Bills Digest No. 27,
2018–19
PDF version [591KB]
Jonathan Mills
Law and Bills Digest Section
Cat Barker
Foreign Affairs, Defence and Security Section
17
September 2018
Contents
Purpose of the Bill
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
Key issues and provisions
Other provisions
Date introduced: 20
June 2018
House: House of
Representatives
Portfolio: Home
Affairs
Commencement: Schedules
1 to 8 commence on proclamation or six months from Royal Assent, whichever
comes first. The remaining sections of the Act commence on 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 September 2018.
Purpose of
the Bill
The purpose of the Unexplained Wealth Legislation
Amendment Bill 2018 (the Bill) is to amend the Proceeds of Crime
Act 2002 (the POC Act), the Telecommunications
(Interception and Access) Act 1979 (the TIA Act) and the Proceeds of Crime
Regulations 2002 to establish a national cooperative scheme on unexplained
wealth (NCSUW).
The NCSUW will not replace existing unexplained wealth
regimes operating at Commonwealth level and in the states and territories, but
is intended to operate concurrently with them and enhance them by providing a
more coordinated scheme with information sharing, access to information
gathering powers and sharing arrangements for seized assets available to
participating jurisdictions.
Structure
of the Bill
This Bill is divided into eight schedules.
- Schedule
1 amends the POC Act to establish how states may join or leave the NCSUW
by reference to the Commonwealth or adoption of the amended Act
- Schedule
2 amends the POC Act to extend the main unexplained wealth provisions of
that Act to relevant offences against the laws of a participating state
- Schedule
3 amends the POC Act to extend the main unexplained wealth provisions of
that Act to offences against the laws of the Northern Territory or the
Australian Capital Territory
- Schedule
4 amends the POC Act to create a scheme for information gathering by
participating states and the territories
- Schedule
5 amends the POC Act to enable and set out arrangements for the sharing
of proceeds between jurisdictions under the NCSUW
- Schedule
6 amends the TIA Act to enable the recording, use and sharing of
information under that Act between the agencies of and for proceedings under
the unexplained wealth legislation of the Commonwealth, a participating state,
the Northern Territory or the Australian Capital Territory
- Schedule
7 amends the POC Act to require a review, after four years, of the
national unexplained wealth provisions and any other matter specified for
review in the NCSUW agreement
- Schedule
8 contains an amendment to the Proceeds of Crime
Regulations 2002 to appropriately define the unexplained wealth legislation
of New South Wales and the Northern Territory so that those jurisdictions can
access the information gathering and sharing measures of Schedules 4 and 6.
Background
What is ‘unexplained wealth’?
As outlined in an earlier Bills Digest:
‘Unexplained wealth’ laws enable a court to issue an order
unless the subject of proceedings can establish, on the balance of
probabilities, that his or her wealth was lawfully acquired. An assessment is
made of the quantum of unexplained wealth (the difference between the person’s
total wealth and that shown to be derived lawfully), and the subject of the
order must pay the amount to the relevant jurisdiction.
Unexplained wealth laws are designed to target the wealth of
senior organised crime figures, who profit from crime while tending not to be
directly linked to the commission of specific offences.[1]
Commonwealth unexplained wealth laws
The POC Act, which already provided for
conviction-based and civil confiscation, was amended in 2010 to include unexplained
wealth laws.[2]
The POC Act provides for three types of orders relating to unexplained
wealth:
- unexplained
wealth restraining orders, which restrict a person’s ability to dispose of or
otherwise deal with property
- preliminary
unexplained wealth orders, which require a person to attend court for the
purpose of enabling the court to decide whether to make an unexplained wealth
order and
- unexplained
wealth orders, which require a person to pay the amount determined by the court
to be the difference between the person’s total wealth and that which has been
legitimately acquired.[3]
Limitations
of Commonwealth scheme and proposal for a national scheme
As noted above, unexplained wealth laws can be
particularly valuable in the context of organised crime, where those who derive
the greatest profits are not directly involved in the commission of offences.
