contraband

NEW ZEALAND CUSTOMS SERVICE MARCH 2012 ISSUE 121

IN NEW ZEALAND

HISTORY OF DRUG ABUSE

MARCH 2012
PUBLISHER New Zealand Customs Service, The Customhouse, 1 Hinemoa St, Wellington 6011, PO Box 2218, Wellington 6140 Ph: 04 901 4500, Fax: 04 901 4555 ISSN 0113-3292 EDITOR Sara Stavropoulos CONTRIBUTORS Sara Stavropoulos, Nicky Elliott, Aaron Hailwood, Angus Senior, Andy Cameron, John Houghton, Stuart Mills, Geoff Wilson, John Ladd, Shane Panettiere, Mark Day. DISCLAIMER While every effort has been made to ensure that the information in Contraband is correct, readers must refer to the relevant statutory publications for conrmation. Opinions expressed in this magazine are those of the contributors and are not necessarily the ofcial views of the New Zealand Customs Service. COPYRIGHT All material published in Contraband is copyright and may only be reproduced with the permission of the Editor. ENQUIRIES Email: publications@customs.govt.nz SUBSCRIBE To request your free electronic copy of this magazine, email: publications@customs.govt.nz and list your name, organisation, and email address. IMAGES New Zealand Customs Service, National Drug Intelligence Bureau, Alexander Turnbull Library. Names of individual artists are available on request by contacting the Editor. New Zealand Customs Service is the government organisation that protects the community from potential risks arising from international trade and travel, while facilitating the legitimate movement of people and goods across the border. As New Zealands gatekeeper, our role includes: intercepting contraband (such as illegal drugs); checking travellers and their baggage, cargo and mail; protecting businesses against illegal trade; and assessing and collecting Customs duties, excise taxes, and goods and services tax on imports. We use intelligence and risk assessment to target physical checks of containers, vessels, and travellers. As a law enforcement agency we conduct investigations and audits and prosecute offenders. Customs works closely with the other border agencies, the Ministry of Agriculture and Forestry and the Department of Labours Immigration New Zealand.

PAGE 6

NATIONAL DRUG INTELLIGENCE BUREAU 40TH ANNIVERSARY

This year, the National Drug Intelligence Bureau (NDIB) will celebrate 40 years of providing tactical, operational, and strategic intelligence support against drugs.
PAGE 10

HISTORY OF DRUG ABUSE IN NEW ZEALAND

For as long as there has been European settlement in New Zealand, there has been drug-use to the point of dependence and abuse.
PAGE 14

SMARTGATE NOW AVAILABLE FOR 16- AND 17-YEAR-OLDS

Building on the phenomenal success of SmartGate, New Zealand and Australian ePassport holders aged 16-years and over are now able to use SmartGates in both countries.

3 4 5 8 16 17 18 20 22

Message from the Comptroller Government steps up border management work Preparing to introduce the Trade Single Window The importance of inter-agency collaboration Things to consider when buying goods online Cocaine smuggler stopped at the border Advance notice of arrrival small craft Customs cracks down on money laundering Customs in Court

Contraband March 2012

MESSAGE FROM THE COMPTROLLER

With the Government objective of providing better public services, 2012 is going to be a challenging year for the New Zealand Customs Service, but it is one I am excited to be leading. A key priority for us in the coming year will be the development of the Joint Border Management System (JBMS) with the Ministry of Agriculture and Forestry (MAF). We know that the number of people, goods, and craft that are coming to New Zealand is increasing every year. We also know that those involved in international trade and travel are looking for seamless, effective, and efcient border systems. Our current border system relies on Customs and MAFs computer systems (CusMod and Quantum). These systems are almost 15 years old, and lack the exibility to respond to changing needs. So together with MAF, we are developing the JBMS to provide a modern border management system that will help keep New Zealand secure, while facilitating trade and travel well into the future. The JBMS will be made up of a number of elements. Most important for industry will be the Trade Single Window, which will allow single submissions of border-related information. However, this will require richer and more detailed data and information than is presently the case (as you can read about in the article on page 5 of this issue of Contraband). Once we have that richer information, Customs and MAF will be using a number of new analytical tools and systems. By using these tools, we will have greater visibility of the risks that are present, and be able to make better-informed decisions on what we do and who we interact with. It will also allow us to manage effectively the risks at the border in a seamless manner. The benets of this will be two-fold. Firstly, Customs and MAF will be better able to identify people, goods, and craft that we need to take a closer look at (or that pose the highest risk). Secondly, this will mean we can tell importers and exporters at an earlier stage, and with more certainty, whether or not we are going to interact with their goods. This will provide industry with more information and enable companies to plan their work with more certainty. From talking with a number of organisations and people involved in importing in recent months, I know this is something that will be of real benet. While the JBMS is a challenging programme of work, ultimately it will enable Customs, MAF, and industry to work more effectively together to manage the risks at our border. I am looking forward to working closely with our partners in the coming months as we prepare for the introduction of the JBMS. Carolyn Tremain Comptroller of Customs

