Senate debates

Thursday, 22 March 2007

Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007

In Committee

Consideration resumed from 21 March.

Photo of Grant ChapmanGrant Chapman (SA, Liberal Party) Share this | | Hansard source

The committee is considering government amendments (1) to (4).

9:56 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I have a couple of things to follow up on from yesterday. I thank the minister and others for their comments. The issues raised about the CEO of AUSTRAC actually raise more concerns for me. Of course, I recognise that the minister was saying that ASIS is going to determine whether their request is appropriate and so is the CEO of AUSTRAC. I accept what you are saying. ASIS are going to want to proceed with their investigations and they are going to be rather supportive of what they are doing and put that forward. I have certainly not heard anything that has convinced me that the CEO of AUSTRAC is the best person to decide whether ASIS are doing their job or not. If there is anything else on that I would be happy to hear it.

The minister made some comments yesterday about IGIS, the Inspector-General of Intelligence and Security, and responded to my comments in my speech on the second reading about them being underfunded and understaffed. I wonder if the minister is able to outline how many staff are now working for IGIS. I think the last time I asked that question it was four, and that included admin staff. Having an idea of the number of staff in ASIS compared to the number of staff in IGIS gives us some insight into the capacity for oversight of that issue.

The minister asked yesterday whether I could give an example of my concern. I want to put a specific example to the minister that has come to mind just now, which is of Australians who may be providing donations to family members who are in Tamil controlled areas of Sri Lanka. This is something we have talked about before in other arenas, whereby intelligence would be in AUSTRAC that there were Australians who were providing funding to organisations or individuals in Tamil controlled areas of Sri Lanka. The amendment being proposed here by the government is that ASIS be given access to that information and that they be able to pass that on to foreign governments, which in this case would be the intelligence services of Sri Lanka. I asked some questions yesterday about how we can make sure that that information is not used inappropriately. Of course, I am not suggesting that the Sri Lankan intelligence services or government can do anything about the people in Australia. But how do we make sure that when that information is passed over it does not lead to the detention, death or torture of people or other inappropriate violence or human rights abuses towards those family members who are being provided with money by Tamils in Australia or indeed the Australians themselves when they are in Sri Lanka?

10:00 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

With respect to the resourcing of the inspector-general, I refer the learned senator to the most recent annual report. All of the material she seeks is set out there. With respect to the safeguards, I have answered that question in great detail with respect to the role of the Minister for Foreign Affairs. With respect to the duties and obligations of each of the CEOs of ASIS and AUSTRAC prior to allowing the information to pass, I think the question has been answered.

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I was expecting a little bit more. I was anticipating that the minister might refer to section 133 of the AML legislation, which we talked about yesterday. What is contained in the existing legislation certainly does not satisfy me that we can be assured with respect to any intelligence that is passed on by ASIS, or indeed by the AFP or ASIO, to the Sri Lankan government—to use the specific example—or their intelligence organisations. It does not leave me confident that the relatives of Tamils in Australia will not have that information used inappropriately. The section in the act says:

(1)
The Director-General of Security may communicate AUSTRAC information to a foreign intelligence agency if the Director-General is satisfied that:
(a)
the foreign intelligence agency has given appropriate undertakings for:
(i)
protecting the confidentiality of the information; and
(ii)
controlling the use that will be made of it; and
(iii)
ensuring that the information will be used only for the purpose for which it is communicated to the foreign country; and
(b)
it is appropriate, in all the circumstances of the case, to do so.

I do not think that provides us with any assurances that it will not be used in that way. If you provide information to the Sri Lankan government, or an intelligence arm of the Sri Lankan government, about which Tamils are receiving support from their family members in Australia, does that provide us with a guarantee that that information will not be used to persecute those people? That is the history that we have seen. I am using this example because it is a current one, having regard to the 82 Sri Lankans sent to Nauru on the weekend. It is an example that Justice Dowd has spoken about in similar inquiries—that there are activities that provide support for family members or organisations in Tamil controlled areas of Sri Lanka, such as when Australians send money in order to support reconstruction after tsunamis and earthquakes in that region of the world. I do not want the parliament to be making it easier for the perpetrators of that persecution, be they the Sri Lankan government, militias or whomever, to be able to persecute individuals in Sri Lanka or Australian Tamils when they travel to Sri Lanka. That is the concern that I have.

