It will be difficult to discuss the entire laws that govern and/ or regulate and promote the foreign investment in The Bahamas because most of the legislations in The Bahamas in one way or the other will no doubt impact foreign investment.

Hence only a cursory attempt will be made touching on legislations that directly and in a fundamental way influence foreign investment in The Bahamas. First and foremost it might be propitious to enumerate some saws which a foreign investor will definitely have to come into contact with, e.g the Business License Act and the Amendment thereto (ie. Business License (Amendment) Act 1993, International Persons Landholding Act Act 1993 (discussed elsewhere). This Act specifically repealed the previous Immovable Property (Acquisition by Foreign Persons) Act, Chapter 125 and makes innovative and far-reaching provisions to facilitate the purchase/ holding of land/ property by non-Bahamian persons and by companies under their control or beneficially owned by them. It came into operation on the 1st day of January, A.D., 1994. Under this Act the only registration with the Investment Board is required in certain cases and no permit to hold or purchase land by non – Bahamians are required (See Section 8 of the International Persons Landholding Act).

Under Section 10 of the above mentioned Act, this Act is non-discriminatory in respect of the amount of stamp duty payable on the property as the provision of Section 8 is to the effect that non-Bahamians are only required to pay the same amount as would be payable by a Bahamian (See Section 11…2 and Clauses 1-14 of the said Act).

Other laws include the International Business Companies Act (IBC), Exchange Control Regulations Chapter 330 which is in an Act that makes provision for the control and regulation of gold, currency, securities and foreign exchange (See the Exchange Control Regulation Act) and amendments made thereto or in connection therewith.

Section 3 subsection 2 of the Exchange Control Regulations Act Chapter 330 enpowers and enables the Minister of Finance to make regulations (finance regulations) as he may deem necessary or expedient in respect of any matter or thing connected with exchange control. In actual life and in practice it is the Central Bank of The Bahamas that performs most of the functions relating to the control of foreign exchange or bringing into or repatriation of foreign currency from The Bahamas by foreign investors.

In fact Section 4 of the Exchange Control Regulation requires the control of the Central Bank of The Bahamas for any persons other than an authorized dealer to buy, borrow, or deal in foreign currency in The Bahamas.

Regulation 5 of the Exchange Control Regulations prohibits repatriation of currency from The Bahamas without the permission of the Central Bank (See also Regulation 6).

Note also that for a person residing outside The Bahamas to subscribe to the Memorandum of Association of a company to be formed under the Companies Act needs the permission of the Controller of Foreign Exchange. Failure to obtain such permission will render the subscription of the Memorandum of Association by such a person resident outside the territories invalid in so far as it would on registration of the memorandum have the effect of making him a member or shareholder of the company.

Note also that this failure to obtain such permission of the Controller shall however not render invalid the incorporation of the company (See also Regulation 8(2)). There is a caveat here though. One the promise of being made shareholders, some non-Bahamians have been induced to entering into agreements leading to the formation of a Bahamian company without obtaining the required permission, only to discover at a later date he or she has been duped. It is open to question whether a trust arrangement can be made between the parties under which a Bahamian may hold that share in trust for a non-Bahamian or whether this can be accomplished through any other well structured corporate vehicle on behalf of a non-Bahamian. However one is always advised to consult a lawyer to advise him properly before getting into anything.

Actually the author was induced to becoming in active director and shareholder in a company named the Institute of Professional and Paralegal Training, a tertiary institution offering legal education to The Bahamas. His certificates were fraudulently obtained and used to make an application and to obtain a business license from the Grand Bahama Port Authority; his certificates were also forwarded to the Ministry of Education in an attempt to obtain accreditation for the said School.

This author later discovered that this was a fraudulent scheme by a man whose appointment was terminated from another tertiary institution in The Bahamas for gross misconduct and dishonesty. He immediately took steps to stop the scheme by notifying the Port Authority Licensing Department, the Minister of Education and the Office of the Registrar General in addition to instituting an action against the perpetrator of this fraud. He also sought an injunctive relief restraining the operation and running of the school pending the determination of the suit.

Potential foreign investors must exercise caution and circumspection in there investment dealings so that they do not fall into the hands of fraudsters who will not only defraud them but might also sully the integrity of the jurisdiction. It is suggested that anyone who wants to make an investment or do business in The Bahamas, should seek expert advice and if possible retain his own attorney (See also Regulation 21 and 22 of the Export Control Regulations).

