Bills Digest no. 75 2015–16
PDF version [639KB]
WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Cat Barker, Foreign Affairs, Defence and Security Section
Jonathan Mills, Law and Bills Digest Section
2 February 2016
Contents
Purpose
and structure 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
Schedule 1: Proceeds of Crime Act 2002 amendments
Schedule 2: False accounting offences
Schedule 3: Amendments to serious drug offences
Schedule 4: AUSTRAC information
Schedule 5: AusCheck information
Date introduced: 26
November 2015
House: House of
Representatives
Portfolio: Justice
Commencement: Sections
1 to 3 will commence on Royal Assent and Schedules 1 to 4 the day
after Royal Assent. Schedule 5 will commence on a day fixed by
Proclamation, or six months after Royal Assent, whichever is sooner.
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 ComLaw
website.
The purpose of the Crimes Legislation Amendment (Proceeds
of Crime and Other Measures) Bill 2015 (the Bill) is to amend:
- the
Proceeds of Crime Act 2002 (PoC Act) to maintain, in light
of recent court decisions, the operation of the provisions that permit the non-conviction
based confiscation of assets (Schedule 1)
- the
Criminal Code Act 1995 (Criminal Code) to:
- insert
new offences for false accounting (Schedule 2) and
- amend
the definitions of drug analogue and manufacture for the purposes of the serious
drug offences in Part 9.4 (Schedule 3)
- the
Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF
Act) to enable broader sharing of financial intelligence data and other
information obtained under the AML/CTF Act (Schedule 4) and
- the
AusCheck Act 2007 to allow AusCheck scheme personal information to be
shared with a broader range of authorities, and directly with state and
territory authorities (Schedule 5).[1]
The Bill will amend a range of crime related provisions
across several Acts. The amendments in the different schedules are quite
separate. For this reason, background relevant to specific
measures is provided separately in the analysis of Schedules to the Bill.
The Government has grouped these amendments together under
the broad purpose of ‘measures to improve and clarify Commonwealth criminal
justice arrangements’.[2]
Senate Legal and Constitutional
Affairs Legislation Committee
The Bill has been referred to the Senate Legal and
Constitutional Affairs Legislation Committee for inquiry and report by 3 February 2016.
Details of the inquiry are at the inquiry
homepage.[3]
Senate Standing Committee for the
Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
(Scrutiny of Bills Committee) commented on Schedules 2, 4
and 5 of the Bill in an Alert Digest.[4]
The Scrutiny of Bills Committee was satisfied with the justification provided
in the Explanatory Memorandum for the departure from the standard imprisonment
to penalty ratio in Schedule 2.[5]
Its concerns about Schedules 4 and 5 are outlined in
the analysis of those Schedules below.
The Australian Labor Party supports the Bill.[6]
Other non-government parties and independents did not appear to have publicly
stated a position on the Bill at the time of writing this Digest.
The views of some stakeholders are set out in their
submissions to the Senate Legal and Constitutional Affairs Legislation
Committee’s inquiry into the Bill and statements to the media. The inquiry
attracted only a small number of submissions, mainly focused on the proposed
amendments relating to proceeds of crime in Schedule 1 of the Bill,
and to a lesser extent on the proposed false accounting offences in Schedule 2.
A brief summary is provided below, with further detail included where relevant
in the analysis of those Schedules.
Stakeholder comments on other parts of the Bill are noted where
relevant in the analysis of particular Schedules.
Proceeds of Crime Act 2002
amendments
The Australian Human Rights Commission, the Law Council of
Australia (LCA), the Victorian Bar and Criminal Bar Association and Families
and Friends for Drug Law Reform (ACT) each recommended that the Proceeds of
Crime Act 2002 amendments should not be made.[7]
The LCA was concerned that the amendments would not be constitutionally valid
to the extent that the restrictions on a court’s ability to stay proceedings
may require a court to exercise its judicial power in a manner inconsistent
with the judicial function of the courts and so breach the separation of powers
doctrine.[8]
The other submissions pointed out that the amendments may
unduly infringe the right to a fair trial by requiring a person to disclose
their defence in forfeiture proceedings before related criminal proceedings are
finalised.[9]
In this regard, the submissions reiterated the concerns of the High Court as
expressed in the decision that prompted the amendment.[10]
The Justice and International Mission Unit of the Uniting
Church in Australia’s Synod of Victoria and Tasmania (Uniting Church) supported
the proposed amendments and noted that a non-conviction based asset
confiscation scheme was an important tool for ‘dealing with the problem of
money stolen from developing country governments and shifted to Australia’.[11]
False accounting offences
The LCA and Johnson Winter & Slattery Lawyers both
expressed concern at the breadth of the proposed offences, and accordingly, the
potential for unintended negative consequences.[12]
On the other hand, the Uniting Church welcomed the proposed offences and
suggested amendments that would further strengthen them.[13]
Transparency International and corruption expert Professor
AJ Brown (of Griffith University) both welcomed the introduction of the
proposed false accounting offences, but neither made a submission to the
inquiry into the Bill or commented on the detail of the provisions.[14]
In the Explanatory Memorandum, the Government states that
Schedule 1 of the Bill ‘will ensure that the Commonwealth’s ability to
confiscate the proceeds and benefits of criminal offences via non-conviction
based forfeiture proceedings is maintained.’[15]
Schedules 2–5 of the Bill will have not financial
impact.[16]
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.[17]
Parliamentary Joint Committee on
Human Rights
The Parliamentary Joint Committee on Human Rights had not reported
on the Bill at the time of writing this Digest.[18]
The proposed amendments in Schedule 1 would amend the
PoC Act in an attempt to maintain the operation of the provisions that
permit the confiscation of assets without requiring a related conviction. This
set of amendments is in response to recent court decisions that affected the
order of hearing concurrent proceedings and so altered the circumstances in
which criminal proceedings may adversely affect the progress of civil
confiscation proceedings under the PoC Act.