We have already had a substantial debate on this matter. I want to make it clear that I have heard a lot of very useful information about how the system is going to work, and it concerns me that the CEO of AUSTRAC is going to decide whether or not ASIS are doing their job. I have not heard anything to say that that individual is in the best position to be able to do that. With respect to having systems in place to ensure that ASIS can have access to this information, obviously everyone wants to stop the financing of terrorism, but there are other systems in place whereby people need a warrant from a judicial officer, for example, to make sure that they are following proper procedure. That is not proposed here. What is proposed here is that the CEO of AUSTRAC will determine whether or not ASIS are doing their job.

If we did have a system which was about warrants, that would be great. That would be along the lines of acceptability to the Greens. But it is not what we have. All I have heard is that the CEO of AUSTRAC will decide if ASIS are doing their job. I know, because groups have been contacting me, that there is significant concern in the Australian community that this legislation seeks to increase the capacity for ASIS to spy on Australians, and the implications that has for Australians who are supporting their family members, be they in Palestine, Tamil controlled areas of Sri Lanka or various other parts of the world. This legislation, which exempts banks from the anti-discrimination legislation, is going to see racial profiling occur. We have heard police organisations talk about the danger in doing this.

What is proposed in this specific piece of legislation to increase the powers of ASIS has not been justified by the government. Some arguments have been put forward, but I think those arguments lead us to a view that any access, if at all, by ASIS should be far narrower than what is proposed in the legislation. It would be far more appropriate to have a system of requiring a warrant from an independent judicial officer—the kind of avenues that are followed elsewhere in other pieces of legislation. That is not contained in the legislation.

Whilst the Greens can accept that there may be some arguments for this proposal, they are not before us. So there is a need to start again and try to put in place a system that ensures that any information received by security agencies, be they ASIS or others, is for the purpose of preventing the financing of terrorism. That is what we want to do. Let us make sure that we introduce legislation that does that. This legislation does not. It does not provide appropriate safeguards. We have not had a justification from the government about why ASIS is to be given access, on top of the other 30 intelligence agencies that were given access in the previous legislation. We are just not in a position to support this proposal because the safeguards are not there. Yes, we all want to stop the financing of terrorism, but let us do that in the legislation instead of just throwing out the net and letting innocent people be caught by it.

10:06 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I am very respectful of the learned senator’s concerns; I do not share them. I did mention to the senator sections 133 and 133A and set out the safeguards. I want to add that to the list of safeguards I have mentioned this morning. I have previously outlined the process by which access to AUSTRAC information by designated agencies under section 126 of the Anti-Money Laundering and Counter-Terrorism Financing Act occurs. In summary, the terms under which ASIS or, for that matter, any other designated agency can access information will be governed by a memorandum of understanding between AUSTRAC and the designated agency.

The particular MOU between AUSTRAC and ASIS will regulate the process by which information is requested. So not only do the CEOs of each agency have a statutory obligation to review and to satisfy themselves that they are within power; the MOU will specifically direct what threshold issues must be addressed prior to the information passing, the overarching principles being those set out in section 126—namely, that AUSTRAC information can only be used for the purposes of the agency’s function. That is a matter that I have already mentioned. The MOU between ASIS and AUSTRAC will be negotiated. In the broad matrix of all of the issues, I am respectful of the senator’s concerns but I do not share them.

10:08 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I thank the minister for that information. Do you have any idea on the time frame for the negotiation of the MOU and whether or not, once the MOU is finalised in the negotiations, it will be publicly available?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

As the senator would understand, the intelligence is sought. It is sought on a basis which would have it available as soon as is reasonably possible. It is something that is being expedited and, no, it is not a public document.

10:09 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

As I understand it, the Director-General of ASIS may communicate AUSTRAC information to a foreign intelligence agency from the day after this act receives royal assent, so that is in fact a retrospective operation of that particular provision. Is that right? In other words, ASIS has been omitted—and I am sure you have provided a reason for that. I want to confirm that that is what we are now doing in moving the amendment regarding ASIS first.

10:10 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I am advised that it will commence at the same time as the other ASIS amendment in the bill, which is upon royal assent.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

In other words, the bill would receive royal assent and it would then operate from that start date? What date is that, or when will it commence?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

When the legislation receives royal assent. We are unable to give a specific date because of the appointment requirements with respect to the Governor-General.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

So it is not a retrospective operation; ASIS will come in and operate from the day this receives royal assent? It is just when you look at amendment (1) it says ‘clause 2, page 2 (table item 6), omit the table item’. So you are omitting the table from the current act and introducing a new table, which is schedule 1, items 21 to 57. That means that item 40A then falls within items 21 to 57, which means that the bill will receive royal assent and the schedule is being varied. That aside, the question really is: from when does item 40A operate—from when this bill receives royal assent or from when the principal act receives royal assent and, if so, has it?

