Money Laundering & Criminal Proceeds (Recovery) Act 2009

Money Laundering meaning

Dealing with the proceeds of criminal activity in such a way as to make the proceeds appear to have been legitimately acquired.

3 stages of the money laundering cycle

Placement - cash enters the financial system
e.g an offender makes money from selling cannabis and then deposits these proceeds into an associate’s bank account.

Layering - money is involved in a number of transactions
e.g the associate transfers the money into an account held by a ‘she'll’ company that the offender is the director of.

Integration - money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy
e.g the money is declared as revenue for the company, tax is paid, and then the offender pays himself director fees or a salary out of the company account.

Money Laundering - (Engages In)

s243(2), CA61

1. In respect of any property that is the proceeds of an offence,

2. Engages in a money laundering transaction,

3. Knowing or believing that all or part of the property is the proceeds of an offence OR being reckless as to whether or not the property is the proceeds of an offence.

Elements of money laundering explained

• In respect of any property that is the proceeds of an offence:
  Includes both tangible and intangible property and interests in real or personal property whether within or outside NZ.
  - Includes offences, acts and omissions committed overseas that would be an offence in NZ if committed in NZ.

• Engages in a money laundering transaction:
  One must conceal property or enable another to conceal the property and then also deal with the property or assist with such dealing.
  - Includes disposing or transferring the property; bringing or removing the property from NZ; or changing from one form to another.

• Knowing or believing that all or part of the property is the proceeds of an offence:
  Knowledge is proven via direct evidence and/or circumstantial evidence.
  Knowledge must exist when the property is dealt with (R v Kennedy).

• Or being reckless as to whether or not the property is the proceeds of an offence:
  Recklessness is the conscious and deliberate taking of an unjustified risk (Cameron v R).

Money Laundering - (with intent to engage in)

s243(3), CA61

1. Obtains or has in his or her possession

2. Any property (being property that is the proceeds of an offence committed by another person) —

(a) with intent to engage in a money laundering transaction in respect of that property; and
(b) knowing or believing that all or part of the property is the proceeds of an offence, or being reckless as to whether or not the property is the proceeds of an offence.

Money Laundering - (conceals/ deals with the property)

s243(4), CA61

In concealing any property or by enabling any person to conceal any property, that person -

(a) deals with that property, or
(b) assists any other person, whether directly or indirectly, to deal with that property

Money Laundering - (Conceal)

s243(1), CA61

To conceal or disguise the property, and includes, without limitation:

(a) to convert the property from one form to another:
(b) to conceal or disguise the nature, source, location, disposition, or ownership of the property or of any interest in the property.

Money Laundering - (Deal with)

s243(1), CA61

To deal with the property in any manner and by any means, and includes, without limitation:

(a) to dispose of the property, whether by sale, purchase, gift or otherwise
(b) to transfer possession of the property
(c) to bring the property into New Zealand
(d) to remove the property from New Zealand.

Money Laundering - (Interest)

s243(1), CA61

Interest: in relation to property, means:

(a) a legal or equitable estate or interest in the property; or
(b) a right, power, or privilege in connection with the property.

Money Laundering - (Offence)

s243(1), CA61

An offence punishable under New Zealand law, including any act, wherever committed, that would be an offence in New Zealand if committed in New Zealand.

Money Laundering - (Proceeds from an offence)

s243(1), CA61

Proceeds: in relation to an offence, means any property that is derived or realised, directly or indirectly, by any person from the commission of the offence.

Criminal Proceeds (Recovery) Act 2009

Purpose, s3 ss(1)

(1) To establish a regime for the forfeiture of property —

(a) that has been derived, directly or indirectly, from significant criminal activity; or
(b) that represents the value of a person’s unlawfully derived income.

Criminal Proceeds (Recovery) Act 2009

Purpose, s3 ss(2)

(a) ELIMINATE the chance for persons to profit from undertaking or being associated with significant criminal activity; and
(b) DETER significant criminal activity; and
(c) REDUCE the ability of criminals and persons associated with crime or significant criminal activity to continue or expand criminal enterprise; and
(d) DEAL with matters associated with foreign restraining orders and foreign forfeiture orders that arise in New Zealand.

Meaning of unlawfully benefited from significant criminal activity

s7, CPRA09

• Knowingly,

• Directly or indirectly,

• Derived a benefit from significant criminal activity

The High Court must make a Profit Forfeiture Order if it is satisfied on the balance of probabilities that—

s55, CPRA09

(a) The respondent has unlawfully benefited from significant criminal activity within the relevant period of criminal activity; and
(b) the respondent has interests in property.

Instrument of crime definition

Property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence.

Assessment process before application for restraint of instrument of crime.

Used to determine:

• Asset value

• Asset equity

• Any third party interest in the asset

• The cost of action in respect of the asset.

Affidavit required for the application for restraint of instrument of crime.

Needs to outline:

• Officer in Charge

• Offender(s)

• Search warrant

• Admissions made during interview(s)

• Property

Who to seek guidance from for completing a restraint application

Prosecutions and/ or the Asset Recovery Unit

What must occur before Criminal Proceeds action can be taken

And what belief is required.

A restraining order is the first step in the asset seizure process.

Reasonable grounds for belief that the property is tainted – that it has been acquired, or directly or indirectly derived, from “significant criminal activity”.

How long is a restraining order valid from the date on which the order is made?

One year

What is the purpose of the assessment process when preparing an application for a restraining order relating to an instrument of crime?

The assessment process is conducted to determine:

• The value of the asset

• Equity in the asset

• Any third party interest in the asset

• The cost of action in respect of the asset.