By Neil Hartnell
Tribune Business Editor
nhartnell@tribunemedia.net
Two Guaranty Bank & Trust clients have failed to prevent the Bahamian Financial Intelligence Unit (FIU) from obtaining their financial records despite claims of political persecution.
The Court of Appeal, in a unanimous verdict, refused to overturn an earlier Supreme Court ruling that declined to impose the injunction on the FIU sought by two Ecuadoraen citizens, Carlos Paraeja Cordero and Carlos Pareja Dassum.
The duo, claiming they had been forced to seek asylum in neighbouring Peru due to efforts by their home government to “frame” them, wanted to block the FIU’s demands for their bank records over fears that the information obtained would be used to further persecute them in Ecuador.
But Sir Michael Barnett, writing the Court of Appeal’s judgment, said there was no legal basis to grant the Paraejas’ demands given that the FIU Act’s section four “clearly empowers the FIU to make a demand for the information sought by it”. As a result, the duo had no case - especially since the Ecuadorean authorities were not named as parties to the action.
The verdict reveals that the FIU had to contact Guaranty Bank & Trust twice in October/November 2017 to obtain the necessary information and, on the second occasion, warn that it would break the law if it failed to make the necessary disclosures.
The Bahamian financial institution, though, had already made the Paraejas aware of the FIU’s request following receipt of its first letter. This sparked the Ecuadorean duo’s hasty rapid legal action, launched just weeks later on November 9, 2017, to prevent disclosure to the Bahamian regulator of the financial records relating to their company, Dramiston Ltd.
The Paraejas argued that the FIU’s request would breach its founding law, and sought to block both the demands it made of Guaranty Bank & Trust, any freezing of their assets, and any sharing of financial information obtained with its counterpart in Ecuador.
To support their case, Carlos Pareja Dassum alleged in a November 22, 2017, affidavit: “My son and I are currently in Peru having secured refugee status as asylum seekers. We are fighting the false allegations both at home through counsel, and by bringing an action in the United States against the prosecutors for the criminal conduct and acts that they committed in an effort to frame me.”
He argued that the Ecuadorean FIU had become aware of his interest in Dramiston Ltd from records “illegally obtained” in the US, and added: “I am challenging the order for disclosure because like everything else that happened in the last year, it is premised on the basis of false and manipulated information.
“Disclosure of the information requested [by] the FIU, and thereafter to its Ecuadorean counterpart, will only act to continue my political persecution in Ecuador... If I am vindicated, as I am confident I will be, the FIU will have violated my privacy.
“And should the FIU push to proceed for disclosure despite becoming aware of the instant facts, in the event I am successful they will have knowingly disclosed private banking information to enable furtherance of a political persecution on the basis of false and misleading information that was known or suspected to be unreliable.”
Sir Michael, though, said there was nothing in the FIU’s two letters to Guaranty Bank & Trust “which suggest that the FIU was threatening to disclose the information sought to anybody”. And neither the bank nor the Ecuadorean government were a party to the case.
As a result, he backed Supreme Court justice Indra Charles, who agree with Loren Klein, acting for the Attorney General’s Office, that the Paraejas’ case was “bad in law” and did not contain any case for action against the FIU. Justice Charles also backed Mr Klein’s argument that the FIU Act’s section seven prevents any legal action being brought against the unit over its actions.
Sir Michael, though, said the Court of Appeal had not examined whether the FIU Act’s section seven completely “insulates” it from legal action from persons alleging it had wronged them, adding thar the Paraejas’ case was not an appropriate one for determining this.
He did, though, find it was “unarguable” that the FIU had the legal basis to make such demands of Guaranty Bank & Trust, and that the Paraejas’ injunction bid was premature because the information requested had not been obtained.
“There was nothing in the material before the court to show that the FIU intended to disclose the information it may receive to a foreign FIU. Indeed, no such decision could have been made unless and until the FIU received the information from the bank,” Sir Michael concluded.
“There was no basis upon which the court could have at that stage granted the declaratory relief sought or to restrain the FIU from disclosing information it had not yet received. It could not have restrained the FIU from making a decision whether or not to disclose the information to anyone, including the Ecuadorean authorities.
“The FIU would not even have had an opportunity to consider what conditions it may wish to impose in the event it was minded to disclose the information received from the bank to anyone.”
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