Introduction

Mutual Legal Assistance Treaties (MLATs) are one of the most important tools available to law enforcement agencies conducting international investigations. Recently, decisions in Canada and the United Kingdom highlighted both their necessity as well as their limitations in respect of these investigations.

R v Rajaratnam, 2020 CanLii 3698 (Rajaratnam): limits to MLAT evidence in Canadian criminal trials

In Canada, the use of MLATs was recently considered in the case of Rajaratnam. In Rajaratnam, four accused were charged with organizing, inducing, aiding or abetting people to come into Canada, colloquially known as “human smuggling”, in contravention of section 117 of Canada’s Immigration and Refugee Protection Act. At trial, rather than call as witnesses certain police officers from Thailand who arrested the accused and who might have been able to attest to these matters from their own knowledge, the prosecution introduced this evidence pursuant to the provisions of section 36 of the Mutual Legal Assistance in Criminal Matters Act (the MLACMA). Section 36 of the MLACMA states:

36 (1) In a proceeding with respect to which Parliament has jurisdiction, a record or a copy of the record and any affidavit, certificate or other statement pertaining to the record made by a person who has custody or knowledge of the record, sent to the Minister by a state or entity in accordance with a Canadian request, is not inadmissible in evidence by reason only that a statement contained in the record, copy, affidavit, certificate or other statement is hearsay or a statement of opinion.

(2) For the purpose of determining the probative value of a record or a copy of a record admitted in evidence under this Act, the trier of fact may examine the record or copy, receive evidence orally or by affidavit, or by a certificate or other statement pertaining to the record in which a person attests that the certificate or statement is made in conformity with the laws that apply to a state or entity, whether or not the certificate or statement is in the form of an affidavit attested to before an official of the state or entity, including evidence as to the circumstances in which the data contained in the record or copy was written, stored or reproduced, and draw any reasonable inference from the form or content of the record or copy.

Three of the four accused filed an application challenging the constitutional validity of section 36 of the MLACMA. They alleged that the provision infringed sections 7 and 11(d) of the Charter (the right to life, liberty and security of the person and, innocent until proven guilty in a fair hearing, respectively) and sought a declaration of invalidity pursuant to the Constitution Act, 1982. The trial court granted the accuseds’ application. In its reasons, it found section 36 of the MLACMA infringed an accused’s right to a fair trial and to make full answer and defence and violated sections 7 and 11(d) of the Charter. It held section 36 of the MLACMA unconstitutional and declared the provision to be of no force and effect in respect of the giving of evidence at trial.

The accused were acquitted of human smuggling charges. The Crown appealed the decision to the British Columbia Court of Appeal (the BCCA), who upheld the verdicts of acquittal and confirmed the constitutional invalidity of section 36 of the MLACMA. Specifically, the BCCA held that section 36 of the MLACMA ran afoul of Canada’s “principled approach” to hearsay, which the SCC has previously held is enshrined in the constitution. On January 23, 2020 and without further reasons, the SCC dismissed the application for leave to appeal the BCCA decision.

The SCC’s decision may affect ongoing (and future) trans-national criminal investigations in Canada as enforcement authorities, in particular, the Royal Canadian Mounted Police (the RCMP) rely heavily on MLATs in order to obtain and present evidence at criminal trials. In almost all cases, these investigations, and especially investigations where MLAT materials are exchanged, are time-consuming, expensive, and resource intensive. Section 36 of the MLACMA provided investigators and prosecutors with a “shortcut” of sorts to facilitate the entry of evidence at criminal trials in a more expedient manner. By virtue of Rajaratnam, that “shortcut” tool has been removed from Canadian law enforcement’s toolkit.

Rajaratnam also injects uncertainty into the trans-national criminal investigation landscape. Specifically, because the BCCA made the decision not to comment as to the application of section 36 in any circumstances other than the Crown introducing evidence in a criminal trial, section 36 has been and remains “on the books” with no indication that the decision has removed section 36’s application in other aspects of criminal procedure. The result is that an international investigation may continue with investigators being informed by MLAT evidence that is ultimately inadmissible at trial. Reliance upon such materials by the authorities could potentially lead to charges being dismissed should evidence be gathered by way of MLAT information sharing where there is no chance of primary testimony at trial to avoid the issue of hearsay.

With that being said, investigators weighing whether to forgo the MLAT process due to the complications arising out of Rajaratnam may face insurmountable obstacles in prosecuting trans-national investigations. In addition to document collection, MLATs also provide Canadian authorities with practical efficiencies, including but not limited to:

• Securing cooperation from foreign countries for investigative travel;
• Facilitating communications in the language of the foreign jurisdiction;
• Locating evidence and having witnesses cooperate with Canadian authorities; and
• Introducing procedures that allow Canadian authorities to continue an investigation without being required to agree to an unknown future trial in a foreign jurisdiction.

As a result, it will likely be impossible for investigators to abandon the MLAT process entirely. Investigators, and all other stakeholders in a Canadian trans-national investigation, will likely need to deal with the practical consequences that stem from Rajaratnam and be prepared to factor in the possible delays or additional resource outlays that will be arise because of the decision.

