Yu v New Zealand Customs Service [2016] NZCA 140 (20 April 2016)

Last Updated: 29 April 2016

IN THE COURT OF APPEAL OF NEW ZEALAND
CA389/2015 [2016] NZCA 140
BETWEEN	XIAOSHENG YU Appellant
AND	NEW ZEALAND CUSTOMS SERVICE Respondent

Hearing:	11 February 2016
Court:	Miller, Fogarty and Toogood JJ
Counsel:	DPH Jones QC for Appellant I R Murray for Respondent
Judgment:	20 April 2016 at 12.30 pm

JUDGMENT OF THE COURT

1. The questions of law are answered as follows:

(a) For an offence under s 106 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 is the requirement that cash has been moved into or out of New Zealand part of the actus reus of the offence?

Answer: Yes.

(b) Under s 106 of the Anti-Money Laundering and Countering Financing of Terrorism Act, at which point is accompanied cash “moved out of New Zealand”?

Answer: When the person takes the cash out of New Zealand.

(c) Is it possible to have an attempt to commit an offence under s 106 of the Anti-Money Laundering and Countering Financing of Terrorism Act?

Answer: Yes.

(d) Was the information as framed a nullity?

Answer: No.

2. The appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

[1] It is an offence to fail to make a cash report to a Customs officer disclosing cash of $10,000 or more^[1] that a person moves or takes out of New Zealand.^[2] Xiaosheng Yu failed to make such a report and was apprehended after passing through Customs checks but before boarding his overseas flight. A charge of attempting the offence was found proved.^[3]
[2] The principal question on this appeal is whether the offence of moving cash out of New Zealand without making a cash report is complete on leaving the jurisdiction or after the last official opportunity to disclose the cash to a Customs officer at a Customs checkpoint. The answer matters because it is said to determine the ultimate issue: whether an attempt is impossible in law because the offence comprises an omission to do something.

The legislation

[3] The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the 2009 Act) was enacted to detect and deter money laundering and the financing of terrorism and organised crime.^[4] To that end it creates the offence of failing without reasonable excuse to make or cause to be made a cash report concerning cash over the applicable threshold value ($9,999.99)^[5] that the person charged has moved into or out of New Zealand:

106. Failure to report cash over applicable threshold value moved into or out of New Zealand

A person commits an offence if the person fails, without reasonable excuse, to make or cause to be made a cash report, in accordance with subpart 6 of Part 2, concerning cash over the applicable threshold value that the person has moved into or out of New Zealand.

[4] The obligation to make such a report about the movement of cash into or out of New Zealand is found in s 68:

68 Reports about movement of cash into or out of New Zealand

(1) A person must not move cash into or out of New Zealand if—

(a) the total amount of the cash is more than the applicable threshold value; and

(b) the person has not given a report in respect of the movement of that cash in accordance with this subpart; and

(c) the movement of that cash is not exempted under this Act or regulations (if any).

(2) For the purposes of this Act, a person moves cash into New Zealand if the person brings or sends the cash into New Zealand.

(3) For the purposes of this Act, a person moves cash out of New Zealand if the person takes or sends the cash out of New Zealand.

It will be seen that subs (3) specifies that a person moves cash out of New Zealand if the person takes or sends the cash out of New Zealand.

[5] Section 70 specifies what form the cash report must take and when and to whom it must be made; that is, the report must be provided to a Customs officer at the same time as a departure card is presented:

70 Reporting requirements

A report under this subpart must—

(a) be in writing in the prescribed form; and
(b) contain the prescribed information; and
(c) be completed in accordance with regulations (if any); and
(d) be provided to a Customs officer,—

• (i) in the case of accompanied cash, at the same time as a departure card is presented in accordance with section 126(2) of the Immigration Act 1987:
• (ii) in the case of unaccompanied cash, before the cash leaves New Zealand.

