Submission: Criminal Proceeds (Recovery) Amendment Bill
About the New Zealand Council for Civil Liberties
- The New Zealand Council for Civil Liberties (‘the Council’) is a voluntary, not-for-profit organisation which advocates to promote human rights and maintain civil liberties.
- We wish to make an oral submission to the Committee.
3. The Council disputes that there is a need for this bill. The regulatory impact statement itself asserts that no need has been demonstrated:
Due to the covert nature of much criminal activity, quantitative data can be difficult to obtain; for example there is limited data on the exact scale of the problem, and there is not an easy objective way to measure the ultimate impact of the amendments on rates of significant criminal activity.
4. The Council recommends that the Committee reject this bill in its entirety.
5. The Council further calls for the repeal of the principal act, and the restoration of a rights preserving system like the one in the Proceeds of Crime Act 1991.
Te Tiriti o Waitangi
6. By the government’s own admission “there was no consultation with Māori on the proposals in the bill”.
7. The government claims that consultations were skipped as there is a need to pass this legislation quickly. The Council does not believe that the government has made the case for this urgency as a justification for abandoning its Tiriti obligations.
The Council recommends that the bill be withdrawn for the required consultations.
Proceeds of Crime Act 1991
8. The Proceeds of Crimes Act 1991 provided a just, and functional process to seize property gained through criminal activity. Once anyone was convicted of a crime, whatever property they owned as a result of, or in pursuit of, criminal activity could be confiscated.
9. The government has failed to provide evidence that that Act was not working or that further measures were needed.
Criminal Proceeds (Recovery) Act 2009
12. When the Criminal Proceeds (Recovery) Act 2009 (the principal act) was first proposed, the Council opposed it, calling it “dangerous and immoral.”
11. Since the principal act came into effect, organised crime in Aotearoa New Zealand has grown in strength. There can be no dispute that the principal act, and the dozen other acts limiting our rights, have failed to produce the desired results. This should surprise no one, as the drivers for crime have not been addressed and the deterrence effect these acts depend on is a myth.
Right to a Fair Trial
12. The main difference between the principal act and the prior legislation is the reversal of the burden of proof: the person being accused needs to prove in “civil proceedings” that they obtained their property legitimately.
13. Articles 7, 8, and 10 of the Universal Declaration of Human Rights (UDHR) provide for the right to a fair trial. Section 27 of the New Zealand Bill of Rights Act (1990) (NZBORA) enacts this as the Right to Justice.
14. The concept of this process as a ‘civil action’ is no more than a convenient fiction to seize the assets of people who have not been convicted of any crime. It is hard to see how the restraining and forfeiture actions in the principal act fit any definitions of a ‘civil action’. The principal act does not claim that the state has been materially wronged or needs to be compensated. Nor does the principal act provide the safeguards accorded respondents in civil actions. Instead respondents are subject to the same measures as if they were being prosecuted in criminal courts: search warrants, examination orders, production orders and seizure of property.
15. The Council notes with considerable alarm that clause 5 of the bill adds section 5B(2)(b) which seeks to penalise people who have been acquitted. This is directly contrary to natural justice. Again, penalising an acquitted person could not possibly be considered without the fiction that this bill’s measures are ‘civil actions’.
The Council recommends the repeal of the principal act and the restoration of the Proceeds of Crime Act 1991.
Freedom of Association
16. Clause 5 of the bill adds section 5A to the principal act, which establishes that the assets of “associates”, who are circularly defined as someone who “is associated with the member or participant,” can have their assets seized and forfeited.
17. Article 20(1) of UDHR, to which New Zealand is a signatory, states: “Everyone has the right to freedom of peaceful assembly and association.” Freedom of Association is enacted in New Zealand by section 17 of NZBORA which reads as follows: “Everyone has the right to freedom of association.”
18. The Regulatory Impact Statement draws attention to this problem:
However, the scope of those captured by association is potentially broad (including friends, family, and businesses), and primarily limited by the requirement for Police to show that a person’s known legitimate income is insufficient. The broad initial scope of capture (by association) may affect whether the power constitutes a reasonable seizure under NZBORA.