R (on the application of KBR, Inc) v Director of the Serious Fraud Office, [2021] UKSC 2 (KBR): international investigations require international cooperation

By contrast, the United Kingdom’s Supreme Court in KBR highlighted an attempt by a government agency attempting to avoid the MLAT process in prosecuting a trans-national investigation by limiting the Serious Fraud Office’s (the SFO) ability to collect extra-territorial evidence without them. The decision arose out of a bribery and corruption investigation involving KBR Ltd, a UK-based corporation that is itself a subsidiary to KBR, Inc, an American engineering and technical consulting company. In April 2017, the SFO issued a section notice under section 2(3) of the Criminal Justice Act 1987 (the CJA) to KBR Ltd, requiring it to produce specified documents and information. Section 2(3) of the CJA reads:

2(3) The Director may by notice in writing require the person under investigation or any other person to produce at such place as may be specified in the notice and either forthwith or at such time as may be so specified, any specified documents which appear to the Director to relate to any matter relevant to the investigation or any documents of a specified description which appear to him so to relate.

Traditionally, the SFO interprets this provision broadly, taking the position that it provides investigators with the power to compel any person to produce evidence connected to an investigation, whether that person is within the UK or not. In response to the section 2(3) notice, KBR Ltd provided the documents that were under its control, but advised the SFO that KBR, Inc. held some of the requested records in the United States. The SFO arranged a meeting in London in July 2017 to discuss the case and insisted that officers of KBR, Inc. should attend. At the meeting, an SFO representative issued a section 2(3) notice on KBR, Inc.

KBR, Inc. applied to quash the notice, which the UK’s High Court dismissed on several grounds. KBR appealed to the Supreme Court on a single issue, namely whether the KBR, Inc. notice was ultra vires on the grounds that it requested material held outside the jurisdiction from a company incorporated in the USA.

The five judges considering the appeal unanimously held that the SFO could not use section 2(3) of the 1987 Act to compel a foreign company to produce documents held overseas. Instead, the SFO must rely on mutual legal assistance instead, working with overseas agencies to obtain evidence.

In coming to its conclusion, the Supreme Court noted the presumption in domestic law that legislation is generally not intended to have extra-territorial effect. KBR, Inc. had never carried on business in the UK or had a presence here, so was certainly outside the UK jurisdiction. The Supreme Court then considered section 2(3) and the history of the 1987 Act more generally to determine whether an extra-territorial effect was intended. It found nothing to indicate that Parliament meant to permit UK authorities unilaterally to compel, under threat of criminal sanction, the production of documents held out of the jurisdiction by a foreign company. Indeed, it noted that a report which led to the 1987 Act had emphasised "the importance of establishing reciprocal arrangements for obtaining evidence from abroad", and that Parliament had indeed developed this system of mutual legal assistance, enacting safeguards and protections. It held that it was improbable that Parliament had created one set of refined machinery to obtain overseas evidence, while intending to leave the SFO a "parallel system" which operated through "unilateral demand".

The net result of KBR, Inc.is an affirmation of the importance of the MLAT system in UK investigations. Enforcement agencies in the country will need to work with their counterparts in other jurisdictions to conduct investigations and collect evidence.

Conclusion

Taken together, the cases of Rajaratnam and KBR illustrate both the necessity for MLATs in international investigations, the difficulties with relying upon them, and their tensions with domestic laws. In Rajaratnam, the Court identified a difficulty between the RCMPs approach to MLAT evidence collection and the Charter, one of Canada’s constating documents. It upheld the Charter at the expense of law enforcement’s use of MLATs, and in so doing might have severely restricted the existing government-to-government practice of practical cooperation. The ability of Canadian investigators to rely upon the MLAT process that not only effectively obtained evidence from foreign jurisdictions but also inherently dealt with issues of language barriers, unknown trial dates, concerns over foreign authorities trampling upon local investigative practices, to name a few, may be severely impacted. By contrast, the Court in KBR pushed back against efforts by an enforcement agency to avoid having to rely on an MLAT process by taking an aggressive approach to the extraterritorial effect of domestic law. It is likely that the SFO and other UK enforcement agencies will need to proceed through the MLAT process in order to generate evidence that it previously obtained unilaterally.

The upshot of both decisions is most likely a reduction in net total enforcement efforts in both Canada and the UK. Enforcement authorities, prosecutors, and defence counsel already face enormous resource, staffing, logistics, costs, timing and legal issues when multi-jurisdictional investigations occur. The cases expose a further difficulty: the frailty of international investigations when success is tied directly to the use of (or conscious choice to forgo the use of) MLAT processes. The Courts have removed or otherwise made it more risky to rely some of the tools of law enforcement to generate and present evidence, and in doing so has made the process of trans-national investigations more difficult, lengthier, and more expensive. By contrast, both cases provide defence counsel and those subject to an investigation with blueprints to challenge the evidence put forward by law enforcement. Counsel to those under an investigation will need to be aware of these decisions and how they may affect the rights and obligations of their client as it is investigated.