Background of Proceeds Act (Makko Oko)

Background of Proceeds Act
Citation	2024 c. XX
Enacted by	3rd Session of the Law Council
Date enacted	June 12th, 2024
Date effective	June 12th, 2024
Status: Struck down

The Background of Proceeds Act (c. XX) is an Act of Council of the 3rd Session which was ratified on June 12th, 2024 by Emperor Conall Solis. The act is seen as an expansion of the Residential Security Act ratified back in 2022. It mandates that all businesses report the origins of proceeds received, that home sellers and landlords selling or renting out a residence perform background checks prior to authorizing or conducting any business transaction and makes illegal any proceeds obtained that did not follow this act, or that involved an illegal third party, such as an illegal immigrant. The law was heavily denounced, with many saying that the act is just a statutory repeat of tax reporting requirements but expanded to include all activities, even those not subject to taxation.

Legislative History

The BPA was ratified in response to the selling of a home in relation to the 2023 attempted coup to a person with a fake identity and no HIJS record.

Cases

TCEEA v. Rodriguez

TCEEA v. Rodriguez started as a case in the Tax Litigation Court of Makko Oko against defendant Amando Rodriguez, who was a small business owner from Xuzilvuis in the small city of Rul, Taupo, Makko Oko. When Rodriguez filed his annual tax return in 2025, he had attested to the source of all income received and spent for his business, however, the TCEEA opened an inquiry and later began to audit their finances, with a lawsuit being filed against them in Tax Litigation Court in July, citing violations of the reporting requirements set out under the BPA, and accused him and his business of money laundering. Rodriguez, representing himself pro se, had argued that the court had no jurisdiction to enforce the BPA, arguing that "Laundering and liability are crimes, and this court has no power to assert itself in a criminal manner over me". The court disagreed, and Rodriguez ended up losing, with the TCEEA now threatening asset seizure, Rodriguez appealed to the Appellate Court of Appeals and later successfully to the Supreme Court, however this time, represented by the NCRU. The Supreme Court ruled 3-1-2 in favor of Rodriguez, restricting an agency's authority to bring cases in addition to restricting the power of the Tax Litigation Court heavily.

Beck v. Holland

Beck v. Holland was a court case that made its way up to the Supreme Court of Makko Oko regarding Denise Beck and CCS Detective Robert Holland. The lawsuit, filed on February 21st, 2026, regarded an accusation that Det. Holland while undercover stole money from Beck, and showing evidence to the local station after the case was closed and the prosecution finished, the CCS rejected the claims and stated that no money was ever taken from Beck. The Supreme Court would rule 5-1-0 for Beck, and ordered the government to pay a settlement to Beck the amount that was stolen plus attorney's fees. In addition, it reinterpreted Article XIX of the statute to make law enforcement officers liable for crimes committed in the fulfillment of their duties, thereby making them subject to civil forfeiture and seizure.

Castiglione v. Makko Oko

Castiglione v. Makko Oko was a court case filed by Makkonian citizen Jaime Castiglione against His Emperor's Government for a "violation of civil rights". The case was successfully petitioned to the court on June 11th, 2027, and the Supreme Court would rule 4-1-1 for Castiglione, and this case would lead to the act being struck down as unconstitutional and "in conflict with other laws".

Effects

The act's ratification led to the immediate collapse of the real estate industry as it had no time to implement the provisions stipulated under it and enforce it. In addition, it made renting or purchasing a home in the nation less accessible to the disabled and more difficult overall for the nation's citizens, however foreigners had it the hardest as they were not in government systems on account of being a non-citizen and as such background checks, which were already run when they applied for a visa, could take months, sometimes up to a year to be completed. The accounting industry on the other hand ballooned with clients and income as the reporting requirements under the BPA were cited as "difficult and complicated to understand" by citizens. The home that caused this legislation to be ratified, could not be seized by the TCEEA because the proceeds were not obtained illegally due to the law not having been in effect at the time of the sale.

Full Text

SECTION I - DEFINING PROCEEDS

ARTICLE I - Proceeds shall heretofore be defined within this statute as any money, income or profit gained or obtained due to one or more transactions with one or more parties.

SECTION II - MANDATED REPORTING

ARTICLE II - It shall be mandated under this article that all persons with which aim to, or successfully obtain, proceeds, shall report any and all information about how said proceeds were obtained to the TCEEA, regardless on its taxability. This includes the origins, timing, related bank accounts, reasoning, etc.

ARTICLE III - All persons with which are selling a house or renting one out shall have government-run background checks on all persons with which plan to gain from it prior to the transaction being conducted or official.

SECTION III - PROHIBITED PROCEEDS

ARTICLE IV - All proceeds that are obtained through illicit means, or that did not have mandatory reporting under this statute, shall under this article be illegal.

ARTICLE V - No proceeds shall be made from an illegal immigrant.

ARTICLE VI - No proceeds shall be made from a prohibited group classified under the Anti-Terrorism Act.

ARTICLE VII - No persons shall obtain proceeds on behalf of one or more persons, rather in attempt to skirt the law or otherwise.

SECTION IV - LIABILITY

ARTICLE VIII - All proceeds that cause, rather directly or indirectly, a terrorist attack or any illegal conduct therefore, even if the proceeds themselves were not illegal, shall be liable to direct civil or criminal action under this article.

ARTICLE IX - No persons or groups shall be held liable for denying a party or parties a transaction due to following the statutes.

ARTICLE X - All records, including background checks, as part of this statute, shall be made available and accessible to all parties with due haste. A failure to do so is hereby illegal.

ARTICLE XI - No persons or groups shall lie to terminate a transaction should it have been due to anything under this statute, and shall tell the whole truth and nothing except the truth.

SECTION V - GOVERNMENT USE

ARTICLE XII - The government shall store all records of checks etc. as a part of this statute for a minimum period of three (3) months, with no maximum.

ARTICLE XIII - The government shall be able to use the records stipulated under Article XII in any way, shape or form, with zero liability to the government for such use.

ARTICLE XIV - The government shall be able to disclose any record stipulated under Article XII publicly as deemed fit.

SECTION VI - SEIZURE OF PROCEEDS

ARTICLE XV - Any proceeds may such be seized by the TCEEA upon a credible suspicion or report of illegal activities through those proceeds, or proceeds obtained in violation of this statute.

ARTICLE XVI - Shall proceeds such be seized, the government shall have 90 days to indict any persons in relation to the proceeds, otherwise, the proceeds must be given back to the person(s).

SECTION VII - LAUNDERING & ENFORCEMENT

ARTICLE XVII - All proceeds that were disguised (or laundered) shall such be able to be seized under Article XV without application of Article XVI.

ARTICLE XVIII - All proceeds that cause what is described under Article VIII shall such be able to be seized under Article XV without application of Article XVI.

ARTICLE XIX - This statute shall exempt all law enforcement officers under undercover operations from being liable to seizure, prosecution or lawsuits.

ARTICLE XX - In times of martial law, any proceeds may such be seized by the Ministry of Defense for any length of time as deemed fit, and as such is excluded from Article XVI application.