The current non-conviction provisions allow a proceeds of
crime authority (the Commissioner of the Australian Federal Police (AFP) or the
Commonwealth Director of Public Prosecutions (CDPP)) to deal with property in
situations involving a reasonable suspicion of that property being criminal
profits but where no conviction has been made. To achieve this, the PoC Act
allows an authority to apply to the Court for an order to:
- restrain
property where it is suspected of being the proceeds of an indictable offence and
- have
the restrained property forfeited if the court is satisfied, on the balance of
probabilities, that the property is proceeds of an indictable offence.
However, the PoC Act provides that a person may apply
to the Court for an order to exclude property from either a restraining order
or forfeiture order.[19]
Such an order will only be granted where the Court is persuaded that interest(s)
in question are not proceeds of crime or instruments of unlawful activity of
the offence, or any offence, to which the order relates. In addition, in some
instances the applicant for an exclusion order relating to property the subject
of a restraining order (or restraining order proceedings) will also need to
demonstrate that:
- there
are no reasonable grounds to suspect that the interest in question are the
proceeds of the offence(s)
- there
is a suspect in relation to the order, but they have not been convicted of, or
charged with, the offence(s)
- the
conduct in question was not for the purpose of, in preparation for, or in
contemplation of, any other indictable offence and
- the
interest(s) could not have been covered by a restraining order if none of the
offences had been serious offences.[20]
As a result, the ‘exclusion order’ regime contained in the
PoC Act allows persons subject to restraining or forfeiture orders or
proceedings to seek to have property excluded from such orders. The Government
has described the rationale for the non-conviction scheme (including the
exclusion order regime) as follows:
The non-conviction based forfeiture scheme was introduced in
2002 in response to findings of the 1999 ALRC Report entitled Confiscation that
counts, which concluded that Commonwealth conviction-based proceeds of crime
laws were inadequate. Earlier laws had failed to impact at all upon those at
the pinnacle of criminal organisations, who, with advancements in technology
and globalisation, could distance themselves from the individual criminal acts,
thereby evading conviction and placing their profits beyond the reach of
conviction based laws.[21]
The proposed amendments are in response to two recent court
decisions, Commissioner of the Australian Federal Police v Zhao [2015]
HCA 5 (Zhao) and In the matter of an application by the Commissioner
of the Australian Federal Police [2015] VSC 390 (Zhang), highlighted
problems with the interpretation and operation of the non-conviction based
confiscation provisions.[22]
Zhang
In Zhang the Victorian Supreme Court considered a
case in which the Commissioner of the Australian Federal Police had obtained
restraining orders over properties under section 19 of the PoC Act and
then applied for forfeiture orders under sections 59 and 49. The respondents
had applied for exclusion orders in relation to both the restraining and the
forfeiture orders (exclusion orders are described above).
The Court was required to determine the order in which the
various matters should be heard, and found that ‘the fairest way to conduct
these proceedings ... is to hear and determine the forfeiture application first,
and then, if necessary, the exclusion applications.’[23]
Existing section 315A provides for the concurrent hearing
(and determination) of two or more applications under the PoC Act. The
Explanatory Memorandum explains the potential issues that the Zhang
approach may cause when applied to applications for exclusion from restraining
orders:
A restraining order is an interim measure aimed at preventing
a respondent from dissipating property prior to the court having the
opportunity to consider the forfeiture of the property. If an exclusion
application in respect of a restraining order is not to be heard until after
forfeiture has occurred, the more appropriate path would be to make an
application for exclusion from forfeiture, as there would be no extant
restraining order on foot once forfeiture had been ordered. The amendments do
not affect the ability of an individual to make an application for exclusion of
property from restraint or forfeiture.[24]
Proposed subsection 315A(2) would clarify the
required order of proceedings in response to the Zhang decision and
provides that where an authority has applied for a forfeiture order on property
and a person has applied for an order to exclude that property from a
restraining order, the application for the exclusion order must be determined
before the court hears the forfeiture application.
