There are three formal methods for recovering stolen assets held in Australia:

• via mutual legal assistance legislation pursuant to a foreign criminal proceeding or investigation regarding a foreign offence (criminal asset recover);
• via legislation that enables the recovery of proceeds of crime without a conviction for a foreign offence (civil asset recovery); and
  
• via law suits in the civil law courts (civil proceedings).

There is also the possibility of agency-to-agency cooperation (informal or administrative legal assistance) and formal assistance with business regulatory agencies for non-punititive processes. (See: MABMRA Australia)

I. Criminal asset forfeiture

Subject to any bi- or multi-lateral MLA treaties between Australia and the requesting state, the Mutual Assistance in Criminal Matters Act 1987 (Cth) (as amended) (MACMA Australia), together with the Proceeds of Crime Act 2002 (POCA 2002) govern the provision of legal assistance by Australia in criminal matters. They allow Australia to support foreign criminal proceedings by:

• taking evidence and ordering the production of documents;
• providing material lawfully obtained by its law enforcement agencies;
• tracing property and monitoring bank accounts;
• searching premises and seizing property; and
  
• restraining and forfeiting property pursuant to foreign orders or Australian orders.

1. Process for receiving and responding to requests

Foreign requests to Australia for legal assistance received and processed by the federal Australian Attorney-General's Department. They are subject to strict confidentiality. In most cases, the MACMA Australia requires that the Australian Attorney-General (or delegate) authorize other Australian law enforcement agencies (such as the Australian Federal Police (AFP) or the Commonwealth of Public Prosecutions (DPP)) to apply to specified Australian courts for orders giving effect to the request: see section 40 MACMA Australia. For this reason, most incoming requests to Australia are finally decided by the courts.

2. Key concepts

Assistance under the MACMA Australia is only available in relation to 'criminal matters'. Furthermore, the type of assistance available depends, firstly, on the type of offence alleged, secondly, on the type of criminal process and, third, on the type of property and its connection to the offence.

a) 'Criminal matters' under the MACMA Australia

Under section 3 MACMA Australia 'criminal matter' includes:

• a criminal matter relating to revenue (including taxation and customs duties);
• a criminal matter relating to foreign exchange control;
• a matter relating to the forfeiture or confiscation of property in respect of an offence;
• a matter relating to the imposition or recovery of a pecuniary penalty in respect of an offence; and
• a matter relating to the restraining of dealings in property, or the freezing of assets, that may be forfeited or confiscated, or that may be needed to satisfy a pecuniary penalty imposed, in respect of an offence;

whether arising under Australian law or a law of a foreign country': section 3 MACMA Australia.

b) Types of offence

• Offence 'includes an offence against a law relating to taxation, customs duties or other revenue matters or relating to foreign exchange control'.
• Serious offence 'means an offence the maximum penalty for which is death, or imprisonment for not less than 12 months'. In most cases this refers to the status or severity of the offence under the law of the place of the proceeding'.
• Foreign offences and foreign serious offences are 'offences' and 'serious offences' against a law of a foreign country: section 3 MACMA Australia.

c) Types of criminal process

• Criminal investigation 'means an investigation into an offence (whether the offence is believed to have been committed, to be being committed or to be likely to be committed)'.
• Criminal proceedings 'in relation to an offence, means a trial of a person for the offence or a committal proceeding in respect of the offence. … Trial, in relation to a foreign offence, includes any proceeding to determine whether a person should be convicted of the offence.'
• Proceeding in relation to a criminal matter 'includes a proceeding before a judicial officer or a jury for the purpose of: a) gathering evidential material that may lead to the laying  of a criminal charge; or b) assessing evidential material in support of the laying of a criminal charge'

d) Types of property

Under the MACMA Australia, Assistance may be available with regards to 'property' or 'instruments' or the 'proceeds of an offence'. In relation to offences, these terms have the same meaning as in the POCA Australia 2002.

Property 'means real or personal property of every description, whether situated in Australia or elsewhere and whether tangible or intangible, and includes an interest in any such real or personal property… Interest, in relation to property or a thing, means (a) a legal or equitable estate or interest in the property, or (b) thing or a right, power or privilege in connection with the property or thing, whether present or future and whether vested or contingent': section 338 POCA Australia 2002.

Proceeds of an offence are items of property which are wholly or party derived or realized, whether directly or indirectly, from the commission of the offence: section 329(1) POCA Australia 2002. In DDP (Cth) v Corby [2007] QCA 58 (2 March 2007), the Queensland Court of Appeal held, in relation to 'literary proceeds', that 'derives' means to mean 'to receive or obtain from a source of origin, to trace from a source or origin'.

An instrument of an offence is property used or intended to be used in, or in connection with, the commission of an offence: section 329(2) POCA Australia 2002. The phrase 'in connection with the commission of an offence' poses a question of proximity and degree, the connection need not be direct or substantial: R v Sultana (1992) 74 A Crim R 27 (per Gleeson CJ), R v Polain (1989) 52 SASR 526 (per Cox J), R v Hadad (1989) 16 NSWLR 476, R v Milienou (1989) 46 A Crim R 211: para 9. For this reason, in R v Zerafa [2003] NSWCCA 101 (10 April 2003) (per Buddin J) the New South Wales Court of Appeal held that the 'circulating capital' of a 'drug business' could be considered the instrument of an offence.

