Money Laundering and Criminal Proceeds Act 2009

Question 1

Q) Define “Conceal” under Section 243(1) Crimes Act 1961

Answer 1

• in relation to property, means to conceal or disguise the property, and includes, without limitation
  a. To convert property from on form to another
  b. To conceal or disguise the nature, source, location, disposition, or ownership of the property or any interest in the property

Question 2

Q) Define “Deal with” under Section 243(1) Crimes Act 1961

Answer 2

• in relation to property means 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

Question 3

) Define “Interest” under Section 243(1) Crimes Act 1961

Answer 3

• In relation to property, means to deal with the property in any manner and by any means, and includes, without limitation:
  a. A legal or equitable estate or interest in the property, or
  b. A right, power, or privilege in connection with the property

Question 4

Q) Define “Offence” under Section 243(1) Crimes Act 1961

Answer 4

• Means an offence (or any offence described as a crime) that is punishable under New Zealand law, including any act, wherever committed, that would be an offence in New Zealand if committed in new Zealand

Question 5

Q) Define “Proceeds” under Section 243(1) Crimes Act 1961

Answer 5

• In relation to an offence, means property that is derived or realised, directly or indirectly, by any person from the commission of the offence

Question 6

Q) Define “Property” under Section 243(1) Crimes Act 1961

Answer 6

• Means real or personal property of any description, whether situated in New Zealand or elsewhere and whether tangible or intangible and includes an interest in such real or personal property.

Question 7

Q) What are the 3 phases of the Money Laundering Cycle?

Answer 7

1. PLACEMENT: Cash enters the financial system
   Example: an offence makes cash selling drugs and then deposits it in an associates bank account
2. LAYERING: Money is involved in a number of transactions
   Example: The associate transfers the money into an account held by a “shell” company that the offence is the director of
3. INTERGRATION: Money is mixed with lawful funds or integrated back into the economy, with the appearance of legitimacy
   Example: 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 8

Q) What are the elements of Money Laundering

Answer 8

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

Question 9

Q) When interviewing a suspect about money laundering or criminal proceeds matters, what points should be considered?

Answer 9

• Suspect’s legitimate income
• Suspect’s illegitimate income
• Expenditure
• Assets
• Liabilities
• Acquisition of financial records from banks, financing companies, loan sharks and family trust documents
• Clarification of the above documentary evidence

Question 10

Q) What is significant criminal activity

Answer 10

• Section 6 – Significant criminal activity
• Significant criminal activity means an activity engaged in by a person that if proceeded against as a criminal offence would amount to offending:
  o That consists of, or includes, one or more offences punishable by a maximum term of imprisonment of 5 years or more
  o From which property, proceeds or benefits of a value of $30,000 or more have, directly or indirectly, been acquired or derived

Question 11

Q) What is a qualifying instrument forfeiture offence?

Answer 11

• Means an offence punishable by a maximum term of imprisonment of 5 years or more
• Includes an attempt to commit, conspiring or being an accessory to an offence with such a punishment.

Question 12

Q) What is an instrument of crime

Answer 12

• An instrument of crime means property used (wholly or in part) to commit or facilitate the commission of a qualifying instrument forfeiture offence
• Includes funds for allocated the purpose of committing that offence
• Includes the proceeds of the disposition of such property after the commission of the qualifying offence.

Question 13

Q) When has a person unlawfully benefitted - Section 7, CPR 2009

Answer 13

• A person has unlawfully benefitted from significant criminal activity is the person has knowing, directly or indirectly, derived a benefit from significant criminal activity (whether or not that person undertook, or was involved in the significant criminal activity).

Question 14

Q) Profit forfeiture order – Section 55 CPRA 2009

Answer 14

• The High Court must make a profit forfeiture order if it is satisfied on the balance of probabilities that –
  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

Question 15

Q) What was held in Pulman v Commissioner of Police

Answer 15

• The Court held that the purpose of the forfeiture regime was not only to prevent the ability of a person to actually profit from undertaking significant criminal activity but also the ‘’chance’ that they may be able to do so and also to deter significant criminal activity
• (Unlawful benefit as soon as receive cash from purchases; how they deal with cash afterwards is irrelevant)

Question 16

Q) What must happen before Criminal Proceeds action can be taken?

Answer 16

• A restraining order is the first step. An application must be made at High Court that shows reasonable grounds for belief that the property is tainted (that is has been acquired, or directly or indirectly derived from, significant criminal activity.

Question 17

Q) An application for restraint of instrument of crime requires and affidavit from the officer in charge. What must be outlined in this affidavit?

Answer 17

• Officer in charge – details
• Offender(s) – details, charges and criminal convictions
• Search warrant – describe the nature of the offending discovered at or involving the property concerned.
• Property – Describe property sought to be restrained and its value, and show that the offender owns, has custody or controls it.
• Admissions made during interview

Question 18

Q) Define “Tainted Property” under Section 5 of the Criminal Proceeds (Recovery) Act 2009

Answer 18

a) Means any property that has, wholly or in part, been
a. Acquired as a result of significant criminal activity, or
b. Directly or indirectly derived from significant criminal activity, AND
b) Includes any property that has been acquired as a result of, or directly or indirectly derived from, more than 1 activity if at least 1 of those activities is a significant criminal activity.

Question 19

Q) Who may apply for restraining Orders – CPRA 2006 – MC

Answer 19

• Only members of Asset Recovery Units may apply for restraining orders, assets forfeiture orders and profit orders