10:12 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

From the day after this bill receives royal assent.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

So, in short, there is no retrospectivity?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Not upon my instructions.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

The question before us relates to government amendments on sheet QS416. Senator Nettle has asked that the amendments be taken in two parts—amendments (1) and (4) together and then amendments (2) and (3) together. The question is that government amendments (1) and (4) on sheet QS416 be agreed to.

Question agreed to.

The Temporary Chairman:

The question now is that government amendments (2) and (3) on sheet QS416 be agreed to.

10:13 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I want to follow up on the question that I asked earlier about staffing for IGIS. The last time I asked it was four but I understand it is seven now and looking at going to eight. How does that compare with the staffing for ASIS? I saw the ads in the paper at the weekend looking for more ASIS staff, and I acknowledge that it is one of the many security agencies where the government has been increasing staffing numbers. I would appreciate getting an idea of that comparison.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I am not in a position to assist the senator with that. The staffing of those agencies is set out in annual reports and other documents. I do not have the specific information at this stage, other than to ask for estimates from officials, and I am not sure that anything greatly turns upon it. I have just been informed that those numbers are not in the public record; I stand corrected.

10:14 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

That was going to be my point: ASIS does not do an annual report so I am not in a position to be able to make that kind of assessment around staffing numbers. I would appreciate any information that can be provided—and it does not have to be an exact number, just within a realm. We are talking about seven IGIS staff. We know there has been a massive expansion in recruitment by ASIO and by ASIS. Are we talking hundreds? I do not need an exact figure, just an idea in order to make that comparison.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I do not have one. Given that we have a nondisclosure of records with respect to ASIS, I would not wish to intend to get them.

10:15 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I indicate that the Australian Greens will not be supporting these amendments because we have not heard the justification for them. I will raise that when I move my amendments. We think that any access that would be provided needs to be limited to ensuring that it is stopping the financing of terrorism. We have not been provided with the argument as to why ASIS now needs this information. Perhaps the minister can provide more about it.

We have the 30 other agencies. We have ASIS and the AFP. How did it come about? Did ASIS say, ‘Oops, you left us off’? Did the government say, ‘Oops, we left you off’? We just have not heard how this came to be. We are not satisfied that the safeguards are there. We have heard talk about IGIS. We know it has seven, going on eight, staff that people are not aware of in order to make complaints to them. We have heard that there will be a memorandum of understanding and that it will not be made public. Our concerns have not been addressed.

I accept that the minister has gone some way towards seeking to address this. I thank him for the information that he has provided. But he has not been able to provide the information. It may be there. Then we would be satisfied. But the case has just not been made. If there is going to be any access, we think it needs to be far more limited than is proposed under this current piece of legislation. So we are not in a position to support this wider access.

If we had more information then we might be able to support a narrower and more defined access which is limited to stopping the financing of terrorism. But that is not what we have. We have only an open slate, and an open slate is not acceptable to the Greens or, I think, many people in the community. It extends the operations of ASIS and their spying on Australians without the relevant justification. It is to do with the comments I made earlier: when governments ask for these expansions of power to intelligence organisations—to occur behind closed doors—then there needs to be a justification. We have simply not heard that justification or seen the appropriate safeguards to ensure that it is limited to what we all want to achieve, which is stopping the financing of terrorism.

10:17 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I think we might have dealt with it in part yesterday, but only to make it plain why Labor does support these amendments. What Senator Nettle is proposing is quite a unique position. She is opposing the idea that the Director-General of ASIS may communicate AUSTRAC information to a foreign intelligence agency. We have the AUSTRAC CEO, with the relevant safeguards and oversight, and the Director-General of ASIS, who, I presume, is a responsible person as well in terms of both his capacity as Director-General of ASIS and the act under which he works. The act also provides a limit to the work they can do which is offshore in that sense for foreign intelligence service.

