Bills Digest No.66, 2018–19
PDF version [591KB]
Cat Barker
Foreign Affairs, Defence and Security Section
Cathy Madden
Politics and Public Administration Section
25 March 2019
Contents
Purpose of the Bill
Background
Committee consideration
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Date introduced: 20 February 2019
House: House of
Representatives
Portfolio: Attorney-General
Commencement: The day after Royal Assent
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
March 2019.
Purpose of the Bill
The purpose of the Foreign Influence Transparency Scheme
Amendment Bill 2019 (the Bill) is to amend the Foreign Influence
Transparency Scheme Act 2018 (the FITS Act) to:
- replace
the definition of ‘communications activity’ to ensure that producers of
relevant information or material will be liable to register under the Scheme
- require
that the information or material includes a disclosure about the role of a
foreign principal in its production
- clarify
the factors to be considered in determining the purpose of an activity and
- make
technical amendments to offences for failing to apply for or renew registration
under the Scheme.
Background
The Foreign Influence Transparency (FIT) Scheme commenced
on 10 December 2018.[1]
The purpose of the Scheme is to ‘provide the public and government
decision-makers with visibility of the nature, level and extent of foreign
influence on Australia's government and political process’.[2]
Persons (whether individuals or organisations) are required to register under
the FIT Scheme if they have certain arrangements with, or undertake activities
on behalf of, foreign principals (defined to include foreign: governments,
political organisations, government-related entities and government-related
individuals).[3]
Types of registrable activities include:
-
parliamentary lobbying on behalf of a foreign government
-
parliamentary lobbying on behalf of other kinds of foreign
principals for the purpose of political or governmental influence
-
general political lobbying for the purpose of political or
governmental influence
-
communications activities for the purpose of political or
government influence
-
disbursement activities for the purpose of political or
governmental influence
-
employment or activities of former Cabinet ministers
-
employment or activities of recent designated position holders in
the 15 year period immediately following their public role.[4]
Registrants must disclose information about the nature of
their relationship with the foreign principal and the activities they are
undertaking (or have an arrangement to undertake) on behalf of the foreign
principal.[5]
The FITS Act was part of a legislative package
introduced to address concerns about foreign influence and foreign interference
in Australia, along with the National Security
Legislation Amendment (Espionage and Foreign Interference) Act 2018 and
the Electoral
Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2018.
The proposed laws were controversial, and the Bills for all three Acts were
amended substantially in response to reports of the Parliamentary Joint
Committee on Intelligence and Security and the Joint Standing Committee on
Electoral Matters before being passed.[6]
Amendments were made to the FITS Act late in 2018
to expand the scope of information to be included on the publicly available
register and to reduce the grace period for registration by persons with
registrable arrangements in place when the Act commenced.[7]
The Government has emphasised the need for the Bill to be
passed quickly to ensure transparency about foreign influence in light of the
upcoming federal election, due by the 18 May 2019.[8]
Committee
consideration
At the time of publication of this Bills Digest, the Bill
had not been referred to any parliamentary committee, and neither the Senate
Standing Committee for the Scrutiny of Bills nor the Parliamentary Joint
Committee on Human Rights had reported on the Bill.[9]
Policy
position of non-government parties/independents
The Australian Labor Party supports the Bill.[10]
At the time of publication of this Digest, there was no
public indication of the policy position of other non-government parties and
independents on the Bill.
Position of major
interest groups
At the time of publication of this Digest, there was no
indication of reactions by major interest groups.
Financial
implications
The Explanatory Memorandum states that the Bill will have
no financial impact.[11]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[12]
Key issues
and provisions
Section 4 of the FITS Act sets out a simplified
outline of the Act. Item 1 of Schedule 1 will amend section
4 to clarify that the responsibilities under the FIT Scheme applying to a
registrant also apply to persons who are liable to be registered. The amended
outline will note that the extended disclosures obligations regime applies to
persons who undertake registrable communication activities, whether or not the
person is a registrant. These changes to the outline reflect the amendments
outlined under ‘Definition of communications activity’ and ‘Reporting
obligations’ below.
Definition of communications activity
Various proposed definitions of communications
activity for the purposes of the FIT Scheme attracted controversy.[13]
The existing definition in section 13 of the FITS Act is the result of
previous Government amendments to the definition of communications
activity originally proposed in the Foreign Influence Transparency
Scheme Bill 2018.
