N3410

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR 276 OF 2008

THE STATE

v

JING HUI GAO
Accused

Waigani: Davani .J
2008: 19th, 25th June

CRIMINAL LAW – guilty plea to transfer or removal of currency out of Papua New Guinea – K50,000.00 involved– s.7 of Central Banking (Foreign Exchange and Gold) Regulation 2000.

CRIMINAL LAW – sentence – first offence – whether court has a discretion to reduce prescribed penalty – Courts power to order forfeiture of or not of confiscated currency etc, discussed – s.33 (1) (2) of Central Banking (Foreign Exchange and Gold) Regulations 2000).

CRIMINAL LAW – Costs – the awarding of – s.101 (5) of Central Banking Act 2000.

Facts

The accused travelled out of Papua New Guinea to Cairns, Australia, without declaring K50,000.00 that he had on him. This was discovered in Australia and he was apprehended and questioned by authorities whilst in Cairns.

On return to Papua New Guinea, he declared these monies which he had converted to Australian dollars, an amount of AUD$17,855.00. He was then arrested and charged.

Held

1.	The offence is serious and is reflected in the penalty provisions.

2.	In relation to penalty, the Court does not have a discretion but to order either a fine which is either payment of K100,000.00 or twenty five percent (25%) of the total value of funds or property involved, whichever is the greater amount or imprisonment for a term not exceeding five (5) years. (s.33 (2) (a) (b) of the Central Banking (Foreign Exchange and Gold) Regulation 2000).

3.	The Court will order costs for the Central Bank 

Cases cited:
Wilson Kamit v Michael Dowse Collins MP 46 2006

Counsel:
T. Ai, for the State
R. Gwaibo, for the Accused

SENTENCE

25 June, 2008

1. DAVANI .J:	The accused pleaded guilty to one count of transfer or removal of currency out of Papua New Guinea, charge laid under s.7 of the Central Banking (Foreign Exchange and Gold) Regulation 2000. (the ‘Regulations’) This section reads;

" 7.	Transfer or removal of currency out of Papua New Guinea.

(1)	Subject to subsection (2), a person other than the Central Bank who, except with the authority of the Bank or an authorized dealer, takes or sends, or attempts to take or send, out of Papua New Guinea –

i.	any Papua New Guinea currency; or
ii.	any foreign currency other than foreign currency obtained in accordance with an authority granted under Section 6,

is guilty of an offence.

(2)	Subsection (1) does not apply to a money order issued at a post office in Papua New Guinea and payable outside Papua New Guinea.

(3)	Where the authority of the Central Bank or of an authorized dealer is given to any person for the taking or sending out of Papua New Guinea of any Papua New Guinea currency for a specified period or subject to conditions, he must not use the currency otherwise than for that purpose, or fail or refuse to comply with the conditions, as the case may be."

2. The Regulations are made under s.105 of the Central Banking Act 2000 (the ‘Act’) whose purpose amongst others, is to; 

"…
(b)	confer upon the Bank of Papua New Guinea certain functions and powers including formulation and implementation of monetary policy and regulation of the financial systems; and
(c)	make provision for and regulate foreign currency; and
(d)	make provisions in respect of foreign exchange and international reserves." (s.2 of Central Banking Act 2000).

S.80 of the Act states that regulations made under s.97 of the Regulations; 
"… may provide for or relate to;
(a)	the control of foreign exchange; and
(b)	the control of gold.
…".

S.80 (2) (d) of the Act further provides that the Regulations may also relate to;

"the taking or sending out of the Country of Papua New Guinea, currency, foreign currency or gold;"

3. Section 7 of the Regulations does that. In the exercise of its functions, the Central Bank regulates the financial system of Papua New Guinea, (s.105 of the Act), one of which is the transfer or removal of any Papua New Guinea currency out of Papua New Guinea without the authority of the Central Bank.

4. "Papua New Guinea currency" means any currency that is legal tender in Papua New Guinea. (s.3 of the Act).

