Introductory Info
Date introduced: 11 August 2021
House: House of Representatives
Portfolio: Foreign Affairs
Commencement: The day after Royal Assent
Bills Digest at a glance
Australia, as a member of the United Nations (UN), is
required to implement sanctions imposed by the UN Security Council.
In 2001, in response to the terrorist acts committed on 11
September, the Security Council adopted Resolution
1373 which requires UN Member States to:
- prevent
and suppress the financing of terrorist acts
- criminalise
the financing of terrorist acts
- freeze
the assets of persons who commit, or attempt to commit, terrorist acts or
participate in or facilitate the commission of terrorist acts, and those
associated with such persons and
- prohibit
their nationals or any persons and entities within their territories from
making any assets available to terrorists or entities associated with
terrorism.
Under the Charter of the
United Nations Act 1945 (COTUNA) the Foreign Minister must list
a person or entity for counter-terrorism financial sanctions if they engage in
or support terrorism, or are under the direct or indirect control of such
persons or entities. The Foreign Minister must also list an asset, or a class
of asset, if they are satisfied that the asset, or class of asset, is owned or
controlled by such a person or entity.
Between 2001 and 2020, successive governments have
gazetted twenty-one listings under the COTUNA and associated Regulations
to implement Australia’s obligations with respect to Resolution 1373. These
instruments have previously been treated as being administrative in character
by the Government and, while they were gazetted in the Australian Government
Gazette, they were not registered on the Federal Register of Legislation.
This Bill appears to be a response to the Government
becoming aware of a potential legal error in not registering instruments, which
would arise if the listings met the definition of a ‘legislative instrument’.
The existing listings were registered on 26 May 2021 but there is a danger that
actions taken under those instruments could be invalid.
This Bill retrospectively validates those actions and
requires future instruments be registered to avoid that error occurring in the
future.
The Parliamentary Joint Committee on Human Rights, while
not yet having considered the Bill, has raised concerns about the validity of
these instruments and the possible actions a person disadvantaged by these
listings may take. The Foreign Minister has provided a response to the
Committee but this has not yet been published.
There is a possibility that the validation retrospectively
makes certain conduct criminal. The Government contends this is not the case.
The Government has stated that the proposed amendments ‘do not specifically
remove a cause of action for affected persons to seek an effective remedy’, but
rather ‘remove a possible ground of challenge for convicted persons to contest
their convictions’.
The proposed amendments will, therefore, extinguish the
ability of persons disadvantaged by a counter-terrorism listing to seek
judicial review on the basis that their listing was not valid and therefore not
enforceable.
Purpose of
the Bill
The purpose of the Charter of the United Nations Amendment
Bill 2021 (the Bill) is to amend the (COTUNA) to:
- require
counter-terrorism financial sanctions listings and revocations made under the COTUNA
to be made by legislative instrument and registered on the Federal Register of
Legislation (the Register)
- provide
that, where a listing was not previously registered on the Register, the
listing is taken to have been registered at all times before the commencement
of the Bill
- retrospectively
validate any actions taken against a person the subject of a listing that would
otherwise be invalid due to the listing not having been registered.
Background—implementing UN sanctions in Australia
Australia, as a member of the United Nations (UN), is
required by Article 25 of the Charter
of the United Nations (the Charter) to implement UN Security Council
decisions.[1]
Under Chapter VII of the Charter,
the Security Council can take action to maintain or restore international peace
and security, including the imposition of sanctions.[2]
Since 1966, the Security Council has established thirty sanctions regimes, by
way of legally binding resolutions.[3]
The Security Council can only impose non-military
sanctions where it has determined ‘the existence of any threat to the peace,
breach of the peace, or act of aggression’,[4]
and where nine or more members have cast an affirmative vote and none of the
five permanent members have cast a veto vote.[5]
Charter of the United Nations Amendment Bill 1993
Prior to 1993, Australia’s practice for implementing
Security Council resolutions was through the making of Regulations under a
number of Commonwealth Acts.[6]
However, due to limitations on the Government’s power to make Regulations under
these Acts, Australia was unable to fully give effect to Security Council
resolutions via this practice.[7]
Following the Security Council’s resolution to impose sanctions
on the Former Republic of Yugoslavia on 17 April 1993, the Government
introduced the Charter of the United Nations Amendment Bill 1993.[8]
The purpose of this Bill was to amend the COTUNA to provide a
legislative basis for the Governor-General in Council to make Regulations ‘dealing
with situations which fall outside the present regulatory framework’.[9]
These situations include the freezing of funds held in Australia by an
individual or entity subject to sanctions or preventing Australian individuals
or entities from providing certain services to a government subject to
sanctions.
