On Tuesday 23 August 2016, New Zealand police announced that they had reached a deal with a controversial Chinese-born businessman for him to pay a record NZ$42 million (£23 million) order following a joint money laundering investigation with China. A court approved the deal and the police have said that the money will be split between the New Zealand and Chinese governments.
William Yan, is on China’s most-wanted list of international fugitives, accused of embezzlement. Yan’s assets were seized over two years ago. The settlement means that Yan avoids any criminal or civil responsibility in New Zealand but the position regarding any further action from China remains uncertain.
China’s Foreign Ministry confirmed that Chinese and New Zealand police had worked closely on the Yan case, but it did not say if China would seek his extradition. There is currently no extradition treaty between New Zealand and China but New Zealand Prime Minister John Key has indicated that a treaty with China was “possible”. Key has also said up to 60 Chinese corruption suspects were in New Zealand.
Last year China appeared to have secured its first extradition from New Zealand in the case of Kyung Yup Kim, a South Korean national accused of murder. The extradition proceedings were facilitated by way of an ad hoc agreement between New Zealand and China. Justice Minister Amy Adams approved his extradition after the Chinese authorities provided assurances from that he would be properly treated on his return. However, in July this year a court ruled that those assurances were inadequate.
In the absence of traditional extradition and mutual legal assistance treaties China continues to pursue creative strategies to secure the return of its targets. It is claimed that over 40 percent of the 738 fugitives who returned to China in 2015 were “persuaded” to come back rather than being subjected to formal extradition. The true nature of these “persuasion” tactics is unknown but the Chinese authorities have been open about using fugitives’ family members to secure the return of key targets. Li Gong jing, a Shanghai police officer, said, “It’s very effective. A suspect is like a kite. Although he is in a foreign country, his line is in China and we can find him through his relatives”.
Mr Yan’s financial settlement was reached in the context of the New Zealand Criminal Proceeds (Recovery) Act. Many New Zealand lawyers have criticized the law, which requires individuals to prove how an asset was paid for – even in the absence of any criminal charges.
Earlier this year the UK government indicated its intention to introduce similar measures here in the form of “unexplained wealth orders”. Lawyers are waiting to see how these proposals develop and what safeguards will be put in place in the event that they are introduced to the UK.
Gherson can assist individuals internationally who are concerned about extradition or asset restraint and forfeiture proceedings. If you require assistance please do not hesitate to contact us.