Carlos Ghosn Is Now a Fugitive In Exile. Here Are His Legal Options, According to Experts
At his two-and-a-half hour press conference from Beirut on January 8, Carlos Ghosn passionately and garrulously protested his innocence from the alleged financial crimes that led to his indictment and 130-day imprisonment in Japan. Just ten days after he escaped house arrest in Tokyo, smuggled inside a musical instruments crate in a caper worthy of a Hollywood thriller, Ghosn—attired in dark suit and pink tie—appeared super-charged for combat, snapping his fingers and flapping his arms to dramatize his attack. “I am innocent of all the charges, and I can prove it,” he intoned on a global videocast carried online by major news outlets, and extensively discussed on venues from CBS This Morning to CNBC’s Squawk Box, proving just the spotlight the media-savvy showman craved.
Ghosn’s press offensive isn’t mainly aimed at getting Japan to dismiss or settle the case against the one-time auto mogul, or even convince the world that he did nothing wrong. Neither outcome is likely, and Ghosn probably knows it. Instead, it may well be about expanding the gilded cage that has him trapped in luxury, but still trapped.
Ghosn was renowned as an inveterate globetrotter when he headed three major automakers with worldwide networks: Nissan and Mitsubishi of Japan and Renault of France. He was born in Brazil to a family of Lebanese immigrants, and lived there until age 6, when his family moved to Lebanon, where he attended grammar and high school. He received his higher education in France, earning a diploma from the nation’s top academy for the business and government elite, École Polytechnique. At the presser, he delivered a tour de force in multilingual dexterity, answering questions in English, French, Arabic, and Portuguese. Ghosn is now living on the lam as the world’s most famous white-collar fugitive, and Japan is desperate to capture him for trial. Tokyo will apply diplomatic pressure and seek cooperation from any country where it can legally nab him, and that nab-able territory encompasses most of the globe.
Hence, this ultra-internationalist’s world has now shrunk to just three nations where he’s probably safe to live and visit by virtue of being a citizen: Lebanon, France, and Brazil. Of course, many fugitives would be content keeping quiet, and enjoying their riches hopping freely among those nations where they’re protected and welcome––and Ghosn is embraced in France and Lebanon as a hero.
But Ghosn will chafe at boundaries. He’s used to living like an emperor who relished nothing more than circling the globe and alighting to pose with heads of state. So he’s speaking out loudly, and the likely reason is that he wants to visit lots of other nations, even if briefly, with little chance of being detained, and if he should get unlucky and be arrested, to minimize the chances he’ll be flown back to Japan in handcuffs. (Fortune could not immediately reach Ghosn for comment.)
Ghosn will doubtless be carefully advised by a security staff that will assess where it’s relatively safe to travel, and where he’s at high risk of being caught and extradited. But getting careless by spending too many days in the wrong nation or getting arrested at a stopover in Athens or Madrid on his way to Rio isn’t the only way that Ghosn could face extradition to Tokyo. In the 1980s, the U.S. employed fake meetings with a middle-Eastern businessman to lure fugitive commodities trader Marc Rich to a yacht in the Adriatic, and planted spies to get wind of his coming trips, resulting in sundry-near nabs that never happened.
Traditionally, the Japanese have always taken a more cautious approach to nabbing fugitives, and that could be good news for Ghosn.
Nevertheless, the Japanese dread that Ghosn will become the new Marc Rich, the nation’s most-wanted white collar fugitive basking in luxurious exile—especially since while Rich was mainly silent, Ghosn is already making headlines by bashing the “corrupt” and “inhumane” Japanese legal system and “vindictive” accusers from the safety of Beirut. At a minimum, the Japanese will use their extensive intelligence network to discover if he’s visiting a nation where he can be detained, and given how badly they want Ghosn, might even change its cultural aversion to undercover capers.
One reason that Ghosn may be claiming so loudly that he was victimized in Japan by a corrupt justice system is to lay the legal groundwork for possible future visits to states where he’s now vulnerable to detention and extradition. That’s the opinion of experts consulted by Fortune, notably Ben Brandon, partner and head of the extradition practice at London law firm Mishcon de Reya.
Brandon points to Ghosn’s assertions in his press conference that the charges in Japan weren’t based on even-handed justice but “political” motives, that he has “zero chance” of getting a fair trial in Tokyo, and that he was a victim “inhumane” treatment in prison, where he was held in solitary confinement, allowed to shower just once a week, and “interrogated day and night without a lawyer.” Ghosn alleges that the Japanese courts might have taken five more years to reach a judgment that he was certain to lose because of what he calls a stacked legal system, leaving him convinced “you’ll die in Japan or you have to get out.”
