ON INTERNATIONAL CRIMINAL COOPERATION IN ASSETRECOVERY – THE TIMORESE LEGAL SYSTEM FOR FORFEITURE OFTHE INSTRUMENTS, PROCEEDS AND BENEFITS OF CRIME AND AN
EXAMPLE OF INTERNATIONAL COOPERATIONRogério Viegas Vicente*

The theme of this paper concerns asset recovery through international cooperation and isdivided into two parts: first, the Timorese legal system for the forfeiture of instruments, proceeds
and benefits of crime, and second, an example of international criminal cooperation.
I. FORFEITURE OF PROCEEDS AND BENEFITS OF CRIME
A. Political-Criminal Significance of the Forfeiture of Property, Proceeds and the Benefitsof Crime
In line with modern legal systems, Timor-Leste's criminal law enshrines the mechanism of theforfeiture of criminal property, proceeds and benefits — based essentially on preventive grounds.
Thus, the mechanism of forfeiture has the purpose of general prevention, aiming to demonstrate
and give effect to the idea that “crime does not pay”, but also has the purpose of special prevention,
based on the idea that the proceeds or benefits can be subject to forfeiture if they “pose serious riskof being used in the commission of further crimes”.
B. The Timorese Law on Forfeiture of Property, Proceeds and Benefits of Crime
The Timorese law imposes a general regime of forfeiture of property, proceeds and benefits ofcrime (articles 102.ᵒ and 103.ᵒ of the Penal Code) and a special regime of forfeiture of property ofcriminal origin, contained in the law to prevent and combat money-laundering. Law No. 17/2011
of December 28. The general regime distinguishes between the forfeiture of objects (hereinafter,“instruments”) and proceeds of crime, and the forfeiture of benefits arising from crime proceeds.
1. Regime: Classic Forfeiturea. Forfeiture of instruments and proceeds of crime
Article 102 deals with instruments “which were or were intended to be used for the commissionof a crime”, i.e. the instrumentalities of crime and the proceeds of crime. “Instruments” means theobjects (things) used as a means of carrying out the crime. “Proceeds of crime” means “property”
created or produced by criminal activity.
The first requirement for the forfeiture of instruments and proceeds of crime is that the object
has been used in a criminal activity and that the proceeds result from a criminal activity. However,
it is not necessary that the crime has been consummated.

*Public Prosecutor, General Prosecution Office, Timor-Leste.

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The "forfeiture" must be decreed, provided that the elements on which the existence of a crime
depends, except for fault, are verified. Thus, subject to “forfeiture” they can be both imputable andunimputable agents.
The decision to "confiscate" the instruments and proceeds of crime does not require anydetermined person to be persecuted and convicted of the criminal act. Thus, the forfeiture ofproperty and benefits may take place even in cases where the agent-in-fact is not determined, butalso in cases where, although the agent-in-fact is determined, the case must nevertheless be closed
for some reason (cause of termination of criminal liability, e.g. prescription example, or for lackof procedural assumption).
The second requirement for the forfeiture of instruments and proceeds of crime is thehazardousness of such objects or products, which means that the forfeiture only affects objects andproceeds of crime that could prove to be criminally dangerous.
Effectively, the State’s law that instruments and proceeds of crime are declared forfeited to theState “where by their nature or by the circumstances of the case endanger the safety of persons orof public order, or pose a serious risk of their being used for the commission of new crimes”,
Article 102, point (1). It should be noted that the forfeiture of instruments and proceeds of crimeto the State must always safeguard the rights of victims and also the good faith for the property
rights of third parties.
b. Forfeiture of benefits from crime
Article 103 governs the forfeiture of “things, rights and benefits acquired” as a result of thecommission of crimes. The term “benefit” has a broad meaning, meaning both the reward given
or promised to the agent, as well as any property benefit that results from or has been obtained
through the crime.
If, in the case of forfeiture of the instruments or proceeds of crime, their immediate danger is
at stake, in the case of forfeiture of the “benefits”, what is at stake is the overall crime prevention
objective linked to the need for “withdrawal of the crime”. Unlawfully obtained asset benefits and,
consequently, to the idea that the State “cannot tolerate an anti-juridical property situation”, andthe legal means of asset recovery should therefore be applied.
The "forfeiture" of the benefits of crime (in favour of the State) has as its formal presupposition
the practice of a typical illicit fact (and not properly, or technically, of a crime). In fact, concern
with the “forfeiture of the benefits of crime” responds to “the social alarm” that might arise fromthe conviction that, in the end, the breach of the criminal law can “compensate”, it would be
absolutely contradictory that the institution of “forfeiture” could not be applied simply because theagent-in-fact is not imputable or because he acted without fault. Thus, even under theseassumptions, the benefit resulting from unlawful de facto practice must be neutralized andremoved, and the original assets must be restored.
The Timorese law provides that all benefits acquired, directly or indirectly, “as a result of thecommission of a crime”, must be declared forfeited to the State, paving the way for the forfeiture- 143 -of benefits to occur independently of the sequence of exchanges or transmissions that took place.
Only the rights of bona fide third parties are safeguarded.
On the other hand, the law provides that “if things, rights or benefits” cannot be appropriatedin themselves, the forfeiture is replaced by payment to the corresponding State. This happens, forexample, when the benefit takes the form of reward given to the agent and is not "susceptible todirect transfer to the State".
2. Special Scheme: Extended Forfeiture
In addition to the general regime, as mentioned, the Timorese legal system contains a specialregime for the confiscation of property of criminal origin, contained in the law to prevent andcombat money-laundering — Law no. 17/2011 of 28 December. This special regime is valid onlyfor the offences listed in a catalogue (as listed below) contained in article 32-A of theaforementioned law:i.
Drug trafficking
ii. Terrorist organizations, terrorism and terrorist financing
iii. Arms trafficking
iv. Corruption, embezzlement and economic participation in businessv.
Money-launderingvi. Criminal associationvii. Smuggling practiced in an organized mannerviii. Sexual exploitation of third parties and organized child pornography
ix. Counterfeiting of money also practiced in an organized manner
The special scheme for confiscation in favour of the State is set out in Article 43 of the Law
which, in paragraph 1, provides that claims are declared to the State:
i.
ii.
iii.
iv.

