Additional Comments by Liberal Senators
1.1
Organised crime imposes major costs on the Australian community both in
financial and human terms. Liberal Senators therefore strongly support the aim
of the Bill to strengthen the legislative mechanisms available to tackle
organised crime. We also endorse the recommendations in the majority report, apart
from recommendation 12 which relates to proposed changes to the TIA Act. In
addition to our concerns about recommendation 12, Liberal Senators have a
number of further comments and recommendations for amendments to the Bill.
Amendments to the Proceeds of Crime Act 2002
Constitutionality of the
unexplained wealth provisions
1.2
At the public hearing for this inquiry, Liberal Senators questioned
officers of the Attorney-General’s Department in relation to the constitutional
validity of the unexplained wealth provisions in the Bill. The answers provided
to the committee at the hearing were less than satisfactory and ultimately
these questions were taken on notice.
1.3
Given the recent decision of the High Court in relation to the constitutional
invalidity of the legislation establishing the Australian Military Court, it
would seem prudent for Senate committees to independently scrutinise the
reasoning of government departments with respect to the constitutional validity
of provisions in bills.[1]
In particular, Liberal Senators note that the concerns of the Senate Standing Committee
on Foreign Affairs, Defence and Trade about the constitutionality of the
Australian Military Court were disregarded, with most unsatisfactory results.[2]
1.4
The Government has obtained legal advice on the constitutionality of the
unexplained wealth provisions but was unwilling to provide that advice to the
committee. It is difficult to see how the disclosure of legal advice provided to
the Government in these circumstances is contrary to the public interest. It
would assist committees in performing their role to scrutinise proposed legislation
and it may well help the Government to avoid the embarrassment of having
legislative provisions struck down with potentiality more dramatic consequences
than would have arisen from amending the original bill. Moreover, the failure
to disclose the legal advice leaves perhaps unwarranted suspicions that the
advice was not unequivocal.
1.5
The Government’s failure to disclose this legal advice robs Liberal
Senators of an opportunity to be reassured that the proposed unexplained wealth
amendments are constitutional. We therefore recommend that, unless the Senate
is provided with early advice that persuasively confirms the constitutionality
of the provisions, a more cautious approach would be to base such provisions
upon a referral of powers by the states to the Commonwealth.
Additional recommendation 1
1.6
Liberal Senators recommend that, unless the Senate is provided with early
legal advice which persuasively confirms the constitutionality of the proposed
unexplained wealth provisions of the Proceeds of Crime Act 2002, those
provisions should be based upon a referral of powers from the states.
1.7
Liberal Senators also consider that additional amendments to the 2002
POC Act should be considered in relation to:
-
the grounds on which preliminary unexplained wealth orders are
granted;
-
the power to apply for restraining orders under the unexplained
wealth provisions;
-
the grounds on which an unexplained wealth order is granted; and
-
the disclosure of information gathered under the Act.
Preliminary unexplained wealth
orders
1.8
While Liberal Senators support the unexplained wealth provisions in the
Bill, it is critical to minimise the possibility of innocent parties being
captured by those provisions. This could be readily achieved by providing that
before issuing a preliminary unexplained wealth order a court should be
satisfied that there are reasonable grounds to believe, not merely
reasonable grounds to suspect, that a person’s wealth exceeds his or her
lawfully acquired wealth. The Office of the Privacy Commissioner suggested such
an amendment to the committee and noted that requiring this higher level of
knowledge:
...could assist in making sure that individuals who have not
actually committed any offence nor gained personally from any illegal activity
are not inadvertently caught up through this mechanism.[3]
1.9
The test of ‘reasonable grounds to believe’ is not uncommon under
federal legislation and exists in provisions in both the Crimes Act and the
Criminal Code. For example, the Deputy Privacy Commissioner explained how the
two tests are used in current provisions in the Criminal Code:
...‘reasonable grounds to believe’ requires a higher level of
knowledge than, say, ‘reasonable grounds to suspect’. This distinction has been
applied in some other legislation. An example I can give is the Criminal
Code Act 1995, where both levels of knowledge are required in different
circumstances. So, for example, within the Criminal Code Act, ...at section
[105.43(2)(b)]—and that concerns taking fingerprints, recordings or samples of
handwriting or photograph use—it is required that the police officer...
