A special police unit is being set up to seize criminal assets and it will have a hit list to work on.

Police Minister Judith Collins and Police Commissioner Howard Broad announced the formation of the 22-member Assets Recovery Unit (ARU) today, saying it would hunt down and seize millions of dollars in profits from organised crime.

"The ARU will be at the sharp end of our fight against organised crime and methamphetamine," Ms Collins said at a press conference.

"Gangs in this country have evolved into sophisticated criminal businesses that make tens of millions of dollars a year."

Mr Broad said organised crime posed a national security threat and the methamphetamine trade alone was worth $1 billion a year.

Intelligence gathered over the last few years had delivered the information the new unit would need, he said.

"There are certainly people associated with some of our criminal organisations that they will have in mind.

"Our people are busting to get going on this."

Mr Broad said the unit would use new legislation passed by Parliament – the Criminal Proceeds (Recovery) Act – to do its work.

The Act comes into force on December 1 and under its provisions police can demand answers from people about their "unexplained wealth" without having to prove a criminal conviction against the person holding the assets.

"We know there are people who haven't worked throughout their adult life yet they control considerable assets," Mr Broad said.

"The question is where did it come from? If there's a reasonable explanation, that's easy to answer. But there are those who have acquired large assets through drugs and other criminal means and they should be held to account."

The Act gives police similar powers to the Inland Revenue Department and the unit will work with it, the Customs Department, Immigration and the Serious Fraud Office.

Ms Collins said "the most dreadful thing" about the methamphetamine trade was its potential for corruption.

"The money it generates has the potential to lead to corruption throughout New Zealand, from law enforcement to politics, that's the biggest danger to our way of life," she said.

The Government intends using some of the seized proceeds of crime to fight crime.

"We've made it plain, in the methamphetamine strategy, that we're not averse to taking these ill-gotten gains and using it against the criminals themselves," Ms Collins said.

It would go into crime-fighting agencies but there would be no direct connection with police funding.

The seized proceeds will also be used to help rehabilitate victims of the drug trade.