The prescribed form of report is very detailed. It calls for details of the value of the cash, its destination or origin, its source, what it is to be used for, and if the person is moving cash on behalf of another person, the details of that other person.^[6] We understand that a passenger is required to complete the form upon reporting the cash to a Customs officer by ticking the appropriate box on the departure card.

The facts

[6] The facts are of narrow compass and undisputed. On 13 November 2012 Mr Yu went to Auckland International Airport with his wife, Hong Fang, and a friend, intending to travel to Hong Kong. They signed departure cards, were processed by Customs, and cleared the aviation security checkpoint. All that remained was to board their flight. At that point a Customs dog trained to detect large amounts of cash indicated on a bag carried by Ms Fang, and it was established that between them the trio were carrying substantial amounts of cash in Chinese yuan. All of it belonged to Mr Yu. Some of the cash, which was equivalent in value to NZD 136,452.24, was carried in their checked luggage.
[7] Mr Yu was charged with an attempt under s 106 of the 2009 Act and s 72 of the Crimes Act 1961 because the New Zealand Customs Service (Customs) believed the cash had not been taken out of New Zealand when he was apprehended. The information, which was laid under the Summary Proceedings Act 1957, charged that:

Xiaosheng Yu ... on 13 November 2012 ... at Auckland, did commit an offence against [s]ection 106 & 112 Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and section 72 & 311(1) Crimes Act 1961 in that you [a]ttempted to move cash over $9,999.99 out of New Zealand without first making a cash report to a Customs Officer.

[8] Mr Yu was convicted after a defended hearing in the District Court^[7] and his conviction was upheld on appeal by Duffy J,^[8] who granted leave to appeal to this Court on questions of law.^[9]

The questions of law

[9] The questions posed for the opinion of this Court are:^[10]

(a) For an offence under s 106 of the Anti-Money Laundering & Countering Financing of Terrorism Act 2009 (AMLCFT Act) is the requirement that cash has been moved into or out of New Zealand part of the actus reus of the offence?

(b) Under s 106 of the AMLCFT Act, at what point is accompanied cash “moved out of New Zealand”?

(c) Is it possible to have an attempt to commit an offence under s 106 of the AMLCFT Act?

(d) Was the information as framed a nullity?

[10] Mr Yu contends that movement of cash into or out of New Zealand is not part of the actus reus of the offence; that accompanied cash is “moved out of New Zealand” once the obligation to report has crystallised at the Customs check point; that the completed offence is a conduct offence as opposed to a results offence, meaning that it is not possible to charge attempt; and that the information was a nullity because it disclosed no offence and was incapable of amendment.

Legislative history

[11] New Zealand is a signatory to the United Nations Convention against Transnational Organised Crime, which provides that states must criminalise moneylaundering and should both take measures to detect cash moving across their borders and ensure that they can cooperate and exchange information about such movements with other states.^[11] It is also a member of the Financial Action Task Force, an intergovernmental body that promotes the criminalisation of moneylaundering, the establishment of investigative and enforcement powers, and the establishment of mechanisms to share information among counterparts.^[12] A paper prepared by the Task Force explains:^[13]

37. International co-operation is usually demand driven and, since incoming travellers always arrive from somewhere, it is important that destination jurisdictions and jurisdictions of origin share information, both spontaneously and upon request, in relation to cross-border transportations of currency/[bearer-negotiable instruments (BNI)]. In particular, since one jurisdiction’s outgoing traveller will be another jurisdiction’s incoming traveller, it is best practice for the competent authorities to inform their overseas counterparts, in a proactive manner, of travellers who are known to be carrying significant amounts of currency/BNI and who are on their way to the other jurisdiction, especially where there is insufficient suspicion to restrain the currency/BNI or detain the traveller. Likewise, when a traveller arrives from an overseas jurisdiction with a significant amount of currency/BNI, it is also best practice to proactively inform overseas counterparts of the jurisdiction from where the traveller departed, given the practical challenges of monitoring outbound currency/BNI flows.