believes on reasonable grounds that there is enough evidence or information to
support those actions. Whereas in section 105.24, where it is referring to the
conduct of ordinary searches, it only requires the police officer to suspect on
reasonable grounds.[4]
1.10
The test of reasonable grounds to believe is also applied under existing
section 244 of the 2002 POC Act in relation to whether a thing may be moved to
another place for processing or examination in order to establish whether it
may be seized under a search warrant.[5]
1.11
The Law Council supported the strengthening of the test applicable to
preliminary unexplained wealth orders to ‘reasonable grounds to believe’ at the
public hearing.[6]
While Civil Liberties Australia was critical of the use of the test of
‘reasonable grounds to suspect’ even at the earlier stage of obtaining a
restraining order under the unexplained wealth provisions and argued that:
The burden selected strikes an inappropriate balance between
the law enforcement interests of the state on the one hand, and the interests
of the individual on the other.[7]
1.12
Liberal Senators accept that the test of ‘reasonable grounds to suspect’
is appropriate in the context of restraining assets under proposed section 20A.
Indeed this is the test applicable to other restraining orders under existing
sections 18 to 20 of the 2002 POC Act. However, to apply the same test to a
preliminary unexplained wealth order is quite a different matter given the
serious consequences of such orders: namely that an individual will be required
to prove the provenance of his or her property or face forfeiture of that
property. As a result, Liberal Senators recommend that the higher threshold of
‘reasonable grounds to believe’ ought to be met before a preliminary
unexplained wealth order is made.
Additional recommendation 2
1.13
Liberal Senators recommend that before making a preliminary unexplained
wealth order under proposed section 179B of the Proceeds of Crime Act 2002 a
court must be satisfied that there are reasonable grounds to believe that
a person’s wealth exceeds his or her lawfully acquired wealth.
Power for AFP to apply for a
restraining order
1.14
Liberal Senators are also concerned that criminals should not be able to
evade the unexplained wealth provisions by dispersing assets before they can be
restrained. Liberal Senators therefore support the Commissioner of the AFP
being empowered to apply for a restraining order under proposed section 20A of
the 2002 POC Act. In circumstances where assets may be dispersed quickly to
defeat unexplained wealth proceedings, it would seem reasonable for the
Commissioner of the AFP as well as the DPP to be able to seek restraint of those
assets.
Additional recommendation 3
1.15
Liberal Senators recommend proposed section 20A and related provisions
of the Proceeds of Crime Act 2002 be amended to empower the Commissioner
of the AFP to apply for a restraining order under the unexplained wealth provisions.
Granting unexplained wealth orders
1.16
Under proposed paragraph 20A(1)(g) of the 2002 POC Act, a court must be
satisfied that there are reasonable grounds to suspect that a person has
committed specified offences or that a person’s wealth was derived from such
offences before issuing a restraining order. This requirement is not replicated
in the provisions dealing with preliminary unexplained wealth orders and
unexplained wealth orders. In response to questions from the committee, the
Attorney-General’s Department explained the reason for this anomaly was that
proposed paragraph 20A(1)(g) provides the nexus to constitutional heads of
power by linking the provision to offences which are within Commonwealth power.
Such a connection is not required in relation to preliminary unexplained wealth
orders under proposed section 179B. In relation to unexplained wealth orders
under proposed section 179E, the constitutional nexus is achieved through the
definition of ‘unexplained wealth amount’ as the difference between total
wealth and wealth that was not derived from offences within Commonwealth power.[8]
An officer from the department explained:
It was appropriate [in proposed section 179E] for us to
connect it to Commonwealth power to describe unexplained wealth by reference to
offences that were within Commonwealth power. But it was not appropriate to
include that second ground that is in [proposed paragraph 20A(1)](g), which
relates to the person’s commission of an offence, in part because that would
move it away from being an unexplained wealth order and, in addition, if the
person also had to demonstrate that they had not committed an offence to the
satisfaction of the court that would be quite an inappropriate provision to
include in the making of an unexplained wealth order.[9]
1.17
While this reasoning may be sound in relation to the constitutional
bases for the provisions, it leaves the rather unsatisfactory outcome that at
the final stage of making a forfeiture order in relation to unexplained wealth
there is no specific requirement for a court to be satisfied that there are
reasonable grounds for believing that a person’s wealth is illicit. Liberal
Senators accept that it would be inappropriate for the onus to be on the respondent
to demonstrate that he or she had not committed one of the specified offences
as well as having to account for the source of his or her assets. Nevertheless,
the court should remain satisfied that there are reasonable grounds to believe
a person has committed offences or derived wealth from offences when making an
unexplained wealth order. Consideration should be given to amending proposed
section 179E of the Proceeds of Crime Act 2002 to achieve this result.
