Power Simon: Criminal Proceeds (Recovery) Bill — Second Reading 
Power Simon: Criminal Proceeds (Recovery) Bill — Second Reading 
[Volume:652;Page:1370] 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Criminal Proceeds (Recovery) Bill be now read a second time 
. I thank the Law and Order Committee of which I was a member for its careful consideration of the bill. I am confident that the amendments recommended by the committee will improve the operation of the legislation but I need to alert the House that there will be a further Supplementary Order Paper to consider in the Committee stage. 
The committee listened to 14 submitters and received 26 submissions while considering the bill. There was a range of views on different aspects of the bill but in general submitters supported the bill’s aim of preventing criminals from profiting from crime. The unfortunate reality is that crime really does pay. Too many criminals are able to retain property and income acquired through criminal offending by distancing themselves from those committing the crimes. This weakness in the existing criminal forfeiture regime enables gangs and career criminals to amass more money to fund more crime. The current legislation the Proceeds of Crime Act 1991 did not provide enough of a disincentive to deter crime. This bill seeks to remedy the problem by introducing a new civil forfeiture regime under which assets and profit gained from crime can be confiscated without a conviction. It will be sufficient to prove on the balance of probabilities that a person has benefited from significant criminal activity. 
This bill was introduced by the previous Labour Government. At the 2005 election it promised to pass into law a civil forfeiture regime to allow gangs to be stripped of the proceeds of crime. That never occurred. It surprised me because this bill was on the Order Paper for quite a considerable period of time before the House lifted going into the general election. A number of law and order bills were sitting there waiting to go and would have been supported by the then National Party had they been included in the former Government’s final urgency motion which they were not. One can assume only that it was not a lack of will that saw this particular set of circumstances transpire but rather the arrangements that Labour had with its support parties because those urgency motions in Labour’s last weeks as a Government simply did not allow it to proceed with this legislation. 
Hon David Parker 
: Your opposition to the urgency motions. 
Hon SIMON POWER 
: Well we were actually in favour of this legislation and had agreed to support it for quite some time I say to Mr Parker. 
Hon David Parker 
: Not the urgency motion. 
Hon SIMON POWER 
: No we did not support the urgency motion but that was not our issue. The then Government was left at a distinct disadvantage on the platform during the election campaign when it could have progressed this legislation rather than some less significant legislation that I recall was progressed at that time. 
This measure should improve the level of compliance with international obligations to combat money-laundering and terrorist financing. Creating a civil forfeiture regime strengthens our mutual legal assistance framework enabling New Zealand to assist other countries more effectively in recovering the proceeds of crime. The speed and ease with which funds can be transferred internationally make it imperative that countries cooperate to ensure that criminal proceeds transferred offshore can be seized and returned to their country of origin. I want to be clear however that it will still be necessary to obtain a criminal conviction before property used to commit crimes can be confiscated. 
I now turn to the changes to the bill recommended by the Law and Order Committee. Part 1 contains interpretations of terms used in the bill. The main substantive change which I support is the specification that the New Zealand Police will be the agency responsible for civil forfeiture. This was a matter of some discussion and some controversy at the select committee. My recollection is that originally the then Government had intended the Serious Fraud Office to hold that role but the select committee formed the view that the New Zealand Police would be the most appropriate agency. This change will provide the public with clarity and certainty about where the responsibility lies and it will empower the Independent Police Conduct Authority to hear related complaints which may address concerns raised in public submissions about the potential for the misuse of civil forfeiture powers. Having carefully considered advice from the New Zealand Police on proposals to establish an independent specialist group to undertake the new civil recovery functions the committee recommended changes to the bill that would afford police operational flexibility while ensuring the head of the new group would be directly responsible to the Commissioner of Police. This was an extremely important point and on my thinking back it seemed really complicated at the time we were discussing it in the committee; when I just say it out loud in the House now it seems to make perfect sense. 
The changes to the bill include replacing references to a recovery body and its director with references to the Commissioner of Police. I am confident that the New Zealand Police is the agency best placed to assume this new role and carry it out effectively and efficiently. The bill targets organised crime and the police have the knowledge and expertise to investigate and take proceedings effectively in respect of gangs. Civil forfeiture complements existing policing roles and related crime prevention initiatives. The New Zealand Police will be able to maximise efficiencies by leveraging existing operational infrastructure policies and procedures such as information sharing with other agencies. 
Part 2 of the bill sets out the investigative powers under the new regime. It provides for search warrants and production orders both of which can be issued only by judicial officers. The bill would also have introduced examination and production notice powers which could have been issued by the Commissioner of Police but the notice powers were a concern for some submitters on the bill who considered that such powers could be subject to abuse because of the lack of judicial oversight of their use. These matters have been widely canvassed by the Law Commission in its report on search and surveillance powers. The commission recommended against the provision of notice powers for criminal investigative purposes. Although it is possible to draw a distinction between civil and criminal forfeiture investigations the committee considered that on balance some of the concerns raised in submissions were equally applicable to civil forfeiture investigations and that there was no compelling reason to diverge from the Law Commission’s recommendation. Accordingly the committee has recommended amendments to remove the production notice power and replace the examination notice with an examination order power. The committee has also recommended changes that would reduce the duration period for production orders from 3 months. I am confident this change will not impair the police’s ability. 
Part 2 also provides for information to be shared with the Inland Revenue Department as a result of submissions from the Institute of Chartered Accountants and concerns raised by the Inland Revenue Department. The committee has recommended the insertion of new clause 167A which creates a privilege for tax advisers that is similar to professional privilege for lawyers. It is also consistent with the privilege available to tax advisers. The committee has also recommended a number of technical amendments to the information-sharing provisions for clarity and workability. 
As I said earlier I signal my intention to put forward a Supplementary Order Paper. As a result of cases heard since the bill was referred to the select committee some problems have been identified with the mutual assistance provisions in the bill as reported back to the House. 
I thank all members of the Law and Order Committee and in particular Martin Gallagher who chaired that committee in a gentlemanly gentle and laid-back way but who retained a certain control which was very elusive and hard to pin down. The Criminal Proceeds (Recovery) Bill will greatly enhance the police’s crime-fighting capability and will enable New Zealand to better meet its obligations in the international arena. I commend this bill to the House.