N11582

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS (POCA) NO 4 OF 2025

IN THE MATTER OF SECTION 32 AND OTHER RELATED PROVISIONS OF THE PROCEEDS OF CRIME ACT 2022

BETWEEN 
ACTING PUBLIC PROSECUTOR
Plaintiff

AND
YIMING YAN
First Defendant

AND
LUI CHI YAN
Second Defendant

WAIGANI: BERRIGAN J
7, 10 NOVEMBER 2025

PROCEEDS OF CRIME ACT – APPLICATION FOR RESTRAINING ORDER - Section 32, Proceeds of Crimes Act, 2022 – Meaning of “serious offence” - Meaning of “suspicion” – Reasonable grounds to suspect that the defendants committed serious offences and that the property is the property of the suspects or is the proceeds of the offence(s) – Application granted.  

The Acting Public Prosecutor applied to restrain property pursuant to s 32 of the Proceeds of Crimes Act, 2022. An affidavit was filed by a police officer in support stating that he suspects that the defendants have committed various offences, including failing to make a report under s 12(1) of the Proceeds of Crimes Act and transferring gold into or out of Papua New Guinea with the written consent of the Central Bank, contrary to s 24 of the Central Banking (Foreign Exchange and Gold) Regulation 2000. Having reviewed materials obtained by the PNG Customs Service he suspects that five gold bars weighing almost 6 kg and worth almost K1.74m were confiscated from the first defendant by officers of the PNG Customs Service at Jacksons International Airport on 21 August 2024 whilst he was waiting to board his flight to Hong Kong. A gold bar weighing almost 900 gm and worth about K275,000 was confiscated from the second defendant after it was detected in her hand luggage passing through the airport scanning machine on the way to the same flight. 

Held 

(1)	There are reasonable grounds to suspect that each of the defendants have committed the abovenamed offences. There are reasonable grounds to suspect that the property to be restrained is the property of the defendants. To the extent that there are reasonable grounds to suspect that the property is the property of another person, whether an unknown person or PNG Five Star Metals Ltd, there are reasonable grounds to suspect that the property was both subject to the effective control of each of the defendants at the time it was confiscated and is the proceeds of the offences. 

Application granted.

Cases cited
The Acting Public Prosecutor v Kathleen Ruth James (2025) N11483
The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 
George v Rockett (1990) 170 CLR 104
Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948
Queensland Bacon v Rees (1966) 115 CLR 266, 303

Counsel
T Kametan, for the plaintiff

DECISION

1.	BERRIGAN J: The Acting Public Prosecutor has commenced proceedings against Yiming Yan and Lui Chi Yan seeking orders for restraint and forfeiture.

2.	The Acting Public Prosecutor now moves a motion seeking orders pursuant to s 32 of the Proceeds of Crimes Act 2022 (POCA) to restrain six “melt bars” of gold which were confiscated from the defendants by officers of the PNG Customs Service at Jacksons International Airport on 21 August 2024.

3.	The application was heard ex parte at the request of the Acting Public Prosecutor pursuant to s 35(2) of the POCA. 

SECTION 32 OF THE PROCEEDS OF CRIME ACT, 2022

4.	The application for restraint is made under s 32, POCA:

32.         RESTRAINING ORDERS ON PEOPLE SUSPECTED OF COMMITTING SERIOUS OFFENCES.

(1)   The Court shall order that –
(a)   a property must not be disposed of or otherwise dealt with by any person; and
(b)   a property must not be disposed of or otherwise dealt with by any person except in the manner and circumstance specified in the order; and
(c)   the Public Prosecutor applies for the order; and
(d)   there are reasonable grounds to suspect that -
(i)           a person has committed a serious offence; and
(ii)         the offence was committed before, on or after the day the application was made; and
(e)   the requirements in Subsection (3) have been met; and
(f)   the Court is satisfied that the police officer who made the affidavit mentioned in Subsection (3) holds the suspicion or suspicions mentioned in the affidavit, on reasonable grounds.
 
(2)   The order must specify, as property that must not be disposed of or otherwise dealt with, the property mentioned in the application for the order, to the extent that the Court is satisfied that there are reasonable grounds to suspect that the property is any one or more of the following:
(a)   all or specified property of the suspect; and
(b)   all property of the suspect other than specified property; and
(c)   specified property of another person (whether or not that other person's identity is known) that is subject to the effective control of the suspect; and
(d)   specified property of another person (whether or not that other person's identity is known) that became tainted property because of the offence.
 