Property is also proceeds and instruments of an offence if it is:

• wholly or partly derived or realised from a disposal or other dealing with proceeds of the offence or an instrument of an offence;
• wholly or partly acquired using proceeds of the offence or an instrument of the offence;
• credited to an account;
• disposed of, or otherwise dealt with: section 330(1)-(3) POCA Australia 2002.

The definitions of 'proceeds' and 'instruments' also make clear that 'property' can be the proceeds or an instrument of an offence even if it is situated outside Australia and no person has been convicted of the offence: section 329(1)-(3) MACMA Australia.

3. Nature of the assistance

a) Gathering evidence and intelligence

Australia helps foreign countries gather evidence and intelligence in relation to offences against Australian and foreign law, primarily under sections 13 and 13A MACMA Australia.

i) Taking evidence and producing documents – section 13 MACMA Australia

What can Australia do under section 13 MACMA Australia?

Pursuant to section 13 MACMA Australia, if the Australian Attorney-General authorizes the taking of evidence, a Magistrate may take evidence from a witness under oath. The Magistrate records and certifies the witness testimony and sends a transcript of that testimony to the Australian Attorney-General: section 13(2)(a) MACMA Australia.

Under section 13(6) MACMA Australia, the laws of evidence in each state or territory determine who is a compellable witness in proceedings under section 13. The applicable state or territory laws apply, however, with some qualifications:

• the person to whom the proceeding in the requesting country relates is competent but not compellable: section 13(7) MACMA Australia;
• the person required to give evidence or produce documents is only compellable to answer questions for which s/he would be compellable in the requesting country: section 13(8) MACMA Australia.

The Magistrate can allow legal representatives from the following parties to participate in the proceedings:

• the person to whom the proceeding in the requesting country relates;
• any other person giving evidence or producing documents or other articles at the proceeding;
• the relevant authority of the requesting country: section 13(3) and (4) MACMA Australia.

Moreover, if the requesting country has so requested, representatives of the subject of the foreign proceeding and requesting state authority may (in the Magistrate's discretion) cross-examination witnesses by video link: section 13(4A) MACMA Australia.

Once the Attorney authorizes the production of documents or other articles, the Magistrate may issue orders for the production of documents or other articles and, once produced, send the originals or copies to the Australian Attorney-General: section 13(2)(b) MACMA Australia.

When can Australia assist under section 13 MACMA Australia?

Australia can assist under section 13 MACMA Australia when taking evidence or requiring the production of documents is 'for the purpose of a proceeding in relation to a criminal matter' in the requesting country or another foreign country: section 13(1) MACMA Australia. 'Proceeding in relation to a criminal matter' is defined by section 3 and discussed above.

The power to assist is exercised by the Commonwealth Attorney General and is discretionary. In Samsonidis v Commissioner, Australian Federal Police [2007] FCACF 32 at paras 25 to 31, the Full Federal Court held, in obiter dictum, that the Attorney’s discretion would not allow him/her to authorize the provision of information that would be prohibited under another act.

Which Magistrate decides the application?

Section 3 MACMA Australia defines 'Magistrate', to be (amongst other things) a Magistrate of State 'in respect of whom an arrangement under section 39 is in force'. Arrangements under section 39 are made between the Commonwealth Governor-General and a state Governor 'with respect to the administration of [the MACMA Australia], …' and published in the official Commonwealth government Gazette: section 39(1) and (3) MACMA Australia. A similar system applies to Norfolk Island and other external territories.

ii) Providing material lawfully obtained – section 13A MACMA Australia

In more serious cases, section 13A MACMA Australia allows Australia to share 'material lawfully obtained' with other states. 'Material lawfully obtained' includes material obtained by consent and material obtained by warrant or court order for the purposes of an Australian investigation or prosecution: section 13A(6) MACMA Australia. It does not include material obtained under the Telecommunications (Interception and Access) Act 1979.

The conditions for sharing this material are more restrictive than for section 13 MACMA Australia as it is held by Australian law enforcement authorities and it can include surviellence orders. The Attorney-General may only authorize law enforcement agencies to share information with a foreign country if:

• the foreign country has commenced an investigation into, or proceedings in relation to, a serious criminal offence against the laws of that country i.e. an offence punishable at the most by death, or imprisonment for 12 months or more;
• the requested material is relevant to the foreign investigation or proceedings;
• the AG is satisfied that the material is lawfully obtained by the Australia agency and lawfully in its possession: section 3 and 13A(1) MACMA Australia.

Information may only be sought and obtained through surveillance devices if the investigation or proceedings relates to a serious criminal offence which is punishable by a maximum term of 3 years imprisonment, life imprisonment or death: section 13A(2). Note that Australia may specify how that material is to be used: section 13A(4).

b) Tracing

i) Production orders relating to foreign serious offences – section 34N

What can Australia do under section 34N MACMA Australia?