What you then do is say that AUSTRAC cannot provide information to a foreign intelligence agency. But you have already accepted that AUSTRAC can, under existing legislation, provide information to a foreign intelligence agency. So we have the unique position where AUSTRAC can provide information to a foreign intelligence agency through what the current law allows, but the Director-General of ASIS cannot. If for some reason the government were to take up your position, it would not change one fact: they would get it in any event, just through another route.

This is a sensible amendment. It allows the Director-General of ASIS to communicate AUSTRAC information to a foreign intelligence agency in that instance rather than going through the bureaucratic loop that is currently in the legislation. What is then proposed from the Greens perspective is to add a bureaucratic loop. The information will still flow. On that basis I have not been persuaded by your argument as to why this should not be supported.

10:20 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I think it is worth making it clear that this is not the only place that I have made these arguments. I made these arguments in the previous round of anti-money-laundering legislation. My concerns at the moment are directed at ASIS, because that is what we are dealing with in this legislation, but I have made several comments in this forum and others about definitions of terrorism and the impact that has on the broad net that is thrown.

If we are going to take away the privacy of Australians, we need justifications and we need to ensure that, in taking away that privacy, it is for a specific purpose. We do not think that in this case or in previous cases it has been specific enough. We are not saying that there are not instances where it may be appropriate. We are saying: ‘Let’s be clear. Let’s hear the justifications. Let’s ensure that, if we are taking away the privacy of Australians, as is proposed in this legislation, we are doing it for legitimate reasons and the legislation limits the privacy implications for Australians to what is absolutely necessary.’ This legislation does not do that. That is why we cannot support these particular amendments.

Going back to the figures I was talking about previously around staffing, I think ASIO is up to 110,000 staff. I was just stabbing in the dark on where we might be with ASIS. But it is certainly a large number of staff. We have seven, going on eight, Inspector-General of Intelligence and Security staff for oversighting. I am not saying that they cannot do a good job. But those seven going on eight include the admin staff. So their capacity to have that oversight is not extensive. I do not know—and by all accounts it does not sound like I am going to find out—how that compares to the number of staff that exist in ASIS.

Perhaps the minister can answer one more question: given that this is proposed to be the system for ASIS to access information through AUSTRAC, have there previously been any instances of ASIS accessing AUSTRAC information? The assumption is no and that this is setting up the system, but perhaps I am wrong; perhaps they have already been doing it through some other mechanism—whether it be through ASIO or whatever. I thought I should check that. It seems to be setting up a system on the way in which ASIS will get access to AUSTRAC. Is it fair then to assume that up until now ASIS has never had access to AUSTRAC information?

10:23 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I have no specific information. The Inspector-General has oversight of this and the annual report of the Inspector-General indicates that he takes his function as to the compliance of these agencies with the statutory provisions for objects and duties very seriously. I have no information with respect to what access, if any, has occurred.

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I appreciate that information is not here. If the minister is able to provide us with any information about that during the committee stage of this debate, it would be appreciated. I accept it is information that is difficult to have here, but if he is able to provide us with any information on whether ASIS has had access to AUSTRAC information in the past, it would be appreciated.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

The question is that amendments (2) and (3) on sheet QS416 be agreed to.

Question agreed to.

10:24 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

The Australian Greens oppose schedule 1 in the following terms:

(1)   Schedule 1, items 3 to 6, page 3 (line 14) to page 4 (line 6), TO BE OPPOSED.

(2)   Schedule 1, items 26 and 27, page 9 (line 16) to page 10 (line 7), TO BE OPPOSED.

(3)   Schedule 1, item 32, page 10 (lines 22 to 27), TO BE OPPOSED.

(4)   Schedule 1, items 35 and 36, page 11 (lines 1 to 9), TO BE OPPOSED.

There has been a lot of debate on these issues already. The Greens’ opposition to these items is that we should not be giving ASIS officers access to AUSTRAC. I have been through the arguments already as to why that might be the case.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I think they are getting the information anyway.

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I am waiting to hear that from the minister. Do they already have access to AUSTRAC? If that is the case it would be helpful to the debate to know that. If we are putting in place a regime to give them access and they have already got access, it makes you question what we are doing. I am still waiting to hear whether we can get that information. I have made the point before: we all want to stop the financing of terrorism, and legislation that we introduce that takes away the privacy of Australians needs to be justified and needs to be specific to that. Our concern is that this is not specific. If what was being proposed by the government was more specific, that would be a different matter and we would be able to look at that; but it is not. We think it is too open-ended and we are not satisfied with the safeguards that have been outlined.