(3)   The application for the order must be supported by an affidavit of a police officer stating -
(a)   that the police officer suspects that the suspect committed the offence within the seven years preceding the application, or since the application was made; and
(b)   if the application is to restrain property of a person other than the suspect - that the police officer suspects that –
(i)     the property is subject to the effective control of the suspect; or
(ii)  the property is proceeds of the offence; and
(c)   the grounds on which the police officer holds the suspicions.
 
(4)   The reasonable grounds referred to in Subsection (l)(d), need not be based on a finding as to the commission of a particular serious offence.
 
(5)   The Court shall make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with.
 
(6)   The Court may specify that a restraining order covers property that is acquired by the suspect after the Court makes the order, but if the Court does not make that specification in the order, property acquired by the suspect after the Court makes the order is not covered by the order.	

5.	In summary, the Court shall order that property, 

must not be disposed of or otherwise dealt with by any person, except in the manner and circumstances set out in the order, if there are:

a)	rreasonable grounds to suspect that a person has committed a serious offence;
b)	the application is supported by an affidavit by a police officer stating that:
i.	he suspects the person has committed the serious offence within seven years preceding the application, or since the application was made; 
ii.	if the application is to restrain property of a person other than the suspect, that he suspects that the property:
(1)	is subject to the effective control of the suspect; or
(2)	is proceeds of the offence;
iii.	the grounds on which he holds the suspicions; and
c)	the Court is satisfied the police officer holds the suspicions on reasonable grounds, and

to the extent that the Court is satisfied that there are reasonable grounds to suspect that the property is any one or more of the following:

(a) all or specified property of the suspect;
(b) all property of the suspect other than specified property; 
(c) specified property of another person (whether or not that other person's identity is known) that is subject to the effective control of the suspect; and
(d) specified property of another person (whether or not that other person's identity is known) that became tainted property because of the offence.

6.	An “application for a restraining order or an interim restraining order may be made by the Public Prosecutor on the basis of hearsay evidence and the Court can be satisfied that the suspicion of the police officer is held on reasonable grounds even if it is based on hearsay evidence”: s 276, POCA.

7.	It is not necessary for the Court to entertain the relevant suspicion or belief itself. It is only necessary for it to be satisfied that there are reasonable grounds for entertaining the suspicion. Suspicion is a “state of conjecture or surmise where proof is lacking” or a “slight opinion without sufficient evidence”. There must, however, be some factual basis for the conjecture, surmise or opinion: The Acting Public Prosecutor v Kathleen Ruth James (2025) N11483 at [19] to [21]; The State v Paul Paraka (Decision on Admission of Bank Records) (2022) N9568 (2022) [110 to 113] adopting George v Rockett (1990) 170 CLR 104 at [7], [8] and [14], citing Shaaban bin Hussien v Chong Fook Kam [1970] AC 942, 948 and Queensland Bacon v Rees (1966) 115 CLR 266, 303. 

8.	The reasonable grounds need not be based on a finding as to the commission of a particular serious offence: s 32(4). The Court shall make a restraining order even if there is no risk of the property being disposed of or otherwise dealt with: s 32(5).

ARE THE SUSPECTED OFFENCES “SERIOUS OFFENCES”?

9.	A “serious offence” is defined under s 3 of the POCA as “an indictable offence or a foreign indictable offence for which the maximum penalty is death or imprisonment for at least three years or an offence prescribed in the regulations”.

10.	As above, the reasonable grounds to suspect that a person has committed a serious offence need not be based on a finding as to the commission of a particular serious offence: s 32(4) POCA but it is alleged on that basis in this case. 

11.	The application is supported by an affidavit of a police officer, Detective Constable Jeremiah Kalap, of the Royal Papua New Guinea Constabulary, currently attached to the National Fraud and Anti-Corruption Directorate (NFACD), stating that he suspects that the suspects, Yiming Yan and Lui Chi Yan, committed the following offences:  

a)	smuggling contrary to s 149 of the Customs Act, 1951; 
b)	failure to make a report to relevant authorities contrary to s 12(1) and (4) of the POCA; and 
c)	failure to comply with regulations relating to transfer of gold into or out of PNG contrary to s 24 of the Central Banking (Foreign Exchange and Gold) Regulation 2000.

12.	The officer states that the offences are "indictable offences". The officer and the Acting Public Prosecutor are mistaken in part. 

13.	Indictable offences are defined under s 3 of the Act to mean “an offence against the law of Papua New Guinea:

(a)   that may be prosecuted on indictment (whether or not the offence can be dealt with summarily); and
(b)   for which the maximum penalty is death or a term of imprisonment for at least one year or an offence prescribed in the regulations.