Section 34N enables the federal Attorney-General to authorize law enforcement authorities to apply for a production order under the Proceeds of Crime Act 2002 (Cth) (POCA Australia 2002) for a property-tracking documents: section 34N(1).

What is a 'property tracking document'?

A 'property-tracking document' is principally a document relevant to identifying, locating or quantifying:

• property of any person who has been convicted of, charged with, or whom it is proposed to charge with, a foreign serious offence;
• proceeds of an indictable offence, or an instrument of an indictable offence, of which a person has been convicted or with which a person has been charged or is proposed to be charged.

However, it is also a document relevant to identifying or locating any document necessary for the transfer of such property and documents that would assist in reading or interpreting such documents: sections 3 and 34P MACMA Australia; sections 202(5), 329 POCA Australia 2002.

When is property no longer the proceeds or instrument of an offence?

In some circumstances, property may stop being a proceed or an instrument of an offence if the property is transferred to a third party, distributed in a deceased estate, distributed under the Family Law Act 1975, used to pay for reasonable legal representation or sold or disposed of under the POCA Australia 2002 or otherwise as specified in the regulations or if forfeiture or restraining orders are satisfied.

In all cases, the POCA Australia 2002 insists upon a certain distance between the offence (or the offender) and the person acquiring the interest. For example, where property has been transferred to a third party, the third party must have paid sufficient consideration, without knowing that the property was proceeds of an offence or an instrument of an offence and in circumstances that would not arouse a reasonable suspicion that the property was the proceeds of an offence or an instrument of an offence.

Moreover, if the property remains in the effective control of the offender or the offender re-acquires the property, the property may again be proceeds of an offence or an instrument of the offence: section 330(5) and (5A) POCA 2002.

When will the Attorney-General authorize an application under section 34N MACMA Australia and the POCA Australia 2002?

The federal Attorney-General may authorize an application for production orders for a property tracking documents when:

• a foreign country has started a criminal proceeding or investigation in respect of a foreign serious offence;
• it is reasonable suspected that a property-tracking document relating to the offence is located in Australia;
• the foreign country requests the Attorney-General to obtain the issue of a production order requiring that the document be produced or made available for inspection in accordance with Australian law.

The Attorney-General then authorizes an authorized officer of a law enforcement agency to make application  to a Magistrate in the State or Territory specified in the application.

When will the Magistrate grant the order?

Section 202(2) POCA Australia 2002 states that 'the magistrate must not make a production order unless s/he is satisfied by information on oath that the person is reasonably suspected of having possession or control of such documents'. In effect, section 202(2) creates rebuttable presumption against production orders.

What orders is the Magistrate not able to grant?

Section 202(2)(b) and (c) POCA Australia 2002 categorically prohibits the magistrate from granting orders that require any accounting records used in the ordinary business of a financial institution to be produced to an authorized officer.

Moreover 'a production order cannot require documents that are not in the possession or under the control of a body corporate; or cannot require documents that are not used or intended to be used in the carrying on of a business or be produced or made available to an authorized officer': section 202(2) POCA Australia 2002.

What happens to the documents?

The Australian Attorney-General is to direct the law enforcement officer how to deal with the documents: section 34ZF(1) MACMA Australia. This may include a direction that the documents be sent to the requesting state: section 34ZF MACMA Australia. In any case, the authorized officer may retain the property-tracking documents for no more than a month: section 34ZF(1) MACMA Australia.

c) Monitoring orders

The MACMA Australia provides two mechanisms for obtaining information from financial institutions. The first – a 'notice to financial institutions' – is used to gather information which is needed in relation to the MLA proceedings. The second – a monitoring order in relation to a foreign serious offence – allows foreign countries to obtain evidence or intelligence from Australian banks under the POCA Australia 2002.

i) Notices to financial institutions – section 34R MACMA Australia

What can Australia do under section 34R MACMA Australia?

Section 34R(1) allows the Australian Attorney-General or a senior Departmental officer to give a written notice to a financial institution. That notice requires the financial institution to provide information or documents relevant to:

• determining whether a specified person holds or is a signatory to an account;
• details of any related accounts (including names of those who hold those accounts);
• the current balance of the account held by that person, and details of transactions on such an account for a period of up to 6 months; and
• transactions by the financial institution on that person’s behalf.

When can Australia issue a notice under section 34R MACMA Australia?

Subsection (2) prohibits the Australian Attorney-General or the senior Departmental officer from issuing the notice under section 34R MACMA Australia unless s/he reasonably believes that giving the notice is required to:

• determine whether to take any action under this Division (namely Division 2 MACMA Australia) or under the POCA Australia 2002 in connection with the operation of this Division;
• in relation to proceedings under this Division or under the POCA Australia 2002 in connection with the operation of this Division.

The relevant division of the MACMA Australia is Division 2, entitled 'Requests by foreign countries' and contains Australia's asset recovery mechanisms.

