PARLIAMENT OF THE COOK ISLAND: TAINTED CRYPTOCURRENCY RECOVERY BILL EXPLANATORY NOTE This note is not part of the Bill, It is intended to indicate it general effect, GENERAL EXPLANATION Background ‘The country is a longstanding member of the Asia/Pacific Group on Money Laundering, (APG), which (as an associate member of the FATE) is part of the global network to combat money laundering, the financing of terrorism and the financing of the proliferation of weapons of mass destruction. Asset recovery strategies are now a focus of FATE, as best articulated recently by the current President of the FATF: FATE President . Raja Kumar noted in his opening remarks “We can only derive high benefit from enhanced or new asset recovery legislation and measures iF the righ structures and systems are put in place that will facilitate is effective use .. As part of its ongoing commitment to combat money laundering, the financing of terrorism and the financing of the proliferation of weapons of mass destruction, the Cook Islands has identified an opportunity to demonstrate a pioneering initiative that has the potential to address the core concerns expressed by the FATE, with international impact. ‘The Bill addresses core concern to develop new asset recovery legislation This Bill, therefore, is concerned with the detection, investigation of, seizure and forfeiture of cryptocurrency that is, or represents the proceeds of proscribed conduct. It achieves this by an in rem process of civil forfeiture. The Bill is, necessatily, of extraterritorial effect, meaning that the legislation extends beyond the territorial boundaries of the Cook Islands, This is essential as the preci “location” of crypto currency can be difficult to determine both physically, and as a matter of private intemational law. No. 14-1‘The Constitution specifically allows an Act to have extraterritorial effect. Further, as a matter of intemational law, certain cri nes are considered so universally harmful that countries are permitted, and encouraged, to seize jurisdiction in order to ensure that such crimes do not go unpunished, regardless of any t THE BILL Clause 1 Clause 2 Clause 3 Clause 4 Clause 5 Clause 6 Clause 7 torial act or effect, specifies the short title of the bill. that the bill comes into force on a date to be determined by the King's Representative by Order in Executive Council, sets out the purposes of this Act that are, briefly, to provide territorial and extra-territorial power and authority for approved Cook Islands companies to identity track and seize tainted cryptocurrency, to make provision for a regime of civil forfeiture of that ‘cryptocurrency with constitutionally appropriate recourse for claimants and, in this way, allow the Cook Islands to contribute positively to the global war on crime through the recovery of illicit cryptocurrency assets and ensuring those assets cannot be used for criminal benefit Part 1 Preliminary matters sets out certain defined terms; attention is drawn to the concepts of “bot fide interested party”, “claimant”, “engaged party” and “victim” which typify various categories of actors, along with the concepts of “cryptocurrency recovery agent” and “ethical recovery hacking”; a number of technical terms that relate specifically to cryptocurrency are defined here. defines, in detail, what is meant by “eryptocurrency recovery business”; this is the activity that eryptocurreney recovery agents will be entitled to carry on, defines, in detail, what is meant by “ethical recovery hacking”; that is to say, the (echnical means by which the investigation into tainted eryptocurteney and its seizure and bringing into the control of the Cook Isiands is appropriately carried out defines, in detail, what is meant by a “fit and proper person”, a concept that is important in determining the fitness of and appropriateness of approving, a ryptocurrency recovery agent to cary on cryptocurrency recovery businessClause 8 Clause 9 Clause 10 Clause 11 Clause 12 Clause 13 Clause 14 defines, in detail, what is meant by a “property interest”. ‘This is an important concept as Articles 40, 64 and 65 of the Constitution are all engaged by this Bill; eryptocurrency is constitutionally protected property, as are the rights of action that persons (typically outside the Cook Islands) will have; this clause recognizes that the Bill must be consistent with the Constitution and must be alive to different systems of law and legal concepts that may be in play extra-terri ly. defines, in detail, “proscribed conduct”. Again, for while the Constitution specifically authorizes legislation (o have extra- lerritorial effect if Parliament chooses, Parliament must legislate in a manner that is consistent with international law; this definition is intended to ensure that consistency while at the same time, and subject to that constitutional imperative, being consistent