They provide an alternative avenue where senior figures cannot be pursued
effectively through prosecution or traditional confiscation action:
Unlike existing confiscation orders,
unexplained wealth orders will not require proof of a link to the commission of
a specific offence and in that sense they represent a quantum leap in terms of
law enforcement strategy.[4]
However, due to the need
for a connection with a constitutional head of power, the application of the
Commonwealth unexplained wealth regime is currently limited to instances where
a court is satisfied that there are reasonable grounds to suspect that:
- the
person has committed an offence against a law of the Commonwealth, a foreign
indictable offence or a state offence that has a federal aspect or
- part
of the person’s wealth was derived from an offence against a law of the
Commonwealth, a foreign indictable offence or a state offence that has a
federal aspect.[5]
This undermines the key advantage of unexplained wealth
laws over prosecution or traditional confiscation as, in practice, a connection
must be made to a specific offence or fairly specific type of offence in order
to satisfy the jurisdictional requirement. For this reason, and to provide
national consistency, the Parliamentary Joint Committee on Law Enforcement
recommended in March 2012 that the Australian Government:
... seek a referral of powers from the states and territories
for the purpose of legislating for a national unexplained wealth scheme, where
unexplained wealth provisions are not limited to having to prove a predicate
offence.[6]
Negotiations with state and territory governments
The Australian Government first raised the proposal with
state and territory governments in April 2012.[7]
Despite assurances that they would still retain proceeds seized under their own
laws, the states and territories initially rejected the proposal and in
June 2013, former police commissioners Mick Palmer and Ken Moroney were
appointed to negotiate with jurisdictions on a national scheme to ‘break the deadlock’.[8]
Palmer and Moroney reported to the Government in 2014 and negotiations
continued with the states and territories, with New South Wales (NSW) the first
state to agree to participate in a national unexplained wealth scheme in
November 2015.[9]
Victoria, South Australia (SA), Western Australia (WA), the Northern Territory
(NT) and the Australian Capital Territory (ACT) were also involved in the
negotiations at various points, but Queensland and Tasmania were not.[10]
However, the Victorian, South Australian and Western Australian Governments
were all reported to have ruled out participating in the national scheme at
different points.[11]
If the Bill is passed, the NT and ACT will be included in
the scheme without the need for separate legislation in those jurisdictions.[12]
NSW is the only state to have introduced legislation to refer its powers at the
time of publication of this Digest.[13]
The Bill will provide a framework for a national scheme, but will not actually
establish a national scheme—that will rely on other states referring their
powers. The utility of the scheme will depend on how many states choose to do
so.
Committee
consideration
Senate Legal
and Constitutional Affairs Legislation Committee
The Bill was referred to the Legal and Constitutional Affairs
Legislation Committee for inquiry and the Committee published its report on 6
August 2018. The Committee recommended that the Bill be passed.[14]
Details of the inquiry are at the inquiry
webpage.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
considered the Bill in its Digest 7 of 2018,[15]
and flagged several issues on which the Committee requested responses from the
Minister.
The Minister responded on 12 July 2018[16]
and the Committee considered the response in its Digest 8 of 2018.[17]
In light of the response, the Committee chose to make no further comment on
some concerns and left to the Senate as a whole consideration of the
appropriateness of abrogating legal professional privilege and the privilege
against self-incrimination.
Policy
position of non-government parties/independents
The Bill enjoys the support of the Australian Labor Party.[18]
At the time of writing this Digest, it appears that no other parties or
independents had commented on the Bill.
Position of
major interest groups
Some concerns have been raised by interest groups
regarding the proposed extension of the unexplained wealth regime.[19]
These centre around the powers that the schemes grant to law enforcement and
the past application of the regime to seizing assets of criminals involved in
less serious crimes, rather than only senior crime figures. These concerns
however, relate to the nature of existing unexplained wealth laws and the
manner in which they have been used, rather than relating to the subject matter
of the current Bill. The Shadow Minister for Justice, Clare O’Neil, addressed
this issue in her second reading speech:
I would like to speak about a number of concerns that were
expressed by stakeholders through the parliamentary process that this bill has
gone through. An unexplained wealth regime does have some issues where
well-established principles of law that protect us have to be amended for us to
be able to put unexplained wealth laws into our parliamentary context. They are
valid concerns—they really are—and that's why I want to draw them out in this
discussion. They are things like the abrogation of legal professional
privilege, the privilege against self-incrimination, issues around use and
derivative use immunity, and immunity from liability. These are all core
principles in law that essentially allow individuals to protect themselves from
admitting to liability for crimes. In some senses, the unexplained wealth
regime probably doesn't technically sit well with those principles.