The passage of the Charter of the
United Nations Amendment Act 1993 has allowed the Government to make Regulations
to fully give effect to Security Council sanction regimes.[10]
These include sanctions regimes which deal with particular countries such as
Lebanon,[11]
or regimes that deal with organisations such as the Taliban.[12]
Later amendments to COTUNA
In 1999, the UN adopted the UN International Convention
for the Suppression of the Financing of Terrorism.[13]
On 28 September 2001, the Security Council also adopted Resolution
1373 in response to the terrorist attacks in the United States of
America on 11 September 2001.[14]
Resolution 1373 requires UN Member States to:
- prevent
and suppress the financing of terrorist acts
- criminalise
the financing of terrorist acts
- freeze
the assets of persons who commit, or attempt to commit, terrorist acts or
participate in or facilitate the commission of terrorist acts and those
associated with such persons and
- prohibit
their nationals or any persons and entities within their territories from
making any assets available to terrorists or entities associated with
terrorism.[15]
On 9 October 2001 the Howard Government gazetted the Charter of the United
Nations (Antiterrorism Measures) Regulations 2001 (the Anti-Terrorism
Regulations) which commenced on 15 October 2001.[16]
These Regulations gave effect to Resolution 1373 in Australia by
preventing a person in Australia, or a citizen of Australia, from dealing with
financial assets of persons or entities that engage in or support terrorism, or
are under the direct or indirect control of such persons or entities.[17]
Specifically, section 7 of the Anti-Terrorism Regulations required the
Minister to list persons or entities who engaged or supported terrorism as per Resolution
1373 in the Gazette.
On 21 December 2001 the Howard Government listed in the
Gazette the names of terrorists and terrorist organisations whose assets were
required to be frozen by the holder of those assets under the Anti-Terrorism
Regulations.[18]
As part of a package of counter-terrorism legislation, the
Suppression of the Financing of Terrorism Bill 2002 was introduced into the
House of Representatives on 12 March 2002.[19]
Among other things, the Bill proposed to amend COTUNA to introduce new
higher penalty offences than those available under the Anti-Terrorism
Regulations for using or dealing with the assets of specified persons and entities
involved in terrorist activities and making assets available to those persons
or entities.[20]
Listings under the counter-terrorism (UNSC 1373) sanctions
regime
Between 2001 and 2020, successive governments gazetted
twenty-one listings under the COTUNA and associated regulations to
implement Australia’s obligations with respect to Resolution 1373. These
have included the listing of the person responsible for the 2019 attacks on two
Christchurch mosques,[21]
and Islamic State fighters Khaled Sharrouf, Mohamed Mahmoud Elomar and Neil
Christopher Prakash.[22]
The effect of these listings was to freeze the existing
assets of the entities/individuals designated in the instruments and make it an
offence for a person to use or deal with an asset owned or controlled by those
entities/individuals.[23]
The Department of Foreign Affairs and Trade (DFAT) also maintains a
‘Consolidated List’ of all designated persons and entities under Australian
sanctions law.[24]
On 26 May 2021 the Government registered all 21 listings
on the Register as legislative instruments:
As part of its role in examining all Bills and legislative
instruments which have an impact on human rights, the Parliamentary Joint
Committee on Human Rights (PJCHR) examined the 12 legislative instruments which
imposed sanctions on ‘almost 300 individuals and entities’.[26]
The PJCHR identified that the legislative instruments had
been incorrectly classified as being exempt from disallowance:
The explanatory statements for each instrument state they are
exempt under section 44(1) of the Legislation Act 2003 – however, this
states that the usual disallowance provisions do not apply if the enabling
legislation facilitates the establishment or operation of an intergovernmental
body or scheme involving the Commonwealth and one or more States or
Territories. However, this is not an intergovernmental scheme of this nature. [The
explanatory statements] also noted that previous sanctions instruments have
been subject to disallowance, see for example [F2016L01208]. In addition, while
the Legislation (Exemptions and Other Matters) Regulation 2015 exempts from
sunsetting instruments which give effect to an international obligation, it
