From 1 October 2018 Customs will have a new Act. The changes mainly affect our business customers. Find out what this may mean for your business.
Customs continues to protect New Zealand through identifying and managing a variety of risks and threats at the border.
We must respond effectively to the increasing volume, diversity, and sophistication of border and revenue offending. We use an integrated, risk-based approach to facilitate the flow of people, goods, and craft across the border while also addressing the associated risks.
We developed and introduced our Intelligent Enforcement strategy in 2016/17, which guides how Customs approaches the risks and threats we face. It is based on four key principles:
- prevention – minimising harm to New Zealand by having a greater effect offshore and upstream
- being intelligence-led – expanded information gathering to enable us to know what is normal and target what is abnormal
- efficient prioritisation – strategic prioritisation and targeting of resources
- effective partnerships – with our domestic and international partners.
Methods of concealing drugs continue to become more elaborate and sophisticated. We use intelligence to understand and identify risk, and focus our efforts accordingly. Customs seeks to continually enhance our risk-targeting methodologies and capabilities, and to deliver greater assurance at the border.
Significant interceptions of illicit drugs by Customs in 2016/17, and examples of the various and changing concealment methods by drug smugglers, include:
- the largest-ever seizure of methamphetamine imported into New Zealand: approximately 176 kg concealed in the doors of shipping containers sent from China in July 2016 (the result of a 16-month investigation). A 20-year-old Hong Kong man pleaded guilty and was sentenced to over 15 years’ imprisonment in May 2017
- approximately 20 kg of methamphetamine hidden in an air cargo shipment from Hong Kong (80 boxes of 24-piece spatula sets) in August 2016 – Customs’ investigators linked the shipment to, and arrested, a Hong Kong national who had arrived in May 2016
- 4.8 kg of methamphetamine at the International Mail Centre in June 2017, hidden inside a consignment of candles sent from Canada – our investigators linked the consignment to, and arrested, a Canadian man
- 4.6 kg of cocaine concealed in the suitcases of a Brazilian woman arriving at Auckland airport in April 2017 – she was sentenced to eight years’ imprisonment in June 2017.
New Zealand street prices for methamphetamine are among the highest in the world, making this a lucrative and attractive market for both domestic and international crime groups. Customs plays a key role in the multi-agency response to tackling methamphetamine. Our efforts to disrupt the supply of methamphetamine and its precursors into New Zealand are coordinated under Customs’ Methamphetamine Campaign Plan 2016–2020.
There continues to be a shift towards importing methamphetamine rather than its precursors. In 2016/17 we seized 353.1 kg2 of methamphetamine, an increase of 20.1% from the 294.0 kg seized in 2015/16. Meanwhile, the volume of methamphetamine precursors seized has dropped, from the 2015/16 total of 1,227 kg (with an estimated yield of 919.9 kg of methamphetamine) to 725 kg in 2016/17 (with an estimated methamphetamine yield of 543.3 kg)3.
In January 2017 Customs also intercepted around 160 litres of t-boc methamphetamine contained in a cargo consignment from Hong Kong labelled as dishwashing liquid.4 The t-boc form of methamphetamine is chemically masked to prevent it being detected, and it can then be converted back into methamphetamine; the amount seized in this consignment is estimated to convert into approximately 120 kg of methamphetamine. This intercepted import is an example of criminal syndicates employing new and sophisticated methods in their attempts to supply the illicit drug market.
We are also seeing a recent trend in organised criminal syndicates attempting to smuggle MDMA (ecstasy) into New Zealand in larger quantities – in addition to the smaller amounts coming in through the mail stream after being bought over the dark web. This resulted in us intercepting 32.3 kg in crystal form and over 5,000 tablets in 2016/17, compared to 6.6 kg and nearly 6,000 tablets in 2015/16.
Agencies use a range of measures to understand the New Zealand illicit drug market. In 2016/17, the National Drug Intelligence Bureau (NDIB)5 began a pilot wastewater analysis programme to help accurately assess the levels of drug consumption in New Zealand, and to inform enforcement and treatment strategies by the relevant agencies. Wastewater collected in Auckland and Christchurch in the preliminary analysis undertaken in 2016/17 indicated that the drugs being consumed in New Zealand reflect the drugs Customs is seizing at the border – predominantly methamphetamine but also MDMA and cocaine.
Customs is seeing, and responding to, increasing diversification in the source and transit countries for the smuggling of methamphetamine into New Zealand. In 2016/17 we have seen a change from China, Hong Kong, and Taiwan as the predominant source countries due to a rise in North American smuggling routes (from Canada, the United States, and Mexico).
In 2016/17 we continued to increase our presence overseas and work cooperatively with our international partners to disrupt illicit drug supply chains offshore, and intercept attempted imports ‘upstream’ before they reach our border (as discussed in Intelligence-led). Our overseas partners (including those in Hong Kong, Germany, Canada, and the US) have told us that in 2016/17 they made 16 interceptions of illicit drugs, mainly methamphetamine, destined for New Zealand. Those interceptions avoided potential harm to New Zealand of over $30 million, based on the New Zealand Drug Harm Index, which quantifies the social and economic costs associated with illicit drugs.