THE BAHAMAS IBC ACT 2000

As a corporate vehicle, an IBC will enable investors to have a holding company here in The Bahamas. The Hotel Encouragement Act, Chapter 263, Statute Laws of The Bahamas was an Act which was enacted to encourage the construction of hotels in The Bahamas by making some provisions under the Act for the refund of Customs and emergency taxes and certain other concessions. It further made provisions for the exemption of such hotels from certain taxation to existing hotels from certain taxation. The Principal Act has witnessed series of amendments.

Note that when a government grants concessions to the foreign investors, it is usually in the nature of a contract in which a country transfers some rights to a foreign enterprise (foreign investor) or privileges which then encourage in some significant way certain kinds of business activities such as mining, construction or building of hotels on the approval of the State and subject to the terms of the contract (concessions). This can in turn ignite or promote other types of local businesses thus fueling the economy of The Bahamas.

See Section 4(1a) under which customs duties paid in respect of all materials necessary for the construction, equipping, furnishing and completing of the new hotel which may be imported into The Bahamas may be refunded while Section 4 (1b) provides for the importation into The Bahamas free of all customs duties of the construction plant required for the construction, building, furnishing equipment and completing of the hotel. Section 2(1c) provides for the exemption of the new hotel and all building comprising the new hotel and all additions thereto and the parcel of land upon which the same shall be situated from the payment of real property tax and any other tax now or that may be imposed on real property for a period of ten years from the date on which the new hotel opens for business (See Section 3 (1a-h) and also the Hotel Encouragement Act, Chapter 265, Statute Laws of The Bahamas).

However note particularly the provisions of Section 3 subsection 1H which makes a balanced provision for the admission to The Bahamas of key personnel and special workmen both during the construction period and the operation of the new hotel. The subsection has a proviso, which protects the interest of The Bahamas as it requires that at all times seventy – five percent of the total number of persons employed in the construction or operation of the new hotel shall be natives of The Bahamas (Bahamians) in so far as such Bahamians are available to perform several and respective services required.

See Also Section 3(1g) which prohibits any government restrictions regulations or condition from discrimination against the new hotel. Section 5 of the Act makes provision of some concessions for existing hotels almost similar to the ones mentioned above.

The construction plant imported into The Bahamas under the provisions of the Hotel Encouragement Act shall not be used for any purposes other than the construction of the new hotel or the project in respect of which the same was imported except with the consent of the Governor General (See Section 8 and 9 of the Act and also Section 11, which makes it an offence and provides for penalties for wrongful application of materials under the Act). There is no subsidiary legislation of the Act which makes special provisions in respect of machinery and raw materials imported free of customs duty. Section 10 provides for relief from other taxes, e.g. from any export tax in respect of any relevant approved manufactured and any profits or gains earned by the manufacturer of the relevant approved product shall not be taxed and there is also relief in respect of the relevant factory premises (See the Business License Act, Chapter 302).

Another legislation that is investor friendly is the Agricultural Manufactories Act which aims at encouraging Agricultural factory in The Bahamas and any person registered as desirous of building or erecting any such factory to import into The Bahamas or take out of any warehouse or port therein without payment of import duties all machineries tools, fixture or supplies which may from time to time be required for the purpose of the process carried out to the factory.

Section 7 makes provision on exemption from the payments of inward tonnage of light duties, while Section 8 provides for exemption from payments of outward tonnage duties (See also the rules relating to the Act).

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- By Clement Chigbo[esq], LLB[Hons], LLM[London], L.E.C, B.L, Dip.Lat, MCIarb

A crime constitutes an offense not just against an individual, but also against the state. The state must also take a direct interest in protecting persons within its territory from conduct which has been declared to be, or accepted as, criminal. Those who contravene the criminal law make themselves liable to punishment. As Hart postulated, a crime is a conduct which, if duly shown or proved to have taken place, will incur a formal and solemn pronouncement of moral condemnation of the community and the state effectuates its obligation by imposing the appropriate sanction on the culprit.

A few days ago, this beautiful Island of ours, The Bahamas, was rocked by a sensational allegation involving high profile Bahamian public figures bordering on an attempt to extort money from noted and high profile celebrities whose son recently passed away while they were vacationing in The Bahamas.

We extend our profound commiseration to this celebrity family. As usual, when we comment on legal issues in this column, we do not seek to try cases or matters in this column or attempt to deal with matters that are sub judice [pending in court]. However, when we comment on matters, we are guided by the noble and core principle and objective of true journalism which is to inform, educate, enlighten and entertain our numerous readers all over the world who have and continue to express support for and interest in this column.

In the light of the foregoing, this article will examine the nature of the offence of extortion and blackmail.