existing Cook Islands law that addresses relevant treaty obligations. defines what is meant by “tainted cryptocurrency” — in general terms cryptocurrency “stained” with wrongdoing. As noted in the introductory remarks, this Bill establishes an in rem regime of civil forfeiture, by which is meant that it does not target criminals, as persons, but rather ctyptocurrency that is or represents the proceeds of specified unlawful activity (that is to say “proscribed conduct”), regardless of who or what carried on that activity, provides that the Act binds the Crown, Part 2 Judicial Framework Subpart | ‘The Cryptocurrency Restitution Tribunal establishes the Cryptocurrency Restitution Tribunal as alist judicial body with both judicial and lay membership to address the particular needs of this legislation. ‘The Tribunal is a Cook Islands (ribunal; this clause does, however, allow for procedural flexibility as to how and where itsits, provides for administrative aspects of the ‘Tribunal’s registry. speaks to the expectations of the Constitution (specifically Article 65(1)(d)) as to how the Tribunal will act. ‘The provision specifically proteets the right of a person against self-incrimination, allowing, instead, inferences on other matters to be drawn from the exercise of that right by any witness.Clause 15 Clause 16 Clause 17 Clause 18 Clause 19 Clause 20 Clause 21 a wse 22 Clause 23 Clause 24 Clause 25 provides the Tribunal with exclusive jurisdiction to hear and determine a specified range of matters set out in this clause, while further powers and procedures are provided for in the Schedule to the Bill, allows for cooperation as between the Tribunal and the High Court in areas in which one may be in a position to assist the other. gives the Tribunal an express power to rule on its own jurisdiction, allowing an appeal to the Court of Appeal by a dissatisfied pariy, provides for the appointment of judicial members of the Tribunal, It follows closely the provisions of the Constitution as to the appointment of Judges of the High Court; the intention is that the Tribunal will have judicial members of experience and standing broadly similar to that of High Count judges. provides for lay members to be appointed to the Tribunal, This is in recognition of the limited and specialist area in which the Tribunal will operate, and in recognition of the extra-territorial effect of the legislation. provides for continuity of a proceeding of the ‘Tribunal if a member is unable to complete the hearing due to resignation or expiry of appointment. sets out provisions that speak to the powers and responsibilities of the President of the Tribunal, provides for the tenure and removal of judicial members of the Tribunal, again in terms that are broadly similar, in the case of judicial members, to those of a High Court Judge. Clause 19 deals with the position regarding its lay members. deals with the composition of the Tribunal for the purposed of dealing with a proceeding, and provides for majority and split decisions. allows for a determination of the Tribunal {o be enforced as an order of the High Court, and sets out the basis on which this may, if needed in any case, be achieved, Subpart 2 High Court jurisdiction allows for judicial review, by the High Court, of determinations made by the Tribunal, by the Head of FIU, or by the Cryptocurrency Receiver.Clause 26 Clause 27 Clause 28 Clause 29 Clause 30 Clause 31 Clause 32 Clause 33 requires that a party wishing (o seek judicial review must seek leave to do so from the High Court; the clause prevents a person who does so, electing to pursue an appeal. sets out the criteria that the High Court must apply in deciding whether or not to grant leave, the test being one of whether there would have been a ‘substantially different’ outcome if the conduct complained of had not occurred. Subpart 3 Court of Appeal confers an express jurisdiction for the Court of Appeal to determine a preliminary point of law if requested to do so, and on the terms and conditions set out in this clause. confers an express jurisdiction for the Court of Appeal to determine a matter if the Tribunal is deadlocked in circumstances that clause 23 will not operate to resolve the matter. confers an express jurisdiction for the Court of Appeal to heat appeals; an appeal is not of right, but with the leave of the Court of Appeal, and itis, confined to appeals on questions of lavy; as with judicial review precluding appeal (clause 26), this clause precludes judicial review. provides for strike out of appeals in the circumstances set out in the clause, provides for the Court of Appeal to grant leave to appeal on such conditions as i€ thinks fit and sets out the procedure to be followed in an appeal under this subpart. Subpart 4 General Provisions mandates the principle of open justice by requiring that “court” proceedings must be