Zhao
In Zhao the High Court dismissed an appeal by the
Commissioner of the Australian Federal Police seeking to overturn a stay on
confiscation proceedings, pending related criminal proceedings. In this case
the same property was subject to restraining, forfeiture and exclusion
proceedings, as well as allegedly being proceeds of an offence that was the
subject of criminal proceedings. The court found that the forfeiture
proceedings and the exclusion proceedings should be stayed until the completion
of the criminal matter. As the issues in the forfeiture and the criminal
proceedings were substantially identical, there was a risk that the forfeiture
proceedings could prejudice the criminal matter. The Court noted that ‘(i)t may
be accepted that criminal proceedings are not an impediment to civil
proceedings under the PoC Act, but it does not follow that it is
intended that forfeiture proceedings brought under the PoC Act will
continue where to do so would put a respondent at risk of prejudice in his or
her criminal trial.’[25]
The result of these amendments would be to generally permit
civil proceedings to continue despite related criminal proceedings, while
providing certain safeguards to reduce the chance of the civil proceedings
prejudicing the criminal proceedings.[26]
As noted above in the ‘Position of major interest groups’ section of this
digest, several submissions to the Senate Legal and Constitutional Affairs
Legislation Committee’s inquiry into the Bill expressed concerns that the
result of the proposed amendments would be to permit the confiscation
proceedings to potentially constitute the very prejudice that the court had
refused to accept in Zhao.[27]
The PoC Act currently provides, at section 319, that
‘the fact that criminal proceedings have been instituted or have commenced
(whether or not under this Act) is not a ground on which a court may stay
proceedings under this Act that are not criminal proceedings’. However, in
light of the abovementioned court decisions, proposed section 319 would
replace existing section 319 to clarify the principles to be considered by a court
when granting or refusing a stay.
Proposed subsection 319(1) would provide a level of
safeguard by permitting a court to grant a stay of civil proceedings under the PoC
Act if ‘the court considers that it is in the interests of justice to do
so’.
Proposed subsections 319(2)–(5) would specify the
grounds on which a court must not grant a stay, including the existence of
criminal proceedings in the same or related matters, or where evidence may be
required that may be relevant in the criminal proceedings. It would also provide
that a Court must not stay proceedings because proceedings in relation to
another person have, or are to be, or may be, stayed.
Proposed subsection 319(6) would provide that, in
considering whether a stay is in the interests of justice, a court must have
regard to the expeditious resolution of both civil and criminal matters, the
cost to the Commonwealth of retaining property without being able to realise
its proceeds, the risk of prejudice to a proceeds of crime authority, whether prejudice
to another person may be dealt with other than by a stay, and any orders that
may address this prejudice.
Taken together, the provisions of proposed section 319
would require a court to consider the circumstances of the particular civil and
criminal proceedings in considering the interests of justice, rather than
simply granting a stay due to the existence of any related proceedings. The proposed
sections would also require a court to consider other options (such as ordering
that relevant civil proceedings be heard in closed court[28])
for responding while still allowing a stay to be granted in the interests of
justice.
While this may reduce the circumstances in which a stay
would be ordered, the Bill includes some safeguards to prevent the potential
prejudicing of related criminal matters.
Existing subsection 266A(2) provides a power to disclose
evidence obtained under the PoC Act to listed authorities for certain
specified purposes. Proposed subsection 266A(2) would further provide
that information obtained under the PoC Act cannot be shared with an
authority where this would contravene a specific non-disclosure order by the
court.
Proposed section 319A would provide another safeguard
mechanism by allowing civil proceedings under the PoC Act to be ordered
to be heard in closed court, in order ‘to prevent interference with the
administration of criminal justice.’[29]
Australia ratified the Organisation for Economic
Cooperation and Development (OECD) Convention on Combating Bribery of
Foreign Officials in International Business Transactions (the OECD
Convention) in 1999.[30]
The third mutual evaluation of Australia’s compliance with the OECD Convention
was completed in 2012, and one of the areas identified as in need of
improvement was sanctions for false accounting.[31]
Article 8 of the OECD Convention requires parties to
have ‘effective, proportionate and dissuasive civil, administrative or criminal
penalties’ in place for engaging in false accounting practices for the purposes
of foreign bribery or of concealing foreign bribery. In meeting those
obligations, Australia has previously relied upon provisions in the Corporations
Act 2001 and state and territory laws.[32]
The 2012 evaluation found that the penalties associated with those laws were
not effective, proportionate and dissuasive, particularly in relation to legal persons
(such as corporations). Accordingly, the OECD Working Group on Bribery recommended
Australia either increase the maximum penalties that apply to legal persons for
false accounting under Commonwealth law or increase the scope and penalties
that apply to state offences.[33]
Schedule 2 of the Bill would respond to that
recommendation by inserting Proposed Part 10.9 into the Criminal Code
to create new false accounting offences.