Current
definition and exclusions
Section 13 of the FITS Act defines what is meant by
communications activity for the purposes of the FIT Scheme.
Currently, it means communicating or distributing information or material to
the public or a section of the public. However, subsection 13(3) excludes from
the definition of communications activity activities undertaken
by a ‘disseminator’ where the activity:
- is
undertaken in the ordinary course of the disseminator’s business and
- is
communicating or distributing, to the public or a section of the public,
information or material
- produced
entirely by a person other than the disseminator or
- produced
by the disseminator only to the extent that the disseminator alters the
information or material, without affecting substance, to ensure compliance with
the law or to fit time or space constraints and
- the
identity of:
- if
the producer produced the information or material on behalf of another
person—that other person or
- otherwise—the
producer of the information or material
is either apparent in the
communicating or distributing or is disclosed in accordance with rules
prescribed for the purposes of the definition of communications activity.
As noted in the Explanatory Memorandum:
As currently drafted, subsection 13(1) only applies to a
person that communicates or distributes information or material to the public
or a section of the public - it does not apply to a person that produces
information or material for a foreign principal if that material is given to
another party to distribute. As a result, there is currently no requirement
for a producer to register or to comply with the other obligations under the
FITS Act relating to disclosures in communications activity. In addition, there
is no requirement to register on a person who disseminates information or
material that is produced entirely by another person and in circumstances where
the identity of the producer of the information is evident. In those
circumstances, there may [sic] be any evidence as to the involvement of a
foreign principal in the production of the information or material and no
enduring record (through a registration) of the activity being undertaken.[14]
The Bill will extend the operation of the FIT Scheme to
ensure this is no longer the case.
Proposed
changes
Item 2 of Schedule 1 will repeal and replace
subsection 13(1). The new definition of communications activity will
continue to apply the FIT Scheme to a person communicating or distributing
information or material to the public or a section of the public. However, the
effect of proposed paragraph 13(1)(b) is to extend the Scheme to also
include persons producing information or materials for a foreign principal, for
the purpose of that material being communicated or distributed to the public or
a section of the public by someone else.[15]
This extended definition means that producers of
information and materials will be liable to register and to provide disclosures
about the role of the foreign principal in their production of the information
or material.[16]
An example of the intent of this amendment is to capture a
person who produces an advertisement on behalf of a foreign government for the
purpose of influencing voters at the upcoming election, where that
advertisement is then distributed by another organisation.[17]
Retrospective
operation of amendments
Item 28 provides that the amendments to section 13
of the FITS Act apply in relation to an arrangement for a person to
undertake an activity, whether the arrangement existed before or after the
amendments commence. That is, those amendments will apply retrospectively to
existing arrangements to undertake activities captured by the revised
definition of communications activity.
Reporting
obligations
Part 3 of the FITS Act outlines the reporting and
other obligations of persons once they are registered under the FIT Scheme.
Current
reporting and related obligations
Briefly, the existing reporting and related obligations
under the FITS Act include:
- promptly
reporting any material changes affecting the registration
- promptly
reporting any disbursement activity undertaken on behalf of the
foreign principal
- during
the voting period for a federal election or designated vote—reviewing the
currency of information provided by the registrant and promptly reporting about
certain registrable activities undertaken during the voting period
- making
various disclosures when undertaking communications activity on behalf of the
foreign principal
- renewing
registration annually for so long as the person remains liable to register
under the scheme and
- keeping
proper records.[18]
Disbursement
activity under the FITS Act and reporting obligations under the Commonwealth
Electoral Act 1918
The FITS Act defines disbursement activity
as disbursing money or things of value, where neither the person nor a
recipient of the disbursement is required to disclose it under Division 4,
5 or 5A of Part XX of the Commonwealth
Electoral Act 1918 (CEA).[19]
That is, the definition excludes disbursements that are
required to be disclosed under another law, namely the CEA. Part XX of
the CEA deals with election funding and financial disclosure. Division 4
requires the disclosure of donations to candidates or political parties.
Division 5 requires the disclosure of electoral expenditure. Division 5A
requires political parties, associated entities and those who spend more than
the disclosure amount on political expenditure in a financial year to provide
annual returns.[20]
Registered
political parties, political campaigners and associated entities provide
returns each financial year to the Electoral Commission setting out details
relating to amounts received, paid or incurred by the parties, campaigners or
entities during the year. Third parties also provide annual returns setting out
details relating to electoral expenditure incurred by the third parties during
the year.
