By Paul Gregoire and Ugur Nedim
NSW police minister Paul Toole told the NSW lower house on 21 September that he understands that “serious organised criminal groups” are these days using “professional money launderers”, who benefit from a level of “strategic ignorance” about the origins of the money they’re cleaning.
These circumstances then create a barrier to prosecuting career money launders and that’s what the provisions within the Crimes Amendment (Money Laundering) Bill 2022, that Toole was introducing, seek to overcome. And these laws were subsequently enacted on 18 October.
“Money laundering is not a victimless crime. It is the enabler and lifeblood of organised crime,” the minister asserted during his second reading speech on the bill. And he added that the laws within it sought to overcome the advantage of keeping at arm’s length from the direct crime was providing.
The legislation was part of a group of three cognate bills presented as a package, which included a bill that created a new regime to target those using dedicated encrypted criminal communication devices, as well as another that makes it easier to access and search civilians’ electronic devices.
The NSW police minister suggested that “recent public shootings” in NSW highlighted the need for more comprehensive laws to target “organised crime syndicates head on”, which the Australian Institute of Criminology estimated cost the nation between $24.8 and $60.1 billion over 2020-21.
Overriding the authorities
Toole outlined that the NSW court decisions made in 2011’ s Chen v Director of Public Prosecutions and 2014’s R v McKellar No 3 had resulted in a situation where in order to prove money laundering had occurred it had to be shown that the accused knew how the proceeds had been generated.
These authorities held despite section 193F of the Crimes Act 1900 (NSW) stating pre-amendment that in order to prove the proceeds are derived from crime it’s not necessary that a particular offence was committed in relation to it or that a specific person committed a related offence.
The NSW Court of Criminal Appeal and the state Supreme Court both found that section 193F(1) relieved the burden upon the prosecution to prove which criminal event any proceeds were derived from, but the Crown still had to prove what type of crime was involved, such as armed robbery.
The changes to be made to the state legislation, the police minister outlined, were in line with those made to federal money laundering laws by the Morrison government via the Crimes Legislation Amendment (Economic Disruption) Bill 2020, which saw offences added to the Criminal Code (Cth).
And the new legislation inserted subsection 193F(3) into the Crimes Act, which makes clear that in order to prove that property is the “proceeds of general crime” it’s not necessary to prove “an offence or type of offence” or that a “particular person committed an offence or type of offence”.
New offences on the books
The Toole bill inserted new section 193BA into the Crimes Act. Subsection 193BA(1) contains the new offence of dealing with the proceeds of general crime with the value of over $100,000, when reckless to its origins and “intending to conceal or disguise features” of the proceeds.
This offence sees those convicted of it liable to up to 15 years inside.
In terms of what’s relevant in finding concealment or disguising features has occurred, subsection 193BA(2) stipulates that this can be the money or property’s nature, value, source, location, any disposition, movement or rights, as well as the identity of those controlling or having rights over it.
While subsection 193BA(3) contains the lesser offence of dealing with the proceeds of general crime over $100,000 in value and simply being reckless to its origins, which carries up to 10 years imprisonment.
The new legislation further expanded on the offences already set out in section 193C of the Crimes Act, so that a person who deals with property valued at more than $5 million and there are reasonable grounds to suspect it was the proceeds of crime, can now be sent away for up to 8 years.
And if this is done under conditions of aggravation, the maximum jumps to 10 years inside.
Circumstances of aggravation can involve using a professional trust or fiduciary duty, being related to “a criminal group, serious crime organisation or serious criminal activity”, a terrorism connection, the person having helped finance the crime involved or attempting to transfer value out of the state.
New section 193CA sets out the reasonable grounds to suspect criminal proceeds, which include transactions structured to avoid reporting under federal law, substantial amounts of money, the use of accounts with fake names and being in possession of over $100,000 without an excuse.
And in terms of a controlled operation, if property is represented as being the proceeds of crime by undercover officers, “whether verbally, in writing or by conduct”, then new section 193CB provides that it’s to be dealt with as if it is the proceeds of crime regardless of origin when prosecuting.
In the public interest
New standing orders took effect in June this year, which require that the NSW government provide a statement of public interest to accompany all government bills to be considered by the Legislative Council to assist with decision-making. This excludes legislation involving government funding,
And as for the statement accompanying the new money laundering legislation, it outlines that it’s in the public interest to pass such laws as this criminal practice is crucial to enabling organised crime to continue in the community.
Key factors warranting the changes include that court rulings had created a barrier, that the punishment for offences should reflect their seriousness, that circumstances of aggravation weren’t being factored in and an expansion of reasonable grounds was necessary to capture more activity.
“As with any reforms to strengthen criminal offences, there may be resource implications on the criminal justice system associated with prosecutions for offences under the laws,” the public interest statement continues.
“However, the public interest to tackle money laundering in NSW outweighs any potential cost.”