Extortion is generally and loosely defined as threat coupled with a demand and it is often said that neither be unlawful and that it is the conjunction of the two that will constitute the offence of extortion. Hence, if A says to B, “Give me $500 or I will tell the Police about you”; this will constitute a threat of the nature under discussion and consequently an attempt to extort and an attempted extortion. It is immaterial that to ask for $500 or to tell the press about B is not unlawful. Although it is acceptable that words cannot amount to assault, however the law still deems it necessary to deter in some other way the using of word in such a manner as to cause fear and alarm.

Extortion consists in obtaining from another some advantage by unlawfully and intentionally subjecting him to pressure which induces him to submit to the taking. An attempt to do the above will be attempted extortion and in a sense will also amount to blackmail. A person is guilty of the crime of extortion who from improper motives, and by inspiring fear and disquietude in the mind of another demands from, and compels the latter to render some advantage which is not due to the author of the demand or the request. The method adopted by the common law recognizes that it is sometimes criminal to threaten to do things to the detriment of the person threatened.

Depending on what is said, some threats are criminal as soon as they are communicated irrespective of why they were, as long as the accused meant to communicate them to the victim. With respect to threats, they are not reckoned as criminal at all, unless they are made with the object of forcing the victim to do some thing he otherwise would not have been willing to do. In both cases, the mens rea element appears to be intention. Exploitation of information of a sordid or demeaning or embarrassing nature concerning the victim in the possession of the extorter or blackmailer will constitute the offence. The essence of the crime is that the extorter uses his office or influence or the information to obtain a benefit- which is not otherwise due to him. A curious feature of the crime is that it is not necessary that the pressure applied nor the benefit sought should be unlawful in nature. Thus, where X threatens to reveal that Y is engaged in an extra-marital affairs unless Y provides him with an employment; it is neither unlawful to reveal the existence of extra-marital affairs nor to solicit employment; yet X, in doing these things commits the crime of extortion. Note that blackmailing embraces both extortion and demanding with intent to steal i.e. improperly and perfidiously menaces with intent to steal as the crime is viewed in New Zealand. See section 238 of the New Zealand Crimes Act 1961. See also R v Boyle and Another [1914] 10 Cr. App. R. 1807. Note that in England, the crime of blackmail cannot be committed by a person who believes that he has reasonable grounds for his demand and that the use of malice is a proper means of reinforcing that demand. In this regard, claim of right is considered as a defence to extortion.

The Canadian criminal Code talks of extortion simply as ‘making threats without reasonable justification or excuse’ [ See section 346

of the Code], so that not merely to demand may not constitute the crime but the reasonableness Ð of the use of particular threats to back it up must be accepted by the law, and not just believed in by the accused. See the case of The Queen v Naterelli [1967] S C R 539. See also Criminal Law by Sir Gerald Gordon and Michael Christie, Chap 12, p 247 Ð 259, vol ii. Extortion [ sometimes blackmail] under English law is provided for in Theft Act 1968, section 21. See also the case of Tracy v D P P [1971] A C 537 [HL] where the House of Lords held by a majority, that blackmail is committed by mere making of the extortionate threat. Lord Diplock in the above-mentioned case observes as followsƒ

“I see no reason for supposing that Parliament did not intend to punish conduct which is anti-social or wicked Ð if that word is still in current use- unless the person guilty of the conduct achieves his intended object of gain to himself or another. The fact that what a reasonable man would regard as an unwarranted demand with menaces after being posted by its author goes astray and never reaches the addressee, or reached him but fails to disturb his equanimity may be relevant factor in considering what punishment is appropriate, but does not make the conduct of the author any less wicked or anti-social or less meet to be deterred”.

Extortion or blackmail is always viewed as conduct capable of unsettling the victim’s mind or mental equanimity. It would seem that the difference between extortion and blackmail has disappeared and the terms are synonymously used in English law to denote the crime of the use of threats to gain an advantage. See section 22 of the Theft Act 1968. The Theft Act of 1968 achieved much needed reform by reducing the various statutory forms of blackmail to one general principle. In terms section 21 of the Theft Act 1968, provides that a person is guilty of blackmail if, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; and for this purpose a demand Ð with menaces is unwarranted unless the person making it do so in the belief that he has reasonable grounds for making the demand, and that the use of the menaces is a proper means of reinforcing the demand. Here [in] lies the criminal defence the accused may have in the instant case.

The leading case on criminal threats is still that of James Miller [1862] 4 Irv 238 where Lord justice ÐClerk Inglis listed many threats and the most commonly applicable to this article is no doubt threat to do someone serious injury as to his property, fortune, or reputation. It would seem as if threat to release the photo or picture of the dying or dead son of the noted celebrities will no doubt fit into this category and of course, if that threat is coupled with a demand for pecuniary or monetary advantage. Note that in any of the categories listed by Lord Justice Clerk-Inglis, that if intended to carry out what he threatened, then did it not matter whether that he had no particular purpose to serve in making the threat at all.

