Allan KiritapuCRIMINAL PROCEEDS (RECOVERY) AMENDMENT BILLFirst ReadingHon KIRITAPU ALLAN (Minister of Justice): I present a legislative statement on the Criminal Proceeds (Recovery) Amendment Bill.DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon KIRITAPU ALLAN: I move That the Criminal Proceeds (Recovery) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 9 February 2023. Our civil forfeiture regime set out in the Criminal Proceeds (Recovery) Act 2009 is among the best in the world. The inter-governmental Financial Action Task Force rated New Zealand as one of only five countries having a high level of effectiveness at confiscating proceeds of crime. However organised crime and transnational offending will always seek new ways to evade law enforcement. This is why I am pleased this evening to recommend the Criminal Proceeds (Recovery) Amendment Bill to the House. This bill will improve the success and efficiency of our laws at restraining and forfeiting property derived from significant criminal activity. This will reduce the ability of criminals to continue or expand criminal enterprise and help to deter profit-driven criminal conduct. The four amendments will contribute to achieving New Zealand's transnational organised crime strategy for responding to local national and transnational organised crime. These will also complement our reforms in the Criminal Activity Intervention Legislation Bill. I'd like to start with the new restraining and forfeiture orders. These are designed to respond to the particular difficulties that arise in going after the leaders and facilitators of organised crime. Under the current law police must satisfy the court that either a person's assets were derived from significant criminal activity or that the person knew they were profiting from significant criminal activity. However organised criminal groups will deliberately structure their activities so that the leaders and facilitators avoid involvement in or knowledge of the specific offending even as they benefit from a portion of the profits. For example in one case involving approximately $10 million worth of property police relied on evidence from 16 different police operations over nearly 20 years. The investigation could not identify a legitimate source for this wealth with the owner alleged to have received a portion of the proceeds from criminal activity undertaken by other people. The new asset forfeiture orders will allow a court to restrain or forfeit property if satisfied to the required standard that first the respondent has interest in or control over specific property; and second the respondent is associated with an organised criminal group whose members or participants have been involved in or unlawfully benefited from significant criminal activity; and third the respondent's legitimate property would have been insufficient to acquire that specific property; and fourth the value of the specific property not explained by the respondent's legitimate property is at least $30000. The burden of proof will be on the police to prove these criteria to the standard of reasonable belief to believe for a restraining order or on the balance of probabilities for a forfeiture order. If police prove these criteria to the required standard the court must presume the property is tainted. The respondent will have the opportunity to rebut this presumption by proving on the balance of probabilities the specific property in the application was not derived from significant criminal activity. In addition the court will have the discretion to decline to make a forfeiture order if it would not be in the interests of justice to do so. These provisions protect respondents against unjust seizure. This new type of asset forfeiture order will improve the Act's effectiveness in disrupting organised crime. It will enable police to intervene to prevent illicit profits being reinvested in crime or used to recruit prospective members. Next I'll speak to the new disclosure of source orders. These respond to difficulties arising from obtaining information from persons overseas. Police are already able to restrain assets that are in New Zealand and likely to have been derived from offshore offending such as illicit drug trafficking and international money laundering. For example police cases have identified criminal proceeds invested in our real estate markets and our financial sector. However if the owner of the property is overseas this can impede forfeiture. Domestic respondents are subject to production and examination orders. It is an offence to fail to comply with these orders which require the production of documents or examination to answer questions. But these are not enforceable against residents where outside of New Zealand and it is not always possible to obtain the information required for forfeiture from foreign jurisdictions. This new disclosure of source order will require the respondent to provide information on the source of a restrained property within two months. If they fail to respond or file a materially false or misleading disclosure the court can presume that the property is tainted. The respondent would still have the opportunity to rebut this presumption at a forfeiture hearing. This new tool will allow more investigations to be pursued and will deter further offending. This will help to protect New Zealand's reputation as a safe secure and high-integrity jurisdiction against efforts to launder illicit funds here. The third amendment fixes a technical gap in the Official Assignee's authority to temporarily hold property seized under a warrant. Currently property must be returned after 28 days unless subject to a restraining order or until the determination of an application for forfeiture. This leaves a gap in cases where an application for a restraining order has been made but the courts do not make a determination until after the 28-day period. This amendment allows seized property to be retained until the determination of any restraining order. This also avoids police having to return and then re-seize property with the risk that the respondent uses the opportunity to dispose of the assets. Finally and briefly this bill will allow funds in KiwiSaver to be forfeited where they have shown under the Act to be the proceeds of crime. Currently section 127 of the KiwiSaver Act 2006 provides a general prohibition on KiwiSaver funds being passed to another person unless an enactment expressly provides otherwise. This presents any funds in KiwiSaver from being forfeited until withdrawn from the scheme. This could enable criminals to abuse the KiwiSaver scheme by hiding the proceeds of their crimes in their KiwiSaver. This change will allow funds in the KiwiSaver schemes to be subject to civil forfeiture orders. It will put KiwiSaver in an equivalent position to other retirement schemes such as bank accounts and managed funds which do not have a prohibition preventing forfeiture. These amendments have been carefully designed. They strike a balance between upholding the rule of law in terms of the effectiveness at seizing illicit assets and safeguarding human rights to a fair hearing and freedom from unreasonable seizure. The new powers will only be available where their respective evidential standards are met and where there is a presumption in favour of forfeiture. Police must have first satisfied the courts of the relevant criteria. The court can decline a presumption if they consider it would not be in the interests of justice and respondents will have the opportunity to rebut a presumption. At the same time they fulfil the Labour Party's 2020 election manifesto commitment to ensure police have the resources and powers to disrupt criminal activity and seize proceeds of crime. I commend this bill to the House.DEPUTY SPEAKER: The question is that the motion be agreed to.