Chapter 16
Proceeds of crime requests


Domestic legislation


16.7In 1991, New Zealand enacted the Proceeds of Crime Act. This Act allowed for the proceeds of serious criminal offending to be restrained during court proceedings and confiscated following a conviction.

16.8When MACMA was enacted in 1992, provision was made for foreign restraining, forfeiture, and pecuniary penalty orders to be registered in the High Court and to be enforced through the Proceeds of Crime Act.685 It also permitted New Zealand authorities to apply for a search warrant or an interim restraining order in respect of tainted property relating to a foreign serious offence and believed to be located in New Zealand.686 To give effect to the MACMA provisions, the Proceeds of Crime Act was substantially amended.687
16.9Over time, the Proceeds of Crime Act became ineffective, as it failed to address the growing problem of how members of organised criminal groups were often able to distance themselves from the commission of specific offences and therefore avoid being subject to orders.688 To address this, CPRA was enacted in 2009. CPRA created a conviction-based regime in relation to instruments of crime and a non-conviction-based regime to deal with proceeds of crime or property assessed to be from unlawfully derived income.

16.10The non-conviction-based regime, or “civil” regime, operates independently of any criminal proceedings that may be under way or contemplated. Under the non-conviction-based regime, two types of confiscation orders are available, namely:

Both orders require that the property or benefits in question must have been derived from significant criminal activity, that is, offending punishable by five years’ imprisonment or more, or that has generated at least $30,000 in profit.691 Under the conviction-based regime, only an instrument forfeiture order is available,692 which is primarily dealt with in the Sentencing Act 2002.693

MACMA sections 54 to 62

16.11When CPRA came into force, MACMA was substantially amended.694 As amended, MACMA allows New Zealand to assist a foreign country by:
16.12This assistance is possible only if the request from the foreign country relates to a “criminal proceeding or investigation” concerning proceeds or instruments of crime. The interpretation provision of MACMA extends the definition of “criminal investigation or proceeding” to allow such assistance if the foreign country is using, or intends to use, a non-conviction-based confiscation regime.699

International obligationsTop

16.13New Zealand has made extensive commitments as to how it will provide assistance to foreign countries in confiscating proceeds and instruments of crime.

The Financial Action Task Force (FATF) Recommendations

16.14Recommendation 38 of the FATF Recommendations states:700
Mutual legal assistance: freezing and confiscation
Countries should ensure that they have authority to take expeditious action in response to requests by foreign countries to identify, freeze, seize and confiscate property laundered; proceeds from money laundering, predicate offences and terrorist financing; instrumentalities used in, or intended for use in, the commission of these offences; or property of corresponding value. This authority should include being able to respond to requests made on the basis of non-conviction-based confiscation proceedings and related provisional measures, unless this is inconsistent with fundamental principles of their domestic law. Countries should also have effective mechanisms for managing such property, instrumentalities or property of corresponding value, and arrangements for coordinating seizure and confiscation proceedings, which should include the sharing of confiscated assets.
To assist in complying with this Recommendation, FATF released a best practice paper.701

The Harare Scheme

16.15Part VI of the Harare Scheme sets out the measures that state parties should consider having in place to assist each other in freezing, restraining, seizing, forfeiting, confiscating, and disposing of proceeds and instruments of crime. The Model Legislation builds on Part VI of the Scheme and provides model provisions and associated explanatory notes in relation to these issues.

The United Nations Convention against Transnational Organised Crime (UNTOC)

16.16Articles 13, 14, and 18 of UNTOC deal with international cooperation for the purposes of confiscation, the disposal of confiscated proceeds of crime or property, and mutual legal assistance generally.

The United Nations Convention against Corruption (UNCAC)

16.17Asset recovery is explicitly stated as a fundamental principle of UNCAC, and countries are required to take measures that will support the tracing, freezing, seizure, and confiscation of proceeds of corruption. Chapter V of the Convention specifies how this cooperation and assistance should be rendered.

685Mutual Assistance in Criminal Matters Act 1992, ss 54 and 55.
686Mutual Assistance in Criminal Matters Act 1992, ss 59 and 60.
687Proceeds of Crime Amendment Act 1992.
688Therefore, the total amount of property confiscated under the Proceeds of Crime Act was relatively small: Criminal Proceeds (Recovery) Bill 2007 (81-1) (explanatory note) at 1.
689Criminal Proceeds (Recovery) Act 2009, s 50.
690Criminal Proceeds (Recovery) Act 2009, s 55.
691Criminal Proceeds (Recovery) Act 2009, s 6, definition of “significant criminal activity”.
692Criminal Proceeds (Recovery) Act 2009, ss 70 and 71.
693Sentencing Act 2002, ss 142A–142Q.
694Mutual Assistance in Criminal Matters Amendment Act 2009.
695Mutual Assistance in Criminal Matters Act 1992, ss 59, 61 and 62.
696Mutual Assistance in Criminal Matters Act 1992, s 60.
697Mutual Assistance in Criminal Matters Act 1992, s 54.
698Mutual Assistance in Criminal Matters Act 1992, s 55.
699Mutual Assistance in Criminal Matters Act 1992, s 2(2).
700Financial Action Task Force International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (February 2012) at recommendation 38.
701Financial Action Task Force Best Practices on Confiscation (Recommendations 4 and 38) and a Framework for Ongoing Work on Asset Recovery (FATF/OECD, 2012).