[12] An offence of failing to make a cash report was formerly found in the Financial Transactions Reporting Act 1996 (the 1996 Act). It provided that every person arriving in or leaving New Zealand who had on his or her person, or in accompanying baggage, cash exceeding the prescribed amount must make a cash report^[14] and committed an offence by failing without reasonable excuse to do so.^[15] This offence did not require, in the case of an outgoing passenger, that cash must leave New Zealand. The offence was complete (subject to the defence of reasonable excuse) when the offender failed to give the report to a Customs officer before the cash left Customs’ control.
[13] The explanation for the requirement in the 2009 Act that cash must be moved into or out of New Zealand may lie in the legislature’s decision to extend the offence to unaccompanied cash.^[16] The 2009 Act provides that a report for unaccompanied cash must be provided “before the cash leaves New Zealand”.^[17] No other explanation for the change appears in the legislative record. It is admittedly an incomplete explanation, because there was no need to add that requirement in the case of accompanied cash, for which liability could be triggered, as under the 1996 Act, by the offender’s passage through Customs checks.

Enforcement where cash and offender have both left New Zealand

[14] The requirement that cash must be taken out of New Zealand creates an enforcement problem. The offence is not completed, in the case of accompanied cash, until both cash and offender have left New Zealand and so, on the face of it, are beyond the reach of New Zealand authorities. The same difficulty would not apply to unaccompanied cash, so long as the person sending it was and remained in New Zealand.
[15] The appellant’s answer to this is that the cash must be deemed to have left New Zealand once it has left Customs’ control, as was the case under the 1996 Act. The appellant takes that apparently perverse view, from a defendant’s perspective, in order to advance his contentions, first, that the actus reus of the offence is the failure to report at Customs and, second, that an attempt is impossible. He points out that the penalty for an offence is half that for the completed offence and suggests that if most offences can be charged as attempts only, the legislation is ineffective.
[16] Customs, by contrast, accepts that the offence is not complete until the cash has left New Zealand. It does not concede that the legislation is toothless, however. The offence is not a particularly serious one — exporting cash is not per se illegal and the maximum penalty for non-disclosure is three months’ imprisonment and a fine of up to $10,000 (or in the case of a body corporate $50,000)^[18] — and Customs maintains that an attempt can be charged. Further, if the cash was detected on arrival at an overseas port the New Zealand authorities would be told of it and might prosecute the offender on his or her return. We observe that the offender might have escaped punishment under the former legislation where he or she was not detected at Customs, and further that we do not know how likely it is in practice that a person will be detected once past the Customs checkpoint.
[17] Against that background, we turn to the questions posed.

Is the requirement that cash has been moved into or out of New Zealand part of the actus reus of the offence?

[18] The appellant contends that the actus reus of the offence is the failure to report, that being the mischief that the legislation addresses. Mr Jones QC, for the appellant, accepted that cash must leave the country but characterised that as a mere evidential requirement that triggers the obligation to report.
[19] Mr Jones accordingly submitted that the offence is the failure to report if cash over the threshold amount has already been moved out of the country. He contended that that approach is consistent with the defence in s 109 of the 2009 Act, under which it is a defence to make a report as soon as practicable after the obligation to do so arose.
[20] The actus reus is normally taken to comprise all the elements or specified circumstances of the offence.^[19] In this case, the proscribed behaviour is moving a qualifying amount of cash out of the country without having reported it. We accept Mr Murray’s submission for Customs that it would be artificial to interpret movement of the cash as a mere evidential requirement. There are offences in which a consequence is not part of the actus reus,^[20] but exporting the cash is something that the offender must do to complete the offence. As such, it is an integral part of the actus reus.
[21] That said, we do not think that it helps much to analyse the offence in terms of its actus reus. A court normally identifies the actus reus of an offence not for any abstract reason but because the law presumes that the Crown must prove intent as to the circumstances or elements comprising the actus reus.^[21] Mens rea is not the issue here; counsel agreed that the offence is one of strict liability, subject to the s 109 defence. (We did not understand Customs to dispute that an attempt at a strict liability offence requires mens rea,^[22] such that in this case there would have to be intention to move the cash outside of New Zealand, but that is a different point.)
[22] The real question is simply whether the offence contains two distinct elements, being failure to report and moving the cash out of New Zealand. In our opinion the answer is plainly affirmative. We observe that even on the appellant’s view these two things are done at different times because the movement does not happen until the offender, having failed to report, leaves the Customs checkpoint.

