Chapter 6
Committee view
6.1
The committee strongly supports the underlying aim of the Bill to ensure
that law enforcement and prosecuting agencies are provided with an appropriate
suite of legislative tools to enable them to investigate and prosecute the
perpetrators of serious and organised crime and, importantly, to deny them the
proceeds of crime. While the committee is supportive of the provisions in the
Bill, it received evidence suggesting a number of improvements could be made to
the provisions.
Proceeds of Crimes Act 2002 amendments
Unexplained wealth
6.2
The committee wholeheartedly endorses the purpose of the unexplained
wealth provisions: namely targeting the people at the head of criminal networks,
who receive the lion’s share of the proceeds of crime, whilst keeping
themselves safely insulated from liability for particular offences. It is clear
that targeting the assets acquired through crime is an effective strategy not
only to remove the prime motivation for involvement in crime but also to
prevent the reinvestment of proceeds in further criminal enterprises. However,
the committee has some concerns about the potential operation of the provisions
which could be addressed through minor changes.
6.3
The threshold for obtaining both restraining orders and preliminary
unexplained wealth orders is relatively low, requiring only that an authorised
officer has ‘reasonable grounds to suspect’ that a person’s wealth is illicit. Once
the onus of showing that there are reasonable grounds to suspect a person has
wealth that was not lawfully acquired is discharged, a respondent will bear the
burden of demonstrating the source of his or her wealth and, if he or she is
unable to do so, a court must order the forfeiture of any unexplained
wealth.
6.4
The placing of the onus of proof on a respondent in proceedings where
the respondent faces a penalty of forfeiting property is an exceptional step
because it represents a departure from the axiomatic principle that those
accused of criminal conduct ought to be presumed innocent until proven guilty. Despite
this, the committee accepts that it would defeat purpose of the provisions if the
onus was not on the respondent: the purpose of unexplained wealth orders is to
require the respondent to explain the source of his or her wealth.
6.5
In most cases, a respondent whose wealth is not derived from illicit
activities will be able to produce evidence that demonstrates this. Nevertheless,
there are legitimate reasons why a person may not have access to such evidence.
For example, records may have been accidentally destroyed or they may have been
discarded after the period that they are required for tax purposes has expired.
6.6
The committee is also concerned about the potential for the provisions
to be used where it has proved too difficult or time consuming to meet the
exacting requirements of criminal prosecution of offences. In addition, there
is nothing to prevent use of the provisions where a prosecution has failed and
thus the provisions could be used to pursue individuals who have been
investigated, tried and found not guilty of an offence. It might be argued that
this is currently the case under the provisions in the 2002 POC Act providing
for non-conviction based forfeitures but in those proceedings the onus is on
the DPP to make out a case on the balance of probabilities.
6.7
A further issue is that the provisions are not in any way limited to the
targeting of major criminal figures and could be directed at relatively minor participants.
The committee notes the evidence it received that the approach law enforcement
agencies and the DPP adopt in practice when considering proceedings under the
2002 POC Act is to target senior organised crime figures. While the committee
has every confidence in Commonwealth law enforcement and prosecuting
authorities, it is poor practice for legislation to rely entirely on the
appropriate exercise of discretion by government officials in all cases.
6.8
For all of the above reasons, the committee considers that the bills
should be amended to provide a mechanism for ensuring no injustice arises from
the application of the provisions. In particular, a court should have a
discretion in relation to the revocation of preliminary unexplained wealth orders
and the making of unexplained wealth orders. This would be consistent with the
approach taken in relation to the proposed provisions dealing with the forfeiture
of instruments of serious offences in non-conviction based proceedings. Under
those provisions the court will have discretion not to order forfeiture if it
would not be in the public interest to do so. The existing provisions under
section 48 of the POC Act for forfeiture of instruments of indictable offences
in conviction based proceedings also provide the court with a discretion as to
whether to make a forfeiture order. Placing the onus of proof on the respondent
in unexplained wealth proceedings means that there is a real risk of injustice
unless the court has a similar discretion to revoke a preliminary order or to
refuse a forfeiture order.
6.9
There is one further respect in which the drafting of the unexplained
wealth provisions of the Bill could be improved. The requirements for an
affidavit in support of a preliminary unexplained wealth order are set out
under proposed subsection 179B(2) and require the authorised officer to state
the grounds on which the officer suspects: that property is owned or under the
effective control of a person, and that a proportion of that property was
lawfully acquired. It seems inconsistent that the authorised officer is not required
to also state the grounds on which he or she holds a reasonable suspicion that
a person’s wealth exceeds his or her lawfully acquired wealth. An authorised
officer is already required to hold such a suspicion under proposed paragraph 179B(2)(b)
so a requirement to state the basis of that suspicion should not place any
additional burden on law enforcement agencies.