conducted in public, except in the circumstances set out in the provision, A party to the proceedings can apply for the proceedings to be held in private. The expression “court” means any court considering the matter and includes the Tribunal, the High Court and the Court of Appeal sets out the requirements with which a party, seeking to have the proceedings heard in private, must meet.Clause 35 Clause 36 Clause 37 Clause 38 Clause 39 Clause 40 Clause 41 Clause 42 Clause 43 Clause 44 sets out the considerations and criteria that the court must apply in deciding whether or not to grant the application to hear the proceedings in private. sets out the effect of an order, if made, to allow the proceedings to be heard in private, Adininistration of CRT sets out the principles by which the Tribunal is to be funded and administered. ‘The clause provides for initial public funding, but the ‘Tribunal is intended, from then on, to be self-funding on a ‘user pays? basis. consistent with the concept of ‘user pays? this clause sets out procedural provisions to give effect to that concept; these provisions are modelled, broadly, on the approach taken in privately funded arbitration. Part 3 Cryptocurrency recovery agents Subpart 1 General provisions this provision allows for companies, but not natural persons, to carry on cryplocurreney recovery business in the Cook Islands. allows a cryptocurrency recovery agent that is approved to do so under the legislation, to carry on eryptocurrency recovery business in the Cook Islands but it must comply with the conditions of its approval, allows a cryptocurrency recovery agent to act by and through a subsidiary, but in imposing joint and several liability, the provision does not operate to relieve the agent of liability for the acts ofits subsidiary, ions to a limited ion, allows a cryptocurrency recovery agent to delegate fi range of persons, using the procedure set out in the pro sets out the legal effect of the acts of a delegate, Subpart 2 Approval to carry on cryptocurrency recovery business requires a company that wishes fo carry on eryptocurrency recovery business to apply to the Head of FIU for approval to do so; the provision sets out the limited range of corporate entities that may make such an application and it contemplates that an applicant may be a foreign enterprise within the meaning of the Development Investment Act 1995-6,Clause 45 Clause 46 Clause 47 Clause 49 Clause 50 Clause 51 Clause 52 gives the Head of FIU a power to require additional information if that ally provided, is insufficient for any reason. gives the Head of FIU a specific right to consult with the board of the Financial Supervisory Commission, for the reasons, and the purpose, set out in this ‘The provision also provides a right to consult with the Cook Islands Police and overseas law enforcement agencies as part of the anticipated due diligence. addresses the interrelationship between the processes of approval under this legislation, and the provisions of the Development Investment Act 1995-6; the clause allows for a provisional approval to issue. aims at avoiding duplicated processes as between FIU and BTIB. It provides for liaison between the Head of the FIU and BTIB, with a cettificate to be provided by the Head that is conclusive proof of the matters set out in it, and upon which the BTIB must accordingly register that foreign enterprise without any further enquiry and issue a foreign enterprise registration certificate to the applicant and provide a copy to the Head. Given the specialist nature of cryptocurrency recovery business and the detailed provisions of this Bill, this clause mandates primacy of this Bill and for its processes, in this regard, to be a code for such foreign enterprises, addresses the Head’s power to approve a complying application, and makes specific provision for those applicants that may have provisional approval and wish full approval to be granted. allows approval to be refused where the applicant is not fit and proper (as that expression is defined in clause 7), allows approval to be refuused where the applicant does not possess the appropriate qualifications and resources to carry on ctyptocurrency recovery business in full compliance with the legislation and in a commercially successfinl way, The clause sets out the criteria to be applied in this regard, extending to all personnel of the agent, There is express provision for compulsory insurance cover by way of professional indemnity, sets out other grounds of refusal on which the Head of FIU may rely, relating to matters touching on the honesty, integrity and good character of the applicant and those associated with it, or on questions of financial viability that may arise.Clause 53 Clause 54 Clause 58 Clause 59 Clause 60 Clause 62 Clause 63 sets out the time at which an approval to carry on eryptocurrency recovery business