Shared intelligence and joint operational activity also sees New Zealand helping other countries protect their borders. Customs’ intelligence played a key role in Australian authorities seizing over 1.4 tonnes of cocaine in February 2017 from a sailing vessel before it arrived in Australia (the largest-ever seizure of drugs in Australasia).6
Gang Action Plan
Gangs are a key player in the methamphetamine supply chain in New Zealand. In 2016/17 Customs continued to work with New Zealand Police (NZ Police) and other agencies under the Whole-of-Government Action Plan to Reduce the Harms caused by New Zealand Adult Gangs and Transnational Crime Group. Customs’ focus is on gang involvement in drug trafficking activities. We have a representative in the multi-agency Gang Intelligence Centre, which enables agencies to combine intelligence to allow better targeting and coordination.
We continue to work with other agencies, both locally (particularly the National Organised Crime Group) and internationally, to disrupt criminal resources and money laundering, and to identify people who enter the country intending to carry out fraudulent activity.
In September 2016 Customs searched a female passenger arriving at Auckland airport on a Romanian passport and found an air waybill detailing a consignment destined for New Zealand. The consignment was intercepted by Customs and found to contain equipment used to ‘skim’ credit cards used in ATM machines. Customs investigators identified the likely recipient of the consignment as a visiting male Hungarian national. He was arrested by Customs in September 2016 as he attempted to leave New Zealand, and charged with importing a prohibited good. This prevented a potentially significant amount of fraud, and resulting losses by banks.
One of Customs’ roles is to ensure that money crossing the border is being carried for legitimate purposes.7 The movement of large sums of cash has been linked to illegal activities and criminal networks. Our dual-trained detector dogs, which are able to detect cash as well as illicit drugs, are one of the tools we use at the border.
In 2016/17 Customs continued to work on combatting and reducing objectionable material and online offending, including that involving child sexual exploitation and abuse, and that relating to terrorism or extremism. Our role includes identifying those carrying images and videos across New Zealand’s physical border.
Customs has strong partnerships in this area with the Department of Internal Affairs and NZ Police. Internationally, the three agencies work closely with overseas partners as a ‘Virtual Global Taskforce’ to catch perpetrators and identify and protect child victims. This international collaboration includes the sharing of intelligence that enables offenders to be targeted, as well as information on trends, practices, and technology used by both law enforcement and offenders.
Following an investigation by Customs, in May 2017 an Auckland man was convicted and sentenced to 26 months’ imprisonment on one representative charge of knowingly distributing objectionable publications. He was also ordered to be registered on the Child Sex Offender Register.
2All of the 2016/17 drug totals in this report (including precursor totals), and the associated drug harm figures based on those totals, are provisional figures based on Customs’ initial weighing and recording of interceptions. These figures may change – for example, quantities may be updated after substances are further tested or the drugs are reweighed as the relevant investigation progresses to a prosecution.
3Since 2014 ephedrine has made up the bulk of our interceptions of methamphetamine precursor at the border, replacing pseudoephedrine (in the form of ContacNT) as the predominant precursor. Ephedrine has a significantly higher methamphetamine yield than pseudoephedrine – granules of ContacNT convert to methamphetamine at a rate of 0.3027 per gram while pure ephedrine converts at a rate of 0.75 per gram (assuming high cook efficiency). Customs adopted the new calculation in 2016/17, and updated the 2014/15 and 2015/16 ‘estimated methamphetamine yield from precursors’ amounts using that higher yield rate (given the shift to ephedrine from 2014). Accordingly the 2014/15 and 2015/16 amounts stated above, and shown in the above graph, differ from those in the New Zealand Customs Service Annual Report 2016.
4This is not included in the volumes of methamphetamine or precursor seized by Customs in 2016/17 as t-boc methamphetamine was not classified as a controlled drug under the Misuse of Drugs Act 1975. Following a joint Customs and New Zealand Police operation, the interception ultimately led to the arrest of four people in March 2017 on charges relating to having the equipment to manufacture methamphetamine, and the supply of methamphetamine.
5A joint operation headquartered at New Zealand Police including representatives from Customs and the Ministry of Health – responsible for producing intelligence reports that provide assessments of the state of the illicit drugs scene in New Zealand.
6The seizure is discussed in this press release from the Australian Federal Police: www.afp.gov.au/news-media/media-releases/australias-biggest-cocaine-interception-14-tonnes-seized-six-charged.
7Travellers must declare cash in any currency or form if it is the equivalent of NZ$10,000 or more. Undeclared or misdeclared cash is a prohibited good under the Customs and Excise Act 1996, and can be subject to forfeiture and seizure. Not declaring cash or providing false or misleading information is an offence under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and is subject to a range of penalties, including fines and imprisonment.