Philip Ruddock (Berowra, Liberal Party, Attorney-General) Share this | Hansard source

I am pleased to have heard the critique of the government’s performance from one who did not even know that important legislation in this area had been introduced into the parliament today. One would think that, claiming perfection, one would not put oneself in a position of such immediate embarrassment.

In summary, the primary purpose of the Financial Transaction Reports Amendment Bill 2006 is to vary amendments to the Financial Transaction Reports Act 1998 made by schedule 9 of the Anti-Terrorism Bill (No. 2) 2005. The current amendments are necessary to address the representations made by the non-bank money remittance businesses that the current application of division 3A of part II of the FTR Act could affect their business operations. Those businesses pointed out that they do not have the systems in place to recognise same institution funds transfers, where effectively they would be sending customer information to themselves—in other words, they do not use the Society for Worldwide Interbank Financial Telecommunication, SWIFT, style systems which would recognise such transfers.

The amendment to restrict division 3A of part II of the FTR Act to authorised deposit-taking institutions, ADIs, will mean that, on this issue, the FTR Act will not fully comply with special recommendation VII of the Financial Action Task Force. However, that issue will be resolved by the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006, the AMLCTF Bill, which I introduced today, in the first tranche of reforms. Under that bill there will be provision for rules to be made that will extend the operation of the relevant provisions of the bill to entities other than ADIs. The amendments in the Financial Transaction Reports Amendment Bill 2006 will be replicated in the AMLCTF Bill, when it is enacted, thereby ensuring a consistent approach is maintained. I am pleased to say that industry have examined the specific amendments and they have confirmed that the amendments will meet their concerns. While it has taken time to develop the AMLCTF Bill, industry have been extensively consulted in relation to that bill. I commented when I introduced the bill that the Minister for Justice and Customs had consulted very extensively.

These matters do require getting a difficult balance. That balance is ensuring that businesses are not unreasonably affected by measures that are absolutely essential to deal with terrorism financing. They appreciate the importance of that. They appreciate the importance of being FATF compliant. But, interestingly, if you take a rigorous view of these matters, you might well drive businesses out of business in addressing the particular problem. If you pursue the approach that we have, where you develop risk based programs in which you work with those who are in the best position to be able to identify suspect transactions, you can put forward measures of the sort that we have seen in the AMLCTF Bill that I introduced into the House today.

This consultation has been vital in formulating a package that accommodates industry’s needs both operationally and on a cost basis. The government does not apologise for taking time to consult with industry to get the bill right in what is a complex area. I might say it is certainly the case that if you look at why these changes have been made you will see that the amendments were drafted on the basis of issues that were identified by industry during the AMLCTF Bill consultation process, and those issues were raised after the ATA legislation—the antiterrorism legislation—had been introduced and passed by parliament late last year. The government amendments reflected later comments received by industry. In other words, industry did not form fixed and instant views when it saw the legislation. Industry have raised additional issues as the consultation process has progressed. This is the main reason we had to make government amendments to the initial amendments.

Other issues have been raised, but I do not intend to canvass them because I think each of them was raised in another place. The importance of dealing with these issues comprehensively, effectively and in a balanced way is the approach that this government take, and we do not apologise for ensuring that we consult fully and properly with all those who are likely to be affected. I commend the bill to the House and reject the amendment because I think it is only there for colour.

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