Burton Mark: Criminal Proceeds (Recovery) Bill — First Reading 
Burton Mark: Criminal Proceeds (Recovery) Bill — First Reading 
[Volume:638;Page:8120] 
Hon MARK BURTON (Minister of Justice) 
: 
 I move  
That the Criminal Proceeds (Recovery) Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Law and Order Committee. The Criminal Proceeds (Recovery) Bill which is before the House provides for a new forfeiture regime for the proceeds of crime. It replaces the Proceeds of Crime Act 1991. Both that Act and the new bill are based on the principle that crime must not be allowed to pay. The bill before the House will achieve this in a fundamentally different and I believe more effective way than its predecessor. The Proceeds of Crime Act allows the Crown to confiscate the profit made from crime after a person is convicted of that crime. That approach is all very well if the criminal is the only person who profits and if the crime is readily provable but in this day and age increasingly that is quite often not the case. Organised criminal gangs—particularly those involved in large-scale drug dealing—will not be caught for every crime they commit. They will also spread the profits from crime around their membership. We see a lot of evidence of that. In the end the person selling the $20 tinnies every day is usually not the same person who as with their gang mates lives a lavish lifestyle off the proceeds of such criminal activity. 
The Criminal Proceeds (Recovery) Bill deals with this issue. It gives the Crown the power to confiscate profits and assets obtained through criminal activity on the civil standard of proof. That is to say that if the Crown can prove on the balance of probability that a person has benefited from significant criminal activity that person’s property will be liable to forfeiture. Unlike the current regime no criminal conviction will be required before forfeiture can occur. 
The bill establishes two orders to deal with this property. One is the profit forfeiture order which is directed at the unlawfully derived income of a person. The other is the assets forfeiture order which targets property that has been acquired or directly or indirectly derived from criminal activity regardless of who the owner is. This approach will allow us to target gang leaders who do not get their own hands dirty but in the end enjoy the benefits of their fellow gang members’ illegal activity. It will also help New Zealand to meet its international obligations regarding laundered money international crime and terrorist funds. The bill will enable New Zealand to cooperate with other nations to confiscate the proceeds of overseas crime if they ever end up in this country. This will be made possible through expanding the Mutual Assistance in Criminal Matters Act 1992 to expressly enable the enforcement of foreign civil forfeiture orders. 
The bill also targets property used to commit a crime such as a farm used to grow marijuana. In the bill this sort of property is termed “an instrument of crime”. As with the current regime it will be liable to forfeiture only after a criminal conviction. The court case that leads to that conviction will usually also prove whether particular property was in fact used to facilitate the offence. If the crime is of sufficient seriousness which the bill defines as an offence carrying a maximum penalty of at least 5 years the prosecutor can then apply for the forfeiture of the property to the Crown. 
Requiring a conviction before an instrument of crime is in whole or part forfeited acknowledges the fact that instruments of crime—unlike profits of crime—may have been obtained quite legitimately. The instruments we refer to—whether a farm growing marijuana or a basement of a house being used for meth lab activity—may in fact have been passed down from generation to generation from one honest Kiwi to the next only to come in the way of one wayward son or daughter who abuses his or her legacy. 
The bill takes a new approach to instrument forfeiture in one important aspect. It recognises that confiscating a person’s lawfully gained property is itself a sanction in a similar way to a reparation order or fine. In the same way as those sanctions are taken into account in determining the total sentence imposed on an offender instrument forfeiture should also be taken into account in the sentencing process. This will not stop the courts from imposing appropriate sentences on culpable criminals but it will make sure that the penalties for committing crime are consistent and proportionate. I suggest that this is not the case under the current law where the forfeiture is completely separate from the sentencing process. 
 As with the current regime in all cases the Crown can gain control over property before a forfeiture order is made to ensure that property stays in one piece. This occurs through what is called a restraining order. A restraining order can be granted over property if there are reasonable grounds to believe that it is an instrument of crime an asset derived from crime or that the person who owns the property has unlawfully benefited from significant criminal activity. 
Effective operation of the regime is dependent on the right enforcement agencies being chosen to take charge of forfeiture. The bill establishes the Serious Fraud Office as the home of a recovery body to be responsible for the civil forfeiture regime. The New Zealand Police will continue to be responsible for the confiscation of instruments of crime because of the criminal aspect of such orders. The official assignee will continue to be responsible for the maintenance of restrained property and the dispersal of forfeited property. 
These agencies need powers to help them carry out their roles. The bill contains a broad suite of powers to enable enforcement agencies to search for to seize and to restrain the proceeds of crime. The bill gives the Crown significant new powers but it also provides protections for those targeted by the various orders. For example when a property is restrained the courts can allow reasonable living and business costs to be met out of restrained property. The courts can also ask that the recovery body undertake to pay any damages or costs associated with the making of a restraining order. More significantly protections are available for those facing the forfeiture of property. Often third parties will have a legitimate interest in property targeted by this regime. These third parties can apply to have their interest in property excluded from any order and I think again members would generally see that as a sensible and reasonable protection. The exclusion provisions are primarily intended to protect people and institutions in business relationships with property owners such as banks. They may also protect the spouse children and dependants of criminals who might otherwise become innocent victims of forfeiture orders. 
In all cases of forfeiture the courts can look at the hardship that might be caused to people whose property is at risk and make orders accordingly. This applies to the person who is targeted by the order as well as the third parties. These orders might exclude property from forfeiture or provide that a payment be made from forfeited property to the applicant. Again spouses children and other dependants are likely to benefit from such orders. 
Overall I believe that this bill finds an appropriate balance between targeting the proceeds of crime and toughening up on that as we should while protecting personal and property rights. Accordingly I commend the Criminal Proceeds (Recovery) Bill to the House.