“He’s publicly building a number of defenses,” says Brandon. “They follow three lines: that the prosecution was motivated by politics, that he can’t get a fair trial in Japan, and that his incarceration was inhumane and degrading. All three are enshrined in human rights conventions governing most of the countries that Ghosn where could potentially be apprehended. He can use those arguments to lower the chances that he will be either detained when visiting a nation outside of the three where he’s a citizen, or if he is detained, to avoid extradition.”
For Brandon, Ghosn’s thinking fits a common pattern for fugitives who were once shrewd operators in the business world. “These senior business leaders are well-versed in assessing risk,” he says. “For Ghosn, it will be about balancing the risk of arrest versus freedom of movement. That risk will be dynamic.” But these human rights arguments, if successful, could significantly increase the chance he won’t be stuck in just three countries for the rest of his life.
Arguing innocence will not protect Ghosn
Ghosn faces several charges of criminal financial conduct in Japan. Two counts accuse him of failing to report $80 million in compensation that was to be paid to him in retirement. He’s also accused him of transferring $17 million in personal losses on derivatives trades to Nissan, and funneling $5 million that Nissan paid to a distributor in Oman to benefit companies with ties to his family. The cases are fiendishly complex, in part because the $80 million was never actually paid to Ghosn since he was indicted prior to his planned retirement. Ghosn also alleges that Nissan was fully aware of the deferred comp arrangement, and that the board would have to approve it before he actually got the money.
Although Ghosn’s protestations of innocence have some credibility because he never received the pay he’s accused of concealing, his position is weakened by a recent settlement with the U.S. Securities and Exchange Commission. Last year, the SEC charged Ghosn with fraud for concealing more than $140 million of his total pay from Nissan. Ghosn settled the case by paying a $1 million fine, neither admitting nor denying wrongdoing.
As Brandon emphasizes, financial fraud is deemed a crime in virtually every nation around the globe. Hence, accusations of financial fraud by Japan would form grounds for extraditing Ghosn almost anywhere he’s detained. “The test for the nation where he’s detained isn’t whether or not Japan would win the case, but whether the case is worthy of a trial,” says Brandon. “If Ghosn is arrested in another country, arguing that he’s innocent would not prevent extradition. The nation detaining him would simply say that fraud is an extraditable offense since it’s also a crime in our country, and based on the nature of the charges alone, judge that his guilt or innocence should be decided by a trial in Japan.”
Ghosn may try to use human rights arguments to stop “Red Notices”
Immediately after Ghosn fled, Tokyo issued what’s called a “Red Notice” for his arrest around the world through Interpol, the International Criminal Police Organization. Interpol is not an international police force. The General Secretariat that coordinates its activities and oversees its rules, is based in Lyon, France. Interpol is an information-sharing agency that counts 194 nations as members, and fosters cooperation in apprehending criminals and fugitives convicted or charged in one country that are traveling or living in another Interpol member state.
Each nation has a National Central Bureau, usually based in the capital city, composed of police officers who specialize in sharing leads via the Interpol network. The local police who issued the arrest warrant for a defendant who’s fled the country will request that its NCB issue a Red Notice. The NCB will then forward the request to Lyon, stating in Ghosn’s case, for example, that he’s a fugitive wanted for prosecution, along with his picture, and his arrest warrant from Japan. A typical application would read, “Request for Red Notice with view to detention pending an extradition request.” The Lyon headquarters then dispatches the Red Notice to the NCBs at all 194 member nations. The NCBs in turn issue the Notice to their local police departments and immigration agents that check passports at the airports and train depots. Lebanon has acknowledged receiving a Red Notice for Ghosn, meaning that a warrant for his detention has circulated around the globe.
Just because a nation has received a Red Notice doesn’t mean that it will detain a criminal or fugitive. National laws supersede a Red Notice—which could be a big break for Ghosn. France, Lebanon, and Brazil, the nations where Ghosn holds passports, have a blanket policy of declining to extradite their citizens. “Lebanese authorities have no security of judiciary charges against him,” says the Lebanon’s Justice Minister, who also confirmed that Lebanon will not extradite Ghosn. France follows the same policy. “If Mr. Ghosn comes to France, we will not extradite Mr. Ghosn, because France never extradites its nationals,” said an economy ministry official. Since detention is the first step towards extradition, and those nations will not extradite Ghosn because he’s a citizen, the Red Notice will not prompt their local police to detain him.