14.	Smuggling contrary to s 149 of the Customs Act is not an indictable offence. It attracts a maximum penalty of a fine not exceeding K3000. 

15.	Failure to report contrary to s 12(4) of the POCA is not an indictable offence. It is a strict liability offence attracting a maximum of a fine not exceeding K10,000. 

16.	Failure to report contrary to s 12(1) of the POCA is an indictable offence. It attracts a maximum penalty in the case of a natural person or a fine not exceeding K50,000.00 or imprisonment for a term not exceeding five years. 

17.	Failure to comply with regulations relating to transfer of gold into or out of PNG contrary to s 24 of the Central Banking (Foreign Exchange and Gold) Regulation 2000 is an indictable offence attracting a maximum of five years of imprisonment pursuant to ss 99 and 100 of the Central Banking Act. 

18.	The latter two offences are also “serious offences” for the purpose of s 3, POCA. Each are indictable attracting maximums greater than three years.

Section 12(1), POCA – Failure to make a report

19.	Section 12(1), POCA provides that “a person who, for the purposes of or in connection with any report required by Section 10, either (a) intentionally fails to make a report in any material particular; or (b) is reckless as to the making of a report in any material particular, is guilty of an offence”. 

20.	A person shall make a report if the person, inter alia, exports a precious metal with a value of K20,000 or more: s 10(1).  Gold is a precious metal: s 1. The report must be in writing or electronic form in the form prescribed: s10(2). The obligation to make a report arises if: (a) the person knows the value of the precious metal is equivalent to K20,000; or (b) a reasonable person would suspect that the precious metal has a value equivalent to K20,000 or more.  

21.	For present purposes, the report shall be given, if the transportation is to be effected by a person taking the precious metal out of Papua New Guinea with the person or in the person’s accompanying luggage at or before the time worked out in s 11(3): s 11(1)(b).

22.	For the purposes of s 11(1)(b), the applicable time if the movement of the precious metal is to be effected on an aircraft, and the person, embarking goes to the place at which customs or immigration officers examine passports, “at or before the time that the person reaches that place”: s11(3)(a). 

Section 24 of the Central Banking (Foreign Exchange and Gold) Regulation 2000 – Taking gold out of the PNG without written consent 

23.	Section 24 of the Central Banking Regulations provides that: “A person who, without the consent in writing of the Central Bank, takes or sends any gold out of Papua New Guinea … is guilty of an offence”. 

24.	The State was unable to assist as to the meaning of “takes”, in particular at what point that occurs, for instance at or before a person passes through Customs or once a person physically exits the border of the country. The regulations do not assist.  Time does not permit further enquiry but in my view “takes” must include the process of taking out of PNG and not physically crossing the border. The latter interpretation would defeat the purpose of the legislation for obvious reasons.

HAS A POLICE OFFICER FILED AN AFFIDAVIT STATING THAT HE SUSPECTS THAT THE DEFENDANTS HAVE COMMITTED SERIOUS OFFENCES?

25.	DC Kalap states that having reviewed information and documentary material provided by officers of the PNG Customs Service he has reasonable grounds to suspect that the defendants committed the alleged offences for the following reasons. 

26.	The gold bars were confiscated by Customs officers from the defendants on 21 August 2024 at Jacksons International Airport. 

27.	Five bars were discovered inside the bag of the first defendant, Yiming Yan, a Chinese national, during a search by a Custom’s officer. The officer formed a suspicion based on the defendant’s body language and the amount of additional luggage being carried. At the time the defendant was waiting for his flight to Hong Kong. He consented to a bag check during which five gold bars wrapped in blue tape and packed inside a small orange-brown waist bag, locked inside the pocket of his backpack were found. The gold export licence produced by the first defendant from the BPNG addressed to the Managing Director of PNG Five Star Metals Ltd was dated 8 May 2020. It stated that “hand carry” of precious metals with a value of K5000 was not permitted. The licence expired on 31 December 2021. According to analysis, the bars weighed almost 6 kgs and were in total worth about PGK1,735,219.

28.	Another gold bar was detected inside the hand luggage of Lui Chi Yan, the second defendant, a Chinese national, as she passed through the airport scanning machine. Upon questioning she verbally declared that she had smelted gold with all necessary documents for export. She told the Custom’s officer that the gold bar belonged to New Guinea Five Star Metals Limited and that she was taking it to Hong Kong. She presented a company staff identification card in her name, as Operations Manager, together with a sales invoice on Five Star Metals letterhead issued to customer Iong Intl Trading Co Ltd in the sum of USD 71, 097.125. She also produced a copy of the same expired licence issued by BPNG. According to analysis the bar weighed 891.9 grams gross weight and was worth an estimated value of PGK 274,948.