is in effect and allows its indefinite continuing in force subject to any condition imposed on that approval, until the approval is revoked under clause 54, sets out the grounds on which the Head of FIU may revoke an approval requires that the Head of FIU must give notice of a revocation of approval and makes specific provision to allow that to take place without pri notification, allows the Head of FIU to specify conditions in any approval granted, allowing those to be added or vatied from time to time; provision is made for consultation with the relevant agent. provides an applicant with a right of appeal to the Tribunal against a decision of the Head of FIU as set out in this clause; the appeal must be made on the grounds set out in the clause and the clause forces an applicant to either appeal or judicial review and sets out time limits. provides a person, other than the applicant, with certain rights to participate in proceedings should they be held by the Head of FIU not to be a fit and proper person. sets out the procedures that apply iff'an appeal to the Tribunal is suecessfl makes it clear that if the Tribunal refers a matter back to the Head of FIU for further consideration, the person appealing has recourse to the Tribunal in respect of any further decision, provides that an approval is personal to the agent and is not capable of being dealt with by the agent in any way, with any attempt to do so being a breach of that approval. addresses changes in the ownership and control ofan agent, the concept of ‘principal person’ is aimed at those having a prominent role in that regard, ‘The provision affords the Head of FIU powers in this situation that allow control by means of requiring approval of the change, and allowing for variation of the approval {o carry on cryptocurrency recovery business, addresses the civil law consequences of a person carrying on business contrary to the legislation, addressing illegal contract considerations,Clause 64 Clause 65 Clause 66 Clause 67 Clause 68 Clause 69 Clause 70 Clause 71 provides that a eryptocurrency recovery agent is a reporting institution Within the meaning of the Financial Transactions Reporting Act 2017 only in the circumstances set out in clause 76, so that investigation into and seizure of tainted cryptocurrency falls for control, regulation and disclosure within the provisions of this Bill rather than under the 2017 Act. sets out the relationship between FIU and the otyptocurrency recovery agent, recognising the limited circumstances in which the investigations and seizure by an agent may touch and concern domestic law enforcement, The provision does allow an agent to seek assistance from FIU in limited mstances; the provision also recognises and protects the intellectual property of an agent Part 4 Cryptocurrency assets seizure and forfeiture regime Subpart | — General provisions sets out the purposes for which the Bill establishes a regime of tion, seizure and forfeiture of tainted cryptocurrency., specifically allowing ethical recovery hacking. ‘The provision sets out the reasons for forfeiture and the basis upon which due process is afforded interested parties, appropriate restitution and substantial justice afforded victims having property interests in tainted cryptocurreney, and effect given to the weaty obligations of the Cook Islands in respect of other victims. defines the term “applicant” as used in this part of the Bill, explicitly addresses the intended territorial and extra-territorial scope of the Bill, outlining the broad scope of jurisdiction intended for the courts and the Tribunal and the reasons for mandating that scope. confirms that the jurisdiction conferred on the ‘Tribunal is a civil jurisdiction and sets out procedural consequences that flow fiom that and the orders that the Tribunal may make. addresses the particular challenges of proceeding on notice in matters involving the seizure of tainted ctyptocurrency and mandating ex parte applications and the making of orders without notice in specific circumstances. Subpart 2— Tainted Cryptocutrency investigation powers affirmatively mandates a ctyptocurrency recovery agent to carry out ethical recovery hacking as a part of its investigation and seizure activitiesClause 72 Clause 73 Clause 74 Clause 75 Clause 76 Clause 77 Clause 78 Clause 79 10 allows for administrative authority of an interim seizure of tainted cryptocurreney — without first obtaining a cryptocurreney seizure order — in the limited circumstances, and on the terms and conditions set out in this clause, Subpart 3 — Cryptocurrency seizure orders allows a cryptocurrency recovery agent to apply to the Tribunal for a cryptocurreney seizure order in the circumstances set out in this clause, ‘The clause affords the Tribunal a broad power to make that order. sets out the procedures that the cryptocurrency recovery agent must follow