It should be noted that on the authority of the case of James Miller [1862] 4 Irv 238, the learned Lord Justice-Clerk Inglis observed that threats, insufficient to be thought criminal by themselves, could become criminal if Òused for an unlawful purpose such as extorting moneyÓ. See James Miller [1862] 4 Irv 238 at p 246.Was a threat actually made or issued by the accused? Did the accused intended to obtain money or any pecuniary advantage in issuing or making the threat? Did the accused reasonable believe that that it was reasonable and justifiable in the circumstances to make the threat or and the demand? If the answer to the last question is in the affirmative, then there is a defence to the charge or allegation of extortion.

The question for the Prosecution in the instant matter in The Bahamas will be whether such threats [if any?] was made by the accused and whether it was for the purpose of extorting money. It is also immaterial whether the threat was aspirational or operational. We will explain aspirational threat and operational threat that are common parlance among security and military intelligence agencies. The court must consider the nature of the threat and the demand accompanying the threat. In the case of Marion MacDonald and Another [1879] 4 Couper 268, for instance, the accused undertook to expose the alleged sexual improprieties of the victim upon her to his whole family, unless he agreed to pay her £10. The court had no doubt that a relevant charge had been made out when that sort of threat was allied or Òcoupled with that sort of demand, and it was opined that any offer by such an accused to show the truth of what she threatened to expose would be entirely irrelevant. Per Lord Deas in the above mentioned case at page 273. See also a similar type of decision reached in the case of Hogg v H. M. Advocate 1954 S.L.T [Notes] 82.

There must, of course, be an actual threat- express or implied-for extortion to be made out. This is the legal burden which the Prosecution must discharge beyond any peradventure or cavil or what is commonly referred to as ‘beyond any reasonable doubt’. Note that in all cases of extortion that the threat must be accompanied by a demand for some advantage to the person making or issuing the threat and the demand. That demand generally as alleged in the instant matter in The Bahamas, is for payment of money but it is not necessarily restricted to that. As for the nature of threat, an operational threat is a threat which the maker not only has the capacity to carry out but takes active steps or is taking active steps in effectuating or carrying out the threat. Whereas an aspirational threat is merely a threat to do something which that the maker at the time of making the threat does not or may not have the capacity to carry it out and most importantly, has not taken any step to carry out the threat. It is a loose aspiration. In military and intelligence community this kind of threat is often ignored and treated with levity.

One important fact is that the crime of extortion must obviously not be so widely drawn that it prevents, say, a creditor from ‘threatening’ to sue his debtor as a means of obtaining repayment of what is lawfully due. In this instance, the demand for money would be quite legitimate, assuming that the due date for payment has come, as would the threat employed to pressurise the debtor. In this way, it might be though wrong for the law to penalise as extortion some matter which was ultimately for the victim’s owns own benefit. If, for example, an employee had been caught ‘with his hand in the till’, it would clearly be to his benefit to take advantage of an offer from his employer to accept his resignation, even if pressurised into that by the threat of bringing in the Police. See the case of Hill v MacGrogan 1945 S.LT [Sh Ct] 18

Prosecution

There is a system of public prosecution in The Bahamas for an offence of extortion and/or blackmail with intent to obtain pecuniary or monetary advantage and the prosecution of this kind of offence may be undertaken by the Attorney General or the Police before the magistrate court or the Supreme Court respectively. In the instant matter, the prosecution will be brought against the accused by the Police before the Magistrate Court which is clothed or conferred with the requisite jurisdiction to try or deal with this kind of offence or crime. But note that the Magistrate Court is a court of limited jurisdiction with summary jurisdiction as well in terms of its power to try cases and the sentence that it can impose on an accused person upon conviction whereas the Supreme Court is a court of unlimited jurisdiction and a superior court of record.

As for many persons in The Bahamas and the world over who are excoriating, lampooning and calumniating the accused and The Bahamas with respect to this allegation, please be advised that he administration of criminal justice in any well regulated society has a protective function in respect of the accused who is sometimes referred to as the defendant. The system embodies the principles of the presumption of innocence in favour of the accused as enshrined in the Constitution of The Bahamas, the right to fair trial, and strict adherence to the rules of evidence and criminal procedure and of course the right of the accused to legal representation and res judicata [finality] and non exposure to double jeopardy. Unfortunately in The Bahamas where everything is viewed from political prism, the two or three accused or suspected persons in this matter, especially the two with high profile public figures have already been tried by their own kinsmen and condemned and doomed to infamy and inglorious memory even without having been tried by the court.