Recommendation 1
6.10
The committee recommends that the court should have a discretion under
proposed section 179C of the Proceeds of Crime Act 2002 to revoke a
preliminary unexplained wealth order if it is in the public interest to do so.
Recommendation 2
6.11
The committee recommends that the court should have a discretion under
proposed section 179E of the Proceeds of Crime Act 2002 to refuse to make
an unexplained wealth order if it is not in the public interest to do so.
Recommendation 3
6.12
The committee recommends that proposed subsection 179B(2) of the Proceeds
of Crime Act 2002 specify that an officer must state in the affidavit
supporting an application for a preliminary unexplained wealth order the
grounds on which he or she holds a reasonable suspicion that a person’s total
wealth exceeds his or her lawfully acquired wealth.
Other amendments
6.13
The committee acknowledges the concerns raised in relation to the new
powers to obtain a freezing order over assets held in accounts with financial
institutions. Such orders represent a short term means of preventing the
dispersal of highly liquid assets. In addition, applications for a freezing
order will be subject to scrutiny by a magistrate. On balance, the committee
considers such powers are justified and subject to appropriate checks.
6.14
The committee accepts the evidence it received that the six year
limitation period on non-conviction based confiscation causes significant
difficulties where the DPP is pursuing confiscation in matters involving
complex and ongoing offences. The committee therefore supports the removal of
this limitation period.
6.15
The amendments to allow for the restraint and forfeiture of the
instruments of serious offences in non-conviction based proceedings were
opposed by civil liberties groups on the basis that they violate the rule
against double jeopardy by, in effect, imposing a penalty for an offence even
where a person has been acquitted of that offence. However, the committee
considers that the court’s discretion to refuse forfeiture where it would not
be in the public interest provides sufficient assurance that these provisions
will not result in any injustice.
6.16
The Office of the Privacy Commissioner raised concerns about the breadth
of the provisions relating to the disclosure of information obtained under the
2002 POC Act. Given the extensive powers to compel the provision of information
which are available under the 2002 POC Act, the committee agrees that
disclosures to law enforcement and prosecuting agencies should be limited to
disclosure for the purpose of investigation, prosecution or prevention of serious
offences. The committee is also concerned about the possibility of disclosures being
made to foreign law enforcement agencies where the conduct concerned would not
constitute an offence in Australia and recommends that the Bill be amended to
prevent such disclosures. However, the committee accepts that the definition of
‘serious offence’ under the 2002 POC Act is quite narrow. In particular, the
definition requires both that the offence be an indictable offence punishable
by imprisonment for three or more years, and that the offence involve specific
types of unlawful conduct such as money laundering, human trafficking or acts
of terrorism. As a result, the committee considers that disclosure of
information should be permitted in relation to any offence which meets the
first limb of the definition of ‘serious offence’ under the 2002 POC Act.
Recommendation 4
6.17
The committee recommends that the disclosure of information acquired
under the Proceeds of Crime Act 2002 to law enforcement and prosecuting
agencies should be limited to disclosure for the purpose of investigation,
prosecution or prevention of an indictable offence punishable by imprisonment
for three or more years.
Recommendation 5
6.18
The committee recommends that disclosure of information acquired under
the Proceeds of Crime Act 2002 to foreign law enforcement agencies should
not be made unless the offence under investigation would be an indictable
offence punishable by imprisonment for three or more years if it had occurred
in Australia.
Amendments relating to investigative powers and witness protection
6.19
The committee is pleased to acknowledge that several of the
recommendations of the Senate Legal and Constitutional Affairs Committee in
relation to the Crimes Legislation Amendment (National Investigative Powers and
Witness Protection) Bill 2006 have been reflected in the drafting of the
provisions seeking to implement model laws with respect to investigative
powers. In addition, the provisions relating to assumed identities represent a
marked improvement on the existing regime under the Crimes Act.
Controlled operations
6.20
The committee notes the concerns expressed about the extension of civil
and criminal immunity to informants participating in controlled operations. The
committee accepts that this adds an additional element of risk to controlled
operations. However, the committee is satisfied that there are adequate
mechanisms within the Bill to ensure informants participate in controlled
operations in limited and highly regulated circumstances. In particular,
informants would only be permitted to participate in controlled operations
where an authorised officer is satisfied that a law enforcement officer could
not adequately perform the role the informant will perform; and the informant
must be supervised by a law enforcement officer. The approval of extensions to
operations by members of the AAT and the oversight of operations by the
Ombudsman provide additional assurance that these provisions will be used
appropriately.
