Money Laundering

Question 1

Meaning of money laundering

Answer 1

The process of dealing with proceeds of criminal activity in a way that makes the proceeds appear to have been legitimately obtained.

Question 2

Money Laundering

Act/Section/Elements

Answer 2

CA 1961, S243(2)

• Everyone 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

Conceal - Definition

Answer 3

In relation to property, means to conceal or disguise the property, and includes -

a) Converting the property from one form to another; or
b) Concealing or disguising the nature, source, location, disposition, or ownership of the property or of any interest in the property.

Question 4

Deal with - Definition

Answer 4

In relation to property, means to deal with the property in any manner, including:

a) Disposing of the property by sale, purchase, gift or otherwise
b) Transferring possession of the property
c) Bringing the property into NZ
d) Removing the property from NZ

Question 5

Interest - Definition

Answer 5

In relation to property means a legal or equitable estate or interest in the property or a right, power, or privilege in connection with the property.

Question 6

Proceeds - Definition

Answer 6

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.

Question 7

Money Laundering Cycle

Answer 7

PLACEMENT: Cash enters the financial system.

E.g: Offender makes money selling cannabis and deposits the 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 a 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 the offender pays himself a salary out of the company account.