The definition of ‘accounting document’ underpins the offences.
As set out below, the breadth of the proposed definition has been criticised by
some stakeholders. Item 2 of Schedule 2 would amend the
dictionary of the Criminal Code to provide that ‘accounting document’
means:
(a) any
account; or
(b) any record
or document made or required for any accounting purpose; or
(c) any
register under the Corporations Act 2001, or any financial report or
financial records within the meaning of that Act.
It would be an offence if:
-
a person makes, alters, destroys or conceals an accounting
document, or fails to make or alter an accounting document the person is under
a legal duty to make or alter and
-
the person intended (under proposed section 490.1)
or was reckless as to whether (under proposed section 490.2)
the making, alteration, destruction or concealment (or failure to make or alter
a document) would facilitate, conceal or disguise the occurrence of:
- the
person or someone else receiving a benefit not legitimately due to him or her
- the
person or someone else giving a benefit not legitimately due to the recipient
or intended recipient and/or
- loss
to another person that is not legitimately incurred and
-
one of the circumstances in proposed subsection 490.1(2)
applies.
Proposed subsection 490.1(2) lists
circumstances that bring the relevant conduct within the Commonwealth’s
constitutional powers. These include characteristics of the person (for
example, where the person is a constitutional corporation), the location or
context of the act or omission (for example, outside Australia or in concealing
a Commonwealth offence) and characteristics of the document (for example, it is
kept for the purposes of a Commonwealth law). As is usual with an element
relating solely to jurisdiction (as opposed to the substance of an offence), absolute
liability would apply to that element of the offence.[34]
While the offences are being proposed in the context of a
recommendation relating to foreign bribery, they would not be restricted to
false accounting for the purpose of committing or concealing a foreign bribery
offence. They appear to have been drafted as broadly as possible within
constitutional limitations, and would apply to domestic bribery where, for
example, the person is a constitutional corporation or a Commonwealth public
official acting in the course of his or her duties.
Proposed penalties for false
accounting
The maximum penalties for
an individual would be:
-
10 years imprisonment and/or a fine of 10,000 penalty units
(currently this equates to $1.8 million[35])
where the person intended that their conduct would have a result
described above or
-
five years imprisonment and/or a fine of 5,000 penalty units
(currently this equates to $900,000) where the person was reckless as to
whether their conduct would have a result described above.[36]
The maximum penalty for a body corporate where intent can be
proved would be a fine not more than the greatest of:
-
100,000 penalty units (currently this equates to
$18 million)
-
three times the value of the benefit that the body corporate or a
related body corporate obtained directly or indirectly, and that is reasonably
attributable to the conduct constituting the offence (if the court can
determine that value) or
-
ten per cent of the annual turnover of the body
corporate in the 12 months leading up to when the conduct constituting the
offence occurred (if the court cannot determine the value of the benefit).[37]
The maximum penalty for a body corporate where recklessness
can be proved is half that which applies where intent can be proved.[38]
Breadth of the offences
The LCA and Johnson Winter & Slattery Lawyers both
expressed concern at the breadth of the proposed offences, and accordingly, the
potential for negative unintended consequences. Their concerns included:
- the
breadth of the proposed definition of accounting document, which they consider
could capture many documents beyond the commonly understood meaning of the term
- a
lack of clarity about (and accordingly the potential for a very broad reading
of) what constitutes a ‘benefit’ and when something is taken to be ‘not
legitimately due’ and[39]
- the
criminalisation of reckless conduct (proposed section 490.2, as
opposed to intentional conduct, covered by proposed section 490.1) in
the context of the above noted factors, increasing the possibility that actions
‘not very much more than carelessness’ might be captured.[40]
Johnson Winter & Slattery Lawyers recommended the
offences should be expressly limited to conduct relating to foreign bribery to
avoid negative unintended consequences.[41]
The Uniting Church took a different view, and considered
that proving intent would be very difficult in most cases, meaning the offence
criminalising reckless conduct would generally have to be relied upon.[42]
It also recommended the inclusion of an express obligation to maintain proper
accounting records for the purpose of demonstrating compliance with Australia’s
foreign bribery laws, and expansion of the proposed offences to false
accounting that would facilitate, conceal or disguise the occurrence of a
Commonwealth offence.[43]
Appropriateness of associated penalties
The LCA and Johnson Winter & Slattery Lawyers also noted
the high penalties attached to the proposed offences, in the context of the
breadth of conduct that may be captured.[44]
It is worth noting that these are maximum penalties, meaning a court would have
discretion to impose significantly lower penalties where a conviction relates
to conduct at the lower end of that which would be captured by the proposed
offences. As with most Commonwealth offences, there is no minimum penalty
specified.[45]
However, the maximum penalty proposed for the offence in proposed
section 490.1 (where a person intends that their conduct facilitates,
conceals or disguises a person giving or receiving a benefit not legitimately
due or incurring a loss not legitimately due) is the same that applies for the
offence of foreign bribery (for which intent must also be proven).[46]
The Explanatory Memorandum simply states that the proposed maximum penalties
‘are proportionate to the gravity of each offence’.[47]
It does not explain why the Government considers false accounting with the
intent to disguise or conceal, for example, the giving or receipt of a bribe,
as equivalent to the actual giving or offering of a bribe.
