Review of the Proceeds of Crime Act 1987

The fundamental principle of confiscation legislation is that people who engage in unlawful activity should not profit from breaking the laws of society. Money or property gained from such activity should be confiscated, to prevent the reinvestment of that profit into further illegal acts.

The ALRC’s review of Australia’s confiscation regime found that groundbreaking proceeds of crime legislation—introduced in 1987, and designed to strike at the heart of organised crime by attacking the profit motive—had become largely ineffective.

The ALRC advocated a sharp shift in Australia’s approach to federal assets confiscation laws to increase the reach and impact of the legislation, while remaining sensitive to concerns about proper safeguards for civil liberties.

Key recommendations

• A non-conviction based, or civil, confiscation regime should be introduced to replace the conviction based forfeiture regime contained in the Proceeds of Crime Act 1987 (Cth). The incorporation of a non-conviction based regime into the POC Act would enable confiscation of the profits of prescribed unlawful conduct, on the basis of proof to the civil standard of ‘on the balance of probabilities’.
• Recovery of the profits of unlawful activity should not be limited to criminal conduct, but extend to profits gained from unlawful civil activities.
• Existing judicial discretions under the current conviction based regime should be reduced, so that the confiscation of the profits of criminal activity becomes mandatory, except for confiscation of literary proceeds of crime.
• The offence of money laundering should be made provable by reference to a wider range of activity.
• Defendants should be required first to have access to unrestrained assets for their legal defence, rather than allowing them access—with court approval—to restrained assets that are suspected of being the proceeds of crime.
• Where such assets are insufficient for that purpose, defendants should then seek assistance from legal aid commissions. Legal aid commissions should be able to draw down the cost of providing this legal assistance from the Confiscated Assets Reserve, the statutory fund into which proceeds of crime confiscated under the POC Act are paid.
• Provisions in the POC Act relating to the rights of innocent third parties should be simplified.

Implementation

The Proceeds of Crime Bill 2001 was first introduced to the federal Parliament in September 2001, and reintroduced as the Proceeds of Crime Bill 2002 in March 2002. The Bill was considered by the Senate Legal and Constitutional Legislation Committee, which supported the Bill in its report of April 2002.

The Proceeds of Crime Act 2002 commenced operation on 1 January 2003. The recommendations of ALRC Report 87 are substantially implemented by the Act.