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

I thank the members for Brisbane, Hughes and Blaxland for their contributions to this debate on the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007. Of course, an important element for success in the fight against money laundering and the financing of terrorism is a collaborative approach between government and business. We have been very consultative in relation to these measures, and for very good reasons. Throughout that process we have been able to fortify the Australian financial sector against money laundering and also against those who would seek to use the Australian financial sector to fund terror. The financial sector is to be commended on its commitment to this important role.

I note the observations that have been made in the amendment that was moved today. I was looking to find the amendment that was moved on the last occasion that we discussed anti-money laundering and counterterrorism financing. I suspect, from my recollection—I was not able to find that second reading amendment—that, rather than pushing the government to deal with the issues of counterterrorist financing, the emphasis was, in fact, on the need for consultation. When I looked back through the speeches that were made, that was the emphasis that was being put. It is a question of getting the balance right on these matters. The Labor Party is quick to seek Senate standing committee scrutiny of bills. That takes time too. In asking to have a look at these matters, the Labor Party does not say, ‘We’re part of the problem, in causing delay and providing for consultation and leaving unaddressed the recommendations of FATF.’ You cannot have your cake and eat it too in relation to these matters.

We thought it was important to consult. We think it is important to have industry on side in implementing very important measures that deal with money laundering and terrorism financing, but we need to do it in a way that ensures that our financial sector is still able to operate effectively. It is a question of getting the balance right. I would not apologise for being involved in discussions. I know the financial institutions want us to be FATF compliant. It has been said in all my discussions with people about these issues that we do not want Australian financial institutions to be seen as a weak read in addressing these fundamental issues but we also do not want to see them hampered when these same issues are discussed in other jurisdictions. And it has been discussed in the United States and in Britain as to how they deal with these same questions of remaining FATF compliant but still having an effective financial industry.

I am not going to deal with the posturing. When you get AWB run into an amendment of this sort, you know that people are posturing. We obviously oppose the amendment. While I am dealing with matters of form, there were some minor corrections to the explanatory memorandum, and I table a paper dealing with those issues.

I will comment on compliance with the nine special recommendations of FATF. FATF found that Australia was largely compliant with five of the nine special recommendations and partially compliant with three of the special recommendations. The new legislation will significantly improve the way in which we deal with our obligations. With the passage of the AMLCTF Act there were only two outstanding FATF recommendations that were not addressed in their entirety. They were recommendations 12 and 16, which dealt with designated non-financial businesses and professions.

If the Labor Party is saying that we ought to have a comprehensive scheme dealing with the professions—dealing with jewellers, dealing with solicitors, dealing with accountants—and we ought to roll over them without consultation, so be it. But our view was that there needed to be continuing consultation on the second tranche. It commenced in 2004 and it will continue. We will be addressing these matters under a second tranche of AMLCTF reforms.

Issues were raised in relation to the Senate committee recommendations. In the debate in the Senate, the Minister for Justice and Customs provided details of the government’s response to all of the Senate committee recommendations. Since the passage of the act, there has been no further information provided or concerns raised by industry about the government’s approach on these recommendations. Section 251 of the AMLCTF Act requires that the operation of the act be reviewed. This review will be required to be conducted with seven years of royal assent. This seven-year period takes into account the fact that the obligations will not come fully into effect until two years after royal assent. All of the issues raised by the Senate committee can be considered in the review in the context of appropriate operational experience.

The member for Brisbane asked about the term ‘merchant terminal’ and suggested that the term needed to be defined and asked me to deal with that. The advice that we have from the Office of Parliamentary Counsel is that the terms used in the legislation have their ordinary meaning unless otherwise extended or altered by definition. In other words, there was no need to define every single term in the legislation. The term ‘merchant terminal’ will have its ordinary meaning and it will encompass any change in the industry and in the technology used by financial institutions for the purposes of recording and transmitting this information.

A point has been made in this discussion that AUSTRAC was not included in the money laundering task force. The fact is that the task force was set up for the purpose of advising the government and AUSTRAC. In that context, our view is that, in reporting to AUSTRAC, the groups were more appropriate and that it was not necessary for AUSTRAC itself to be included as part of the task force.

The government has been asked why it has taken three years to finalise the bill and introduce it into parliament and whether Australia was left inadequately protected. Our view is that the government moved with appropriate speed to introduce comprehensive, well thought out legislation. It was as a result of extensive consultations that the legislation was presented in its final form.

I think the extent and detail of the consultation process has been widely acknowledged and applauded by affected businesses. IFSA commented that the efforts of the Attorney-General’s Department, along with those of AUSTRAC, had been noteworthy and that the two bodies had worked in a genuine partnership with industry to better understand and resolve important issues. IFSA said that they believed the legislation benefited immensely from the consultative process. The Australian Bankers Association commented that there had been a substantial amount of consultation and that enormous work had been done on both sides to achieve the result that we have. The Securities and Derivatives Industry Association commented:

We also believe that AUSTRAC and the Attorney-General’s Department have worked extremely well with industries affected ...

As a result of this consultation, Australia today has an act which strikes an important balance between the government’s law enforcement and national security objectives and business day-to-day operational reality. The time spent on achieving this balance and limiting the burden on Australian business has been well spent.

It has been claimed that Australia has been a major money-laundering country. The United States international narcotics control strategy report, which is released annually, said that this was so. The report evaluates whether or not a country is a major money-laundering country based on its economy and the complexity of its financial system. It assesses the level of risk of money laundering rather than the effectiveness of the country’s response to that risk. The report identifies countries with large and complex flows of funds as being more vulnerable to money laundering. The 2005 report named Australia, the United States, the United Kingdom and Canada as countries of primary concern, despite their having comprehensive money-laundering laws and conducting aggressive anti-money-laundering law enforcement activities.

The bill deals with technical amendments—matters that have been foreshadowed—and has been the subject of very extensive consultation. While the legislation ensures Australia’s interests in making sure that money laundering and terrorism financing are dealt with and combated effectively, the form it takes will not leave our financial institutions significantly impaired. Getting the balance right in relation to those matters was important. I might say to my colleagues opposite, the member for Brisbane and the member for Barton, that my colleague in another place Senator Ellison has acquitted himself extraordinarily well in terms of what has been a very complex issue and one that has been very demanding in time and effort. Achieving the right balance was the proper approach to take. I commend the bill and hope that it will have a speedy passage.

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