does not exempt such instruments from disallowance (see sections 9 and 11).[27]
The PJCHR noted with some concern the effect of subsection
12(2) of the Legislation
Act 2003 as a result of the failure to register the instruments:
… while the legislative instruments were made over the last
20 years, they were only recently registered on the Federal Register of
Legislation – the effect of which appears to be that before they were
registered the instruments did not apply to persons to the extent that they
disadvantaged or imposed liabilities on them.[28]
The PJCHR requested that the Foreign Minister provide
advice on:
- whether
any of the individuals subject to listing under these legislative instruments
have been, at any time during their listing, in Australia, and if so, how many
- how
many of the listings in these legislative instruments are currently valid and
- noting
that the legislative instruments were never registered, what remedies, if any,
does a person against whom action has been taken pursuant to these listings
have.[29]
The Foreign Minister provided a response to the PCJHR on
23 July 2021 which will be included as part of the PJCHR’s next report.[30]
Committee consideration
Selection of Bills Committee
At its meeting of 11 August 2021, the Senate Selection of
Bills Committee was unable to reach a decision as to whether the Bill should be
referred to committee.[31]
Following the tabling of the report by the Chair of the
Committee, the Australian Greens moved an amendment in the Senate seeking to
have this Bill and the Counter-Terrorism Legislation Amendment (Sunsetting
Review and Other Measures) Bill 2021 referred to the Senate Legal and
Constitutional Affairs Legislation Committee for inquiry and report by 30
August 2021.[32]
The amendment was defeated and the Bill was not referred to committee.[33]
Senate Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
has yet to consider this Bill.[34]
Policy position of non-government parties/independents
As at the date of this Digest, no non-government parties
or independents appear to have commented publicly on the provisions in the
Bill.
Position of major interest groups
While the former Independent National Security Legislation
Monitor (INSLM) Bret Walker SC and academic Don Rothwell have both raised
concerns about the lack of explanation provided by the Government regarding the
need to register the instruments, no other stakeholders have commented on the
provisions of the Bill.[35]
Financial
implications
The Explanatory Memorandum states that the Bill will have
no direct financial impact.[36]
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 considered the following rights and
freedoms in relation to the Bill:
However, the Government considers that the Bill is
compatible because to the extent to which it may limit human rights, those
limitations are reasonable, necessary and proportionate.[38]
This is discussed further at ‘Key issues and provisions’.
Parliamentary Joint Committee on Human Rights
The PJCHR has yet to consider this Bill, though in
considering the recently tabled legislative instruments, the Committee raised
significant human rights concerns with the operation of the sanctions regimes
that apply to individuals and the scheme set out in COTUNA.[39]
The PJCHR requested advice from the Foreign Minister on
whether consideration has been given to, and any action taken to implement, the
Committee's previous recommendations to ensure the compatibility of Australia’s
sanction regimes with human rights.[40]
As noted above, the Foreign Minister provided a response
to the PJCHR on 23 July 2021, which will be included as part of the PJCHR’s
next report.[41]
Key issues and provisions
Part 4 of COTUNA gives effect to Security Council
resolutions made under Chapter VII of the UN Charter that relate to
terrorism and dealing with assets in relation to terrorists.[42]
The Explanatory Memorandum sets out how the relevant provisions currently
operate:
Section 15 of COTUNA, read in conjunction with
subregulation 20(1) of the Charter of the United
Nations (Dealing with Assets) Regulations 2008 (Dealing with Assets
Regulations), obliges the Minister for Foreign Affairs (the Minister) to list a
person or entity for counter-terrorism financial sanctions, if the Minister is
satisfied that they are a person or entity mentioned in paragraph 1(c) of the
UNSC Resolution 1373 (2001) (UNSCR 1373). That is, that they are: a person who
commits, attempts to commit, or participates in or facilitates the commission
of, terrorist acts; an entity owned or controlled by such persons; or a person
or entity acting on behalf of, or at the direction of, such persons and
entities.