6.21
The committee welcomes the amendments in the Bill which strengthen the
powers of the Ombudsman in relation to his inspections and reporting on controlled
operations. The committee considers that the two proposals made by the
Ombudsman for further strengthening reporting requirements in relation to
controlled operations should be adopted. The committee therefore recommends
that:
-
the principal law officer with respect to a controlled operation
should be required to make a report to the chief officer of the law enforcement
agency within two months of the completion of the operation; and
-
the general register maintained by authorising agencies should
include information regarding the handling of narcotic goods.
Recommendation 6
6.22
The committee recommends that that the principal law enforcement
officer with respect to a controlled operation should be required to make a
report to the chief officer of the law enforcement agency within two months of
the completion of the operation and the report should include:
-
the nature of the controlled conduct engaged in;
-
details of the outcome of the operation; and
-
if the operation involved illicit goods, the nature and quantity
of any illicit goods and the route through which the illicit goods passed
during the operation.
Recommendation 7
6.23
The committee recommends that the Bill be amended to require that information
relating to the handling of narcotic goods, and people who had possession of
narcotic goods, is recorded in the general register that authorising agencies
will be required to maintain under proposed section 15HQ of the Crimes Act.
Witness identity protection
6.24
The committee accepts that the rationale of the model laws in relation
to witness protection certificates is to ensure the safety of undercover
operatives and the integrity of law enforcement and intelligence operations.
However, placing the decision about whether it is necessary to protect a
witness’ identity in the hands of law enforcement and intelligence agencies, instead
of the courts, represents a fundamental shift and it does place the right of
every accused person to a fair trial in some jeopardy.
6.25
The power of the court under proposed section 15MM of the Crimes Act to
allow evidence or statements which would reveal a witness’ identity despite a
certificate provides some comfort that the right of the accused to test the credibility
of his or her accuser will be protected. However, proposed subsection 15MM(5)
of the Crimes Act is currently drafted too narrowly to ensure this. In
particular, under paragraph 15MM(5)(a) a court will only be permitted to make
such orders if there is evidence which, if accepted, would substantially call
into question the operative’s credibility. It seems improbable to the committee
that an accused would ever be in possession of evidence that would
substantially call into question the credibility of an operative when he or she
does not know the identity of the operative. In the committee’s view, this
requirement should be deleted so that a court may make orders to allow evidence
that may disclose the operative’s identity: if it is impractical to test the
credibility of the operative without allowing the risk of disclosure; and it is
in interests of justice for the operative’s credibility to be tested.
Drafting issue
6.26
The definition of ‘chief officer’ in relation to assumed identities in
proposed section 15K of the Crimes Act provides that, where regulations specify
an agency as a ‘law enforcement agency’, the ‘chief officer’ of that agency is
the officer specified in those regulations. However, the definition of ‘chief
officer’ in proposed section 15M of the Crimes Act, which relates to the
witness identity protection provisions, does not define the ‘chief officer’ of
an agency specified as a ‘law enforcement agency’ by regulation. Similarly, the
definition of ‘senior officer’ in proposed subsection 15MX(3) of the Crimes Act
does not provide that, where regulations specify an agency as a ‘law
enforcement agency’, senior officers of that agency are the officers specified in
those regulations.
6.27
Clearly, proposed section 15M and proposed subsection 15MX(3) should provide
definitions of the terms ‘chief officer’ and ‘senior officer’ where regulations
specify an agency as a ‘law enforcement agency’.
Recommendation 8
6.28
The committee recommends that proposed subsection 15MM(5) of the Crimes
Act be amended by deleting paragraph (a).
Recommendation 9
6.29
The committee recommends that proposed section 15M and proposed
subsection 15MX(3) of the Crimes Act provide definitions of the terms ‘chief
officer’ and ‘senior officer’ in relation to agencies which are prescribed as a
'law enforcement agency’ by regulation.
Joint commission of offences
6.30
Some evidence to the inquiry suggested that the joint commission of
offences provisions are drafted too broadly and, in particular, that the
provisions should require an element of participation in the criminal venture
by the accused before liability arises. One difficulty with this proposal is
that it would dilute the operation of the provisions in relation to senior organised
crime figures who are in the best position to distance themselves from any
evidence of participation. The committee also received evidence suggesting that
these provisions would be a useful tool for law enforcement agencies to employ
in relation to organised crime groups. On balance, the committee considers the
introduction of the joint commission of offences provisions a proportionate
response to the difficulties involved in combating organised crime.