No request required but cooperation necessary.

Under section 34R the Australia Attorney-General or senior officer is entitled to act of his/her own motion, though cooperation between Australia and the foreign state will be necessary to prepare the notice.

ii) Effect of issuing order

The notice, once issued, confers both protections and obligations on financial institutions and their personnel.

Protection from suit

On the one hand, the notice provides the institution, as well as its officers, employees and agents, with a qualified protection from action, suit or proceeding in relation to steps taken by the institution or person under the notice when they are acting in the course of their duties. The protection also applies if the institution or person acted in the mistaken belief that action was required under the notice: section 34T(1) MACMA Australia. Moreover, a financial institution, or person who is an officer, employee or agent of a financial institution, who provides information under a section 34R notice is deemed not to have been in possession of information for the purposes of money-laundering offences: section 34T(2) MACMA Australia.

Offences for non-compliance – section 34U-W MACMA Australia

On the other hand, notices are enforced with criminal sanctions. The MACMA Australia provides that the recipient of the notice is guilty of an offence if they do not comply with the notice (section 34W) or if they disclose the existence or nature of a confidential notice: sections 34V.  Maximum penalties include imprisonment for 6 months for failing to comply with the notice and imprisonment for 2 years for disclosing the existence of the notice.

It is also an offence for the law enforcement authorities to make a false statement in an application for a notice: section 34U MACMA Australia. False statements by recipients of notices, may be covered by sections 137.1 and 137.2 of the Criminal Code (the offences of providing false or misleading information).

iii) Monitoring orders relating to foreign serious offences – section 34X MACMA Australia

What can Australia do under section 34X?

Section 34X allows the federal Australia Attorney-General to authorize officers of enforcement agencies to apply for a monitoring order under the Proceeds of Crime Act. The order must be in respect of a foreign serious offence and for the purpose of obtaining the information requested by the foreign country: section 34X(1) MACMA Australia. The decision whether to grant the order is taken by a judge of a State or Territory court with jurisdiction to deal with criminal matters on indictment: section 34X(1) and (3) MACMA Australia. The judge may then make an order (a monitoring order) that a financial institution provide information about transactions conducted during a particular period through an account held by a particular person with the institution.

When can the Attorney General authorize an application under section 34X?

The Australia Attorney-General has power to authorize an application for a monitoring order when:

• a criminal proceeding or investigation has commenced in a foreign country;
• the criminal proceeding or investigation is in respect of a foreign serious offence;
• the foreign serious offence is of a type referred to in section 34X(2);
• it is reasonably suspected that information about transactions conducted through an account with a financial institution in Australia is relevant to the proceeding or investigation;
• the foreign country requests the Australia Attorney-General to obtain the issue of an order directing the financial institution to give information about transactions conducted through the account.

Foreign serious offences that can be the subject of monitoring orders - subsection (2)

A 'foreign serious offence' is normally any 'offence the maximum penalty for which is death, or imprisonment for not less than 12 months'. This definition is narrowed further for the purposes of section 34X. At subsection (2), it lists the offences which may be the subject of a monitoring order:

• an offence punishable by imprisonment for 3 or more years that:

1. involves unlawful conduct relating to a narcotic substance, or
2. is a money laundering offence, or
3. involves unlawful conduct by a person that causes, or is intended to cause, benefit to the value of at least $10,000 for that person or another person, or
4. involves unlawful conduct by a person that causes, or is intended to cause, a loss to the foreign country in question or another person of a least $10,000.

• an offence involving the smuggling of migrants;
• an offence involving failure to report financial transactions;
• an ancillary offence in respect of an offence referred to in paragraph (a), (b) or (c).

When can the Court grant the application?

Section 34Y MACMA Australia applies Part 3-4 POCA Australia 2002 to any application for a monitoring order and any order made as a result. The judge may make a monitoring order on application by an authorized officer of an enforcement agency. The judge must not make the order unless s/he is satisfied that there are reasonable grounds for suspecting that:

• the person in respect of whose account the information is sought:

1. has committed, or is about to commit, an offence mentioned in section 34X(2); or
2. was, or is about to be, involved in the commission of an offence mentioned in section 34X(2); or
3. has benefited directly or indirectly, or is about to benefit directly or indirectly, from the commission of an offence mentioned in section 34X(2); or

• the account is being used to commit an offence against Part 10.2 of the Criminal Code (money laundering): section 219(2) POCA Australia 2002, section 34Y(3)(a) MACMA Australia.

So, section 219 POCA Australia 2002 allows monitoring of accounts held by people who are not themselves suspected of committing a listed serious offence or money laundering. This may be of particular interest to for asset recovery practitioners, who are attempting to trace money held by third parties, such as special purpose companies or family members.

Given the definition of 'monitoring order' the judge will also require draft orders specifying a financial institution, an account holder at that institution and a time period.

iv) Effect of orders

Provision of information

Once the order is in force, it requires the financial institution to provide information about its accounts. The definition of 'financial institution' in the POCA Australia 2002 is complex but extensive. It includes betting agencies and casinos, as well as the Reserve Bank of Australia: section 328. The term 'account' is equally broad, meaning any facility or arrangement through which a financial institution accepts deposits or allows withdrawals, and including a facility or arrangement for a fixed term deposit and a safety deposit box: section 328 POCA Australia 2002.

