Key Highlights of the Proceeds of Crime Bill

Existing laws

As part of its overall strategy to combat organized crime, the federal government has taken active measures to remove illicit proceeds of crime from organized criminal groups, with the goal of disrupting, deterring and, ultimately, dismantling their criminal capabilities. Criminal organizations, as recognized by definition under the Criminal Code, are formed for the purpose of committing crimes for material benefit. Therefore, measures which seek to remove proceeds of crime strike at a criminal organizations core motivation of illicit economic gain.

The proceeds of crime provisions (Part XII.2) of the Criminal Code which allow for the seizure, restraint and forfeiture of proceeds of crime have been in place since 1989. The scope of these provisions was broadened to apply to most indictable offences under federal legislation, as part of the criminal organization and law enforcement legislation that came into force in 2002. While proceeds of crime applications are not limited to organized crime situations, they are especially relevant to combating this form of crime.

The Criminal Code currently provides for the forfeiture of proceeds of crime upon application by the Crown, after a conviction for an indictable offence under federal legislation, other than a small number of offences exempted by regulation. Presently, in order to obtain an order of forfeiture, the Crown must prove on a balance of probabilities, that the property is the proceeds of crime and that the property is connected to the crime for which the person was convicted. If no connection between the offence and the property is established the court nevertheless may order the forfeiture of the property if the court is satisfied beyond a reasonable doubt that the property is proceeds of crime.

While criminal organizations are believed to be involved in numerous offences leading to substantial illicit material gain, convictions are typically only sought and obtained in a small number of cases. As these particular offences do not necessarily have associated proceeds (i.e. homicide, criminal attempts), the Crown often has to rely on the test under the current scheme requiring proof, beyond a reasonable doubt, that the property is nevertheless the proceeds of crime. This means that even after a successful prosecution for an underlying offence related to organized crime, there can be significant difficulties in obtaining forfeiture of property which, in the organized crime context, very much appears from the outset to be the proceeds of crime.

Proposed Amendments

The legislation introduced in the House of Commons today proposes amendments to the already existing proceeds of crime laws under the Criminal Code. The amendments introduced today provide that:

• once an offender has been convicted of either a criminal organization offence, or certain offences under the Controlled Drugs and Substances Act, the court is directed to order the forfeiture of property of the offender identified by the Crown unless the offender proves (reverse onus) on a balance of probabilities, that the property is not the proceeds of crime;

• in order for the reverse onus to apply, the Crown would first be required to prove, on a balance of probabilities, either that the offender engaged in a pattern of criminal activity for the purpose of receiving material benefit or that the legitimate income of the offender cannot reasonably account for all of the offender’s property;

These new amendments would apply to all criminal organization offences as defined in section 2 of the Criminal Code where the offence is punishable by five or more years of imprisonment or after conviction, on indictment, for an offence under sections 5, 6, and 7 of the Controlled Drugs and Substances Act (being the offences of trafficking, importing/exporting, and production of drugs).

In addition to the creation of the new reverse onus scheme, the legislative amendments introduced in today's proceeds of crime bill will also clarify the Criminal Code and the Controlled Drugs and Substances Act, to ensure accord between the English and French versions of a provision; to more explicitly affirm the Attorney General of Canada’s authority to pursue proceeds of crime in certain circumstances; to more explicitly affirm the ability of the Crown to seek proceeds upon conviction of offences where the Crown has the option to proceed either on indictment or by way of summary conviction; and, to ensure the applicability of Controlled Drugs and Substances Act warrants to investigations of drug-related money laundering and the possession of property obtained by drug-related crime.

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Department of Justice
May 2005