What I want the stakeholders who have made a contribution to
this discussion to understand is that the bill before us is not changing any
powers that the federal government has over individuals. It's not changing the
powers of police in any way. It's just extending existing powers over new
offences. There is a debate to be had, perhaps, about unexplained wealth
regimes, but this bill is really not the place to do that. I believe we have a
good structure in place and we have some really good protections, too, that are
enshrined in law.[20]
Financial
implications
The Explanatory Memorandum states that that the Bill will
have no financial impact.[21]
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.[22]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights
considered the Bill in its Scrutiny Report 7 of 2018, and flagged several human
rights issues on which the Committee requested responses from the Minister.
[23] Specifically
these related to various aspects which may engage the right to privacy, the
privilege against self-incrimination and the rights to a fair trial and
hearing.[24]
Most of these concerns were related to the operation of the POC Act and TIA
Act as they stand, as those Acts were introduced before the Committee was
established and hence have not been subject to its consideration. For that
reason the Committee recommended that the Minister undertake or consider
undertaking assessments of those Acts to determine their compatibility with
relevant human rights.[25]
Key issues
and provisions
States
joining the national scheme
Schedule 1 amends the POC Act to establish how states
may join or leave the NCSUW and how their laws interact with those of the
Commonwealth.
Proposed section 14A ensures that the laws of
states or territories are able to operate concurrently with the POC Act, except
for the proposed national unexplained wealth provisions.[26]
Proposed section 14L sets out how the proposed national
unexplained wealth provisions of the POC Act interact with the laws
of states or territories. The national unexplained wealth provisions do
not exclude or limit state or territory laws where they can operate
concurrently,[27]
and, for laws of participating jurisdictions, even where the state or territory
law deals with the same matter.[28]
Proposed section 14C provides for states to become
participating states by legislatively referring powers to the Commonwealth
before the enactment of the Unexplained Wealth Legislation Amendment Act
2018 or by legislatively adopting that Act after its enactment.
Proposed sections 14G to 14K provide
mechanisms for participating states and territories to rollback any subsequent
amendments to the POC Act to ensure that they do not apply in their
jurisdiction should they not wish them to.
Item 6 of Schedule 1 introduces transitional arrangements
to deal with orders, proceedings, information, assets and the like in the event
that a participating state withdraws from the national scheme by terminating a
reference or adoption.
Extension
to relevant state offences
Schedule 2 amends the POC Act to extend the main
unexplained wealth provisions of that Act to also apply to relevant offences
under the laws of a participating state.
Item 8 inserts a definition into section 338 to
provide that a relevant offence is one that is specified by the
participating state in its referral or adoption Act.
Extension
to territory offences
Schedule 3 amends the POC Act to extend the main
unexplained wealth provisions of that Act to all offences against a law of a
‘self-governing Territory’. A ‘self-governing Territory’ is defined by section
338 of the POC Act to mean the Northern Territory and the Australian
Capital Territory.
Information
gathering
Schedule 4 amends the POC Act to create a scheme
for information gathering by participating states and the territories.
Item 6 inserts proposed Schedule 1 into the POC
Act to permit authorities of participating states and territories to gather
information for the purposes of their unexplained wealth legislation through a
scheme of production orders and notices to financial institutions. Proposed
clause 18 also lists people to whom any information gathered under that
Schedule may be disclosed and the purposes it may be disclosed for. This
permits disclosures including to an authority of another Australian
jurisdiction for purposes of performing functions under the POC Act or a
corresponding law, or dealing with an offence punishable by imprisonment for at
least three years.
Sharing
proceeds
Schedule 5 amends the POC Act to set out
arrangements for the sharing of proceeds between jurisdictions under the NCSUW.
The amendments in this Schedule provide a legislative
mechanism for the Commonwealth to receive and share the proceeds of confiscated
assets with states, territories and foreign countries (if that country has made
a contribution to the recovery of the proceeds).[29]
Decisions on sharing proceeds between jurisdictions are to be made according to
a process set out under proposed section 297C by a subcommittee
established under that section and under the NCSUW agreement.[30]
The subcommittee is to consist of members of the Cooperating Jurisdiction
Committee from the Commonwealth and contributing states or territories. Once
certain deductions are made,[31]
the remaining part of the proceeds is to be shared equally between relevant
jurisdictions.[32]
Sharing
information
Schedule 6 amends the TIA Act to enable the
recording, use and sharing of information under that Act between the agencies
of the Commonwealth, a participating state, the Northern Territory or the
Australian Capital Territory, and for proceedings under the unexplained wealth
legislation of those jurisdictions.