Evidence

5. The facts which the accused pleaded guilty to were that on 15th June, 2007, he took with him to Cairns, Australia, the sum of K50,000.00 without the authority of the Central Bank. He was in the company of three (3) others all in the employ of the Ramu Nickel Mine. Additionally, because these monies were not declared, it was not discovered by PNG customs but was discovered by Australian Custom Officials at the Cairns Airport.

6. Although, the matter was reported to the Australian Federal Police, no action was taken. However, the Australian Customs officials conveyed this information to PNG Customs officials and also that the accused was departing Cairns for Port Moresby on 17th June, 2007.

7. On 17th June, 2007, the accused returned to Papua New Guinea with converted monies of AUD$17,855.00. This was discovered after a search conducted upon his person by PNG customs officials following a declaration by himself. He was then referred to the Central Bank officials and subsequently charged with the offence that he now plead guilty to.

Analysis of evidence and the law

8. No evidence was put before the Court on the status of the accused in Papua New Guinea. There is only evidence from the bar table that he is an employee of Ramu Nickel. For purposes of mitigation also, the prisoners lawyer has not put before the Court evidence of the circumstances under which the K50,000.00 was taken out of Papua New Guinea. I say this because representations have been made by defence counsel from the bar table that the accused was leader of the group that was travelling that day and was tasked with the responsibility of holding the monies which were company funds and which monies were meant for the groups living expenses in Australia.

9. For all I know, the accused could have been avoiding authorities when travelling with that large sum of money, that he did get past the authorities in Papua New Guinea but was apprehended in Australia.

10. Ms. Gwaibo, Defence counsel, submits that her client did not know that he had to declare those monies. Is that a factor for mitigation? Based on the premise that ignorance of the law is no excuse, I take judicial notice of the fact that any traveller must declare certain items, one of which is a large amount of money. The immigration form stipulates clearly that if K10,000.00 or more is taken out of the country, that it must be declared. The same is done for entry into Australia. If the accuseds employer had tasked him with the responsibility of being custodian of those monies, as a large mining company in Papua New Guinea, it should very well appreciate the requirements in relation to declaration of large sums of money as they deal with large sums of money all the time.

11. Mr. Ai for the State, referred the Court to the penalty provisions in the Regulations and submits that the penalties prescribed reflect the seriousness of the offence. Ms. Gwaibo for the accused submits that the accused is a first time offender, that he cooperated with the police, that there were no victims involved and that he expressed remorse. She also submitted that he did not have the intention to commit a crime.

12. In relation to the latter two submissions, I point out that on allocatus, the accused did not express any remorse, only saying that his lawyer would speak on his behalf. In relation to him not having an intention to commit a crime, I point out that intention is not an element of the offence with which he is charged with. These submissions are made by Ms. Gwaibo, based on instructions she received that her client was holding the money for his employer, a reason I have already discounted because there is no evidence from his employer to support that fact.

13. The mitigating factors, that he is a first time offender and cooperation with the authorities, should be balanced out against the seriousness of this offence. This offence is indeed serious. Monies or Gold or any valuables taken out of this country must be properly declared. In this case, the Government of Papua New Guinea has made provision for the declaration of large sums of money and gold. Apart from the legislated functions and purposes of the Central Bank, no doubt, the Government and the country will benefit in the way of taxes that will come from the gold and monies being taken out. Because the monies were made in Papua New Guinea and the gold is from Papua New Guinea, that persons including foreigners who wish to remove these from this country and to later benefit from it in the way of wealth, must give their due to the government by paying taxes where it is due.

14. No doubt, there are a lot of instances where valuables have been taken out of this country without being properly declared for many reasons. But upon discovery, the authorities must ensure that those responsible are duly prosecuted. This is one such case.

15. Ms. Gwaibo for the prisoner submits that the accused should be fined rather than be imprisoned. Ms. Gwaibo further submits that because K50,000.00 is involved, that the Court should exercise its discretion in imposing a penalty between K8,000.00 to K10,000.00. She submits this because she says the accused does not have a lot of money.

16. This then takes me to the penalty provision in the Regulations. This is found at s.33 which reads;

"s.33	Penalties

(1)	A person who commits an offence against or fails or refuses to comply with any of the provisions of this Regulation may be prosecuted either summarily or on indictment.