At which point is accompanied cash “moved out of New Zealand”?

[23] As mentioned, Mr Jones submitted that cash should be deemed exported once it passes the Customs checkpoint. He invited us to interpret the legislation consistently with the corresponding Australian legislation, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), under which cash is deemed to have left Australia once it passes the Customs checkpoint.^[23] He observed that the checkpoint is a clear and natural point of demarcation and contended that by contrast leaving the country is an ambiguous concept.
[24] The short answer to this submission is that the 2009 Act defines what is meant by moving cash out of New Zealand; cash is moved when the person takes it out of New Zealand.^[24] The definition cannot be dismissed as mere circularity; the legislature has turned its mind to the point and determined that moving “cash out of New Zealand” should mean what it says. This precludes an artificial meaning under which some place standing on New Zealand soil is deemed no man’s land, however sensible that meaning might seem as a matter of policy.
[25] The corresponding Australian legislation takes a different approach. But the fact that it was necessary there to deem that cash has left Australia when it passes the Customs checkpoint suggests that the natural meaning of the term is the one that we have adopted.
[26] We do not need to decide just where New Zealand’s boundaries lie for purposes of the definition. The issue does not arise here. The charge of ambiguity is sufficiently answered by observing that a passenger who passes a Customs checkpoint does so to embark on an international voyage by air or sea and it will be a rare case in which he or she does not soon arrive in another country, along with the cash.

Is it possible to attempt the offence?

[27] The appellant contends that attempt is impossible in law because the offence is a “conduct” offence rather than a “results” offence; that is so because the omission to report must amount to a successful commission of the full offence. Counsel cited the following passage from Principles of Criminal Law in support of the thesis that only results crimes can be the subject of an attempt: ^[25]

[Attempt liability through omission] applies in those rare cases where a result crime may be committed by an omission. However, it will not apply where the offence charged alleges a simple omission that does not require any consequences for its commission. For example, it would not normally be possible to be convicted of the offence of attempting to fail to stop after an accident, or of attempting to fail to permit a blood specimen to be taken. In such cases, D’s omission constitutes not merely an attempt but a successful commission of the full offence. There is no middle ground.

[28] We accept that there may be offences that by their nature cannot be attempted by omission.^[26] But this is not one of them. As we have already held, the offence is not one of pure omission. It also requires a positive act of the offender, because he or she must take the cash out of New Zealand.
[29] There is every reason to admit the possibility of an attempt in circumstances such as those of Mr Yu’s offence. We respectfully adopt what Lang J said in Huang v New Zealand Customs Service:^[27]

[24] The acts relied on as constituting the attempt must, of course, be sufficiently proximate to amount to an attempt rather than an act of mere preparation. In the present case, however, Mr Huang had taken the cash as far as the departure lounge from which he was to board his aircraft. He was therefore just one step away from moving the cash out of New Zealand. That act must, in my view, be sufficiently proximate to constitute an attempt to move the cash out of New Zealand.

[25] If correct, the argument for Mr Huang would lead to startling and absurd results. Two of the stated purposes of the Act are to detect and deter the laundering of money and the financing of terrorism. One of the means by which money may be laundered is by physically moving it out of the country. The financing of terrorism may also be achieved by physically moving cash around the world, thereby avoiding the trail and risks that electronic transactions create. Section 106 seeks to promote these purposes by making it an offence to move money into and out of New Zealand without reporting it at the border. If a person attempts to remove money from New Zealand but is intercepted before being able to do so, it makes perfect sense that he or she should be charged with attempting to commit an offence against s 106. It would make no sense, and would defeat the purposes of the Act, if a charge of attempting to commit that offence could not be laid in those circumstances.