Protecting New Zealands Border

GOVERNMENT STEPS UP BORDER MANAGEMENT WORK

The Governments three border agencies New Zealand Customs Service, Ministry of Agriculture and Forestry (MAF), and Immigration New Zealand are stepping up work to make trade and travel more efcient through better coordination of border services. On 16 February, Primary Industries Minister David Carter, Customs Minister Maurice Williamson, and Immigration Minister Nathan Guy announced Future Directions for the Border Sector, a work programme to look at how the three agencies can operate together more effectively. A wide range of collaborative work is already underway across the three agencies. This new programme will build on the progress made in improving trade and travel services, while keeping a rm focus on border security, said Mr Carter. It is about taking a fresh look at the functions of each agency and how coordination of the overall border management system can be improved. Protecting the integrity of New Zealands biosecurity system is a top priority. With $80 billion of exports and imports and 10 million travellers across our border each year, this must not be compromised, Mr Carter said. The Ministers say travel and trade patterns are changing rapidly as New Zealand interacts with more international partners, tourism is increasing, and pressure is building for more streamlined travel. This work programme will build on a number of joint initiatives already overseen by the Border Sector Governance Group to improve information sharing and the targeting of risk at the border, said Mr Williamson. An example is the Joint Border Management System, a new information system developed by Customs and MAF, which is leading to reduced duplication and fragmentation of border services and lower costs for industry and government. The Ministers say the work is consistent with the Governments goal of delivering better public services across the board. New technologies are giving us access to information faster and we should be using this to improve our effectiveness at the border, said Mr Guy. We must ensure that our border is t for the future. An efcient border management system is critical to New Zealands economic growth and prosperity. The work programme will provide recommendations to the Government by mid-year.

Protecting the integrity of New Zealands biosecurity system is a top priority. With $80 billion of exports and imports and 10 million travellers across our border each year, this must not be compromised.

Contraband March 2012

PREPARING TO INTRODUCE THE TRADE SINGLE WINDOW

Customs and MAF are currently developing the Joint Border Management System (JBMS). The JBMS will ultimately replace Customs and MAFs current border systems (CusMod and Quantum) and allow us to jointly manage customs and biosecurity risks at our border. One of the key elements of the JBMS will be the Trade Single Window (TSW). The intent is for TSW to provide a single electronic channel for ports, air cargo terminals, carriers, freight forwarders, importers, and exporters to comply with New Zealands border requirements. TSW will also make it easier for these supply chain parties to share information with each other to better manage the ow of cargo in and out of New Zealand. To ensure that all the information agencies and industry require can be submitted via TSW, Customs and MAF are developing new cargo reporting and clearance messages. These are based on the World Customs Organizations new WCO Data Model version 3.2. Pete Rosewarne, Customs JBMS Programme owner, says that these messages will be more detailed and contain more information than the current messages that are submitted for customs and biosecurity clearance. It is therefore important that carriers, freight forwarders, customs brokers, and others involved in international trade are aware of the upcoming changes, he says.
INWARD CARGO REPORT

An example of the changes can be seen with the Inward Cargo Report. The current Inward Cargo Report contains details of cargo intended for discharge in New Zealand as well as all cargo to be transhipped in New Zealand. The new Inward Cargo Report message includes information to enable MAF to carry out biosecurity risk assessment. If carriers and freight forwarders are able to complete this information at this early stage, it can do away with the current need for a separate message or application form to MAF to request biosecurity clearance. Additionally, the new Inward Cargo Report message enables carriers and freight forwarders to initiate International Transhipment Requests and Domestic Transhipment Requests. This cuts down the need for separate messages to make these requests, and means the likes of port companies, shipping companies, airlines, and freight forwarders can get earlier conrmation of Customs and MAF approval or requirements, which helps advance logistics planning, says Pete.
DATA QUALITY

Pete says it will be over to carriers, freight forwarders, customs agents, and traders how much information they want to provide in order to ensure an early and complete response from the agencies, and when. High-quality data, such as a recognised product code instead of a free text description of goods, means the agencies can assess risk more easily, so we are less likely to hold up consignments because were not sure exactly what the goods are.
WHERE TO FIND OUT MORE

To learn more about the new messages, a draft set of message implementation guidelines is available on the Customs website www.customs.govt.nz Regular information and updates on TSW are also published in Customs Release, our weekly e-newsletter. To subscribe to Customs Release go to our website www.customs.govt.nz
KEY TSW DATES

A key part of Customs and MAFs ability to provide early advice of clearance or requirements is the quality and completeness of the information provided in the messages.