Part 9.1 of the Criminal Code contains a range
of drug related offences, including trafficking, selling, import and export.
The offences cover controlled and border controlled drugs, precursors and
plants. Schedule 3 of the Bill contains proposed technical
amendments to respond to matters that have arisen in two recent criminal cases.
Drug analogues
Commonwealth drug offences rely on lists of ‘controlled
drugs’ and ‘border controlled drugs’. A controlled drug is a
substance other than a growing plant that is listed as such in the regulations,
a ‘drug analogue’ of a listed controlled drug, or determined by the Minister in
an emergency determination.[48]
A ‘border controlled drug’ is a substance other than a growing plant that is
listed as such in the regulations, a ‘drug analogue’ of a listed border
controlled drug, or determined by the Minister in an emergency determination.[49]
A substance may be listed as a controlled drug without also being listed as a
border controlled drug.
‘Drug analogue’ is defined in section 301.9 of the Criminal
Code. Analogue provisions are designed to avoid the situation of laws
requiring constant amendment to individually include each new substance, by
extending prohibitions to substances that share certain structural properties
with those already listed. However, some substances that are analogues of
listed drugs are themselves also listed. To clarify that the analogue
provisions are intended to apply only where a substance is not listed in its
own right, subsection 301.9(2) states that ‘a drug analogue does
not include a substance that is itself a listed controlled drug or a listed
border controlled drug’.
In R v Poulakis (No. 3), the defendant
was prosecuted for aiding and abetting the import of a marketable quantity of a
border controlled drug.[50]
The drug in question was MDEC, which is not itself listed as a border
controlled drug, but is an analogue of the border controlled drug, butylone.
Accordingly, the prosecution was relying on the analogue provisions to obtain a
conviction. However, while MDEC is not listed as a border controlled drug,
it is listed in its own right as a controlled drug. The defence argued
that based on subsection 301.9(2), the analogue provisions do not apply.
While recognising that the outcome of the case might seem ‘a little unusual and
perhaps even disturbing’, the court ruled that the wording of
subsection 301.9(2) meant that no offence had occurred and ordered the
jury to return a verdict of not guilty.[51]
Item 3 of Schedule 3 of the Bill would
clarify the intention of the analogue provisions by repealing
subsection 301.9(2) and replacing it with proposed
subsection 301.9(3), which would state that:
(a) a drug analogue of a listed controlled
drug does not include a substance that is itself a listed controlled drug; and
(b) a drug analogue of a listed border
controlled drug does not include a substance that is itself a listed border
controlled drug.
Items 1–3 of Schedule 3 would also make
other technical amendments to the definition of ‘drug analogue’.
In summary, the proposed amendments clarify that a substance
may be a drug analogue of a listed controlled drug even if that substance is
also listed as a border controlled drug (and vice versa) and thus will ensure
that the serious drug offences in Part 9.1 continue to apply to all relevant
substances in the future.
Meaning of manufacture
Section 300.2 of the Criminal Code contains
definitions that apply throughout Part 9.1. The section states that
manufacture has the meaning given by subsection 305.1(1), which states:
(1) For the purposes of this Part, manufacture
means any process by which a substance is produced (other than the cultivation
of a plant), and includes the following:
(a) the process of extracting or refining a
substance;
(b) the process of transforming a substance into a
different substance.
The definition has relevance to many of the drug offences
in Divisions 305–311 of the Criminal Code.
In Beqiri v The Queen, the defendant’s
conviction for manufacture of a marketable quantity of a controlled drug was
overturned because the court ruled that the definition of manufacture did not
include a process whereby a substance is converted from one form to another
with no change to the actual structure.[52]
The case concerned cocaine that had been impregnated into towels and clothing,
which was then extracted through evaporation. Because the cocaine was
extracted, but not ‘produced’, the court found the defendant had not engaged in
manufacture.
Item 4 of Schedule 3 would respond
to that case by adding to the definition of manufacture so that it also means
‘any process by which a substance is converted from one form to another,
including the process of extracting or refining a substance’.
The AML/CTF Act provides the legislative basis for
the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s
anti-money laundering and counter-terrorism financing regulator and financial
intelligence unit.[53]
Schedule 4 would make several amendments to the AML/CTF Act
to enable broader sharing of information.
Section 5 of the AML/CTF Act contains
definitions that apply throughout the Act. Item 1 would add the
Independent Commissioner Against Corruption of South Australia to the
definition of ‘designated agency’ in section 5. This will allow officials
from that agency to access financial intelligence data held by AUSTRAC, as is
currently the case for equivalent organisations in other states (item 3
will amend section 22 to set out who is considered an ‘official’ of that
agency).