Disclosure of information
1.18
The Bill would create extensive powers to share information obtained
under the 2002 POC Act for a broad range of purposes. Liberal Senators support
recommendations 4 and 5 of the majority report which limit the provisions
allowing the disclosure of information to law enforcement and prosecuting
agencies to disclosures for the purpose of preventing, investigating or
prosecuting indictable offences punishable by imprisonment for three or more
years. However, these recommendations do not go far enough.
1.19
As drafted, the provisions in the Bill would permit the disclosure of
information obtained in relation to individuals even where a court refused to
make a forfeiture order or other penalty order in relation to the person. This
means that information can be exchanged between agencies even in cases where a
court was not satisfied on the balance of probabilities that a person was
involved in any criminal activity or was the recipient of illicit funds. Liberal
Senators believe that disclosures should be limited to cases where such adverse
findings have been made in relation to the respondent or where forfeiture has
been ordered as a result of a criminal conviction.
Additional recommendation 4
1.20
Liberal Senators recommend that disclosures of information acquired
under the Proceeds of Crime Act 2002 should be limited to cases where a
forfeiture order, pecuniary penalty order or literary proceeds order has been
made by the court.
1.21
A further issue is that the table in proposed subsection 266A(2) of the
2002 POC Act would allow the exchange of information for the ill-defined
purpose of ‘assisting in the prevention of a crime’. It is difficult to imagine
what disclosure of information to law enforcement agencies could not be
justified on the basis that it may serve the purpose of assisting the
prevention of crime. Liberal Senators observe that the drafting of item 2,
column 2, in proposed subsection 266A(2) of the Proceeds of Crime Act 2002 would
be improved by omitting the word ‘prevention’.
1.22
Similarly, Liberal Senators do not support the capacity to share
information obtained under the 2002 POC Act for the purpose of the ATO
investigating tax matters. The coercive information gathering powers granted
under the Act are directed at disrupting organised crime. They should not be
available for subsidiary purposes such as protecting public revenue. Liberal
Senators consider that item 3 in proposed subsection 266A(2) of the Proceeds
of Crime Act 2002 should be deleted.
1.23
Where a person provides information or documents in compliance with the
information gathering powers under the 2002 POC Act, proposed subsection
266A(3) would prevent the use of answers and documents provided by the person
in evidence in criminal or civil proceedings against the person (apart from
certain specified proceedings). As drafted, proposed subsection 266A(3) does
not prevent the subsidiary use of this material against third parties. This
provision could result in considerable injustice to the family members or
business associates of a person required to provide information under the Act.
In essence, it may circumvent an individual’s right to silence by compelling
the production of information related to his or her affairs from his or her
family or associates. To avoid this outcome, consideration should be given to
inserting the words ‘or against any other person’ in proposed subsection
266A(2) of the Proceeds of Crime Act 2002 after the phrase ‘against the
person who gave the answer or produced the document’.
Telecommunications interception
1.24
Finally, the Bill would expand the scope of offences which may be
investigated utilising telecommunications interception warrants to include
offences associated with a criminal organisation which are linked to prescribed
offences. Prescribed offences, in general terms, are offences punishable by
imprisonment for a term of at least three years. Recommendation 12 of the
majority report would include 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 TIA Act. This
offence has a maximum penalty of only two years imprisonment. The change
proposed by the majority report would ultimately allow telecommunications
interception warrants to be obtained in relation to the investigation of this
offence.
1.25
Any amendments to the TIA Act must be applicable to both the existing
state legislation targeting criminal organisations in New South Wales and South
Australia as well as able to accommodate any future legislation passed by other
states and territories. It is not practical, nor is it good policy, to tailor
provisions to any particular state regime. It is therefore inappropriate and
unacceptable to broaden the definition of ‘prescribed offence’ to include a
specific offence which the New South Wales Parliament did not consider
warranted a sentence of more than two years imprisonment.
Senator Guy Barnett
Deputy Chair
Senator
Mary Jo Fisher
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