Customs and MAF will be trialling some elements of TSW from the middle of 2012, while the phased roll-out of TSW for use by industry will start in early 2013. It is intended that the use of TSW and the new messages will be made mandatory 18 months after this.

Protecting New Zealands Border

40th ANNIVERSARY

THE NATIONAL DRUG INTELLIGENCE BUREAU

This year, the National Drug Intelligence Bureau (NDIB) will celebrate 40 years of providing tactical, operational, and strategic intelligence support against drugs.
The NDIB was established following a regional Heads of Narcotics Law Enforcement Agencies conference on illicit drug trafcking, in Canberra, Australia in November 1971. The conference identied the need to establish a national agency to record and disseminate information and direct drug intelligence-related work. In early 1972, a joint paper was placed before the Ministers of Police, Customs, and Health recommending the establishment of the NDIB. From 1 May 1972 the NDIB was established with staff from Customs and Police, and has had a permanent Ministry of Health representative since April 2004. The Coordinator of the NDIB, Detective Inspector Stuart Mills, says interagency communication is vital in dismantling illicit drug networks, and apprehending offenders in New Zealand. The need to share information and improve communications between enforcement agencies was one of the main factors in establishing the NDIB. Having a bureau that could liaise with relevant agencies has led to overall efciency in New Zealands drug enforcement effort, says Stuart. The mission of the NDIB is to provide authoritative intelligence and advice on illicit drugs, potentially illicit drugs, and precursors in order for drug-related harm to be reduced through supply-control and demand-reduction measures. This utilises various sources and relationships within New Zealand and overseas. The Board of Control, composed of the CEOs from Customs, Ministry of Health, and Police, is responsible for high-level governance of the NDIB. The day-to-day operations of the NDIB are managed by the Coordinator, who is responsible to a management committee of senior representatives from each contributing agency. The excellent work of Customs, Health, and Police staff has contributed to the NDIBs success in the past 40 years, and the NDIB continues to provide quality strategic reporting and high-level service to its stakeholders. A reunion of former and current NDIB staff is planned to be held in Wellington to commemorate the NDIBs 40th anniversary.

Contraband March 2012

THE FUNCTIONS OF THE NDIB

Provide authoritative intelligence and advice on illicit drugs, potentially illicit drugs, and precursors that support strategic decision making by participating agencies. Actively contribute to, and participate in, regional and international intelligence efforts to combat the illicit drug trade. Full New Zealands international reporting obligations for illicit drugs, potentially illicit drugs, and precursors that require multi-agency collation of information. Provide collated data that requires de-coniction of information from more than one agency. Progressively enhance its efciency and effectiveness.

February 1988, Customs seize 20 kilograms of cocaine from the Ecuadorian trader Provincia del Guayas, at Auckland wharf.

Protecting New Zealands Border

IMPORTANCE OF INTER-AGENCY COLLABORATION

The Mr Asia syndicate, (featured in the TV series Underbelly) was active in New Zealand and Australia during the 1970s. Terrance John Clark, who was one of the main players in the syndicate, began distributing cannabis imported into New Zealand. The importations were arranged by Christopher Martin Johnstone (Mr Asia) and associates who generally used seaman employed by the Straat line of ships to bring the cannabis into New Zealand. Clarks enterprises prospered and he was soon selling considerable amounts of cannabis through his dealers. Soon he decided to enter the importing side of the business, and in 1975, made several trips to South East Asia bringing back Thai sticks, also known as cannabis sticks. He began using couriers, particularly women, to carry drugs and also turned his attention to heroin, which was more valuable than cannabis. In October 1975, Clark was arrested and charged with importing heroin into New Zealand. Having being bailed on this charge he absconded to Australia, where he based his activities for the next couple of years. Clark arranged for consignments of heroin to be sent to New Zealand from the heroin he imported into Australia between 1976 and 1979. Clark was arrested in London, United Kingdom in October 1979 and charged with the murder of Johnstone. He was also charged with two conspiracies, one to import illegal drugs into the United Kingdom and one to supply illegal drugs in the United Kingdom. After a trial lasting six months, Clark was convicted on all counts. In July 1981, he was sentenced to life imprisonment on the murder charge, 14 years imprisonment on the rst conspiracy, and three years imprisonment on the second. Clark died in prison in 1983. Between 1975 and 1979, Australian law enforcement agencies collected a lot of information about Clark and his associates, with a considerable proportion of this information coming from New Zealand, particularly the NDIB. The 1983 Australian Royal Commission of Inquiry into Drug Trafcking found that Australian law enforcement agencies failed to collaborate on Clark, his activities, and his associates. Not only were the agencies not communicating information they held, but different branches of the Narcotics Bureau were unaware of what other branches were doing, or what material they held. This lack of communication and coordination allowed Clark and his associates to evade the authorities and to commit serious crimes in Australia, New Zealand, and elsewhere. In short, Australian law enforcement agencies had failed to grasp the signicance of this major drug network. The various agencies held both different and similar pieces of information. Unfortunately this information was rarely distributed effectively between law enforcement agencies and, even more importantly, within those agencies themselves.