Failure to comply with the order is an offence for which the maximum penalty is imprisonment for 6 months or 30 penalty units, or both: section 224 POCA Australia 2002.
Protection from suit – section 221 POCA Australia 2002

Persons who provide information in compliance with a monitoring order in the POCA Australia 2002 are afforded equivalent protections as given to persons who supply information under a notice in the MACMA Australia.
Offences relating to disclosure – section 223 POCA Australia 2002

Section 223 POCA Australia 2002 penalizes a broad range of disclosures and applies strict penalties for breach. It makes it an offence to disclose the existence or operation of a monitoring order or information from which the existence or operation of a monitoring order could be inferred: section 223(1) and (2) POCA Australia 2002. The maximum penalty is imprisonment for 5 years or 300 penalty units or both, though there is an exception for disclosures by specified persons who for specified purposes in section 224 POCA Australia 2002.

Passing on information given under monitoring orders – 34Z MACMA Australia

Enforcement agencies given information under a monitoring order in relation to a foreign serious offence, must convey it to the Australian Attorney-General or specified officer as soon as practicable after receiving the information.

d) Search and seizure

There are two ways for Australian authorities to assist in searching premises. The first method under section 15 MACMA Australia is available if the request relates to a 'serious offence', that is, a under Australian law. The second method under section 34ZA and the POCA Australia 2002 is applicable if the request relates to a 'foreign serious offence', that is a serious offences against a law of a foreign country.

i) Search warrants in relation to foreign serious offences – section 34ZA MACMA Australia

What can Australia do under section 34ZA MACMA Australia?

Section 34ZA allows the federal Attorney-General to authorize law enforcement agencies to apply to a Magistrate for a search warrant under the POCA Australia 2002. The warrant will relates to the proceeds of an offence, the instrument of an offence or a property tracking document: section 34ZA(1) MACMA.

Amongst other things, the search warrant enables Australian law enforcement agencies:

• to enter the premises and, if the premises are a conveyance, to enter the conveyance, wherever it is. ('Conveyance' is defined in the POCA Australia 2002 to include an aircraft, vehicle or vessel: section 338);
• to search for and record fingerprints found at the premises and to take samples of things found at the premises for forensic purposes;
• to search the premises for the kinds of tainted property or evidential material specified in the warrant, and to seize things of that kind found at the premises;
• if the warrant so allows—to search a person at or near the premises (section 228 POCA Australia 2002).

In addition, the officer may seize property or a thing that s/he finds and that s/he believes on reasonable grounds to be:

• proceeds or an instrument of the offence or a property-tracking document in relation to the offence, although not of the kind specified in the warrant; or
• proceeds or an instrument of, or a property-tracking document in relation to, another foreign serious offence in relation to which a search warrant issued under that Part is in force; or
• something that is relevant to a criminal proceeding in the foreign country in respect of the foreign serious offence or will afford evidence as to the commission of an Australian criminal offence: section 34ZC(1) MACMA.

The authorised officer must also believe on reasonable grounds that it is necessary to seize the property or thing to prevent it from being concealed, lost or destroyed or used in committing an offence: section 34ZC(2) MACMA

Property other than property tracking documents are retained for 30 days unless a foreign restraining or forfeiture order has been registered or a restraining order has been made under the MACMA: section 34ZE MACMA.

When can Australia assist under section 34ZA MACMA?

The Attorney-General has power to authorize the relevant enforcement agency to apply for a search warrant under section 34ZA if:

• a criminal proceeding or criminal investigation has commenced in a foreign country in respect of a foreign serious offence;
• proceeds or an instrument of the offence, or a property-tracking document in relation to the offence, is reasonably suspected of being located in Australia: section 34ZA(1).

The Magistrate then has power to issue the warrant if s/he is satisfied by information on oath that there are reasonable grounds for suspecting that tainted property or evidential material is at the premises, or will be within the next 72 hours (48 hours in the case of telephone or electronic applications): section 225(1) and (2) POCA Australia 2002. 'Tainted property' means the proceeds of an indictable offence or an instrument of an indictable offence: section 338 POCA Australia 2002.

ii) Searches in relation to a breach of Australian law – section 15 MACMA

The Commonwealth Attorney-General can also authorize the state or federal police to apply for a search warrant if:

• the foreign country has commenced an investigation into, or proceedings in relation to, a serious offence;
• there are reasonable grounds to believe that the evidential material is located in Australia: section 15(1) MACMA.

'Evidential material' is defined to mean 'a thing relevant to a proceeding or investigation, including such a thing in electronic form': section 3 MACMA.

Once authorized, the police officer may apply to a State or Territory Magistrate for a warrant to search persons or premise: section 38B MACMA. The Magistrate may issue the warrants if there are has reasonable grounds for suspecting that evidential material is on a particular premises, or in the possession of a particular person, or will be within the applicable period of time: section 38C(1) and (2) MACMA.