Item 2 would amend the definition of ‘foreign
law enforcement agency’ in section 5 so that in addition to national or
sub-national agencies, it will include Europol and Interpol, and any other
international body prescribed as such in regulations. This will allow AUSTRAC
information to be communicated to those agencies under Subdivision D,
Division 4 of Part 11 of the AML/CTF Act. The Scrutiny of
Bills Committee has sought more detailed advice from the Minister as to why
further international bodies should be able to be added by regulation instead
of through amendment of the AML/CTF Act.[54]
The Government has not indicated which other agencies it may consider adding by
regulation.
Section 49 of the AML/CTF Act allows the
AUSTRAC CEO, AFP Commissioner, CEO of Australian Crime Commission (ACC),
Commissioner of Taxation, Comptroller of Customs, Integrity Commissioner or the
relevant investigating officer to require a person to provide information or
documents further to those obtained under sections 41, 43 or 45. Those
sections require reporting entities (persons providing designated services) to
provide reports to AUSTRAC on certain transactions.[55] Section 122 limits what may be done
with that information.
Subsection 122(2) of the AML/CTF Act provides
that an ‘entrusted investigating official’ commits an offence (punishable by up
to two years imprisonment) if he or she discloses information obtained under
section 49 of the Act to another person. An entrusted investigating
official includes a person who is or was a taxation officer, an AFP member, a
customs officer, an examiner or member of staff of the ACC, the AFP
Commissioner, CEO of the ACC, Commissioner of Taxation, Comptroller of Customs
or the Integrity Commissioner.[56]
Subsection 122(3) sets out various exceptions to the offence.
Item 4 would insert an additional exception
into subsection 122(3) to allow such information to be disclosed for the
purposes of, or in connection with, the performance of the duties of the
entrusted investigating official, other than the Commissioner of Taxation or a
taxation officer. This would include use of the information in investigations,
such as in an application for a warrant.[57]
Schedule 4 was supported by the Uniting Church and
the LCA.[58]
The LCA suggested a sunset clause should apply to the power to prescribe
additional international bodies as foreign law enforcement agencies by
regulation.[59]
The AusCheck Act provides the legislative basis for
AusCheck, which coordinates criminal and national security background checking
services for the purposes of the Aviation Security Identification Card,
Maritime Security Identification Card and National Health Security schemes.[60]
AusCheck collects, uses and discloses information for
purposes relating to background checking for the above schemes. Section 14
of the AusCheck Act authorises and sets parameters around the retention
and subsequent use and disclosure of ‘Auscheck scheme personal information’.
This is personal information, within the meaning of the Privacy Act 1988,
that is obtained under the AusCheck scheme or that relates to administration of
the scheme.[61]
It may include, for example, ‘criminal history information, matters relevant to
a security assessment under the Australian Security Intelligence
Organisation Act 1979 and information relating to an individual’s
citizenship status, residency status and entitlement to work in Australia’.[62]
Paragraph 14(2)(b)(iii) provides that AusCheck scheme personal information
(other than identity verification information) may be used or disclosed for the
purposes of:
(iii) the collection, correlation, analysis or
dissemination of criminal intelligence or security intelligence by the
Commonwealth, or by a Commonwealth authority that has functions relating to law
enforcement or national security, for purposes relating to law enforcement or
national security;
Item 3 would repeal that paragraph and replace
it with proposed paragraphs 14(2)(b)(iii) and (iiia).
This would allow use or disclosure for the purposes of the performance of
functions relating to law enforcement or national security by the Commonwealth
or a Commonwealth authority, or a State or Territory or a State or Territory
authority. These amendments would expand both:
-
the purposes for which information may be shared (it would no
longer be restricted to collection, correlation, analysis and dissemination of
intelligence) and
-
the agencies with which it may be shared (to include state and
territory agencies, and agencies ‘not traditionally considered to be a law
enforcement agency but may require access to the information to respond to
national security or crime threats’[63]).
Allowing information to be shared directly with state and
territory agencies in the same way as Commonwealth agencies appears reasonable
(particularly as the Explanatory Memorandum appears to suggest it is already
being shared in some circumstances, just not directly[64]).