Contraband March 2012

Protecting New Zealands Border

Haining Street The Chinese quarters of the City of Wellington, which had a notorious reputation due to the rumours of opium and gambling dens, published in The New Zealand Mail, 17 August 1904. Courtesy: Alexander Turnbull Library, Wellington, New Zealand.

HISTORY OF DRUG ABUSE IN NEW ZEALAND

For as long as there has been European settlement in New Zealand, there has been drug use to the point of dependence and abuse. Until the discovery of gold in the mid-19th century, this was conned mainly to opium preparations, but miners from California created a market for American set remedies containing morphine and cocaine, the use of which spread widely in the gold elds. Chinese miners brought the opium-smoking habit and, although generally conned to them, there are accounts of others indulging in the habit.

10 Contraband March 2012

Morphine, heroin, cocaine, and barbiturates dependence was seen early in the 1900s, particularly amongst those associated with medicine and the entertainment industry. Following the introduction of free medicine under the Social Security Regulations 1941, the prescribing of some drugs increased signicantly and it seems some patients became dependent on drugs as a result of therapeutic prescribing. During this time New Zealand was named, with Finland and Italy, as one of the highest per capita users of heroin. In 1949, efforts began to eliminate the prescription of heroin and by 1955 this had been virtually achieved. Cannabis was rst noted as being used in New Zealand in the 1940s, although it was commercially grown earlier for bre. Use at this time had been fairly isolated, but by the 1950s it had extended to certain areas of the community the most commonly reported group being musicians. In the 1960s the hippie movement was associated with an increased use of cannabis and it was generally regarded as being a cult phenomenon. By this time the practice of deceiving doctors to obtain drugs on prescription was documented. Until this time, drugs being abused were usually imported, but by 1968, when it seems the supply did not satisfy the demand, there was a dramatic increase in pharmaceutical burglaries. These burglaries were curtailed to some extent by the introduction of regulations requiring chemists to place susceptible drugs in safes.

LSD was rst seen as a problem in 1970. By 1991, several hundred varieties of LSD had been seen in New Zealand, the majority imported from the United States, the United Kingdom, and the Netherlands. In 1970, a Board of Health report on drug dependency and abuse in New Zealand said that: the drug scene was one of rapid change, a scene where drug abusers were involved in multi-drug abuse there appeared to be comparatively little trafcking or pushing drugs for prot

trafcking or pushing was mostly unorganised and it was being conducted on an individual basis. The 1970s saw the most marked and alarming trends in illicit drug abuse. The main focus centred on LSD, together with an upsurge in the abuse of synthetic opiates and cannabis. Also at this time the emergence of organised drug-trafcking was identied in the form of small syndicates. The greatest impact on the illicit drug scene was, however, caused by the involvement of more experienced and sophisticated criminal enterprises.

Right: Drugs being destroyed by Customs ofcers. Far left: An example of marketed medicinal heroin from early last century.

Protecting New Zealands Border 11

HISTORY OF DRUG USE IN NZ

Left to right: A sheet of LSD (Image courtesy USDEA), Cannabis plants, powdered Cocaine, Opium poppies, Methamphetamine crystals, and Ecstasy tablets (Image courtesy USDEA).

Criminals formerly engaged in relatively unsophisticated crimes, such as safe blowing, brought their experience and connections to drug importation and distribution. The Police found that the penetration of a well-established criminal subculture was far more hazardous than dealing with youthful drug abuse. Criminals began to travel more extensively and the international aspect of the drug problem became more relevant to New Zealand.

By 1979, on average, one heroin charge was being laid every day. Late in 1979, because of a number of factors, the availability of heroin declined rapidly. As a result of this decline, the Police noted an increase in the abuse of medicines largely of a psychotropic category by people known to be heroin users. In many cases, this abuse was combined with alcohol, accentuating the problem. During 1979, an increase in LSD availability was noted again, following trends seen in other countries. This availability continued through the 1980s. A major factor in the illicit drug scene, particularly through the 1970s and 1980s, was the increase in the use and availability of cannabis. The small participation in the 1960s had grown to widespread community use.

