Author: Nyman Gibson Miralis
Subject: Unexplained Wealth Laws
Keywords: unexplained wealth order, summons, supreme court, Proceeds of Crime Act 2002 (Cth)
What are unexplained wealth laws?
Unexplained wealth laws require a person who lives beyond their apparent means to justify the legitimacy of their financial circumstances.
How do unexplained wealth laws operate in each state?
New South Wales
The New South Wales Crime Commission may apply to the Supreme Court for an unexplained wealth order under section 28A of Criminal Assets Recovery Act 1990 (NSW), requiring a person to pay the Treasurer an amount assessed by the Court as the value of the unexplained wealth of the person.
The Supreme Court must make an unexplained wealth order if the Court finds that there is a reasonable suspicion that the person against whom the order is sought has, at any time before the making of the application for the order:
a) engaged in a serious crime related activity or serious crime related activities ; or
b) acquired serious crime derived property from any serious crime related activity of another person, whether or not the person against whom the order is made knew or suspected that the property was derived from illegal activities.
Reasonable suspicion need not be in relation to a particular offence, it can also be reasonable suspicion that some offence or other constituting a serious crime related activity was committed.
The Supreme Court may however refuse to make an unexplained wealth order if it thinks it is in the public interest to do so.
The following are key aspects of the WA and NT legislation, which was modelled on the WA provisions:
• the requirement that courts make an order if satisfied that a person’s total wealth is greater than their lawfully acquired wealth;
• the reversal of the onus of proof in favour of the Crown; and
• respondents have a right to object to their property being restrained within 28 days of being served with an order restraining the property.
The legislation in both jurisdictions sets out the following processes whereby law enforcement and prosecution can obtain information about criminal assets:
• the Director of Public Prosecutions (DPP) or police may require a financial institution to provide information about the transactions and/or assets of a particular person;
• the DPP can apply to the courts for an order allowing them to conduct an examination of a suspect individual, which can require a person to provide the court with information/documents;
• the DPP can obtain documents relating to assets or property by applying for a production order;
• the DPP can apply to the court for orders requiring a financial institution to monitor or suspend a person’s account and provide that information to the police or DPP; and
• the police can detain a person if they have a reasonable suspicion that the person has, in their possession, property liable to forfeiture, or documents identifying or determining the value of a person’s unexplained wealth.
Police have the power to seize property if they reasonably believe it was derived from or used in a crime and both the police and the DPP have the power to apply to the court for a restraining or freezing order, which prevents property or assets from being used for a period of time.
There are three key differences between the NT and WA unexplained wealth provisions:
• In Western Australia, confiscation pursuant to an unexplained wealth order is not regarded as a mitigating factor in sentencing, whereas the NT law allows courts to take an offender’s cooperation in such proceedings into account on sentencing.
• Whereas the WA legislation only requires a drug trafficker to have been convicted of one offence before their assets can be declared as unexplained wealth for the purposes of asset confiscation, the Northern Territory sets the threshold higher, at three convictions.
• Because the Northern Territory is a territory, the Constitution requires property to only be confiscated by the government ‘on just terms’. As a result, in the Northern Territory, a court order is required for confiscation after a declaration has been made that the relevant property is unexplained wealth. No such requirement exists in Western Australia.
The Criminal Proceeds Confiscation and Other Acts Amendment Act 2009 (Qld) came into effect on 22 June 2009.
Although these provisions are not generally regarded as unexplained wealth laws akin to those discussed above, the amendments create a statutory presumption that the unexplained portion of a person’s wealth is derived from illegal activity, subject to a finding that the person engaged in ‘serious crime-related activity’ and evidence of unexplained wealth. The onus falls upon the respondent to rebut that presumption.
The Serious and Organised Crime (Unexplained Wealth) Act (2009 (SA) enables the confiscation of any wealth specified in an application for an unexplained wealth order where that wealth has not been lawfully acquired.
Commonwealth confiscation is governed by the Proceeds of Crime Act 2002 (Cth).
Under the Commonwealth legislation as originally introduced, a relevant court must make an unexplained wealth order where:
• a preliminary order has been made; and
• the court is not satisfied that the total wealth of the person was not derived from one or more of the following:
- an offence against a law of the Commonwealth;
- a foreign indictable offence; and/or
- a state offence that has a federal aspect.
The principal difference between the Commonwealth Bill and the WA and NT legislation is that the former is limited to confiscating unexplained wealth derived from offences within Commonwealth Constitutional power.
What are the arguments in favour of unexplained wealth laws?
The perceived benefits of unexplained wealth laws include:
• preventing crime from occurring by ensuring profits cannot be reinvested in criminal activity, as opposed to simply reacting to serious and organised crime;
• disrupting criminal enterprises;
• targeting the profit motive of organised criminal groups; and
• ensuring that those benefiting most from organised crime are the ones captured by the law, which they are often not under ordinary criminal laws and proceeds of crime laws, which require a link to a predicate offence.
What are the arguments against unexplained wealth laws?
Concerns regarding unexplained wealth laws include:
• the reverse onus of proof undermines the presumption of innocence;
• the provisions infringe on the right to silence and exclude legal professional privilege;
• the inadequacy of appeal rights in respect of unexplained wealth declarations; and
• the potential for arbitrary application of the laws, with the Law Council concerned that the use of the laws may be politically motivated and/or target those who fail to keep receipts or records.
How can Nyman Gibson Miralis assist you?
Nyman Gibson Miralis has expertise in providing strategic legal advice to persons the subject of unexplained wealth orders. Unexplained wealth orders is an evolving area of law and so you require the careful management of your case from the very early stages of the proceedings. One of the orders that are often made at the time of the filing of the Summons seeking an unexplained wealth order, is for your examination before the NSW Supreme Court into your financial affairs, including the source of your assets.
Additionally, the Supreme Court can order that you provide the Crime Commissions with a list of your assets and your interest in property both locally and internationally. In some instances information concerning the restraining of your property may be communicated to foreign states so that assets held overseas can be subjected to restraining orders and ultimately forfeiture.
In these circumstances you will require the assistance of Nyman Gibson Miralis’s significant expertise in dealing with international forfeiture proceedings to ensure procedural fairness is observed and that your rights in foreign jurisdictions have not been prejudiced in any way by the conduct of the commissions including breaching your privacy and human rights.
Nyman Gibson Miralis will comprehensively prepare your case providing you with the highest level of legal service with a focus on defending a claim for an unexplained wealth order.