6.31
However, the committee is concerned that proposed subsection 11.2A(6) of
the Criminal Code which relates to a person terminating his or her involvement
in a criminal venture is drafted too narrowly. It would be very difficult for
an accused to satisfy this provision because it requires a person to take all
reasonable steps to prevent the commission of the offence. In the
committee’s view, the provision should simply require that an accused
terminated his or her involvement in the agreement and took reasonable steps to
prevent the offence.
6.32
The committee has considered the arguments for more expansive provisions
targeting criminal organisations than those proposed by the Bill. However the
committee has not received evidence that would justify such provisions. In
reaching this view, the committee was assisted by the detailed and careful
consideration of laws directed at criminal organisations by the PJC in its
report on legislative arrangements to outlaw serious and organised crime groups.
In particular, the committee notes the PJC’s comments that, while the enactment
of such laws at the state level has primarily been a response to concerns about
the criminal activities of outlaw motorcycle gangs:
...the groups committing some of the most serious and
lucrative crimes, and driving the lower-level criminal groups, do not have such
a public face. Moreover, witnesses emphasised the changing nature of organised
crime groups from tightly structured and enduring groups to loosely affiliated
and transitory networks.[1]
6.33
The committee shares the view of the PJC that confiscation of criminal
assets is an effective way of tackling serious and organised crime which shares
many of the benefits of laws targeting criminal organisations without some of
the attendant difficulties, complexities and costs of those laws.[2]
Recommendation 10
6.34
The committee recommends that the word ‘all’ be deleted from proposed paragraph
11.2A(6)(b) of the Criminal Code so that a person will not be liable under the
joint commission provisions if he or she terminated his or her involvement in
the agreement and took reasonable steps to prevent the commission of the
offence.
Telecommunications interception
6.35
The New South Wales Government raised concerns about the manner in which
telecommunications interception powers have been extended in relation to
criminal organisation offences. The committee accepts that there will often be
material which has already been collected under telecommunications interception
warrants which would support proceedings under the Crimes (Criminal Organisations
Control) Act 2009 (NSW). Most commonly this would occur where
telecommunications interception has been used by police to investigate serious
offences committed by members of criminal groups. There would appear to be
minimal impact on civil liberties of allowing the use of such material in
proceedings under legislation directed at criminal organisations and clearly it
would assist law enforcement officials in their efforts to disrupt such organisations.
The committee therefore recommends that the TIA Act be amended to allow the use
of lawfully acquired intercept material in proceedings to obtain declarations
that an organisation is a criminal organisation or to obtain control orders
over members of that organisation.
6.36
The committee is also concerned that the definition of ‘prescribed
offence’ under the TIA Act would not capture a first offence of controlled
members of a declared organisation associating with each other under the New
South Wales legislation. Given the evidence from the New South Wales Government
about the difficulties this would create in relation to the investigation of
such offences, the committee is persuaded that this offence should be included
in the definition of ‘prescribed offence’.
Recommendation 11
6.37
The committee recommends amending the definition of ‘exempt proceeding’
in section 5B of the Telecommunications (Interception and Access) Act 1979 to
allow the use of lawfully acquired telecommunications interception material in
proceedings, under state criminal organisation legislation, to obtain criminal
organisation declarations as well as proceedings to obtain interim control
orders, or control orders, over members of those organisations.
Recommendation 12
6.38
The committee recommends including first time offences of association
under section 26 of the Crimes (Criminal Organisations Control) Act 2009
(NSW) within the definition of ‘prescribed offence’ in section 5 of the Telecommunications
(Interception and Access) Act 1979.
Conclusion
6.39
The committee notes that it received proposals both that the provisions
in the Bill should go much further in terms of the powers and offences created
as well as submissions arguing that the provisions in the Bill intrude on
fundamental legal principles such as the presumption of innocence and the right
to silence. The diversity of the views presented to the committee demonstrates
the difficulty in appropriately balancing the need to provide law enforcement
agencies with the tools to disrupt organised crime whilst not intruding
unnecessarily on the rights of individuals. The committee has sought through its
recommendations to balance these competing imperatives. In overall terms, the
committee views the Bill as a measured and appropriate response to the
challenges posed by organised crime.
Recommendation 13
6.40
Subject to the preceding recommendations, the committee recommends that
the Bill be passed.
Senator Patricia Crossin
Chair
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