Section 15 of COTUNA further gives the Minister the
power to list an asset, or a class of asset, if the Minister is satisfied that
the asset, or class of asset, is owned or controlled by a person or entity
mentioned in paragraph 1(c) of UNSCR 1373.[43]
A listing by the Minister is not subject to merits review
by the Administrative Appeals Tribunal, and there is no requirement that an
affected person be given any reasons for why a decision to list a person has
been made.[44]
What the Bill does
Items 1-2 and 4 of the Bill amend sections
15 and 16 of the COTUNA to provide that a decision by the Minister to
either:
- list
a person or entity for counter-terrorism financial sanctions or
- list
an asset, or class of asset, as being owned or controlled by a person or entity
subject to counter-terrorism financial sanctions or
- revoke
a listing of a person, entity, asset or class of asset
must now be made by legislative instrument.
Items 3 and 5 of the Bill make consequential
amendments to remove references to Ministerial decisions needing to be
gazetted. This is no longer necessary as they will instead be made by
legislative instrument and registered on the Federal Register of Legislation.
Item 6 of the Bill inserts proposed section 38A
into COTUNA.
Proposed section 38A provides that if at a time prior
to the commencement of the Bill a listing made by the Minister under
subsections 15(1) or (3) of COTUNA:
- would
not have applied in relation to a person, or have been enforceable, in relation
to a person as a result of the listing not having been registered or
- would
not have applied in relation to a person because the listing was repealed by
paragraph 32(2)(b) of the Legislative
Instruments Act 2003 (LIA) as a result of the listing not having
been registered,[45]
then the listing is taken, for all purposes, to have been
registered at the time (proposed subsection 38A(4)).
Proposed subsection 38A(5) specifically provides
that to avoid doubt anything done or purported to have been done by a person
that would have been invalid except for the validation provided by proposed
subsection 38A(4), is taken always to have been valid, despite any effect
that may have on the accrued rights of any person.
Legal effect of the proposed amendments
Operation of the Legislative Instruments Act 2003 and the
Legislation Act 2003
With the passage of the LIA in 2003, the Government
introduced a comprehensive regime for the registration, tabling, scrutiny and
sunsetting of Commonwealth legislative instruments.
At the time of enactment, subsection 5(1) of the LIA
defined a legislative instrument as an instrument:
- that
is of a legislative character and
- that
is or was made in the exercise of a power delegated by the Parliament and
that has not been expressly excluded from the operation of
the LIA.[46]
Subsection 5(2) provided that without limiting the
generality of subsection 5(1), an instrument is taken to be of a legislative
character if:
(a) it
determines the law or alters the content of the law, rather than applying the
law in a particular case and
(b) it has
the direct or indirect effect of affecting a privilege or interest, imposing an
obligation, creating a right, or varying or removing an obligation or right.[47]
In listing a person, entity or asset under subsections
15(1) or (3) of COTUNA the Minister is exercising power which has been
delegated by the Parliament. While the listings are likely to be viewed as
applying the law in a particular case, as opposed to determining or altering
the contents of the law, the listings directly impact a person’s interests and
remove their right to deal with their assets as they choose. Listing of an
asset also imposes obligations on others with respect to dealings with that
asset.
Subsection 5(4) of the LIA as made clarified that
for the purposes of defining a legislative instrument ‘if some provisions of an
instrument are of a legislative character and others are of an administrative
character, the instrument is taken to be a legislative instrument for the
purposes of this Act’.
Therefore, it would appear that listings made under COTUNA
were considered to be legislative instruments for the purposes of the LIA,
from its commencement on 1 January 2005.
Subsection 12(2) of the LIA as made provided that
where a legislative instrument, or a provision of that instrument:
- would
adversely affect the rights of a person at a time before the instrument is
registered or
- would
result in the imposition of liabilities on a person in respect of anything
done, or omitted to be done, at a time before the instrument is registered
the instrument or provision is taken to be of no effect in
respect of the period before it is registered to the extent that it would
disadvantage or impose liabilities on a person.[48]
Subsection 31(1) of the LIA provided that a
legislative instrument made on or after the commencement of the LIA and required
to be registered, was not enforceable against any other person or body unless
the instrument was registered. Subsection 32(1) imposed a registration
requirement for instruments made before commencement of the LIA. Paragraph
32(2)(b) provided that the effect of not registering a legislative instrument made
before the commencement of the LIA, by the date that the LIA required
it to be registered, is that it was repealed.