[30] It follows that an attempt is possible.

Was the information as framed a nullity?

[31] This question must be answered in the negative, because it rests on the premise that an attempt is not possible in law. We do not need to address the question whether, if the answer were otherwise, the information would be a nullity, incapable of amendment or rectification.

Decision

[32] We answer the questions posed as follows:

• (a) Yes.
• (b) When the person takes the cash out of New Zealand.
• (c) Yes.
• (d) No.

[33] It follows that the appeal is dismissed and the appellant’s conviction stands.

Solicitors:
Connell & Connell, Auckland for Appellant
Crown Law Office, Wellington for Respondent

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^[1] Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Regulations 2010, reg 5.

^[2] Anti-Money Laundering and Countering Financing of Terrorism Act 2009, s 106.

^[3] New Zealand Customs Service v Yu DC Manukau CRI-2013-092-4300, 30 May 2014.

^[4] Section 3.

^[5] Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Regulations, reg 5.

^[6] Anti-Money Laundering and Countering Financing of Terrorism (Cross-border Transportation of Cash) Regulations, sch.

^[7] New Zealand Customs Service v Yu, above n 3.

^[8] Yu v New Zealand Customs Service [2015] NZHC 539.

^[9] Yu v New Zealand Customs Service [2015] NZHC 1333.

^[10] At [4].

^[11] United Nations Convention against Transnational Organized Crime and the Protocols Thereto GA Res 55/25 (opened for signature 12 December 2000, entered into force 29 September 2003), art 7.

^[12] See FATF 40 Recommendations (October 2003); and International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation: The FATF Recommendations (February 2012).

^[13] FATF International Best Practices: Detecting and preventing the illicit cross-border transportation of cash and bearer negotiable instruments (19 February 2010).

^[14] Financial Transactions Reporting Act 1996, s 37.

^[15] Section 40.

^[16] A policy paper prepared by the Ministry of Justice explained that the 1996 Act was considered deficient because it did not cover unaccompanied cash or bearer negotiable instruments: Simon Power Anti-Money Laundering and Countering the Financing of Terrorism Regime Reform: proposed supervision arrangements (paper three) (Office of the Minister of Justice, April 2009) at [43].

^[17] Anti-Money Laundering and Countering Financing of Terrorism Act, s 70(d)(ii).

^[18] Anti-Money Laundering and Countering Financing of Terrorism Act, s 112.

^[19] Cameron v R [2016] NZCA 48 at [88]; Glanville Williams Criminal Law: The General Part (2nd ed, Stevens & Sons, London, 1961) at 18; and Dennis J Baker Textbook of Criminal Law (4th ed, Sweet & Maxwell, 2015) at [4-004]–[4-005] and [10-001]–[10-004].

^[20] See for example Crimes Act 1961, s 256(1) (forgery).

^[21] R v Howe [1982] 1 NZLR 618 (CA) at 623; Cameron v R, above n 19, at [88]; and AJ Ashworth “The elasticity of mens rea” in HLA Hart and others Crime, Proof and Punishment: Essays in Memory of Sir Rupert Cross (Butterworths, London, 1981) 45 at 50.

^[22] TL & NL Bryant Holdings Ltd v Marlborough District Council HC Blenheim CRI-2008-406-3, 16 June 2008 at [70].

^[23] Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 57(3).

^[24] Anti-Money Laundering and Countering Financing of Terrorism Act, s 68(3).

^[25] AP Simester and WJ Brookbanks Principles of Criminal Law (4th ed, Brookers, Wellington, 2012) at 264 (footnote omitted), cited in R v G [2013] NZCA 146 at [51]. See also Bruce Robertson (ed) Adams on Criminal Law (online looseleaf ed, Brookers) at [CA72.07]; and Garrie J Moloney “Attempts” (1991) 15 Crim LJ 175 at 178.

^[26] R v G, above n 25, at [51].

^[27] Huang v New Zealand Customs Service [2013] NZHC 3277 (footnote omitted).