Money laundering and gambling: the New Zealand experience
| Published date | 01 January 2004 |
| DOI | https://doi.org/10.1108/13685200410809779 |
| Date | 01 January 2004 |
| Pages | 61-68 |
| Author | Brian Brooks |
| Subject Matter | Accounting & finance |
Money Laundering and Gambling:
The New Zealand Experience
Brian Brooks
INTRODUCTION
The problem of regulating the proceeds of crime is an
international one and the extent of the problem is
staggering.
1
At the same time it is important to
understand that if a country has no domestic regula-
tion then that country will attract `hot' money and
other transactions designed to disguise the proceeds
of crime. In New Zealand there are three signi®cant
pieces of legislation which attempt to ful®l New
Zealand's international obligations as a member of
the Financial Action Task Force (FATF) and as a signa-
tory to the 1988 United Nations Convention against
Illicit Trac in Narcotic Drugs and Psychotropic
Substances.
THE RELEVANT LEGISLATION
The Crimes Act 1961
In 1995 the New Zealand Crimes Act 1961 was
amended by the insertion of s. 257A. This made
money laundering, and any activity designed to
facilitate money laundering, an oence punishable
by imprisonment. For the purposes of s. 257A `a
person engages in a money laundering transaction if
that person:
(a) Deals with any property; or
(b) Assists any other person, whether directly or
indirectly, to deal with any property Ð for the
purpose of Ð
(c) Concealing that property; or
(d) Enabling another person to conceal that
property.'
In the ®rst reported prosecution under this section, R
v Liava'a,
2
the oence was explained as having three
elements: (i) engaging in a money laundering transac-
tion (ii) in respect of property that is the proceeds of
an oence punishable by ®ve years' imprisonment or
more (iii) with knowledge or belief that all or part of
the property is the proceeds of such an oence.
The Crown's case was that the accused were
involved with a series of importations of cocaine
purchased in Hawaii and imported to New Zealand
via Tonga. In relation to the money laundering pro-
secution the Crown alleged that two of the accused
made several visits to banks in New Zealand, that
they used false names, that they exchanged New
Zealand dollars for American dollars and that very
large sums of money were involved. The learned
judge made the important point that s. 257A conduct
only amounts to a criminal oence if the person
charged knows or believes that all or part of the prop-
erty is the proceeds of any serious oence and added
that `[I]f the Crown is able to surmount that initial
hurdle then, by de®nition, transactions which
would otherwise be unexceptional, assume a quite
dierent, criminal complexion' (p. 526). The judge
had no diculty in ®nding that the accused with
the knowledge of the illicit nature of the property
did engage in a money laundering transaction.
They dealt with the property, namely New Zealand
dollars, by converting it from one form to another
and by disguising the ownership of the property.
Clearly the defence of `good faith' was not available.
It was sucient for the Crown to prove that, with the
knowledge they were dealing with the proceeds of
serious oences, the accused deliberately converted
the New Zealand dollars to American dollars.
The Proceeds of Crime Act 1991
This Act empowers the Solicitor-General to apply for
a forfeiture order against property that is tainted
where a person is convicted on indictment of a serious
oence. If it is satis®ed that the property speci®ed in
the application is tainted property in respect of the
oence the court may order that such property is
forfeited to the Crown. This legislation is the
ambulance-at-the-bottom-of-the-cli. It is designed
to provide for the con®scation of the proceeds of
serious criminal oending whereas the Crimes Act
1961 in s. 257A addresses the conduct of those persons
in relation to their dealings with the proceeds.
The Financial Transactions Reporting
Act 1996
The Financial Transactions Reporting Act is the most
recent and most important piece of legislation and
Page 61
Journal of Money Laundering Control Ð Vol. 7 No. 1
Journalof Money Laundering Control
Vol.7, No. 1, 2003, pp. 61± 68
#HenryStewart Publications
ISSN1368-5201
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