in applying to the Tribunal, requires the Head of FIU to be served with an application for a eryptocurreney seizure order in the limited circumstances set out in this clause. However, the Tribunal may, in any case, direct service of the application on the Head. sets out the procedures that the cryptocurrency recovery agent must follow if, in the course of investigation into tainted cryptocurreney, it acquires knowledge as to other tainted property; the clause addresses the procedural issues that arise in ensuring both successful seizure and the sharing of information as to that other tainted property. addresses the form of order that the Tribunal may make if satisfied a cryptocurreney seizure order should issue and specifically addresses the question of security of seized cryptocurreney. mandates notification of the seizure of tainted cryptocurrency so that all interested persons who have, or may have tights under this legislation are made aware of the seizure and of those rights, reflects the intended interim nature of a eryptocurrency seizure order as a holding order, pending the heating and determination of an application for a cryptocurreney forfeiture order. This clause sets out the base expiry date as 3 months after the seizure order was made, unless the applicant has filed application for a forfeiture order. Provided that latter application is proceeded with diligently, the seizure ‘order remains in force pending determination of the forfeiture application, addresses the situation in which a forfeiture order is declined, mal provision for ongoing effect of the seizure order if there is an appeal. ngClause 81 Clause 82 Clause 83 Clause 85 Clause 86 Clause 87 Clause 88 Clause 89 Clause 90 allows for a seizure order to be extended by the Tribunal on the terms and conditions set out in this clause; successive applications can be made giving a maximum seizure period of 2 years addresses matters of proof relevant to any application for extension under clause 81. addresses the need, affirmatively, to draw the attention of a seizure order to potential claimants, so that rights afforded under this legislation can be exercised by those persons; it allows for ancillary orders to address this issue, imposes a positive obligation of retum of eryptocurreney if'a seizure order expires without a forfeiture order having been made. Subpart 4 Interim holding of tainted eryptocurreney requires that any interim holding of tainted cryptocurrency must be in an ultra-cold wallet for security reasons and allows for conversion and other steps to be taken, consistent with keeping the seized cryptocurrency or its equivalent, safe and secure. gives cortain claimants, in the circumstances set out in the clause, the right to apply to the Tribunal for an order that the eryptocurreney be converted. Subpart 5 Cryptocurrency Forfeiture addresses the circumstance in which, following seizure, it becomes clear that no part of the cryptocurreney is tainted, and deals with the issue of return of that to parties entitled to it, imposes a positive obligation on an agent to make an application for a cryptocurreney forfeiture order so soon as practicable after seizure and sets ‘out certain procedural requirements. requires that, except as provided by the clause, every application for a cryptocurrency forfeiture order must be made on notice. Where an order is made without notice a suspension period is provided for. allows, in respect of any order made without notice under clause 89, to be set aside on the basis set out in this clause.Clause 91 se 92 Clause 93 Clause 94 Clause 96 Clause 97 Clause 98. 2 allows a suspended order to take effect in the circumstances set out in this clause. Ifa claim is made under clause 99, then the suspension continues as provided in this clause, requires that, except as provided by the clause, every application for a cryptocurrency forfeiture order must be made on notice and makes detailed provision as to how notice is given and allowing adequate time to respond. makes it clear that despite section 92 notice requirements, the Tribunal inust be satisfied that notice will not tip off wrongdoers ~ the Head can be consulted by the Tribunal in this regard. makes provision for those who may be heard at a hearing for a forfeiture order; since upon the making of an order the cryptocurrency is to be passed to the Cryptocurrency Receiver, provision is made to address the practicalities of that sets out the role of the Tribunal in cor order and makes pro is to vest all inter Receiver. idering whether to grant a forfeiture jon for the form of that order and its effect — which sin the cryptocurrency in the Cryptocurrency addresses the question of remuneration of the agent and FIU and for reimbursement of costs, addresses the need for the Cryptocurreney Receiver to have all available information relevant to appropriate distribution; subject