'Premises' includes a structure, building or vehicle, a place (whether enclosed or built upon or not), and a part of a structure, building or place.

Once issued warrants executing officers to take a wide range of action, including searching premises and person and seizing material found on the person or at the premises, and using such force as is necessary and reasonable in the circumstances: section 38E(1), 38F(1) and 38J MACMA.

e) Restraining and forfeiting property

Where a person has been convicted of a foreign serious offence, Australia may restrain and, in some cases, confiscate assets by:

• registering and enforcing foreign orders in the Australian courts and
• obtaining Australian court orders pursuant to foreign proceedings.

i) Registration of foreign orders

Under the MACMA, the Australian courts have the power to register three types of foreign order: 'foreign forfeiture orders', 'foreign pecuniary penalty orders' and 'foreign restraining orders': sections 34, 34A and 3 MACMA.

In each case, the Commonwealth Department of Public Prosecutions (DPP) makes an application for the order pursuant to an authorization by the federal Attorney-General. In deciding whether to authorize the DPP to bring the application, the Attorney applies two standards: one for states listed in the MACMA Regulations and one for states that are not (unlisted states). Currently, the Mutual Assistance in Criminal Matters Regulations 1988 list the United States of America, Ireland, South Africa, United Kingdom and Canada: Regulation 18 MACMA Regulations. In effect, listing allows the registration of non-conviction based forfeiture orders for these countries.

The DPP's application will be heard by a court specified by the Attorney. The specified court must be a State or Territory court with jurisdiction to deal with matters on indictment (see the definition of 'proceeds jurisdiction' in section 335 POCA Australia 2002).

Registration takes places by the registration of the order or a copy of the order in accordance with the rules of court.

ii) Foreign forfeiture orders

What is a 'foreign forfeiture order'?

A 'foreign forfeiture order' is defined in section 3. It means one of two things:

• 'an order, made under the law of a foreign country, for the forfeiture of property in respect of an offence against the law of that country'or
• 'a declaration, made under the law of a foreign country, evidencing forfeiture of property under the law of that country'.

When can the Attorney-General authorise an application for a foreign forfeiture order?

For unlisted countries the Attorney-General may authorise the DPP to apply for the registration of an order if:

• the foreign country requests the AG arrange for the enforcement of the order;
• the order is a foreign forfeiture order or a foreign pecuniary penalty order;
• the order has been made in respect of a foreign serious offence;
• the order has been made against property that is reasonably suspected of being located in Australia or property available to satisfy the order is reasonably suspected of being located in Australia (in the case of a foreign pecuniary penalty order);
• the Attorney-General is satisfied that a person has been convicted of the offence and the conviction and the order are not subject to further appeal in the foreign country: section 34(1) MACMA.

If the requesting state is listed in Regulations, the Attorney-General may authorize the application so long as:

• the order has the effect of forfeiting a person's property;
• the basis of the forfeiture order is that the property is, or is alleged to be, the proceeds or an instrument of a foreign serious offence;
• it is made against property that is reasonably suspected of being located in Australia: section 34(2) MACMA.

In other words, the Attorney-General may authorize applications even if the person has not been convicted of that offence.

When will the Court register a foreign forfeiture order? Section 34A

Courts are required to register the foreign order if the DPP applies for the registration and the application is in accordance with the Attorney-General's authorization: section 34A(1). The DPP must notify certain persons of the application but the court still has an obligation to consider the application if this has not occurred if the DPP requests the court to do so: section 34A(2) and (3) MACMA.

iii) Effect of registering foreign forfeiture orders

A registered foreign forfeiture order is effective and enforceable at the time of registration as if it were a forfeiture order under the Proceeds of Crime Act: section 34B MACMA. In general, this means that the property specified in the forfeiture order vests absolutely in the Commonwealth (though special provisions apply to ‘registrable property’ and to property, the joint owner of which, dies before the order is granted but after the forfeiture application or restraining order is made): section 34B MACMA, section 66 to 68 POCA Australia 2002, see also section 71 POCA Australia 2002).

iv) Foreign restraining orders

What is a 'foreign restraining order'?

A 'foreign restraining order' is defined broadly under section 3 MACMA. It means 'an order':

1. made under the law of a foreign country in respect of an offence against the law of that country; and
2. which is, or purports to be, made for the purpose of preserving property (whether or not the order also purports to do other things) including an order:

• restraining a particular person or persons from dealing with the property; or
• freezing the property; or
• directing the seizure of the property; or
• directing that the property be taken into official custody or control.

When can the Attorney-General authorize an application to register a foreign restraining order?

The Attorney-General may authorize the DPP to apply for the registration of a restraining order from an unlisted country if:

• a foreign country requests the Attorney-General to make arrangements for the enforcement of a foreign restraining order;
• the order is against property that is reasonably suspected of being located in Australia;
• the order is made in respect of a foreign serious offence;
• a person has been convicted of that offence: section 34(3) MACMA Australia
  

If the foreign country is specified in regulations, an order may be registered even if the person has not been convicted of an offence and if their identity is not known: section 34 MACMA Australia

When will the Court register a foreign restraining order?