However, neither ‘law enforcement’ nor ‘national security’ are defined in the AusCheck
Act. Accordingly, ‘the performance of functions relating to law enforcement
or national security’ is a very broad description of purpose, and the sorts of
things it may be considered to capture are likely to change over time. Parliament
may wish to consider whether it would be preferable to have clearer limits in
place either on the agencies with which information may be shared or the
purposes for which it may be shared. Examples that could inform such
consideration include the definition of ‘criminal law-enforcement agency’ in
the Telecommunications (Interception and Access) Act 1979, which lists
specific agencies and allows others to be declared by legislative instrument,
and the definition of ‘security’ in the Australian Security Intelligence
Organisation Act 1979.[65]
The Explanatory Memorandum points to a number of safeguards
that will continue to apply to disclosure of personal information under the AusCheck
Act, including offences for unlawful disclosure, guidelines issued under
regulations, and memoranda of understanding.[66]
The Scrutiny of Bills Committee sought the Minister’s advice on whether
safeguards could be further improved.[67]
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Proceeds of Crime
Act 2002 (PoC Act); Criminal Code
Act 1995 (Criminal Code); Anti-Money Laundering and
Counter-Terrorism Financing Act 2006 (AML/CTF Act); AusCheck Act 2007;
all accessed 11 December 2015.
[2]. M Keenan,
‘Second
reading speech: Crimes Legislation Amendment (Proceeds of Crime and Other
Measures) Bill 2015’, House of Representatives, Debates,
26 November 2015, pp. 13,826–29, accessed
29 January 2016.
[3]. Senate
Legal and Constitutional Affairs Legislation Committee, ‘Crimes
Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015’,
Australian Parliament website, accessed 11 December 2015.
[4]. Senate
Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee), Alert
digest, 14, 2015, The Senate, 2 December 2015, pp. 3–6,
accessed 11 December 2015.
[5]. Ibid.,
p. 4.
[6]. D Feeney,
‘Second
reading speech: Crimes Legislation Amendment (Proceeds of Crime and Other
Measures) Bill 2015’, House of Representatives, Debates,
2 December 2015, pp. 14553–59; S Jones, ‘Second
reading speech: Crimes Legislation Amendment (Proceeds of Crime and Other
Measures) Bill 2015’, House of Representatives, Debates,
2 December 2015, pp. 14562–65; both accessed
29 January 2016.
[7]. Australian
Human Rights Commission (AHRC), Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures)
Bill 2015, 6 January 2016; Law Council of Australia (LCA), Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures)
Bill 2015, 7 January 2016, pp. 5–9; Victorian Bar and
Criminal Bar Association and Families, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures)
Bill 2015, 20 January 2016; Friends for Drug Law Reform (ACT), Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill
2015, 12 January 2016; all accessed 28 January 2016.
[8]. LCA,
op. cit., pp. 5–6.
[9]. AHRC,
op. cit.; Victorian Bar and Criminal Bar Association and Families, op. cit.,
pp. 4–5; Friends for Drug Law Reform (ACT), op. cit., pp. 3–6.
[10]. AHRC,
op. cit., p. 5.
[11]. Justice
and International Mission Unit, Uniting Church in Australia, Synod of Victoria
and Tasmania (Uniting Church), Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures)
Bill 2015, 8 January 2016, p. 2, accessed
28 January 2016.
[12]. LCA,
op. cit., pp. 10–11; Johnson Winter & Slattery Lawyers, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into the Crimes Legislation Amendment (Proceeds of Crime and Other Measures)
Bill 2015, 8 January 2016, accessed 13 January 2016.
[13]. Uniting
Church, op. cit., pp. 6–9.
[14]. J Thomas,
‘Bribery,
false accounting and corruption in Government’s crosshairs as anti-corruption
laws proposed’, ABC News, (online edition),
22 December 2015, accessed 13 January 2016.
[15]. Explanatory
Memorandum, Crimes Legislation Amendment (Proceeds of Crime and Other
Measures) Bill 2015, p. 7, accessed 11 December 2015.
[16]. Ibid.
[17]. The
Statement of Compatibility with Human Rights can be found at page 9 of the
Explanatory Memorandum to the Bill.
[18]. The
Parliamentary Joint Committee on Human Rights (PJCHR) deferred consideration of
the Bill: PJCHR, Thirty-second
report of the 44th Parliament, 1 December 2015, accessed
11 December 2015.
[19]. PoC
Act, sections 29–31 and 73–76.
[20]. Ibid.,
subsection 29(3).
[21]. Explanatory
Memorandum, p. 10.
[22]. Commissioner
of the Australian Federal Police v Zhao 89
ALJR 331, [2015]
HCA 5 (Zhao); Commissioner of the Australian Federal Police v Zhang
& Anor (Ruling No 1) [2015]
VSC 390 (Zhang); both accessed 1 February 2016.
[23]. Zhang,
op. cit., [33].
[24]. Explanatory
Memorandum, p. 12.
[25]. Zhao,
op. cit., [49].
[26]. Explanatory
Memorandum, pp. 11-12.
[27]. AHRC,
op. cit.; Victorian Bar and Criminal Bar Association and Families, op. cit.,
pp. 4–5; Friends for Drug Law Reform (ACT), op. cit., pp. 3–6.
[28]. Proposed
section 319A.
[29]. Explanatory
Memorandum, p. 17.
[30]. Convention
on Combating Bribery of Foreign Officials in International Business
Transactions done in Paris on 17 December 1997 [1999]
ATS 21 (entered into force for Australia 17 December 1999),
accessed 11 December 2015.