The ease of international travel has created gateways and growth opportunities into countries for the illicit drug trade, meaning organised crime groups are setting up networks to transport drugs and cause harm to global communities.

By 1974, the popularity of LSD was waning and little of it was seen in New Zealand for some years. However, heroin was being seen on a scale never previously encountered and was beginning to cause problems. Twenty-four heroinrelated charges were placed before the courts that year and this heralded a rapid increase.

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Throughout the past ve years the New Zealand illicit drug scene has been punctuated by the impact of BZP, synthetic cannabinoids, and the ever-changing ecstasy market due to a worldwide shortage of MDMA. However, cannabis has continued to be widely used, with an everIn the late 1990s, the methamphetamine increasing THC level. epidemic took hold in New Zealand. Internationally there has been a signicant increase in organised As demonstrated previously within crime and illicit drug markets, and the New Zealand drug environment, manufacturers are very resourceful and New Zealand is seen as part of those markets. The ease of international this was shown in the large number travel has created gateways and of clandestine methamphetamine growth opportunities into countries laboratories operating throughout the country. The epidemic led to signicant for the illicit drug trade, meaning organised crime groups are setting importations of pseudoephedrine up networks to transport drugs and into New Zealand, which resulted cause harm to global communities. in signicant crimes occurring as a Drug concealment methods seen in result of methamphetamine or P New Zealand are also the same ones distribution and use. that are being seen overseas, and the The 1980s also saw the emergence of clandestine laboratories throughout New Zealand, used to manufacture morphine and heroin from codeinebased products. The homebake process was brought about by the irregular supply of imported heroin.

rise of internal concealments shows that people are taking bigger risks for bigger rewards; however, they can often pay with their lives. In 2009, a Methamphetamine Action Plan between several government agencies was agreed which resulted in coordinated action across a range of areas, including harm reduction, against the impact of methamphetamine in New Zealand. Customs continues to contribute and support the whole-of-government effort to reduce the supply of illicit drugs into our communities. While Customs is focused on initiatives to reduce the supply of methamphetamine, progress is also being made to reduce methamphetamine use, which will lead to a reduction in the harm it causes.

Protecting New Zealands Border 13

14 Contraband March 2012

SMARTGATE
NOW AVAILABLE FOR
16- AND 17-YEAR-OLDS
Building on the phenomenal success of SmartGate, New Zealand and Australian ePassport holders aged 16 years and over are now able to use SmartGates in both countries. The age change from 18 years of age to 16 years came into effect in both New Zealand and Australia on 18 January 2012. Manager Passenger Facilitation, Geoff Wilson says the age change has given 16- and 17-year-old ePassport holders the opportunity to use SmartGate. Sixteen and seventeen year-olds with ePassports can now take advantage of the benets of using SmartGate. The change in age has made SmartGate more exible and we encourage passengers to use this technology, says Geoff. Lowering the age for eligible SmartGate users will enable an estimated 120,000 additional travellers to use the kiosks every year. An immediate benet to families with teenagers, and high school sports teams is that they can all self-process together. During the 2011 Christmas holiday season SmartGate use reached a new milestone, exceeding 40,000 passengers per week. SmartGate is a stress-free way for New Zealand and Australian ePassport holders to enter both countries, or leave New Zealand. By using SmartGate a passenger can self-process through passport control. All they need is their ePassport the two-step SmartGate does the rest. SmartGate uses face recognition biometric technology along with information stored in the microchips inside ePassports to perform identity checks and document validations that are usually conducted by Customs ofcers. There is still the option of manually processing through Customs but now 16- and 17-year-olds also have the choice. Twenty-two gates are now operating throughout the three New Zealand SmartGate enabled airports for both departures and arrivals. SmartGate is also operating at eight Australian international airports for arriving passengers. Over 2.3 million passengers have already been processed through SmartGate and by 2015 all Australian and New Zealand passports will be electronic, meaning everyone over the age of 16 will be able to take advantage of this fantastic technology. For more information on SmartGate, please visit www.customs.govt.nz

More than 2.3 million passengers have already been processed through SmartGate and by 2015 all Australian and New Zealand passports will be electronic, meaning everyone over the age of 16 will be able to take advantage of this fantastic technology.