Item 1 of Schedule 6 imports the definitions of main
unexplained wealth provisions, participating State and unexplained
wealth legislation from the POC Act.
Item 2 inserts proceedings under the main
unexplained wealth provisions or unexplained wealth proceedings of a
participating state or territory into the list of exempt proceedings in section
5B of the TIA Act. This permits the use of lawfully intercepted
information as evidence in such proceedings.
Similarly item 3 adds those proceedings to the
permitted purposes for which police forces of the relevant jurisdictions may
deal with intercepted information.
Item 4 inserts into the section 6L list of relevant
proceedings, for the NSW Crime Commission, proceedings for prescribed NSW
offences or for confiscation or forfeiture of property, or penalties connected
with such offences. This will allow the NSW Crime Commission to have the same
powers as other similar agencies, such as the Australian Commission for Law
Enforcement Integrity and the ACIC, already have under section 6L.
Items 7 and 8 introduce amendments to
section 68 to allow the chief officer of an agency to communicate lawfully
intercepted information relating to the unexplained wealth provisions to the
AFP Commissioner or to the Commissioner of a state police force.
Item 9 provides that the amendments to the TIA
Act apply only to proceedings begun on or after the commencement of
Schedule 6.
Other provisions
Schedule 7 amends the POC Act by inserting proposed
section 327A to require the Minister to cause an independent review to be
undertaken, after four years, of the national unexplained wealth provisions and
any other matter specified for review in the NCSUW agreement.
Schedule 8 contains an amendment to the Proceeds of Crime Regulations
2002 to appropriately include the relevant unexplained wealth legislation
of New South Wales and the Northern Territory so that those jurisdictions can
access the information gathering and sharing measures of Schedules 4 and 6.
[1]. Footnote
references have been omitted from this quotation and can be viewed in the
source document: C Barker, Crimes Legislation Amendment (Unexplained Wealth and Other Measures)
Bill 2014, Bills digest, 57, 2013–14, Parliamentary
Library, Canberra, 2014, p. 2.
[2]. Crimes Legislation
Amendment (Serious and Organised Crime) Act 2010, Schedule 1. For details of the originating Bill, see M Biddington, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009, Bills digest, 31, 2009–10, Parliamentary Library, Canberra, 2009.
[3]. Proceeds of Crime
Act 2002, sections 20A, 179B and 179E. For further background
to the Commonwealth’s unexplained wealth laws, see M Biddington and C Barker, Crimes
Legislation Amendment (Organised Crime and Other Measures) Bill 2012,
Bills digest, 64, 2012–13, Parliamentary Library, Canberra, 2013. For general
background on unexplained wealth laws, see Parliamentary Joint Committee on Law
Enforcement (PJCLE), Inquiry into Commonwealth unexplained wealth legislation and
arrangements, Commonwealth of Australia,
Canberra, March 2012 and Parliamentary Joint Committee on the Australian
Crime Commission (now the PJCLE), Inquiry into the legislative arrangements to outlaw serious and
organised crime groups, Commonwealth
of Australia, Canberra, August 2009.
[4]. R
McClelland, ‘Second
reading speech: Crimes Legislation Amendment (Serious and
Organised Crime) Bill 2009’, House of
Representatives, Debates, 24 June 2009, pp. 6964–7.
[5]. Proceeds of Crime
Act 2002, sections 20A, 179B and 179E. Foreign
indictable offence and state offence that has a federal aspect
are defined in sections 337A and 338 of the POC Act respectively,
with the latter taking the same meaning as in the Crimes Act 1914
(section 3AA).
[6]. PJCLE, Inquiry into Commonwealth unexplained wealth legislation and
arrangements, op. cit., p. 79
(Recommendation 15). See further pages 30–33, 55–79 (including
Recommendation 14).
[7]. Australian
Government, Australian
Government Response to the Parliamentary Joint Committee on Law Enforcement
Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements,
February 2013, p. 8.
