Money Laundering

Question 1

three meanings of money laundering

Answer 1

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 ‘shell’ 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.

Question 2

Offence of Money laundering

Answer 2

Section 243 Crimes Act 1961
(2) Subject to sections 244 and 245, every one is liable to imprisonment for a term not exceeding 7 years who, in respect of any property that is the proceeds of an offence, engages in a money laundering transaction, 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.

Question 3

in respect of any property that is the proceeds of an offence meaning

Answer 3

Property is defined to include 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 this country

Question 4

engages in a money laundering transaction meaning

Answer 4

One must conceal property or enable another to conceal the property and then also deal with the property or assist with such dealing.

This includes disposing or transferring the property; bringing or removing the property from NZ; or changing it from one form to another (eg. Purchasing a vehicle)

Question 5

knowing or believing that all or part of the property is the proceeds of an offence meaning

Answer 5

Knowledge is proven via direct evidence (e.g. admission) and/or circumstantial evidence.

Knowledge must exist when the property is dealt with (R v Kennedy53)

Question 6

or being reckless as to whether or not the property is the proceeds of an offence meaning

Answer 6

Recklessness is the conscious and deliberate taking of an unjustified risk (Cameron V R)54

Question 7

what is an Assets forfeiture order

Answer 7

An Assets Forfeiture Order (AFO) is issued by the High Court on application. This order must be issued by the court on a successful application that shows on the balance of probability that specific assets which have been acquired have been tainted by significant criminal activity.

Question 8

What is tainted property

Answer 8

means any property that has, wholly or in part, been—

(i) acquired as a result of significant criminal activity; or
(ii) directly or indirectly derived from significant criminal activity;