to payment of the agent’s costs of doing so, the Tribunal may order it to make further investigation for that purpose. Part 5 Claims before CRT sets out what may be described as due process requirements that address the interests of engaged parties, balancing those against the rights of vietims and other claimants, the applicable principles being set out in this provision.Clause 99 Clause 100 Clause 101 Clause 102 Clause 103 Clause 104 Clause 105 Clause 106 Clause 107 13 Subpart 1 Typification Claim sets out the right of @ claimant to challenge the typification of cryptocurrency as “tainted” — and thus seek to have forfeiture not be ordered, ‘The provision sets out the procedural requirements of this, including issues as to burden of proof in the unusual circumstances of eryptocurreney. enumerates the classes of person who are entitled or may be given leave, to make a typification claim. Subpart 2 Hardship Claim addresses the position of persons who may, as a matter of findamental justice, qualify for some measure of relief from the consequences of forfeiture, making clear issues as to deferred priority of payment over that of victims, sets out the procedural requirements for making a hardship claim, A person may make a typitication claim or a hardship claim, but not both. allows the Tribunal a discretion to grant relief where there is severe hardship in circumstances that as a matter of fundamental justice, make it appropriate to provide some measure of relief from the consequences of forfeiture, addresses the position of persons who are false fronts, disentitling them to hardship relief except in limited circumstances as set out in this clauses those are largely concemed with the public interest in ascertaining the identity of the principal parties that stand behind those false fronts. Subpart 3 Procedure This provision addresses in detail the procedural steps for bringing either a typification claim or a hardship claim. provides for information sharing as between the Tribunal and the Head of FIU in respect of those applications, and affords the Head a right to appear and adduce evidence, deals with evidential matters and with the initial requirement for an applicant to demonstrate standing,Clause 108 Clause 109 110 Clause 111 Clause 112 Clause 113 Clause 114 Clause 115 Clause 116 117 Clause 118 Clause 119 Clause 120 4 Part 6 Property Interest compensation Subpart | Over iew sets out the high level principles that are intended to apply in dealing with vietims who would have had property rights prior to Forfeiture, Subpart 2 Cryptocurrency Receiver provides for the appointment, by the Minister of Finance, of a Cryptocurrency Receiver to hold forfeited cryptocurrency and proceeds of s conversion, {s out the cireumstances in which the Minister may remove the ryplocurrency Receiver from office. sets out the required qualifications of a person to be appointed as the Cryptocurrency Receiver. provides that the Cryptocurrency Receiver is @ public servant, allows the Cryptocurreney Receiver a limited power of delegati sets out further limits on those powers of delegation, sets out powers of such a delegate, sets out the effect of a delegation on the Cryptocurrency Receiver. sets out the procedure for revoking such a delegation outlines the principal function of the Cryptocurrency Receiver which may be described shortly as having possession and control of forfeited cryptocurrency and its proceeds, in segregated sub-funds for the purpose of distribution to claimants. confirms the Cryptocurrency Receiver has other duties as specified in the legislation of regulations outlines the powers of the Cryptocurrency Receiver and allows the Receiver to seek directions from the Tribunal.Clause 121 Clause 122 Clause 123 Clause 124 Clause 125 Clause 126 Clause 127 Clause 128 Clause 129 Clause 130 Clause 131 15 provides the Cryptocurrency Receiver with a statutory authority to administer oaths for the purposes of the legislation. imposes an obligation on the part of the Cryplocurrency Receiver to preserve the value of cryptocurrency in the Receiver’s control, The obligation is qualified, in the ways set out in the provision, and there is a right to seek directions from the Tribunal in relation to decisions that may need to be made as to conversion into fiat. imposes general standards of care, honesty and diligence on the Cryptocurrency Receiver. allows the Cryptocurreney Receiver to rely on third party advice and on records in the limited circumstances set out in this clause. imposes record keeping obligations on the part of the Cryptocurr Receiver and allows for inspection of those. icy imposes specific financial accounting and record keeping duties on the Cryptocurrency Receiver, so as to ensure proper management of the Fund, ‘The clause allows for audit and inspection of those records. requires the Cryptocurreney Receiver to prepare