As previously adumbrated, the onus of proof is always on the prosecution, to prove criminal responsibility of the accused beyond reasonable doubt. There are two kinds of burden Ð the legal burden and the evidential burden. The expression ‘burden of proof’ is used in two senses in a criminal trial; [a] the obligation on the Prosecution to prove all the facts necessary to establish guilt; and [b] the obligation on either prosecution or defence to establish the facts upon a particular issue. In the first sense, it is known as the ‘persuasive’ or ‘legal’ burden, meaning the duty of persuading the tribunal of fact, in this case, the jury [if in the Supreme Court] or justices or the Magistrate. In the second sense, the burden is called ‘evidential’, meaning the admissibility of evidence. Therefore, the rule is that the duty of persuading the tribunal of fact, i.e, the burden of proving the defendant’s guilt, is upon the prosecution. This is the cardinal principle of all criminal trials. It forms an essential part of the directions which every jury must receive and which every magistrate must apply. Thus, if the jury or the justices or the Magistrate feel unable to reach a decision, the prosecution have not proved the case and the defendant must be acquitted. See Bromley JJ. Ex p. Haymill [Contractors] Ltd [1984] Crim. L.R 235.

It encapsulates the presumption of law that the defendant remains innocent until he is proved guilty and this is now enshrined in Article 6.2 of the European Convention of Human Rights

Once again, we urge that this matter does not become politicised and be viewed as PLP matter or scandal. Neither has this incident tarnished the reputation of The Bahamas or the PLP. We urge everyone to patiently wait for the legal process to run its course. We also urge the international community and tourists not to use this incident to rubbish The Bahamas as The Bahamas remains an ideal paradise for touristic destination and this incident is not to be seen as damaging the reputational capital of the destination.

The Bahamas criminal law is almost exclusively common law based and the common law is based on the existing principles that have evolved through judicial decisions. The prosecution must prove two elements of criminal responsibility ,i.e. the actus reus and the mens rea. The basis of criminal responsibility is expressed in the latin maxim- ‘actus non facit reum nisi mens sit sit rea’ which means- roughly translated that ‘an act cannot be guilty unless the mind is also guilt’. Thus, ‘mens rea’ literally means ‘guilty mind’. One of the basic principles of legal and criminal responsibility is that those who are punished are those deserve ie those who are considered to be morally or individually as well as factually responsible for what has been done. This is why the proof of the mens rea, or mental element, of any crime is important as it will reveal whether the accused has committed the crime with requisite mental state. The Prosecution must satisfy the court of the above beyond reasonable doubt.

Note that if the offence of extortion is committed in concert with another person or persons, that the Police can also charge the co-accused with conspiracy which is considered an inchoate offence. A conspiracy requires the intentional agreement of two or more people to commit a crime. See Maxwell v H M Advocate [1980]. The mens rea of the offence is intention and the actus reus is agreement to commit a crime. Nothing else needs be done in pursuance of that agreement for a crime to have been committed however it will be difficult to prove a conspiracy unless there is cogent and compelling evidence indicating that such an agreement was reached. See Sayers v H M Advocate [1981]

Since a defence, in its broadest meaning, is any answer which defeats a criminal charge, it may well be that the defence in this case may raise the issue of no common intention [or absence of a common intention] between the ambulance driver and the senator as a defence. It is trite beyond any cavil that where the Prosecution fails to prove the accused formed an intention in common with another person or persons to carry out an unlawful purpose, the accused may not be found liable as a party to an offence arising from the actions of a person or persons involved in a [common] unlawful purpose. See R v Carcia [1990], 75 C R [3rd] 250 [B.C.C.A]

Clement Chigbo [esq], LLB[Hons], LLM[London], L.E.C, B.L, Dip.Lat, MCIarb practises as a registered associate with the law firm of C F Butler & Associates, Nassau, N. P., The Bahamas. He is formerly an ad-hoc Lecturer in Law at The Robert Gordon University, Aberdeen, U K and currently a tutor in law at the University of Aberdeen, U K. Mr. Chigbo is also a PhD/Doctoral candidate in Law at the University of Aberdeen. Opinions, comments and criticisms to his articles and publications are welcome. Please email lawscholar2006@yahoo.com, clemsweiss@hotmail.com

Articles by Clement Chigbo published in the Bahamas Journal: :

http://www.jonesbahamas.com/news/135/ARTICLE/19312/2009-02-18.html

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