Protecting New Zealands Border 15

THINGS TO CONSIDER WHEN BUYING GOODS ONLINE

If you are purchasing goods online for personal use, its important to take into consideration any duties or tax payable when the goods are received in New Zealand. You should also be aware of what goods cannot be brought in to the country or if they require approval before bringing in. Before ordering, familiarise yourself with the import regulations as they apply to you, and what charges may be due on the goods you wish to bring in. Make sure the supplier you are purchasing from completes an accurate customs declaration. Goods arriving in New Zealand by post or courier must have a customs declaration completed by the sender and attached to the package. The declaration should include: an accurate description of the goods their value (normally the actual price you have paid if, not a gift) whether they are gifts, or commercial or personal items.

FALSE DECLARATIONS
Some websites will offer to show a different description of the goods you have ordered and/or a value on the customs declaration much lower than the actual price paid; this is generally to avoid paying duty and/or GST when the goods come in to New Zealand. However, as the importer you are legally obliged to make sure you have an accurate declaration. If the information is inaccurate, or no declaration is made, the package may be delayed while Customs makes further enquiries. Sometimes the goods may be seized and you will be liable for any charges the normal duty and GST are still payable in respect of seized goods, and there may be additional charges, as well such as for testing and storage.

PROHIBITED AND RESTRICTED GOODS

There are certain goods that you are not allowed to bring in to New Zealand under any circumstances, and a number of other goods are restricted. Further information on the following can be found on our website: prohibited and restricted imports excise and duties tips for buying goods online. Always read options offered to you by the supplier, and if you are unsure about something check our website www.customs.govt.nz or contact us on 0800 4 CUSTOMS (0800 428 786).

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COCAINE SMUGGLER STOPPED AT THE BORDER

Customs ofcers came across an interesting discovery at Auckland International Airport last month, when they found two bottles lled with cocaine suspended in liquid inside a passengers luggage. Twenty-nine year old Peter Rhee arrived in New Zealand on a ight from Los Angeles, United States. Mr Rhee was questioned by ofcers about his reason for coming to New Zealand, and he could not provide a legitimate reason for his travel. Ofcers carried out a search on Mr Rhees luggage and found inconsistencies in two bottles of alcohol he had brought with him. Testing of the substance in the bottles showed a positive match for cocaine. Mr Rhee was arrested and charged with the importation of cocaine. Customs Manager Drug Investigations, Mark Day says this interception was another great example of Customs ofcers vigilance and effort to prevent illicit drugs making their way across our border and into our communities. Our ofcers are protecting New Zealands border 24 hours a day, seven days a week. Their commitment shows that people who attempt to bring illicit drugs across our border are not beyond our detection, says Mark. The cocaines value was estimated to be between $800,000 and $1 million. There has been an increasing prevalence of cocaine in illicit drug markets internationally, and New Zealand is seen as part of those markets. The methods of concealment are also the same ones that are being seen overseas. The high-level training our ofcers receive gives them the skills and knowledge to prole passengers that may pose a risk to our border, says Mark. Mr Rhee has been charged with importation of a Class A controlled drug, and his case is currently before the courts. The maximum penalty for the importation and possession for supply of a Class A drug is life imprisonment.

Protecting New Zealands Border 17

ADVANCE NOTICE OF ARRIVAL SMALL CRAFT

New Zealand is a popular destination for internationally cruising small craft, with about 650 making the journey each year. Most of these depart from the South Pacic islands of Tonga and Fiji, and arrive in New Zealand from November to January. They usually depart New Zealand in April through to June, taking advantage of favourable weather patterns. The northern ports of Opua, Whangarei, and Auckland are the most popular arrival ports.
Many of the craft skippers are regular visitors and fully aware of the border requirements of the New Zealand Customs Service and the Ministry of Agriculture and Forestry. These requirements have been put in place primarily to prevent the importation of illegal goods, protect the biodiversity of New Zealand, and facilitate the arrival and departure of legitimate visitors. The vast majority of arriving and departing small craft crew are legitimate and fully compliant. However, the inux of small craft from overseas poses a potential risk and Customs monitors arrivals and departures to ensure these vessels comply.

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Customs ofcers boarding a yacht in Auckland Harbour.

The inux of small craft from overseas poses a potential risk and Customs monitors arrivals and departures to ensure these vessels comply. Customs requires advance notice of a small craft arriving. The skipper must submit an Advance Notice of Arrival at least 48 hours prior to the vessel entering New Zealand. This gives Customs the information needed to clear the craft and its passengers, and this information is also provided to the Ministry of Agriculture and Forestry. If the skipper does not submit this form, there can be penalties.

