Money Laundering Flashcards
Money laundering
- Meaning
Money laundering is the process of dealing with the proceeds of criminal activity in such a way as to make them appear legitimate.
Money laundering
- Cycle
- Placement:
Cash enters the financial system. - Layering:
Money is involved in a number of transactions. - Integration:
Money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy.
Example:
Offender makes money from selling drugs and deposits it into an associates bank account
The associate transfers the money into an account held by a ‘shell’ company that the offender is the director of
The money is declared as revenue for the company, tax is paid, and then the offender pays himself a salary.
Money laundering s243(2)
- Elements
- In respect of any property that is the proceeds of any 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.
*Interest - s243(1)
In relation to any 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.
Offence - s243(1)
Means an offence that’s punishable under NZ law, including any act, wherever committed, that would be an offence in NZ if committed in NZ.
**Proceeds - s243(1)
Means any property that’s derived or realised, directly or indirectly, by any person from the commission of the offence.
Property - s243(1)
Means real or personal property of any description, whether situated in NZ or elsewhere and whether tangible or intangible; and includes an interest in any such real or personal property.
**Tainted property
- s5 Criminal Proceeds (Recovery) Act 2009
(a) Means any property that has, wholly or partly, been:
* Acquired as a result of significant criminal activity
* Directly or indirectly derived from significant criminal activity &
(b) Includes any property that’s been acquired or derived from, more than 1 activity if at least 1 of them is a significant criminal activity.
Significant criminal activity
- s6 Criminal Proceeds (Recovery) Act 2009
Means an activity that if proceeded against as a criminal offence would amount to offending:
- That consists of, 1 or more offences punishable by a max term of imprisonment of 5yrs or more; or
- From which property, proceeds, or benefits of $30,000 or more have, directly or indirectly, been acquired or derived.
*Unlawfully benefited from significant criminal activity
- s7 Criminal Proceeds (Recovery) Act 2009
A person has unlawfully benefited from significant criminal activity if?
The person has knowingly, directly or indirectly, got a benefit from SCA
*Profit forfeiture order
- s55 Criminal Proceeds (Recovery) Act 2009
The High Court must make a Profit Forfeiture Order if it is satisfied on the balance of probabilities that:
- The respondent has unlawfully benefited from SCA within the relevant period of criminal activity
- The respondent has interests in property.
What is the purpose of the assessment process when preparing an application for a restraining order relating to an instrument of crime?
An assessment process is required to determine:
- The value of the asset
- Equity in the asset
- Any 3rd party interest in the asset
- The cost of action in respect of the asset.
*What must occur before Criminal Proceeds action can be taken?
A restraining order is the first step in the asset seizure process.
In the case of tainted property and benefits from crime, an application to the High Court must show reasonable grounds for belief that the property is tainted – that it has been acquired, or directly or indirectly derived, from “significant criminal activity.”
*Restraining orders
Only members of the Asset Recovery Units may apply for restraining orders, assets forfeiture orders and profit orders.
*How long is a restraining order in force for?
1 year from the date the order was made.
