Landmark Decision Sets Precedent in Requests for Foreign Legal Assistance

04/03/2019

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For decades, The Bahamas has been one of the leading jurisdictions for offshore banking and wealth management. However, with the global landscape changing in the context of anti money-laundering legislation and cross border treaties, the confidentiality which was once attached to offshore accounts has been significantly impacted.

Bahamian Courts have generally acceded to requests from foreign jurisdictions to obtain evidence situated in The Bahamas, including bank accounts. The question as to the potential limits to the scope of such cooperation was one of the issues addressed by the [Bahamian] Court of Appeal in a recent ruling arising from three appeals, heard together.

Arising from its investigations into Operacao Lava Jato (the Brazilian Car Wash Scandal) in 2015, the Government of Brazil made a request to the Government of The Bahamas for assistance in obtaining the bank account details relating to a number of corporate entities. This request was facilitated by an ex parte application made by the Office of the Attorney General which resulted in a disclosure Order issued on 7th January, 2016. Upon being notified of the Order, three of the corporate entities (involved in the matter) applied to the [Bahamian] Supreme Court to have the disclosure Order set aside or varied. While the applications were successful, insofar as the Orders were varied to restrict the scope of information provided, they remained quite expansive. The disclosure was therefore appealed.

By the time the appeal was heard in The Bahamas, the conviction of the target of the Brazilian request had become final and a plea agreement entered into by him meant that no further charges would be brought against him. Details with respect to the finality of the investigation were admitted into evidence in an application made prior to the substantive appeal. In a unanimous ruling made on 17th October, 2018, the [Bahamian] Court of Appeal discharged the disclosure Order in its entirety on the basis that the information requested was no longer necessary as it accepted that the investigation underlying the substance of the request had concluded.

Prior to this ruling, there was no indication that, other than ensuring that a request was properly issued, the Bahamian Courts would evaluate the merits of a request for assistance. Further, while earlier cases suggested that there may be instances where our Courts could intervene, there were no cases which provided examples of what considerations would be relevant. With this ruling, it is evident that the Courts will consider the continued relevance of the information being sought and will, at least to some degree, consider the scope of the request limited to the content of the letter of request. While there remains some questions as to the extent of our Courts’ discretion to decline to give effect to letters of request, with this ruling it is clear that such discretion does remain with the Court.

For further information, please contact Tara Archer-Glasgow or Audley D. Hanna Jr.

The information contained in this bulletin is provided for the general interest of our readers, but is not intended to constitute legal advice. Clients and the general public are encouraged to seek specific advice on matters of concern. This bulletin can in no way serve as a substitute in such cases.

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