On 5 March 2016, the LIA was restructured and
renamed the Legislation Act 2003.[49]
While the definition of a legislative instrument was amended, subsection 8(4)
of the Legislation Act (as made and currently) provides that an
instrument is a legislative instrument if it:
- is
made under a power delegated by the Parliament and
- any
provision of the instrument:
- determines
the law or alters the content of the law, rather than determining particular
cases or particular circumstances in which the law, as set out in an Act or
another legislative instrument or provision, is to apply, or is not to apply
and
- has
the direct or indirect effect of affecting a privilege or interest, imposing an
obligation, creating a right, or varying or removing an obligation or right.
The Legislation Act and the Legislation
(Exemptions and Other Matters) Regulation 2015 prescribe the circumstances
in which an instrument is not a legislative instrument.[50]
None of these circumstances apply to listings under section 15 of COTUNA.
Accordingly, the new definition appears to capture
listings under section 15 of COTUNA.
In addition, the substance of subsections 12(2) and 31(1)
of the LIA were captured in subsection 12(2) and section 15K of the
Legislation Act. Therefore, the requirement for the Government to
register listings under section 15 of COTUNA as legislative instruments appears
to have applied since the commencement of the LIA on 1 January 2005.
Consequences of failing to register a legislative instrument
In short, if the listings were legislative instruments but
were not registered in accordance with requirements in the LIA (and
later the Legislation Act), they did not apply to a person to the extent
that they disadvantaged or imposed liabilities on the person, and may in some
case have been taken to have been repealed as a result of not having been
registered.
The Explanatory Memorandum states that proposed section
38A is ‘necessary as historically [counter-terrorism] listings have been
treated as being administrative in character and therefore not subject to the
registration requirement in the [LIA]’.[51]
However, as discussed above, it would appear that the
counter-terrorism listings fell within the definition of a legislative
instrument under the LIA (and the Legislation Act) and were
therefore required to be registered.
In a response to the Saturday Paper, DFAT has
stated that ‘registration does not affect the validity of listings’ but rather
‘brings them in line with the processes set out in the Legislation Act’.[52]
The Government has stated that the proposed amendments ‘do
not specifically remove a cause of action for affected persons to seek an
effective remedy’, but rather:
… remove a possible ground of challenge for convicted persons
to contest their convictions on the grounds that, at the time they engaged in
their illegal actions, the listing instrument relevant to the conviction, was
not registered on the [Federal Register of Legislation] and so was not
enforceable.[53]
The Government noted that the existing remedies were not
extinguished by the proposed amendments:
… it remains open for a listed person to apply for revocation
of their listing or seek judicial review of their listing, or for an affected
person (including convicted persons) to seek review by a higher court of a
conviction or sentence handed down under COTUNA.[54]
DFAT also stated that ‘it was not aware of any person
claiming to have been disadvantaged by the pre-registration listings or seeking
a remedy for any such disadvantage’.[55]
This does not mean that such persons do not exist and it would appear that the
proposed amendments will extinguish their ability to seek judicial review on the
basis that their listing was not valid and therefore not enforceable.
Power of the Parliament
to pass retrospective laws
The High Court of Australia has previously found that the
Commonwealth Parliament has the power to make laws with retrospective effect,
including with respect to criminal legislation.[56]
However, this power is constrained by reason of the
separation of judicial and legislative powers set out in the Australian
Constitution. Chapter III of the Constitution requires judicial
powers to be exercised by courts, and not the legislature. The High Court has
found that laws which find ‘a specific person or specific persons guilty of an
offence constituted by past conduct and impos[es] punishment in respect of that
offence’ fall outside of the Parliament’s power.[57]
The Explanatory Memorandum provides:
The new section 38A of the Amendment Bill does not interfere
with the exercise of judicial power, as the question of whether a person’s
conduct constitutes a breach of counter-terrorism sanctions set out in COTUNA
remains a matter for judicial determination. Consequently, there is no
interference with the operation of Chapter III of the Constitution.[58]
However, whether a person who has been disadvantaged by a
counter-terrorism listing may seek to challenge the legality of the Bill before
the High Court on constitutional grounds, remains to be seen.