29.	Having regard to DC Kalap’s affidavit that the defendant had already passed through Customs, the manner in which he was carrying the five gold bars, their weight, the licence he carried which referred to precious metals, which licence was out of date and prohibited hand carry in excess of K5000, and that he was behaving suspiciously,  I am satisfied there are reasonable grounds to suspect that the first defendant knew that the value of the gold was equivalent to K20,000 or more and that he intentionally failed to make a report in a material particular or at all, or was reckless as to the making of such a report: s 12(1)(a) and (b), POCA, respectively. 

30.	For similar reasons I am satisfied that there are reasonable grounds to suspect that the first defendant was taking gold out of PNG without the written consent of the Central Bank contrary to s 24 of the Regulations. He had passed through Customs and was waiting to board his aircraft with the gold. He did so without the consent in writing of the BPNG to do so. 

31.	As for the second defendant, it is alleged that she failed to make the report “at or before the time” she reached the place where passports are checked pursuant to s 11(3)(a). She had no such report with her to give. She produced a licence that had already expired and did not authorise hand carry above K5000. She held an invoice in the sum of USD 71,097. Having regard to those matters I am satisfied that there are reasonable grounds to suspect that the second defendant intentionally failed to make the report as to a material particular or at all, or was reckless as to the making of such a report contrary to s 12(1)(a) and (b) of the POCA, respectively. 

32.	Similarly, there are reasonable grounds to suspect that she was taking the gold out of PNG contrary to s 24 of the Regulations. She had no valid written authority from BPNG and was in the process of passing through Customs.

ARE THERE REASONABLE GROUNDS TO SUSPECT THAT THE ALLEGED OFFENCES TOOK PLACE WITHIN THE LAST SEVEN YEARS?

33.	I am satisfied both that DC Kalap reasonably suspects that the alleged offences took place within the last seven years, namely on or about 21 August 2024 and that he has reasonable grounds for the suspicion. 

ARE THERE REASONABLE GROUNDS TO SUSPECT THAT THE PROPERTY IS PROPERTY OF THE SUSPECT; OR THE PROPERTY OF ANOTHER PERSON SUBJECT TO THE EFFECTIVE CONTROL OF THE SUSPECT OR PROCEEDS OF THE OFFENCE FOR THE PURPOSES OF S 32(3)?

34.	There are reasonable grounds to suspect that the property is that of the suspects in each case. Both are Chinese nationals who were departing the country. Little other information is provided, for instance as to whether they had return tickets but, on the material, neither have a known residential address in PNG.  

35.	To the extent that there are reasonable grounds for suspecting that the property was the property of another person, for instance an unknown person overseas, or PNG Five Star Metals Ltd, the property “is subject to the effective control of the suspect”, or at least it was at the time of its confiscation: s 32(3)(b)(i). Furthermore, there are reasonable grounds to suspect that the property is the proceeds of the offences for the purposes of s 32(3)(b)(ii), POCA.  

36.	The officer says that the property is tainted property, in particular an instrument of the offence. Tainted property means: a) proceeds of an offence and b) an instrument of an offence: s 1, POCA.  These terms are defined in s 6:

S 6 Proceeds and Instruments
(1) Property is "proceeds" of an offence if -
(a)   it is wholly derived or realised, whether directly or indirectly, from the commission of the offence; or
(b)   it is partly derived or realised, whether directly or indirectly, from the commission of the offence, whether the property is situated within or outside Papua New Guinea.
 
(2)   Proceeds of an offence includes -
(a)   property into which the proceeds of an offence is, wholly or partly, successively converted, transformed or intermingled; and
(b)   income, capital or other economic gains derived or realised from that property since the offence.
 
(3)   The fact that proceeds or an instrument are intermingled with other property does not prevent the property from being treated as proceeds or an instrument.
 
(4)   Property is an "instrument" of an offence if it is -
(a)   used in, or in connection with, wholly or in part, the commission of an offence; or
(b)   intended to be used in, or in connection with, wholly or in part, the commission of an offence, whether the property is situated within or outside Papua New Guinea.
 
(5)   An instrument of an offence includes -
(a)   a property into which an instrument is, wholly or partly, successively converted, transformed or intermingled; and
(b)   income, capital or other economic gains derived or realised from that property since the offence.

(6)   Property remains proceeds of an offence or an instrument of an offence even if -
(a)   it is credited to an account; or
(b)   it is disposed or otherwise dealt with.
 
