuminginnocence would deprive the State of its most powerful advantage under POCAas it stands. In order to prevent precipitating the body of constitutional rights, theState would explicitly refute arguments that the owner in POCA civil proceedingsis an accused facing criminal prosecution.

POCA marks a huge leap forward in the use of civil procedures to deal withcriminal acts. If the potentially penal consequences of POCA are not met bya classification of the procedures as a ‘criminal charge’ (and it seems highlyunlikely that this will happen), it will be necessary for legislators to developsufficient protections so that expediency does not prevail over justice. The domain

149 Interim Constitution (precursor to section 35(3) of the constitution).150 S v Zuma, supra note 147.

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of the civil recovery net is unknown to our law. The world at large is a potentialrespondent, rather than willing parties who enter into transactions, well awarethat in doing so there will be attendant legal obligations. Further, in civil assetforfeiture, as in a criminal trial, the State is the singular antagonist of theindividual, and not an equal party as in ordinary private litigation. The courtsare therefore duty bound to assume an interventionist role in protecting individualrights. If the courts do not take up this constitutional role to protect the rightsof individuals, it is not certain that the POCA process will oblige. Further,although there will be arguments over fact and degree, there can be little doubtthat to some extent POCA indicates a loss of faith in the enterprise of traditionalcriminal procedures and a deliberately expedient approach, technically designedto circumvent their values. In these circumstances, it is necessary to ensure thatsufficient due process protective mechanisms are legislated in order to insulate itspotentially unjust and disproportionate consequences.

the legal challenges of criminal and civil asset forfeiture in south africa: a comparative analysis

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