and present to the Financial Secretary and the Tribunal, a report of operations as they relate to the Act and the Fund, sets out requirements as to the place at which records are to be kept and the duration of their being kept. affords the Tribunal a general power of oversight of the conduet of the Cryptocurrency Receiver with powers of enquiry; the rights of the Minister, the High Court and the Financial Secretary are expressly preserved, Subpart 3 The Fund creates the Cryptocurreney Recovery Fund (“Fund”) in which all funds representing tainted cryptocurrency’ and proceeds are to be kept, and makes provision for if to be divided into segregated sub-funds, each relating to a particular forfeiture order. The clause contemplates that tainted cryptocurrency may be held unconverted, sets out the components of the Fund and makes provision to ensure the integrity of segregation of sub-funds,16 Clause 132 mandates segregation of assets of sub-funds and sets out how those assets are to be applied, with reference to the Fund as a whole. Clause 133 does likewise, in respect of the liabilities of sub-funds. Clause 134 addresses the issue of liabilities that do not fall exclusively, or necessarily atall, ina single segregated sub-fund, Clause 135 imposes conduct requirements on the Cryptocurrency Receiver that are intended to maintain the segregation of sub-funds and to allow lentification of transactions with reference to the applicable sub-fund, It addresses situations in which any error or mistake occurs Clause 136 sets out the rights of third parties in the case of any error, mistake or dispute as (0 attribution of monies to a sub-fund, affording a right of access to the Tribunal for that purpose. Clause 137 allows the Cryptocurrency Receiver a {i segregated sub-fund. ed power fo invest assets of a Subpart 4 General procedure of Cryptocurreney Receiver First steps in Cryptocurreney Receiver's dealings with tainted eryptocurrency Clause 138 defines (erms used in this subpart. Reports Clause 139 requires the Cryptocurrency Receiver to provide a first report to claimants within 30 days of taking control of tainted cryptocurrency, the required contents of which are described in the clause. Clause 140 requires the Cryptocurrency Receiver to provide six monthly reports after that first report, the required contents of which are described in the clause. Claims Clause 141 allows a claimant to make a claim, and sets out, in an introductory way, the procedural and qualification requirements imposed on a claimant. Clause 142 requires that a claim must be for an amount ascertained with reference to the date and time of the making of the forfeiture order and addresses currency conversion issues,Clause 143 Clause 144 Clause 145 Clause 146 Clause 147 Clause 148 Clause 149 Clause 150 Clause 151 Clause 153 Clause 154 Clause 155 Clause 156 Clause 157 Clause 158 7 addresses circumstances in which it may not be possible for @ elaim fo be for an ascertained amount. makes pro} cl ion for the procedure that a claimant must follow if making a allows the Cryptocurreney Receiver to fix a final date for the making of claims and makes provision of public notice of that deadline, allows a late claimant limited rights as set out in the clause. deals with the limited citeumstanees of priority payments and the fail person with priority to establish that within time, imposes a positive duty on the part of the Cryptocurvency Receiver to consider and determine claims, and requires that in the case of rejection, the relevant claimant be advised of rights of recourse to the Tribunal, addresses the powers of the Tribunal to reverse or modify a rejection on the part of the Cryptocurrency Receiver provides recourse to the Tribunal for claimants ha the Cryptocurrency Receiver. 1g other disputes with makes provision for retention of sums by way of dividend pending determination by the Tribunal. addresses the question of costs on any challenge under clause 149. allows for claims to be ranked either preferential or non-preferential, in each case as provided for by clause 155. sets out the order in which claims are to be paid. specifies first priority claims, provides statutory authority for the Cryptocurrency Receiver to recover costs. provides for interest to be payable on claims in certain circumstances and ‘on the basis provided for in this clause. Final Report requires the Cryptocurrency Receiver to prepare a final report and accounts once duties imposed on the Receiver in respect of any particular sub-fund.Clause 159 Clause 160 Clause 161 Clause 162 Clause 163 Clause 164 Clause 165 Clause 166 Clause 167 Clause 168 Clause 169 provides for remaining monies to be paid into the Distribution Suzplus Account, an account under the contro! of the Financial Secretary who is, from that point, bound fo apply those monies as provided for in this clause, Part7 ‘Treaty Inw