[31]. OECD
Working Group on Bribery in International Business Transactions, Phase 3
report on implementing the OECD Anti-Bribery Convention in Australia, OECD,
October 2012, pp. 15–17. For a brief overview of the report, see
C Barker, ‘Australia’s
efforts against foreign bribery—an update’, FlagPost, Parliamentary Library
blog, 1 November 2012. The Australian Government has since provided a
progress report: OECD Working Group on Bribery in International Business
Transactions, Australia:
follow-up to the phase 3 report & recommendations, OECD,
April 2015. All accessed 11 December 2015.
[32]. Phase 3
report, op. cit., pp.15–17. In relation to Commonwealth law, Australia
relied on sections 286 (Obligation to keep records) and 1307
(Falsification of books) of the Corporations
Act 2001 (accessed 11 December 2015).
[33]. Ibid.,
pp. 15–17, 49 (Recommendation 4(a)).
[34]. Attorney-General’s
Department (AGD), Guide
to framing Commonwealth offences, infringements notices and enforcement powers,
AGD, Canberra, September 2011, p. 23, accessed 11 December 2015.
Applying absolute liability to a physical element of an offence means there are
no fault elements to be proven for that physical element and the defence of
mistake of fact is not available: Criminal Code, section 6.2.
[35]. Crimes Act 1914,
section 4AA, accessed 11 December 2015.
[36]. Proposed
subsections 490.1(4) and 490.2(3).
[37]. Proposed
subsection 490.1(5) and proposed sections 490.3 and 490.4.
[38]. Proposed
subsection 490.2(4) and proposed sections 490.3 and 490.4
[39]. These
terms are defined in Division 70 of the Criminal Code for the
purposes of the foreign bribery offences, but those definitions will not apply
to the proposed offences in Schedule 2. ‘Benefit’ is defined broadly as
any advantage and not limited to property; the definition of when a benefit is
‘not legitimately due’ is specific to the context of foreign bribery and not
readily applicable to the proposed offences: Criminal Code,
section 70.1 and subsection 70.2(2).
[40]. LCA,
op. cit., pp. 10–11; Johnson Winter & Slattery Lawyers,
op. cit. (quote taken from Johnson Winter & Slattery Lawyers).
[41]. Johnson
Winter & Slattery Lawyers, op. cit.
[42]. Uniting
Church, op. cit., p. 9.
[43]. Ibid.
[44]. LCA,
op. cit., pp. 10–11; Johnson Winter & Slattery Lawyers,
op. cit.
[45]. See
further Attorney-General’s Department, A
guide to framing Commonwealth offences, infringement notices and enforcement
powers, Australian Government, Canberra, updated September 2011, pp.
37–39, accessed 13 January 2016.
[46]. Criminal
Code, subsections 70.2(4) and (5).
[47]. Explanatory
Memorandum, p. 32.
[48]. Criminal
Code, section 301.1.
[49]. Ibid.,
section 301.4.
[50]. R v Poulakis
(No. 3) [2015] ACTSC
191 (17 July 2015), accessed 11 December 2015.
[51]. Ibid.;
C Knaus, ‘Drug
importation trial collapses, legal flaws mean designed drug is not “border
controlled”’, The Canberra Times (online edition),
17 July 2015, accessed 11 December 2015.
[52].
Beqiri v The Queen [2013] VSCA 39
(4 March 2013), accessed 11 December 2015.
[53]. Australian
Transaction Reports and Analysis Centre (AUSTRAC), ‘About us’, AUSTRAC
website, accessed 11 December 2015.
[54]. Scrutiny
of Bills Committee, Alert digest, 14, op. cit., pp. 4–5.
[55]. Section 41
concerns reports of suspicious matters, section 43 concerns reports of
threshold transactions and section 45 concerns reports of international
funds transfer instructions.
[56]. AML/CTF Act,
section 5 (‘investigating officer’) and subsection 122(1).
[57]. Explanatory
Memorandum, p. 45.
[58]. LCA,
op. cit., pp. 11–12; Uniting Church, op. cit., p. 9.
[59]. LCA,
op. cit., pp. 11–12.
[60].
AGD, ‘AusCheck’,
AGD website, accessed 11 December 2015.
[61].
AusCheck Act, section 4.
[62]. Explanatory
Memorandum, pp 15–16.
[63].
Ibid., p. 48.
[64]. Ibid.
[65]. Telecommunications
(Interception and Access) Act 1979 (TIA Act),
section 110A; Australian
Security Intelligence Organisation Act 1979, section 4; both
accessed 1 February 2016. Note also the distinction drawn in the TIA Act
between a ‘criminal law-enforcement agency’ and an ‘enforcement agency’
(sections 110A and 176A).
[66]. Ibid.,
pp. 6–7.
[67]. Scrutiny
of Bills Committee, Alert digest, 14, op. cit., pp. 5–6.
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