The returns are published
by the Electoral Commissioner, on the Transparency Register, under
section 320 of the CEA.[21]
Proposed changes
to reporting and related obligations
Section 33 of the FITS Act provides a simplified
outline of Part 3. Items 6 and 7 of Schedule 1 will amend
the outline to highlight the expanded responsibilities under the Scheme to provide
disclosures when undertaking communications activities on behalf of a foreign
principal, whether or not the person is a registrant.
Item 8 of Schedule 1, by omitting
‘other than in a voting period’ in the heading of section 35, consolidates the
reporting of disbursement activities under the one section rather
than sections 35 and 37 as previously had been the case. In addition, item 9
will extend the reporting obligations for reportable activities so that they apply
not only to existing registrants but also to persons from the time that they
become liable to register (regardless of whether they ultimately
register or not).
Items 10 and 11 are consequential amendments
related to extending reporting to a person who is liable to register under the Scheme.
Item 12 will insert proposed subsection 35(2)
to clarify timeframes for reporting disbursements that reach the electoral
disclosure threshold (currently $13,800) or a multiple of that threshold. Within
a voting period it will be within seven days, and outside a voting period,
within 14 days.[22]
Items 14–18 will amend section 37, which concerns
reporting of registrable activities during voting periods, to clarify that it
does not include disbursement activities, and to align the reporting timeframes
so that the section will apply to a person from the time they become liable
to be registered (regardless of whether they ultimately register or not).[23]
As noted above, the effect of item 8 is that the reporting of disbursement
activities at all times is consolidated under section 35, making (for
example) existing subsection 37(3) (repealed by item 18) obsolete.
Items 19–21 will make consequential amendments to
section 38 to extend the disclosure requirements to a person undertaking the communications
activity regardless of whether they are registered under the Scheme. This
means, for example, that a person who undertakes relevant activities who is
liable to be registered (but is not) who fails to make the appropriate
disclosures will commit an offence.[24]
Determining
the purpose of an activity
Parliamentary lobbying on behalf of a foreign principal
other than a foreign government, general political lobbying, communications
activities and disbursement activities are registrable under the FIT Scheme
only if undertaken for the purpose of political or governmental influence.[25]
The purpose of an activity is also relevant to other provisions in the FITS
Act, including the definition of lobby and the revised
definition of communications activity proposed in the Bill.[26]
Section 14 of the FITS Act sets out the
matters to be taken into consideration in determining the purpose of an
activity. The first of these is the intention or belief of the person
undertaking the activity. Items 3 and 4 of Schedule 1
will amend paragraph 14(a) to clarify that in relation to belief, it is
the person’s belief (if any) about the intention of the foreign principal on
whose behalf an activity is undertaken that is to be considered (as opposed to
the person’s belief about the purpose of the activity itself). The Explanatory
Memorandum states:
This would mean, for example, that even though a foreign
principal does not explicitly state its intention that a particular activity is
for the purposes of influencing a political or governmental process or
decision, it is relevant that the person undertaking the activity believes that
to be the foreign principal’s intention.[27]
The intention of the person undertaking the activity will
remain a factor to be considered in determining the purpose of an activity, as
it is currently.
Offences
Section 57 of the FITS Act sets out offences
for failing to apply for or renew registration. Currently, one of the elements
of the offences in subsections 57(3), (3A) and (4) is that the person was
reckless as to whether he or she omitted to apply for or renew registration
under the FIT Scheme.
The Explanatory Memorandum notes that the concept of
reckless omission is not defined or used in the Criminal Code Act
1995 (which sets out general principles of criminal responsibility,
including the elements of offences, under Commonwealth laws), meaning that the
current wording of these offences could cause difficulties in any prosecution.[28]
Items 23–27 of Schedule 1 will remove references to reckless
omissions in the offences in subsections 57(3), (3A) and (4), and make
consequential changes to clarify the intended operation of those offences, to
remove those difficulties.
[1]. Foreign Influence
Transparency Scheme Act 2018 (FITS Act), section 2, table item
1, column 3.
[2]. Attorney-General’s
Department (AGD), ‘Foreign
Influence Transparency Scheme’, AGD website.
[3]. FITS
Act, Part 2 (Registration under the scheme) and section 13A
(definition of registrable arrangement).