(2)	A person who commits an offence against, or fails or refuses to comply with, any of the provisions of this Regulation, is liable on conviction to a fine not exceeding –

(a)	K100,000.00; or
(b)	an amount equal to 25% of the total value of the funds or property involved,

whichever is the greater amount, or imprisonment for a term not exceeding five years.

(3)	In addition to any other punishment, a Court may, if it thinks fit, order the forfeiture of any gold, Papua New Guinea currency, foreign currency, securities or goods in respect of which an offence has been committed against the regulations made for the purposes of this section.

(4)	In addition to any other punishment a Court may, if it thinks fit, order the sale to or the vesting in, the Central bank of foreign currency, gold or property retained or obtained in contravention of this Regulation."

17. Ms. Gwaibo submits this in relation to the calculation of the fine, that the Court should rely on s.33 (b) of the Regulations, by taking twenty five percent (25%) of K50,000.00 being K12,500.00, and then pay less than K12,500.00. She asked for an amount between K8,000.00 to K10,000.00.

18. That section speaks for itself. The accused must pay either K100,000.00 or for the Court to impose a term of imprisonment not exceeding five (5) years. (my emphasis).

19. I asked Ms. Gwaibo, if that provision gave me any discretion to impose an amount less than K100,000.00 because I noted that not to be the case. Ms. Gwaibo agreed with me, that section 33 of the Regulations, does not give the Court a discretion in relation to payment of an amount lesser or greater then what is specifically provided therein. It is either payment of K100,000.00 or "an amount equal to 25% of the total value of the funds or property involved, which ever is the greater amount or imprisonment for a term not exceeding five (5) years". (my emphasis)

20. The prisoner asks that the monies be returned to his employer. There is no evidence that the monies are owned by persons other than the accused. Therefore, it is only proper that the monies be applied towards payment of the fine, which I will discuss further below.

21. In terms of penalty, I order the following;

1.	That the prisoner shall pay the amount of K100,000.00 and that this amount shall be paid within seven (7) days from today on or before 2nd July, 2008. The prisoner shall be incarcerated at the Bomana Gaol, during that period.

2.	In the event the amount is not paid within seven (7) days, the prisoner shall serve the term of three (3) years in hard labour at the Bomana Gaol.

3.	The sum of AUD$17,855.00 presently held by the Central Bank shall be converted to PNG Kina and shall be applied towards part payment of the fine, and the balance shall be paid by the accused.

22. I note Justice Mogish’s decision in Wilson Kamit and Michael Dowse Collins MP 46 2006 dated 21.2.02, and the manner in which his honour dealt with the return or forfeiture of the property. The Court has a discretion in s.33 (3) and (4) of the Regulations to either forfeit the gold or foreign currency, in addition to any other punishment. In this case, apart from the fine and the alternate penalty of imprisonment, I also ordered the forfeiture of the Papua New Guinea currency subject to conditions.

23. This then takes me to the issue of costs. Mr. Ai submits that upon the finding of a penalty, the accused or offender should also be ordered to pay costs. He referred me to s.101 (5) of the Act which provides for this. It reads:

"s.101.	Prosecutions
…
(5)	In any prosecution or action brought under this Act by the Central Bank or against the Central Bank, the Court may award costs against any party or claimant other than the Central Bank, which costs may be recovered by the Central Bank as a debt to the Central Bank.
…".

24. As to this, I note the involvement of Australian and Papua New Guinean authorities. Although no figure was put to the Court by Mr. Ai for the State, I can assume that a significant amount of money was expanded by authorities in both countries. Therefore, I order the following;

4.	That the accused pay the Central Bank the sum of K10,000.00 as costs.

5.	The amount of K5,000.00 he paid as bail shall be forfeited towards part payment of those costs.

6.	The accused shall pay the other K5,000.00 failing which the Central Bank can file civil proceedings to recover this from him, to be done in accordance with s.101 (5) of the Central Banking Act 2000.

____________________________
Public Prosecutor: Lawyer for the State
Pacific Legal Group: Lawyer for the Accuse