What if Ghosn flies from Lebanon to another nation? What are the chances he’ll be detained? It depends on the country, and the regimes divide roughly into two categories, countries that follow civil law that’s dominated by statutes, and those ruled by common law heavily influenced by decisions reached in the courts. The civil law contingent includes Germany, France, Spain, Italy, Belgium, and Greece, among many others. In those states, a Red Notice triggers an automatic arrest: If a immigration official at, say, a Frankfurt airport flags a fugitive’s passport via a Red Notice, he alerts the local police, who detain the fugitive right at the terminal, and keep him or under detention for around 40 days. So if Ghosn lands in any of those countries next week, he’s likely to face immediate detention. The civil law states are also the ones that, in general, ban extradition of their citizens, while the common law countries, including the U.S. and U.K., do allow their citizens to be extradited if their courts so rule.
But in common law nations such as Britain, the U.S. and Australia, a Red Notice does not trigger an arrest. Instead, it triggers a potentially time-consuming series of steps to secure a fugitive’s detention. “If Japan gets word that Ghosn is visiting London,” says Brandon, “the Japanese government would have to first agree to an ad hoc extradition arrangement with the U.K. (as we’ll soon see, Japan has few extradition treaties), second, make a provisional request for his extradition, upon which the issue would go to the U.K. courts, which would then rule on whether to issue an arrest warrant—they almost always too. Only then could the fugitive be detained.” Finally, Japan would issue a full extradition in a time period stipulated by the ad hoc arrangement, usually within a period between 40 to 65 days. The problem in states such as Britain, says Brandon, is the time it would take to get an arrest warrant for his detention. Ghosn would probably be safe visiting for short periods if he’s willing to take the risk. By comparison, he’d probably be nailed at the airport in Italy or Germany.
“Ghosn’s immediate goal is probably to eliminate the Red Notices,” says Brandon. “The Interpol constitution prohibits Red Notices when the charges involve violations of human rights. Its Article 3 also sates “that it’s strictly forbidden for the organization to undertake any activities of a political…character.” Given Ghosn’s hammering on those issues in his press conference, the odds are high that he will render an appeal to Interpol, by applying to its Commission for Control of Files, to cancel the Red Notices. If he’s successful, he won’t be detained immediately at the nations that arrest for Red Notices on sight. Those nations would then be in the same position as the U.S. or U.K. They’d require a request from Japan and a court decision, all of which takes time, to detain him. So ditching the Red Notices would greatly increase Ghosn’s travel options, at least for short trips.
“The big problem with Red Notices,” says Brandon. “It that it locks you down, whether you’re traveling to a country that arrests on them or not. Even if you manage you to have them deleted, you don’t eliminate the risk. But it significantly reduces the risk.”
Japan’s lack of extradition treaties doesn’t mean Ghosn can’t be extradited for trial
Amazingly, Japan has extradition treaties with only two nations, the U.S. and the Republic of Korea. “But not having a formal extradition treaty does not bar an extradition,” explains Brandon. Of course, for Japan to succeed in extraditing Ghosn, he’d have to be under detention. Otherwise he could simply bolt the nation he’s visiting. But if Ghosn slips up and is detained in a nation that directly arrests fugitives on a Red Notice here’s what would happen. He’s now in detention under the Red Notice. Japan would be likely reach out diplomatically to the state where he’d been detained, and inquire whether that nation would be receptive to a formal extradition request. It is likely that Ghosn would be detained until the conclusion of any extradition proceedings that followed.
The extradition is probably contain a summary of the charges and even some of the evidence, together with details of the proceedings in Japan. The case would then be considered by a court in the detaining nation to determine is there is any reason why he shouldn’t be extradited. Once again, the decision doesn’t hinge on whether Ghosn would be convicted, but rather on whether the crime merits a trial in the country where it was committed. The offense also needs to be a crime in both countries for the detaining nation to extradite. Once again, few crimes are more universal than financial fraud.
If Ghosn is unlucky enough to be detained, the defenses raised at his press conference might save him. “In most countries, there is a prohibition against extraditing for political purposes, and he may additionally be able to challenge his extradition on the basis that he won’t receive a fair trial in Japan, or would be subject to inhumane and degrading treatment,” says Brandon.
Will Japanese gumshoes to soon start setting traps for Ghosn? They haven’t taken that approach in the past. But Tokyo could get daring and plant a mole in Ghosn’s camp, and get word that he plans a visit to Amsterdam. It could then sign an arrangement with the Dutch government stating that Ghosn is expected to fly to Skipol Airport on a certain date, and securing an agreement for the Dutch police to arrest him. Within weeks, Ghosn could be back in a Tokyo jail. Tokyo’s skulduggery may be the plot line of this real-life thriller’s next episode.
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