New Bill will reap millions from gangs
Hon Phil Goff
Minister of Justice
21 June 2005
New Bill will reap millions from gangs
Millions of dollars a year will be confiscated from gangs and organised crime under the Criminal Proceeds and Instruments Bill introduced to Parliament today, says Justice Minister Phil Goff.
"The Bill will have an immediate impact on becoming law, as it will apply retrospectively to all assets and benefits derived from crime over the seven years prior to a restraining or forfeiture order being made by the Court," Mr Goff said.
The Bill replaces the current Proceeds of Crime Act 1991. It introduces a civil forfeiture regime that, once the Court has found on the balance of probabilities that the property is the proceeds of crime, will force criminals to prove all their property is not so derived. It also updates the existing conviction-based regime.
"It is estimated that up to $14 million per year will be recovered under the new legislation. This is based on the average amount per forfeiture order over the last two years under existing law, and an expectation that about 70 confiscation cases will be taken each year under the new process," Mr Goff said.
"Some critics will argue that the retrospective aspect of the Bill is a breach of rights. This is not the case. The monetary value of the assets and profit for which forfeiture is sought is the amount that the Court has found likely to be unlawfully obtained. No person stands to lose assets or profits that they have rightfully owned or gained. The retrospective application of the Bill is therefore appropriate.
"Under the legislation, the Crown will be able to seek a High Court order restraining a person's assets if it can show reasonable grounds to believe the person benefited directly or indirectly from serious criminal activity. The orders will prevent those assets being dispersed or their value deliberately eroded.
"The Court can then order confiscation if it is satisfied the Crown has proven to the civil court standard of the balance of probabilities that the person did in fact derive some benefit from criminal activity. No specific criminal offence, or value of benefit, need be proved.
"International experience shows that civil forfeiture regimes are the best way to target gang bosses who keep themselves at arm's length from actual offending but still benefit from it.
"Stripping criminal gangs of assets will also seriously reduce the profitability of their activities, and disrupt their capacity to finance further criminal activity.
"Those who want to dispute forfeiture will have to prove their wealth has not been funded by criminal activity. If they can prove the value of restrained assets exceeds the benefits they derived from crime, the forfeiture will be reduced accordingly. If they can't prove that, their entire estate may be confiscated."
Mr Goff said an asset recovery team of around 20 staff would be set up within the Serious Fraud Office to implement the new regime.
"Once the Court issues a restraining order, the recovery body will have the power to require the person under investigation, or whose property is suspected of being derived from crime, to produce documents or to answer questions relating to the investigation. Financial institutions will also have to produce documents when requested.
"It will be offence punishable by up to six months in jail to fail to comply, or to provide false or misleading information.
"The team will have expertise in forensic accounting and in-depth knowledge of fraud and techniques used to conceal money. It will be able to access tax records, which can provide information pointing to criminal activity.
"The team will work closely with Police and fully utilise Police intelligence and knowledge in its investigations. However it is critical that civil action is not seen as an alternative to criminal charges. Convicting criminals and putting them behind bars remains the top priority."
Mr Goff said the existing Proceeds of Crime Act had been only moderately successful compared with overseas models. Between 1995 and July 2003, $8.84 million in assets had been confiscated – including a record $3.7 million in 2003 – through 57 forfeiture orders. In comparison, NSW took $NZ84 million over the same period.