Wednesday, 13 September 2006
Financial Transaction Reports Amendment Bill 2006
Senator Ludwig put forward a number of questions when this matter was last in committee, and I now have a reply for him. Firstly, as I recall it, Senator Ludwig asked, ‘Is there a difference between a unique identification number, as used in section 17FA(3)(b) subparagraphs (iii), (iv) and (v) and a unique reference number as defined in section 17FA(3)?’ The answer is, yes, there is a difference. A unique identification number is any number given to a customer by an Australian government, such as an ABN, or a foreign government. A unique reference number is a concept used in 17FA(3)(c) subparagraph (ii) and is a number given to a transaction by an ADI. The two concepts are different but use similar technology.
Senator Ludwig also asked: ‘Why is ‘unique reference number’ defined in the bill, given that the definition seems self-evident? Why is it defined in two places—section 17FA(3) and 17FB(6)?’ Industry asked that the term ‘unique reference number’ be defined to make the meaning clear beyond doubt. The government accepted this request and section 17 FA(3) defines the term for the purpose of outgoing IFTIs. We use a lot of acronyms in this bill, so I remind the Senate that an IFTI is an international funds transfer instruction. While section 17FB(6) defines the term for the purposes of incoming international funds transfer instructions, there are differences between the definitions. Section 17FA(3) refers to authorised deposit taking institutions, which is a meaningless term for an international funds transfer instruction sent to Australia from a front country. Whether there should be two definitions or one definition which covered all possible variations was a drafting issue. There is no issue of substance in using two definitions.
Another query concerned 17FA(3)(b) subparagraph (ii). Senator Ludwig asked what this change was designed to achieve. AUSTRAC requested this change. When people are asked to disclose their place of birth, most people will give only details such as country, city or town. Some, however, will only give their country of birth. The amendment will make it clear that ‘place of birth’ requires more than just a country. Senator Ludwig also asked for an explanation of how the ATA and this bill as amended fit in with special recommendation VII. This bill was only ever designed to be a partial response to special recommendation VII. That recommendation deals with both international wire transfers and domestic wire transfers. The ATA only ever dealt with international wire transfers. Domestic wire transfers will be dealt with in the AMLCTF Bill.
The effect of the amendments will be to limit the operation of the ATA changes so that they apply only to authorised deposit taking institutions. That is a narrowing down of the provisions, since they will not now apply to non-bank money remittance businesses. That change is necessary because of the way the FTR Act is structured. It would cause problems for non-bank money remittance businesses if they had to comply with the new obligations under the architecture of the FTR Act. Non-bank money remittance businesses will also be dealt with under the AMLCTF Bill. The result is that the current legislation does not fully meet the requirements of special recommendation VII—and, of course, as I said earlier, the government never said that it would.
That covers the issues that Senator Ludwig raised. I commend the amendments to the committee.
Question agreed to.
I move opposition amendment (1) on sheet 5031:
(1) Clause 1, page 1 (line 6), omit “Financial Transaction Reports”, substitute “Anti-Terrorism (Correction of Government Legislative Errors)”.
What has been clear in this whole process is that it is an ad hoc, band-aid solution, and the amendment is designed to simply highlight that fact. It is to ensure that we get the consultative process and the amendments right for the next big bill which will come into the Senate—the anti money laundering legislation. The government is clearly put on notice that we will spend a lot longer with the next bill if we have to start amending it on the run again. I commend the amendment to the Senate.
I do not think I have seen an amendment quite like this before. It must have been very difficult for Senator Ludwig to move this amendment with a straight face. I reject that this has been ad hoc or on the run. I have always said this has been a work in progress. We had our initial legislation to provide an urgent response to the needs of the time. There was always going to be another bill of this sort to take it further. At the end of the day, we will have the wider reform I have been talking about, and that will be in the form of the AMLCTF Bill, which will be introduced into the Senate in this sitting. It will not come as a surprise to anyone that the government opposes this amendment.
Bill, as amended, agreed to.
Bill reported with amendments; report adopted.