Legal
The Extradition Landscape For HNW Individuals: What To Expect?

More countries are fighting financial crime but arguments used to stop cross-border extradition also multiply. This article examines the trends.
The recent UK diplomatic row with Russia over claims that agents from the country attempted to murder people using nerve agents has, understandably, turned a spotlight on what the UK might do regarding Russian nationals where there are suspicions of wrongdoing. Already, this publication has written about the kind of advice private client advisors are giving (see here). One consideration is the UK’s extradition powers and those of other nations. Nick Vamos, a partner at law firm Peters & Peters LLP, considers some of the issues. The editors here welcome these contributions and invite readers to respond. Email tom.burroughes@wealthbriefing.com
The extradition landscape for HNW individuals has arguably never
been more complex. The number of jurisdictions taking aggressive
action against financial crime is on the rise. The risk of
finding oneself under suspicion of criminal activity request is
increasing, but so is the range of arguments that can be deployed
to successfully resist extradition.
Law enforcement activity against financial crime, including
bribery and corruption, has become both more prevalent and less
predictable. Suspects can find themselves in the cross-hairs both
of countries with a vigorous criminal justice system where the
rule of law is strong, as well as regimes emerging from periods
of instability looking to improve their geo-political standing
and encourage foreign direct investment by upping their criminal
enforcement game - or at least appearing to. At the same time,
arguments that the underlying prosecution is politically
motivated or that extradition would amount to a breach of the
suspect’s human rights are finding favour in the courts. Each
case is unique to its own facts, but it is possible to detect
some trends.
Challenging Interpol Red Notices
Contrary to popular myth, INTERPOL is not a cadre of super-cops
with cross-border powers, but more like a large database with a
small brain that passes messages to and from national police
forces. A Red Notice is a notification from one country to all
the others (currently 192 countries) that a person is wanted in
connection with suspected criminal activity. The threshold for
issuing is low: the requesting State need not do much more than
assert that the suspect is under investigation. But the existence
of a Red Notice does not mean that a suspect necessarily will be
arrested, let alone extradited. Many countries, including
the UK and US, do not treat a Red Notice as conferring a power of
arrest and will insist on a formal extradition request. If there
is no separate Treaty that permits extradition, then it cannot
take place. However, there are still enough countries that will
arrest on a Red Notice to make it a serious curb on a suspect’s
ability to travel and conduct business. If the Red Notice
is made public, then it may significantly limit access to banking
and other financial services.
Some countries have been accused of abusing the Red Notice system
in order merely to harass and disrupt those with whom they are
displeased, rather than as a genuine law enforcement tool.
Fortunately, INTERPOL have woken up to this problem and many Red
Notices have been challenged and removed on the basis that they
are politically motivated or amount to a breach of the suspect’s
human rights. Bill Browder, the founder of Hermitage
Capital, has defeated five Russian requests to put him on the
wanted list, most recently in October 2017. Zsolt Hernadi,
chairman and chief executive of the MOL Group, one of the largest
companies in Central Europe, successfully argued in 2016 that a
Red Notice issued by Croatia should be deleted.
Resisting extradition proceedings
One by-product of the worldwide recession has been chronic
underfunding of prisons. The UK High Court has barred extradition
in several recent high-profile cases because the conditions in
the prison where the suspect would be held amounted to “inhuman
and degrading treatment” and therefore in breach of Article 3 of
the European Convention of Human Rights. The list of countries
includes many in Europe, Asia, Africa and South America. The
courts focus not just on the general state of the prison, but on
the allocation of personal space, hygiene, violence from other
prisoners and guards and the availability of adequate healthcare,
which is particularly important for suspects with medical
needs.
Vincent Mallya, ex-head of United Spirits, Kingfisher Airlines and the Force India Formula One team, is currently fighting extradition from the UK to India. His lawyers have pointed to two earlier precedents in which the court found that conditions in Indian prisons were so appalling that it would breach the human rights of the suspect to be extradited. The Indian authorities have countered this argument with an assurance that, whatever the conditions facing the general prison populace, Mallya will get his own special, human-rights-compliant, cell. Such assurances have become prevalent in extradition cases, especially where the political and financial stakes are high.
Russia, despite repeatedly failing to extradite HNW individuals
such as Boris Berezovsky, the vodka tycoon Yuri Shefler and
others on the basis of political interference in the trial
process, has finally managed to persuade the UK courts to accept
assurances that at least its prisons meet required standards. The
new extradition battleground is about whether such assurances can
be relied upon. How does a court monitor and enforce an assurance
about how much personal space a suspect will have after they are
sent back? What can the court do if the assurance is broken?
Defence lawyers are arguing that some assurances – and some
countries – simply should not be trusted. The diplomatic
implications of an adverse court ruling can be serious.
Future trends: the direct approach
If prosecutors cannot rely on the extradition process to get
their man, or have to wait many years for a case to conclude,
then the better tactic can be to avoid extradition altogether.
For example the US Department of Justice, certainly in fraud
cases where the existence of an investigation is public, has been
willing to negotiate with suspects in other jurisdictions to
reach an acceptable plea bargain. A suspect with a reasonable
prospect of resisting extradition or at least dragging it out for
several years may well receive an additional discount: the
vagaries of extradition are priced in to the deal. If the
investigation is not public and the prosecutor is patient, he may
wait for the suspect to travel to a jurisdiction with less
defence-friendly laws. If he is impatient, he may even try and
lure the suspect there instead.
So fewer extradition cases involving allegations of financial
wrongdoing should not be mistaken for evidence that prosecutors
have relaxed: defence lawyers do not have a monopoly on inventive
methods to achieve an outcome.