Details on the arrival and departure documentation and formalities, and the downloadable forms are available on the Customs website (www. customs.govt.nz). You can nd this information in the Yachts and small craft section. Alternatively, a yacht pack containing the required forms and information is available from any NZ Customs ofce and some South Pacic ports. It is essential that all international craft arrive or depart from a Customs port of entry. These ports are also listed on Customs website. The only exceptions are in a severe emergency or with the prior approval of the Comptroller

of Customs. Leaving New Zealand without obtaining Customs clearance of your vessel may result in prosecution. It is highly recommended that anyone arriving or departing on a small craft visit the Customs website (www.customs.govt.nz) which provides full information on this topic. Alternatively, general advice and information is available by calling the Customs Contact Centre on 0800 4 CUSTOMS (0800 428 786), +64 9 927 8036 if calling from overseas, or by emailing feedback@customs.govt.nz

Protecting New Zealands Border 19

CUSTOMS CRACKS DOWN ON MONEY LAUNDERING

In the past couple of years Customs has made some signicant cash seizures under recently introduced legislation.

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 strengthened Customs powers and responsibilities around cash and other bearer negotiable instruments (BNI) such as cheques, money orders, and bearer bonds moved across our border by making such non-declared items prohibited goods pursuant to the Customs and Excise Act 1996.

The international movement of large sums of cash and BNI is often associated with money laundering the conversion of dirty money to legitimate money or goods. This type of movement in funds may represent the proceeds of importing, manufacturing, or dealing in drugs; of people smuggling; or of fraud and related criminal activities, including tax evasion.

Manager Investigations, Shane Panettiere says that Customs has made some signicant seizures of cash in a short period of time. To date Customs has seized in excess of $1.29 million in eight separate instances involving serious breaches of the legislation and related criminal offending. This legislation has given us the authority to crack down on those who choose to break the law, and attempt to launder money through New Zealand, says Shane.

Customs continues to work with law enforcement partners, within New Zealand and overseas, to identify and intercept the movement of illegal cash proceeds as part of an international focus on disrupting criminal networks.

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Other instances have attracted nes under the Act provisions instead of prosecution and seizure. Customs recently intercepted an Australian man arriving from Sydney who had made a declaration for AUD$8,000 (NZ$10,526 equivalent). He was referred for further examination and it was discovered that he was carrying AUD$15,000. A further inspection of his luggage revealed another AUS$90,000 concealed within the baggage lining. The man admitted to Customs ofcers that the cash had been concealed to avoid tax obligations in Australia, and he was intending to purchase a rare vehicle in New Zealand. A subsequent investigation disproved this explanation and revealed suspected criminal links in

Australia. Customs seized the cash and on appeal the decision was upheld by the Customs Appeal Authority. The judge ultimately concluded that the offender could not show the funds had been obtained legitimately. In another recent interception, a Cameroonian male arrived at Auckland from Fiji in possession of NZ$113,000 equivalent in Fijian, American, New Zealand, and Iraqi currencies. The male passenger had not declared the cash, which Customs found in numerous white envelopes in his luggage. Customs ofcers identied the passenger as travelling on a false passport and being engaged in a black money scam in which he had defrauded the cash from an investor in Fiji. The man was refused entry

to New Zealand and was arrested, convicted, and charged with currency export control violations upon his return to Fiji. The cash was seized by Customs and the man has since been deported from Fiji. The excellent work of our frontline ofcers and nancial targeting team shows that these people are not beyond our detection. A key priority for the Government and Customs is to disrupt the contributors in organised crime, and our ofcers are successfully delivering this priority. Customs continues to work with law enforcement partners, within New Zealand and overseas, to identify and intercept the movement of illegal cash proceeds as part of an international focus on disrupting criminal networks.

NOTICE TO TRAVELLERS CASH REPORTING

New Zealand law requires a Border Cash Report to be completed by every person who moves cash into or out of New Zealand, and the total value of cash involved is NZ$10,000 or more (or foreign denominations equivalent to a total of NZ$10,000 or more).
Cash means physical currency, bearer-negotiable instruments, or both. A bearer-negotiable instrument means a: a. bill of exchange b. bearer bond c. promissory note d. cheque e. travellers cheque f. money order, postal order, or similar order. You must advise a Customs ofcer if you are required to complete a Border Cash Report. This must be done at the same time as passport control formalities are undertaken. Where you are responsible for other passengers you must make a separate Border Cash Report for them.
If cash is moved in breach of this requirement, it is a prohibited import or export under the Customs and Excise Act 1996. False or misleading reporting, or non-reporting, of cash may result in its seizure. You may also face criminal prosecution.