considerations sets out the principles which apply to this Part in relation to recognising international treaty commitments and working cooperatively with foreign states to combat proscribed conduct, sets out circumstances where it may be appropriate for the Cryptocurrency Receiver or the Financial Secretary to pass the proceeds of forfeited eryptocurrency to a foreign state. sets out the role of Cabinet in assisting with determining distributions to be made under section 161. enables the Crown to enter info asset sharing agreements with foreign slates in relation to the proceeds of forfeited cryptocurrency and sets out the procedure and requirements of any such asset sharing agreement. Part 8 Miscellaneous Applications ~ general procedure defines who the applicant and decision maker are in relation to applications made to either the Head or the Cryptocurrency Receiver, sets out the requirements of an application and the requirements of the decision maker if it chooses to refuse to consider an application information from the jon maker ean treat an provides that the decision maker can request further applicant and the circumstances in which the deci application as withdrawn, sets out the time periods in which decisions must be made. requires the decision maker (0 give notice of, and reasons for, decisions made, sets out circumstances where the decision maker may withhold information.Clause 170 Clause 171 Clause 172 Clause 173 Clause 174 Clause 175 Clause 176 Clause 177 Clause 178 Clause 179 Clause 180 19 Caleulation of time sets out how dates, ’imes and periods are to be calculated. Confidentiality imposes an obligation of confidentiality in relation to information obtained by a cryptocurrency recovery agent and sets out the circumstances in which that information can be disclosed and to whom. creates an offence where unauthorised losure of information is made; exempts certain disclosures that are authorised or required; specifies what hed, Protection ts and indenmity establishes requirements imposed on cryptocurrency recovery agents and the Cryptocurrency Receiver in relation fo the custody and contro! of cryptocurrency. establishes who are protected parties for the purposes of clauses 175 and 176, sets out the circumstances in which protected parties are exempt from liability under the Act. extends the protected party exemption to the Crown; sets out circumstances in which the Crown has no liability under the Act; and recognises protections afforded the Crown by the Crown Proceedings Act 1050, Limitation establishes a limitation period for claims jade in respect of the Fund. Investigations by Head gives the Head the power to appoint an investigator to investigate a eryptocurrency recovery agent. It scts out the grounds upon, and circumstances in which, that investigation can occur, sets out the powers of an investigator under clause 178. entitles the Court to order the payment of expenses of an investigation if a person is convicted of an offence,Clause 181 Clause 182 Clause 183 se 184 Clause 185 e 186 Clause 187 Clause 188 Clause 189 Clause 190 Clause 191 Clause 192 a ve 193 Clause 194 20 Offences creates an offence where a person becomes a principal person of a cryptocurrency recovery agent without prior written approval of the Head. creates an offence where @ person provides false information under compulsion, ‘creates an offence where a person fails to provide information or obstructs another person from providing information when required to do so. creates offences in connection with an investigation under clauses 178 — 180. creates an offence where information required in connection with an investigation under clause 179 is tampered with. establishes a defence (o a charge under clause 185 where there is innocent destruction of informat oreates an offence where false informe n is provided with intent, creates an offence where a oryptocurrency recovery agent knowingly fails fo provide material information to the Head, creates an offence where, in the course of conducting eryptocurrency recovery agent business a person acts in a dishonest manner. sets out the penalties for offences under the Act or Regulations. Regulations forms and Prudential Guidelines provides for regulations to be made covering a wide range of incidental matters in connection with the application of the Act. enables the Head to prescribe forms, fees, and exemptions from fees. enables the Head to issue prudential guidelines in connection with the application of the Act. Consequential amendment provides for consequential amendments to the Development Investment ‘Act 1995-96,al Clause 195 provides for consequential amendment to the Financial Intelligence Unit Act 2015. Clause 196 provides for consequential amendment to the Proceeds of Crime Act 2003. Schedule 1 This Schedule sets out powers and procedures of the Cryptocurreney Restitution Tribunal