[4]. AGD,
‘Foreign
Influence Transparency Scheme’, op. cit. See also: FITS Act,
Division 3 of Part 2 (Registrable activities) and Division 2 of
Part 1 (Definitions, including of on behalf of and political
or governmental influence).
[5]. FITS
Act, Part 3 (Responsibilities of registrants under the scheme).
[6]. See:
Parliamentary Joint Committee on Intelligence and Security (PJCIS), Advisory
report on the Foreign Influence Transparency Scheme Bill 2017, PJCIS,
Canberra, June 2018; PJCIS, Advisory
report on the National Security Legislation Amendment (Espionage and Foreign
Interference) Bill 2017, PJCIS, Canberra, June 2018; Joint
Standing Committee on Electoral Matters (JSCEM), Advisory
report on the Electoral Legislation Amendment (Electoral Funding and Disclosure
Reform) Bill 2017, JSCEM, Canberra, April 2018. For background to
the Foreign Influence Transparency Scheme Bill 2017, see also C Barker, D McKeown
and J Murphy, Foreign
Influence Transparency Scheme Bill 2017 [and] Foreign Influence
Transparency Scheme (Charges Imposition) Bill 2017, Bills digest, 87,
2017–18, Parliamentary Library, Canberra, 16 March 2018.
[7]. See:
N Horne, ‘Foreign
Influence Transparency Scheme Legislation Amendment Bill 2018’, FlagPost, Parliamentary
Library blog, 5 December 2018.
[8]. C
Porter, ‘Second
reading speech: Foreign Influence Transparency Scheme Amendment Bill 2019’, House of
Representatives, Debates, (proof), 20 February 2019, pp. 8–9.
[9]. The
Bill was introduced after the final meetings of the Senate Standing Committee of
the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights
before the pre-Budget recess.
[10]. M
Dreyfus (Shadow Attorney-General), Transcript
of interview with Fran Kelly: ABC RN Breakfast, media release,
21 February 2019.
[11]. Explanatory
Memorandum, Foreign Influence Transparency Scheme Amendment Bill 2019,
p. 3.
[12]. The
Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory
Memorandum to the Bill.
[13]. See
for example: Barker, McKeown and Murphy, Foreign
Influence Transparency Scheme Bill 2017 [and] Foreign Influence
Transparency Scheme (Charges Imposition) Bill 2017, op. cit., pp.
31–32, 39–42.
[14]. Explanatory
Memorandum, pp. 7–8.
[15]. ‘Produce’
is not defined in the FITS Act, but the Explanatory
Memorandum to the Bill states that ’produce’ in paragraph 13(1)(b) will be
taken to have the same meaning as it does in subsection 13(3).
[16]. Details
of the disclosure requirements for different types of communications activities
are prescribed by the Foreign Influence
Transparency Scheme (Disclosure in Communications Activity) Rules 2018.
[17]. Porter,
‘Second
reading speech: Foreign Influence Transparency Scheme Amendment Bill 2019’, op. cit.
[18]. FITS
Act, sections 33–40.
[19]. FITS
Act, section 10.
[20]. Commonwealth
Electoral Act 1918, Part XX, Divisions 4, 5 and 5A.
[21]. Australian
Electoral Commission (AEC), ‘Financial
disclosure overview’, AEC website, 22 January 2019.
[22]. Voting
period is defined in section 10 of the FITS Act. The threshold
is set under subsection 287(1) of the Commonwealth
Electoral Act 1918.
[23]. For
an overview and examples of registrable activities, see: AGD, Foreign Influence
Transparency Scheme, Registrable
activities, Factsheet 5, February 2019.
[24]. See
the proposed note to subsection 38(1) inserted by item 21 of Schedule
1 of the Bill.
[25]. FITS
Act, section 21. General political lobbying, communications
activity, disbursement activity and political or
governmental influence are each defined in Division 2 of
Part 1 of the FITS Act. Section 12 provides that an activity
is undertaken for the purpose of political or governmental influence
if ‘the sole or primary purpose, or a substantial purpose’ of the activity is
influencing one or more of the processes and proceedings listed (including, for
example, a process in relation to a federal election or a federal government
decision) or influencing the public or a section of the public in relation to
any of those processes or proceedings.
[26]. FITS
Act, section 10; item 2 of Schedule 1 (proposed
subsection 13(1)).
[27]. Explanatory
Memorandum, p. 9.
[28]. Ibid.,
pp. 13–14.
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