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Proceeds of Crime Glossary

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Glossary

Note: Within the POCA, words that have a definition are denoted with a * next to them. Section 338 POCA contains the definitions.

Effective Control

It is not necessary that a person has a legal or equitable estate or interest in the property, nor is it necessary that a person has a right, power, or privilege in connection with the property.

If property is held on trust for the benefit of a person, this is deemed as being under effective control.

If property is disposed of to another person without sufficient consideration,[1] either 6 years before, or 6 years after an application for a restraining order, forfeiture order, pecuniary penalty order, literary proceeds order, or an unexplained wealth order is made, then the property is still deemed as being under the effective control of the person who held the property before it was disposed.

The corporate veil may be pierced when determining effective control.[2]

The court may also have regard to:[3]

  • shareholdings or directorships over a company (that owns property);
  • any trust relationship;
  • as well as the relationships between the various natural persons, companies and/or trusts which have an interest in the property.

Indictable Offence

An offence against a law of the Commonwealth (or a non-governing Territory), that may be dealt with as an indictable offence (even if may also be dealt with as a summary offence in some circumstances).

Instrument

Property is an instrument of an offence if the property is intended to (or is) used in or in connection with, the commission of an offence.

It does not matter whether the property is in or outside of Australia.

Property becomes an instrument if:

  • the property is wholly or partly derived or realised from a disposal or other dealing with an instrument of an offence;[4]
  • the property is wholly or partly acquired using an instrument of the offence;[5]
  • a loan against the property is partly discharged using an instrument of the offence[6] (This covers situations such as a mortgage against a house being repaid using an instrument of an offence. If this occurs, the house is then considered to be proceeds);
  • the cost of retaining, maintaining, or making improvements to the property are partly met using an instrument of the offence[7] (This covers the situation of renovating a property using an instrument of an offence).

If the owner of the property that was an instrument of an offence ceased to be the owner, but then the person acquired the property again, then the property becomes an instrument again.[8]

Lawfully acquired

Property or wealth is lawfully acquired if:

  • the property or wealth was lawfully acquired; and
  • the consideration given for the property or wealth was lawfully acquired; and
  • the property or wealth is not proceeds or an instrument of the offence.

Proceeds

Property is proceeds of an offence if it is (wholly or partly) derived or realised, whether directly or indirectly, from the commission of an offence.

It does not matter whether the property is in or outside of Australia.

Property becomes proceeds when:

  • the property is wholly or partly derived or realised from a disposal or other dealing with proceeds of an offence;[9]
  • the property is wholly or partly acquired using proceeds of the offence;[10]
  • a loan against the property is partly discharged using proceeds of the offence[11] (This covers situations such as a mortgage against a house being repaid using proceeds. If this occurs, the house is then considered to be proceeds);
  • the cost of retaining, maintaining, or making improvements to the property are partly met using proceeds of the offence[12] (This covers the situation of renovating a property using proceeds of an offence).

Property ceases to be proceeds of an offence when:

  • it is acquired by a third party for sufficient consideration without the third party knowing, and in circumstances that would not arouse a reasonable suspicion, that the property was proceeds of an offence;[13]
  • if the property has been distributed in accordance with:
    • an order under the Family Law Act 1975 (Cth) with respect to the property of the parties to a marriage (or a de-facto relationship)[14] or either of them;[15] or
    • a financial agreement, or part VIIIAB financial agreement within the meaning of the Family Law Act 1975 (Cth).[16]

And 6 years have elapsed since that distribution;

If the owner of the property that was proceeds of an offence ceased to be the owner, but then the person acquired the property again, then the property becomes proceeds again.[17]

Serious Offence

The definition of serious offence is large and will be dependent in some circumstances upon the conduct of the criminal offending.

Generally:

  • drug trafficking, money laundering and serious fraud;
  • Migration Act offences relating to people smuggling and the organised harbouring of illegal entrants;
  • certain offences against the Financial Transactions Reporting Act 1988

State Offence with a Federal Aspect

For POCA purposes, the definition of ‘state offence with a federal aspect’ is contained in section 3AA Crimes Act 1914 (Cth).

Broadly, a state offence with a federal aspect is such if, the provision creating the state offence had been enacted by the Parliament of the Commonwealth, instead of by the Parliament of the State, the provision would have been a valid law of the Commonwealth.

Total wealth

The definition of total wealth is relevant for the purposes of Unexplained Wealth Orders.

The total wealth of a person is the sum of all of the values of the property that constitutes the person’s wealth.

Wealth

The definition of wealth is relevant for the purposes of Unexplained Wealth Orders.

Wealth of a person is:

  • property owned; or
  • property that has been under the effective control;
  • property that has been disposed of (whether by sale, gift or otherwise) or consumed;

at any time.


[1] ‘reflects the value of the property, having regard solely to commercial considerations’ – s 338 Proceeds of Crime Act 2002 (Cth).

[2] Proceeds of Crime Bill 2002 Revised Explanatory Memorandum.

[3] Proceeds of Crime Bill 2002 Revised Explanatory Memorandum.

[4] S 330(2)(a) Proceeds of Crime Act 2002 (Cth).

[5] S 330(2)(b) Proceeds of Crime Act 2002 (Cth).

[6] S 330(2)(c) Proceeds of Crime Act 2002 (Cth).

[7] S 330(2)(d) Proceeds of Crime Act 2002 (Cth).

[8] S 330(5) Proceeds of Crime Act 2002 (Cth).

[9] S 330(1)(a) Proceeds of Crime Act 2002 (Cth).

[10] S 330(1)(b) Proceeds of Crime Act 2002 (Cth).

[11] S 330(1)(c) Proceeds of Crime Act 2002 (Cth).

[12] S 330(1)(d) Proceeds of Crime Act 2002 (Cth).

[13] S 330(4)(a) Proceeds of Crime Act 2002 (Cth).

[14] S 330(4)(ba)(ia) Proceeds of Crime Act 2002 (Cth).

[15] S 330(4)(ba)(i) Proceeds of Crime Act 2002 (Cth).

[16] S 330(4)(ba)(ii) Proceeds of Crime Act 2002 (Cth).

[17] S 330(5) Proceeds of Crime Act 2002 (Cth).


* Information contained in this article is of a general nature only and should not be relied upon as concise legal advice.
Please contact us for legal advice tailored to your situation. *


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About Brian Walker

B.Acc., GradDipLegPrac, Juris Dr Barrister & Accountant. Former Criminal Defence Solicitor. Former Federal Prosecutor for the Commonwealth Director of Public Prosecutions prosecuting Commonwealth crimes relating to drugs and child exploitation. Former Australian Federal Police member litigating proceeds of crime matters. Former Australian Taxation Office employee investigating offshore tax evasion matters.

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