Namibia: Prosecutor General Wins Appeal On Organised Crime Law

The prosecutor general has won a Supreme Court appeal on Prevention of Organised Crime Act proceedings against a Chinese-owned close corporation allegedly involved in a multimillion-dollar customs scam that was uncovered near the end of 2016.

In a judgement delivered in the Supreme Court late last week, the appeal court found that the close corporation China South Industry and Trading CC filed a defective notice in terms of the Prevention of Organised Crime Act in a bid to oppose an application by the prosecutor general (PG) to in effect freeze money in two bank accounts of the close corporation.

Because that defective notice did not meet the requirements set out in the act, China South was in terms of the same law not entitled to receive notice of an intended application by prosecutor general Martha Imalwa to have the money in the close corporation’s bank accounts forfeited to the state, appeal judge Elton Hoff stated in the judgement.

In its judgement, written by Hoff, the Supreme Court upheld an appeal by the PG against a High Court decision that set aside an application by the PG for a forfeiture order in respect of the bank accounts.

The appeal court replaced the High Court’s decision with an order dismissing an application in which China South and its sole member, Zhang Ying, asked the court to declare the PG’s application for a forfeiture order invalid.

Deputy chief justice Petrus Damaseb and acting judge of appeal Theo Frank agreed with Hoff’s judgement.

Imalwa was granted a property preservation order over China South’s two bank accounts in January 2017 – about a month after the first arrests had been carried out in a criminal case involving alleged large-scale fraud with the payment of customs duties on goods imported by Chinese-owned businesses based in Namibia and with the payments made to foreign suppliers of the imported goods.

In the criminal case, which is pending in the Windhoek Magistrate’s Court, Walvis Bay-based businessman and former customs officer Laurensius Julius, Chinese businessman and presidential friend Jack Huang and Chinese citizens Tao Huizhong, Gua Zhihua, Jia Hongying, Cao Shuhua, Li Dadi and Zhang Ying are charged with 1 607 counts of fraud and 1 608 counts of money laundering at this stage.

Their case was postponed to 21 February 2022 when the eight accused made their latest court appearance on Monday.

The state is alleging that the eight accused committed fraud and money laundering during the period from 2013 to 2016 by presenting documentation to Nedbank Namibia in which the freight and other charges for goods claimed to have been imported into Namibia were overstated, with the aim of sending inflated amounts of money out of Namibia to supposedly pay the suppliers of the imported goods.

The state is also alleging that while total costs of about N$213,4 million were declared to the customs authorities for goods imported into Namibia, costs of about N$2,78 billion were declared to Nedbank Namibia to have payments made to the suppliers of the goods.

Hoff noted that in an affidavit filed at the High Court, Imalwa stated there was a difference of about US$4 million in the value of imported goods which China South declared to the customs authorities and the value it communicated to the bank when it sent money out of the country to supposedly pay for the goods.

Imalwa alleged she had reasonable grounds to believe that money in China South’s two bank accounts was the proceeds of fraud, forgery and money laundering.

In response to that, a notice was filed with the court on behalf of China South. In the notice it was denied that the money in the accounts was proceeds of crime and was stated that money had been sent lawfully through the close corporation’s foreign currency bank account to pay for imported goods.

However, the notice filed on behalf of China South made “bold denials and unsubstantiated allegations” without disclosing the facts which were relied on, and failed to set out the basis on which it was denied that the accounts’ contents were the proceeds of crime, Hoff found.

The PG was represented by Mariette Boonzaier and Loide Angula with the hearing of the appeal.

Sisa Namandje and Sacky Kadhila-Amoomo represented China South and Zhang.

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