[8]. J
Clare (Minister for Home Affairs and Justice), Mick
Palmer and Ken Moroney appointed to break deadlock on national unexplained
wealth laws, media release, 24 June 2013.
[9]. Australian
Government, National
organised crime response plan 2015–18, Commonwealth of Australia,
Canberra, 2015, p. 14; M Keenan (Minister for Justice) and
T Grant (NSW Minister for Justice and Police), One
step closer to taking the profit motive away from organised crime,
media release, 5 November 2015. The 2014 report does not appear to
have been made public.
[10]. Law,
Crime and Community Safety Council (LCCSC), Draft
Communique, LCCSC Meeting, Canberra, 5 November 2015
(mentions NSW, Victoria, WA, ACT and NT); LCCSC, Communique,
LCCSC Meeting, Melbourne, 21 October 2016 (mentions NSW, SA,
Victoria, WA, ACT and NT); LCCSC, Communique,
LCCSC Meeting, Melbourne, 19 May 2017 (mentions NSW, SA, WA, ACT and
NT).
[11]. F
Anderson, ‘Feds
plan to seize crime money by year's end’, The Australian Financial
Review, 16 June 2016, p. 8 (stated that Victoria and SA
would not participate); A Smethurst, ‘States
in fight for profits of crime’, Sunday Mail Brisbane, 18 June 2017,
p. 9 (reported that WA would not participate; there was a change of
government in WA in March 2017). The status of the Intergovernmental
Agreement on the National Cooperative Scheme on Unexplained Wealth referred to
in the Bill (proposed subsection 297A(2)) and the Explanatory Memorandum (pp. 1, 22,
53) is unclear. If the Agreement already exists, it does not appear to be
publicly available.
[12]. Proposed
subsection 14B(11), to be inserted by item 2 of the Schedule 1,
and Schedule 3.
[13]. Unexplained
Wealth (Commonwealth Powers) Act 2018(NSW).
[14]. Senate
Legal and Constitutional Affairs Legislation Committee, Unexplained
Wealth Legislation Amendment Bill 2018 , Report, The Senate, Canberra,
6 August 2018, p. vii.
[15]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
Digest 7 of 2018, The Senate, Canberra, 27 June 2018, pp.5-14.
[16]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
Digest 8 of 2018 – Ministerial Responses, The Senate, Canberra,
27 June 2018, pp.17-24.
[17]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
Digest 8 of 2018, The Senate, Canberra, 27 June 2018, pp.61-73.
[18]. C
O’Neil, ‘Second
reading speech: Unexplained Wealth Legislation Amendment Bill 2018’, House
of Representatives, Debates, 21 August 2018, p. 2.
[19]. See
for example: Submissions from Civil Liberties Australia (submission no. 2), the
Law Council of Australia (submission no. 5) and Barrister Mr Edward Greaves
(submission no. 7) of the Senate Legal and Constitutional Affairs Legislation
Committee, Unexplained
Wealth Legislation Amendment Bill 2018 , Submissions, The Senate,
Canberra, 2018 ; P Gregoire, Government
to Give Itself Greater Power to Seize the Assets of Citizens, Sydney
Criminal Lawyers, blog, 16 August 2018.
[20]. C
O’Neil, op cit.
[21]. Explanatory
Memorandum, Unexplained Wealth Amendment Bill 2018, p. 5.
[22]. The
Statement of Compatibility with Human Rights can be found at pages 6-14 of the
Explanatory Memorandum to the Bill.
[23]. Parliamentary
Joint Committee on Human Rights, Scrutiny
Report 7 of 2018, Parliament, Canberra, 2018, pp. 65-81.
[24]. Ibid.
[25]. Ibid,
pp.71, 80, 81.
[26]. The
national unexplained wealth provisions are essentially those that deal
directly with the NCSUW, and are defined by proposed sections 338 and 14B
as those under or relating to proposed sections 20A, 14A-14N, Schedule
1 and various relevant definitions.
[27]. Proposed
subsection 14L(1).
[28]. Proposed
subsections 14L(3) and (4).
[29]. Proposed
section 297B.
[30]. Proposed
subsections 297C(3) and (4). Proposed subsection 297A(2) provides
that the NCSUW agreement is an Intergovernmental Agreement as in force
from time to time.
[31]. Proposed
subsections 297C(2) and (5).
[32]. Proposed
subsection 297C(6).
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