The Courts are also required to register the foreign restraining on application of the DPP subject to the notice conditions discussed above (see 'When will the Court register a foreign forfeiture order?').

Effect of registering foreign restraining orders – section 34E MACMA

With some modifications, registered foreign restraining orders take effect as it they were restraining orders under the POCA Australia 2002. Division 4 of Part 2-1 POCA Australia 2002 is particularly important. It allows restraining order to be recorded in property registers and dispositions or dealing to be set aside if they contravene the restraining order.

v) Foreign pecuniary penalty orders

What is a ‘foreign pecuniary pentalty order’?

A 'foreign pecuniary pentalty order' is an order, made under the law of a foreign country, imposing a pecuniary penalty in respect of an offence against the law of that country. Orders for the payment of a sum of money by way of compensation, restitution or damages to an injured person are not foreign pecuniary penalty orders: section 3 MACMA Australia

When can the Attorney-General authorize an application to register a foreign pecuniary penalty order?

As for foreign forfeiture orders, unlisted countries must show that a person has been convicted of an offence and that the conviction is not subject to further appeal. Additionally, the foreign pecuniary penalty order must have been made in respect of a foreign serious offence and there must be a reasonable suspicion that at least some of property available to satisfy the order is located in Australia.

By contrast, listed countries need only show that there is a foreign pecuniary penalty order that has the effect of requiring a person to pay an amount of money, the basis for which is that the money is, or is alleged to be, the benefit derived from a foreign serious offence. It is also necessary that some or all of the property available to satisfy the order is reasonably suspected of being located in Australia. But there is no requirement that a person be convicted of an offence.

Effect of registering foreign pecuniary penalty orders – section 34D

A registered foreign pecuniary penalty order is effective and enforceable (with some modifications) as if it were a pecuniary penalty order made pursuant to POCA Australia 2002: section 34D MACMA Australia

The order may be satisfied by payments in Australia or abroad.

vi) Effect on third parties – 34C MACMA

Section 34C MACMA protects third parties who claim an interest in property which is subject to a foreign forfeiture order.

Who can bring an application under section 34C?

In relation to unlisted states, a third party who claims an interest in property has standing if they were not convicted of the underlying offence. It is more difficult for a third party to challenge an order in relation to an unlisted state. In that case, there must be no reason to believe that they committed the foreign serious offence.

There is a presumption that persons who were given notice of, or appeared at, the hearing held in connection with the making of the foreign forfeiture order are not entitled to apply under subsection (1). The court may give leave to appear but only if there are special grounds for doing so, for instance, if there were good reasons for the person’s failure to attend the hearing  or there is new evidence: section 34C(3) to (5) MACMA.

When can the Court protect third party interests under section 34C.

The Court can intervene to protect the third party's interest if it is satisfied that the applicant was not, in any way, involved in the commission of the foreign serious offence in respect of which the foreign forfeiture order was made. If the applicant acquired the interest in the property at the time of or after the commission of such an offence, it must also be shown that the property was neither proceeds nor an instrument of the offence: section 34C(2)(a) and (b) MACMA.

How does the Court protect third party interests under section 34C?

If the conditions for intervention are met, section 34C allows the court to make an order which declares the nature, extent and value (as at the time when the order is made) of the applicant's interest in the property and either directs the transfer of the interest to the applicant or declares that an amount equal to the interest is payable by the Commonwealth to the applicant.

Period for Applications

The time for making applications is 6 weeks from the day of registration of the foreign forfeiture order, although the Court may grant leave to apply outside that period if it is satisfied failure to apply was not due to any neglect on the applicant’s part. This could be the case, for example, if the Court registers a foreign forfeiture order even though the DPP has failed to notify all relevant parties.

vii) Canceling registration – 34G

The Attorney-General may direct the DPP to apply to a court to cancel the registration of a foreign pecuniary penalty or restraining order if the order has ceased to have effect in the foreign country in which the order was made or 'cancellation of the order is appropriate having regard to the arrangements entered into between Australia and the foreign country in relation to the enforcement of orders of that kind'. The court must cancel the registration.

Australian orders pursuant to a foreign proceeding – section 34J

In some circumstances, the Commonwealth DPP may apply to the courts for an advanced interim restraining order.

 Attorney-General may authorize such an application if:

• a criminal proceeding has commenced, or there are reasonable grounds to suspect that a criminal proceeding is about to commence, in a foreign country in respect of a foreign serious offence;
• there are reasonable grounds to believe that property that may be made or is about to be made the subject of a foreign restraining order is located in Australia; and
• the foreign country requests the Attorney-General to obtain the issue of a restraining order against the property.

If the foreign country is specified in regulations, the Attorney-General may also grant an application on the grounds that foreign confiscation proceedings have commenced, or there are reasonable grounds to suspect that such proceedings are about to commence, in the foreign country. 'Foreign confiscation proceedings' are defined as 'proceedings in a foreign country in respect of the making of a foreign forfeiture order or a foreign pecuniary penalty order': section 3.