19. Penalising people for their connections with others is an attack on the right to freedom of association, as it discourages people from associating together.
20. The Council believes that the policy objective of the bill is more effectively served by the approach of the Proceeds of Crime Act 1991. If the objective is to seize the proceeds of crime, then proving that the property is the proceeds of crime should be the approach. Auditing everyone who has ever met any of the people who are alleged to have committed the crimes to see if they have decades-old records for their income is both invasive and likely to lead to injustice.
The Council recommends the removal of the following clauses of the bill in order to retain freedom of association: 5, 8, and 11 through 31.
The Proceeds of Crime Fund
21. Forfeiture laws like the principal act are a major, world-wide source of police corruption. The temptation for corruption is great, as the Police are both the primary actors in and the primary beneficiaries of forfeiture.
22. If the fund is to continue, it should be redefined so that none of the funds go to Police, the “Justice Sector”, or any government agency. This would remove the appearance of impropriety from the fund.
The Council recommends that only registered charities be eligible to apply. The funding criteria would also need to be adjusted so that charities which support the police are ineligible instead of being the only ones eligible.
The Council further recommends that the transparency of the fund be vastly increased by:
a. publishing all the applications, including those denied
b. publishing the fund’s assessment of every application, including the funding decision.
c. publishing the six-monthly performance reports prepared by the funded programmes.
d. publishing annual external audits of each funded programme.
23. The Cabinet paper and related documents for this bill discuss various lower limit amounts before the powers in this bill can be used, with the bill specifying a threshold of $30,000.
24. The Attorney General notes the limitations of our NZBORA rights can not be justified without a substantial threshold.
25. Similar legislation in Australia has an A$100,000 threshold and that of the United Kingdom a £50,000 threshold.
The Council recommends that clause 4 be amended to change the threshold amount to $100,000.
28 day period
26. The Council has no specific objections to the removal of the 28-day limit.
27. However, the Council hopes that Parliament acknowledges that Parliament is solely at fault for the excessive delays in legal proceedings in our country which motivate this amendment. In addition to stop gap measures like clause 34 of this bill, Parliament needs to address the underlying sources of delays.
The Council recommends increasing the supply of court time by significant increases in funding for our Courts.
28. The Council notes with considerable alarm that the Attorney General has issued a NZBORA compliance report rather than a section 7 report. Typically a compliance report indicates that the Attorney General has found a bill to be compliant with NZBORA, while a section 7 report indicates that a bill is not compliant. For this bill there is a compliance report which says that the Attorney General believes the bill is not compliant.
29. The Council notes that despite s 3.5 of the disclosure statement identifying privacy concerns with the bill, s 3.5.1 indicates that the Privacy Commissioner was not consulted. The Council recommends that the Committee consult with the Privacy Commissioner before preparing its report.
30. The Council thanks members of the Committee for their time and consideration of our submission.
 s 3.2 of https://disclosure.legislation.govt.nz/bill/government/2022/163
 “The presumption shifts the onus onto the respondent to prove, on the balance of probabilities, that the property is not tainted property (i.e. derived from significant transnational offending).” – Regulatory Impact Assessment (RIA), page 9 https://www.treasury.govt.nz/sites/default/files/2022-10/ria-justice-rcpr-dec20.pdf
 RIA page 14
 NZBORA compliance report s7, https://www.justice.govt.nz/assets/Documents/Publications/6997305-SIGNED-BY-AG-Advice-to-the-Attorney-General-Criminal-Proceeds-Recovery-Amendment-Bill.PDF
 Office of the Minister of Justice and Cabinet Social Wellbeing Committee “Criminal Proceeds (Recovery) Act 2009: Proposed Reforms to Better Target Illicit Assets” (19 April 2021) at ,  and .
 “Crown Law considers the organised crime proposal as currently designed risks being inconsistent with NZBORA” RIA, p2