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Civil forfeiture regime puts onus on criminals

Hon Phil Goff Minister of Justice

23 November 2004

Civil forfeiture regime puts onus on criminals

A civil forfeiture regime to be introduced by the government will force criminals to prove their property was legally obtained, says Justice Minister Phil Goff.

Details of the new regime have now received Cabinet approval and the Bill is now being drafted.

The civil regime, coupled with an updated conviction-based regime, will replace the current Proceeds of Crime Act 1991, which has only been moderately successful at recovering assets from criminals when compared with some overseas models, Mr Goff said.

"Legislation that will come before the House early next year will establish an asset recovery body to target the wealth of criminal groups," Mr Goff said.

"Under the legislation, the Crown will be able to seek a High Court order restraining a person's assets if it can show there are reasonable grounds to believe that person benefited directly or indirectly from serious criminal activity.

"The Court can then order confiscation if it is satisfied the Crown has proven on the balance of probabilities that the person derived some benefit from criminal activity in the previous seven years. No specific criminal offence need be proved.

"Two options of recovery will be available to the Court: a Proceeds Assessment Order to cover benefit from the person's criminal activity, or an asset forfeiture order to cover specific property derived from criminal activity."

Mr Goff said the threshold for civil forfeiture action would be set at suspected crimes carrying a five-year jail term or longer (which includes theft, burglary, drug dealing and fraud) or any criminal activity from which at least $30,000 of benefit had been derived.

"Stripping criminal gangs of assets will seriously reduce the profitability of their activities. It will also act as a disincentive and disrupt their capacity to finance further criminal activity. "The new legislation will allow us to target the gang bosses who keep themselves at arm's length from the actual offending but still take the profit.

"International experience shows that civil forfeiture regimes are more effective than conviction-based regimes when it comes to targeting those who head organised crime rather than their lieutenants. It is also more effective in preventing criminal groups dispersing their assets before they can be seized."

Mr Goff said it was likely that most of those whose assets were restrained would reach settlement with the recovery body to pass over proceeds of crime without the matter having to go to Court. "In New South Wales, where the most effective civil forfeiture regime in Australia operates, up to 90 per cent of cases are settled without a hearing needing to take place.

"But if respondents want to dispute confiscation, they will have to prove that their assets were not gained from criminal activity. If they can prove that the value of their assets exceeded the benefits they have derived from crime, the value of the confiscation order will be reduced accordingly. If they can't prove that, their entire estate may be forfeited.

"Respondents will also no longer be able to deduct their legal expenses from restrained assets, as experience shows that assets can be deliberately devalued through lavish defence cases."

Mr Goff said the asset recovery body would work independently, and the restraint and confiscation of assets would not depend on criminal prosecution.

"The body will be able to gain taxpayer information from the IRD, as tax records can provide information pointing to criminal activity, such as inconsistencies between declared income and accumulated wealth.

"Statutory protections will be put in place regarding the use of tax information, which will not be able to be passed to other law enforcement agencies."

Mr Goff said the government was basing its legislation largely on the NSW model because it had proven effective over a number of years. When federal Australian civil forfeiture legislation was passed recently, it was also based on the NSW model due to its proven success.

Since 1995, New Zealand's Proceeds of Crime Act has seen $8.3 million in assets returned to the Crown – including a record $3.7 million last year. In comparison, NSW had taken $NZ84 million through civil forfeiture.

ENDS

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