The application and the restraining order are governed by Part 2-1 of the POCA Australia 2002, with some modifications (section 17, paragraphs 18(1)(e) and (f), subsection 18(3) and sections 19, 20, 29, 44 and 45 of that Act are omitted). The MACMA provides mechanism for excluding property from a restraining order and the cessation of restraining orders (see, in particular, sections 34L and 34M). Other things being equal, the restraining order only has force for 30 days: section 34J MACMA.

f) Repatriation

Whether and how Australia shares recovered funds depends on the mechanism used to recover the assets in the first place.

If assets have been recovered pursuant to a foreign forfeiture order, the Attorney-General may direct how the property will be disposed of or otherwise dealt with: section 34B(3) MACMA.  S/he could direct the return of all the proceeds, or s/he may withhold part or all of the funds, ordering they be paid into the Confiscated Asset Account: section 34B, section 295 POCA Australia 2002. The 'equitable sharing scheme' then allows the Minister for Home Affairs to apportion the recovered proceeds between Australia and the foreign state. However, the Minister must be of the opinion that the foreign country made a significant contribution to the recovery of the proceeds or the investigation or prosecution of the unlawful activity: section 296(4)(c) POCA Australia 2002.

By contrast, money recovered under a foreign pecuniary penalty orders must be paid into the Confiscated Asset Account, though funds may still be shared with another country through the equitable sharing scheme: section 296(c) POCA Australia 2002.

See also: Australian Government Attorney-General's Department. A Better Mutual Assistance System: A Review of Australia's Mutual Assistance Law and Practice. (Commonwealth of Australia: Canberra, 2006).

g) Judicial review

In a judicial review proceeding, a court will determine whether an administrative decision-makers made a decision correctly. It looks at how a decision was made, rather than at whether the decision was right in substance. At the Commonwealth level, the Administrative Decisions (Judicial Review) Act 1977 (JRA) enables persons who are aggrieved certain decisions to apply to the Federal Court or the Federal Magistrates Court for an order for review: section 5 JRA. According to the Australian Attorney-General's Discussion Paper, it may apply to decisions in the MLA review process.

See further:

Australian Government Attorney-General's Department. A Better Mutual Assistance System: A Review of Australia's Mutual Assistance Law and Practice. (Commonwealth of Australia: Canberra, 2006) at 67,ADB / OECD Anti-Corruption Iniative for Asia and the Pacific. (2007). Mutual Legal Assitance, Extradition and Recovery of Proceeds of Corruption in Asia and the Pacific: Frameworks and Practices in 27 Asian and Pacific Jurisdictions (Asian Development Bank, Organisation for Economic Co-operation and Development: Manila 2007)

II. Civil asset forfeiture

Where there is no criminal investigation, proceeding or conviction in the requesting state, the requesting state may still be able to recover assets using the civil forfeiture procedures in section 49 POCA Australia 2002.

To grant the order under section 49(1)(c), the court must be satisfied that:

• the property is the proceeds of one or more foreign indictable offences (as defined under section 337A POCA Australia 2002); and
• that the offence was committed within the 6 years proceeding the application for the restraining order or time since the application was made;
• the property has been 'covered by' a restraining order under section 19 POCA Australia 2002 for at least 6 months.

Restraining order under section 19 POCA Australia 2002 are available regarding property which is reasonably suspected of being the proceeds of a foreign indictable offence committed in the 6 years preceeding the application or since the application was made: section 19(1)(d) POCA Australia 2002. The phrase 'covered by' was discussed in DPP (Cth) v Hart [2007] QCA 184 (1 June 2007). The Queensland Court of Appeal found that 'when an [the POCA Australia 2002] speaks of 'the person’s property covered by a restraining order', it is referring to the interest which a person has in any item of property affected by the order'. So, the Court is able to confiscate property in which the applicant has an interest, even though though that applicant's interest was not specified in order.

It is not necessary to show that an investigation or proceeding has been started overseas, nor to convince the court that a particular offence was committed by a particular person:

section 49(2) POCA Australia 2002. To the contrary: the raising of a doubt as to whether a person engaged in conduct constituting a serious offence is not of itself sufficient to avoid a finding that an offence was committed within the 6 year timeframe: section 49(3) POCA Australia 2002. Moreover, an acquittal does not affect the court's power to make a forfeiture order for the offence: section 51 POCA Australia 2002.

That said, the application may only be brought by the Commonwealth Director of Public Prosecutions and its effect is to forfeit property to the Commonwealth. So states seeking to use the civil forfeiture mechanisms must also satisfy the Australian government of the strength of their case and their reasons for relying on the POCA Australia 2002 directly rather than the formal MLA mechanisms in the MACMA. Also, orders under section 49 POCA Australia 2002 may be subject to a direction by the court to pay a specified amount to relieve any hardship to the dependants of the person who is the subject of the order: section 72 POCA Australia 2002.