Protecting New Zealands Border 21

COURT REPORT

CUSTOMS IN COURT
Customs continues to prosecute offenders for a variety of border-related offences. Here are some recent matters:
OBJECTIONABLE MATERIAL

On 22 November 2011, a man was sentenced at the Manukau District Court after having previously pleaded guilty to charges of importing objectionable material. In March 2009, the mans luggage had been searched at Auckland International Airport. A number of suspect les were found on a hard drive in his possession and many of the les were encrypted so that they could only be opened using a specic computer. The computer used to view the encrypted les was found during a search warrant executed by Customs. The computer held numerous movie les which the man had downloaded. The les depicted rape and other degrading and dehumanising sexual conduct. The man was sentenced to two years intensive supervision (with conditions to complete an internet offending course) and 180 hours of community work. On 29 November 2011, at the Lower Hutt District Court, a man was sentenced on 10 charges of importing objectionable material and seven charges of possessing objectionable material. Both sets of charges carry maximum penalties of ve years imprisonment. When a search warrant was executed at his property, approximately 23,000 objectionable images were located, the majority of these involving child sexual exploitation.

The man was sentenced to ve months community detention and 18 months supervision with a condition that he completes a programme for internet sex offenders. He was also granted permanent name suppression on the basis of a medical certicate and afdavit from his wife that indicated adverse consequences on her already poor mental health.
DRUGS

The judge said that human error was not an acceptable excuse and was unimpressed that both companies were offering the same excuses, saying it was up to the companies to ensure human error was avoided. Both companies were ned $2,500.
FRAUD

On 9 December 2011, a man was sentenced in the Wellington District Court after pleading guilty to importing the class B controlled drug GBL. A psychological report stated that the man suffered from megarexia the overwhelming desire to be very muscular. The man said he used the GBL for building muscle mass. At the time of the offence the man was on parole for similar offending. The judge considered home detention was appropriate and sentenced the man to six months home detention, followed by a further 12 months post-release conditions including attendance at psychological, alcohol and drug treatment, and random drug testing.
UNAUTHORISED DELIVERIES

On 15 December 2011, a man was sentenced at the Auckland District Court on four charges of providing false invoices and incorrect documents to Customs ofcers. On 2 May 2011, the man had arranged the importation of a consignment of wooden furniture into New Zealand. He had provided documents to Customs on a number of occasions with false values for the furniture. After Customs refused to accept the initial invoices, the man had nally provided correct invoices with the true value of the goods. He admitted he had known the value all along and that he had sent incorrect documents to Customs. The judge ordered the man to pay a ne of $2,000 and court costs of $133. No order for compensation under section 236(2) of the Customs and Excise Act 1996 was made by the Court.

In December 2011, two companies were charged under section 200(1)(c) of the Customs and Excise Act 1996, for releasing goods from a Customs controlled area without Customs authority.

22 Contraband March 2012

SmartGate
SmartGate is now available for eligible ePassport holders aged 16 and over.
Holders of New Zealand and Australian ePassports have the option of using SmartGate when arriving at or departing from Auckland, Christchurch, and Wellington International Airports. SmartGate oers you a simple and ecient way to self-process through passport control with an easy two-step process. While the New Zealand Customs Service is pleased to oer you this option, you can still have your ePassport manually checked if you prefer. Passports with the international ePassport symbol* are called ePassports. If you have this symbol on your passport you will be able to use SmartGate.
ePassport symbol
*All New Zealand passports issued after November 2005 and all Australian passports issued after October 2005 are ePassports.

For more information, visit www.customs.govt.nz

Using SmartGate to depart from New Zealand

1 STEP ONE
Look for the SmartGate kiosk signs will help guide you. Place your ePassport into the reader by simply following the instructions on the screen. Answer the standard declaration questions using the touch screen. The kiosk will issue you with a SmartGate ticket, which you will need for step two.

2 STEP TWO
Proceed to the gate and insert your SmartGate ticket. Look at the camera ahead of you while your face is compared with your ePassport photo. Proceed through the gate. Hand in your departure card, and proceed through the Aviation Security Service screening point.

Protecting New Zealands Border 23

BORDER SECURITY IS EVERYONES BUSINESS

It was local knowledge and vigilance that helped identify and capture the Rainbow Warrior bombers. The community has an even greater role in protecting our border today. You know your area best, so let Customs know if you spot anything unusual or suspicious, including people and craft that seem out of place. You can play a vital role in protecting New Zealand communities from international crime, illicit drugs, terrorism, smuggling, and other illegitimate activities by reporting any suspicious border activity to Customs.

CONTACT COASTWATCH 0800 4 CUSTOMS (0800 428 786) free 24-hour, anonymous hotline WWW.CUSTOMS.GOVT.NZ

24 Contraband March 2012