Proceeds from crime, capital and property, or other property of equivalent value
Criminal property and property
Instruments of crime
Funds or property with which the proceeds of crime have been mixed

The specificities of the special regime of forfeiture of property to the State is provided in theaforementioned law wherein the forfeiture to the State, according to the special regime can only
occur with the following requirements:
i.
ii.
iii.

A conviction for one of the catalogued crimes
The factual or juridical domain of the convict over property incompatible (incongruent)
with his known lawful income, andThe existence of an earlier criminal activity of the convict inwhich the offences are included in the catalogue identical to, or
have any connection with, the criminal case in question.

- 144 -II. REFERENCE TO A CASE OF INTERNATIONAL COOPERATION IN ASSETRECOVERY
A. Description of the CaseIn October 2014, a case was filed at the Office of the Fight against Corruption and Organized
Crime with the Prosecutor General of Timor-Leste, for an alleged crime of corruption and moneylaundering, against a Portuguese couple (husband and wife) and a Nigerian national residing andworking in Dili, Timor-Leste.
The Nigerian worked as an international advisor in the Ministry of Finance of Timor-Leste,
specifically in the oil tax department, and the Portuguese couple owned a company that provided
consulting services. As an advisor to the Ministry of Finance, the Nigerian was tasked withnegotiating with two Northern European companies to pay oil taxes owed to the State of TimorLeste.
As soon as he was entrusted with this mission, the Nigerian devised a plan to divert the valueof the taxes to his own advantage. The plan was to create a company headquartered outside TimorLeste, which would be presented to tax-paying companies as an intermediary in whose name tax
amounts should be deposited. In order to carry out this plan, he requested and obtained thecollaboration of the Portuguese nationals for this purpose, who created it in Macao, Republic ofChina (where one of them is a native), a company called “Olive Consultancy Company Limited”
for the purpose of receiving the amounts transferred by the tax debtors. Effectively, upon
indication of the Nigerian, the US $ 859,706.30 (eight hundred fifty-nine thousand seven hundred
six dollars and thirty cents), the amount of taxes, was deposited in BNU (Macao) under the nameof Olive Consultancy Company Limited, and transferred from the Macao-based company tonational and international creditors.
B. Request for International Cooperation (First Request)
As early as October 2014, the Attorney General's Office of the Democratic Republic of TimorLeste sent an application for international cooperation requesting the cooperation of the competentjudicial authorities to the Macao Administrative Region Prosecutor's Office to obtain the following
information:
i.
ii.
iii.
iv.

Identification of the existence of any bank accounts held by the Portuguese couple
concerned;
Obtaining bank transaction statements from 1 December 2011 until the date of the letter(December 2014);
Freezing and seizure of any amounts deposited in these accounts, up to the corresponding
amount of US $ 859,706.30 (eight hundred and fifty-nine thousand seven hundred six
dollars and thirty cents);
Identification of banks' names and addresses, account numbers and holders, bank accountmovements indicating suspicious transactions.

The request for international cooperation was complied with, and freezing of the amounts
deposited in accounts in the defendant's name (the Portuguese couple and the Olive Consultancy- 145 -

Company Limited has an account at Banco BNU Oriente, SA of which they are relatives) fromone of the members of the Pueblese couple (Macao native).
C. Request for Confirmation of the Validity of the Measures Enacted (Second Request)
Subsequently, specifically in May 2018, the Attorney General's Office of the Democratic
Republic of Timor-Leste sent a new letter to the Macao Administrative Region Prosecutor's Officerequesting information on the state / validity of the freezing measure deposited with East Timoresebanking institutions. Following the first letter of request and the maintenance of the decreed freezes
confirmed.
D. Extension of Measures (Third Request)
Recently the Macao authorities indicated that there is another account with Banco BNU Macau.
on behalf of the father of one of the defendants, where the amount of USD 221,010.79 (twohundred twenty-one thousand ten dollars and seventy-nine cents) is deposited, transferred by one
defendant immediately after the initiation of the proceedings, and in light of this information theProsecutor General of the Republic of Timor-Leste has made a new request to freeze this account.
E. Current Situation of the Case
The Nigerian left the country early in the process and fled to the USA. The Portuguese weretried in Timor-Leste, and by the decision of 24 August 2017 of the Dili District Court, they were
found guilty of engaging in a conspiracy to commit the crime of embezzlement and the crime ofmoney-laundering. They were sentenced as follows:••

Eight (8) years’ imprisonment (individually), andTo pay back to the State of the Democratic Republic of Timor-Leste US $859,706.30(eight hundred and fifty-nine thousand seven hundred six dollars and thirty cents), plus
interest for late payment until the full payment.

The judgment of the Dili District Court (lower court) has been appealed by the defendants, andthe appeal is awaiting a decision of the Court of Appeal. The judgment of the Court of Appeal isexpected at any time. After the decision, the Portuguese also fled the country.
F. Possible Developments of the CaseAs soon as there is a final decision in the case, and if it affirms the convictions, the Attorney
General's Office of the Republic of Timor-Leste will request the Macao Judicial Authorities torepatriate the amounts seized in the various bank accounts. On the contrary, if the decision is foracquittal, it will then request the release of the frozen assets.

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