(7)   Proceeds or an instrument of an unlawful activity means proceeds or an instrument of the offence constituted by the act or omission that constitutes the unlawful activity.

(8)   Property can be proceeds or an instrument of an offence even if no person has been convicted of the offence.	

37.	In summary, property is "proceeds" of an offence if it is wholly or partly derived or realised, whether directly or indirectly, from the commission of the offence. Property is an "instrument" of an offence if it is used or intended to be used in, or in connection with, wholly or in part, the commission of an offence.

38.	I am satisfied that there are reasonable grounds to suspect that the gold bars are proceeds of the alleged offence of failing to report contrary to s 12(1), POCA. 

39.	The gold bars were found in the possession of the defendants at the time they were confiscated as a direct result of the commission of the suspected offence in each case, namely the alleged failure to make the report required. In other words, but for the failure to report neither of the defendants would have been in possession of the gold bars at the relevant time. The benefit that each of the defendants derived as a result of the offence was the gold bars held by them in each case. 

40.	For similar reasons I am also satisfied there are reasonable grounds to suspect that the property derived from the alleged taking of the property out of PNG without written approval, contrary to the Regulations, in each case which again was already complete at the time of detection. 

41.	Instruments of offences are most obviously the things that are used to commit the offence, for instance the getaway car to escape following an armed robbery or the laptop to misappropriate funds by electronic transfer. Nevertheless, I am satisfied given the broad definition outlined above that there are reasonable grounds to suspect that the gold bars were instruments of the offence of taking the property out of PNG without written approval, in each case, albeit they were the subject of the offence or what was taken. For similar reasons I am satisfied that there are reasonable grounds to suspect that the gold was an instrument of each of the offences of failing to report.

ARE THERE REASONABLE GROUNDS TO SUSPECT THAT THE PROPERTY IS ALL OR SPECIFIED PROPERTY OF THE SUSPECT; OR THE SPECIFIED PROPERTY OF ANOTHER PERSON THAT BECAME TAINTED PROPERTY FOR THE PURPOSES OF S 32(2)?

42.	I repeat the findings above. 

UNDERTAKINGS AS TO COSTS AND DAMAGES

43.	Before making a restraining order, the Court may require the State to give an undertaking about the payment of damages or costs, or both, in relation to the making and execution of the order: s 48, POCA. The undertaking is given by the Attorney-General. None is provided at this stage. 

44.	It does not appear to me that an undertaking in either case is required at this stage. There is provision for ancillary orders to be made in the future under s 50 if necessary or appropriate. I accept that the gold is being held by the Bank of Papua New Guinea. That is the most appropriate place for such property to be held. 

CONCLUSION

45.	Accordingly, I am satisfied that there are reasonable grounds to suspect that the suspects have committed the serious offences alleged, within 7 years before this application was made, and that that the requirements of s 32(3) have been met, and that the officer holds the suspicions on reasonable grounds. I am further satisfied that the property to be restrained is the property of each of the defendants, or to the extent it is property which is the property of another person, whether an unknown person or PNG Five Star Metals Ltd, there are reasonable grounds to suspect that the property was both subject to the effective control of each of the respective suspects at the time it was confiscated and is the proceeds of the offences. 

46.	I remind the Acting Public Prosecutor that it does not assist the Court to merely reproduce the statements of the officer in his affidavit in the submissions. The Acting Public Prosecutor’s submissions should state in clear and concise terms what is being sought, a summary of the factual basis of the application, and address each of the requirements of the provision under which the application is made, setting out the basis upon which it is submitted that they are met. 

47.	I make the following orders.

ORDERS

(1)	Pursuant to section 32 of the Proceeds of Crimes Act 2022 the property specified in the schedule must not be disposed of or otherwise dealt with by any person until further order.

(2)	Subject to section 57 of the Act, this order shall operate until further order.

(3)	Parties are at liberty to apply on 3 days’ notice.

(4)	Time is abridged. 

Schedule

i.	Melt bar yellow in colour weighing 1.1 kilograms and assay weight of 1146 grams
ii.	Melt bar yellow in colour weighing 1.2 kilograms and assay weight of 1265.5 grams
iii.	Melt bar yellow in colour weighing 1.5 kilograms and assay weight of 1523.3 grams
iv.	Melt bar yellow in colour weighing 0.8 kilograms and assay weight of 871.9 grams
v.	Melt bar yellow in colour weighing 0.9 kilograms and assay weight of 893.9 grams
vi.	Melt bar yellow in colour weighing 0.9 kilograms and assay weight of 891.1 grams

_______________________________________________________________
Lawyer for the plaintiff:		Acting Public Prosecutor