We think that for the CEO of AUSTRAC to make the decision as to whether ASIS is doing its job or not is not the best way to go. We do not think that the Inspector-General of Intelligence and Security is able to provide the level of scrutiny that we would like to see. That is not to say that they cannot do some good things, but we do not think that they are able to provide the level of scrutiny we think is appropriate. The public is not made aware—in the memorandum of understanding, for example—how this will occur and what kind of analysis of financial records is going on, particularly for legitimate businesses that may be caught up in this. That is where our focus is, obviously. We are not here to defend those people who are financing terrorism; we are here for those people who get caught when the net is thrown wide. We want to make sure that there are safeguards in place to protect those people. I do not think I need to expand on it any more, other than to say that we think the scope is too wide for that access to ASIS. We think the case has not been made and we think it is not defined enough to the task that we are all focused on, which is stopping the financing of terrorism.

The Temporary Chairman:

The question is that schedule 1 stand as printed.

Question agreed to.

10:27 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

In the interests of dealing with this efficiently, I seek leave to move opposition amendments (1), (2) and (4) to (7) on sheet 5199. That would leave opposition amendment (3) to be moved separately.

Leave granted.

I move:

(1)    Schedule 1, page 6 (after line 6), after item 13, insert:

13A  Subsection 6(7)

Repeal the subsection.

(2)    Schedule 1, page 8 (after line 20), after item 19, insert:

19A  At the end of Part 6

Add:

79B  Deregistration and register of deregistered providers

        (1)    The AUSTRAC CEO may, by written instrument, deregister a provider from the Register of Providers of Designated Remittance Services.

        (2)    A provider may be deregistered if:

             (a)    the provider is found to be not of good character; or

             (b)    the provider is convicted of a criminal offence against the Commonwealth, a State or a Territory with a penalty of 2 years or longer; or

             (c)    the provider ceases to be able to provide the service.

        (3)    A written instrument in accordance with subsection (1) is a legislative instrument.

        (4)    The AUSTRAC CEO must maintain a register for the purposes of this Part, to be known as the Register of Deregistered Providers of Designated Remittance Services.

        (5)    The register is not a legislative instrument.

        (6)    The AML/CTF Rules may make provision for and in relation to either or both of the following:

             (a)    the correction of entries in the Register of Deregistered Providers of Designated Remittance Services;

             (b)    any other matter relating to the administration or operation of the Register of  Deregistered Providers of Designated Remittance Services.

(4)    Schedule 1, page 14 (after line 5), after item 51, insert:

51A  Subsection 199(4)

After “currency” (twice occurring), insert “or a thing”.

(5)    Schedule 1, page 14 (after line 5), after item 51, insert:

51B  Subsection 199(5)

After “currency” (twice occurring), insert “or a thing”.

(6)    Schedule 1, page 14 (after line 5), after item 51, insert:

51C  After subsection 200(12)

Insert:

Officer may seize other evidence

   (12A)    If a police officer or a customs officer has reasonable grounds to suspect that a thing found in the course of an examination under subsection (12) or (13) may afford evidence as to the commission of an offence against subsection 53(1) or 59(3), the officer may seize the thing.

(7)    Schedule 1, page 14 (after line 10), after item 52, insert:

52A  Subsection 251(1)

Omit “7”, substitute “4”.

Similar amendments were moved when the earlier bill was before us. They were moved because at that time the then minister wanted the bill through parliament before Christmas so he could come back and deal with amendments or any other matters post that. This is the opportunity to do that. Although we understood the minister’s intent at that time, Labor informed him that we would still take the opportunity to move our amendments then, even though we were not going to have an opportunity to look at some of his amendments, and that we would give the minister another look at them when the next opportunity arose.

So it is not a case that we are not dealing with the substantive bill—in other words, the charge could be levelled at us that we are dealing with amendments that do not go to this bill. I reject that. This is a case where I could argue that the sloppy and ill-conceived way these amendments and the original bill were brought forward has necessitated this response by Labor, and we are now in the position of having to move our amendments twice to give the government the opportunity of considering them in the principal bill. I will not make that allegation, although I probably just have.

This also goes to comments made by the minister in relation to the second reading amendment that was moved in the House. It is still relevant—that is, both the second reading amendment moved in the House and these amendments to this bill—because of the process that had been undertaken by the then minister, Minister Ellison, when he introduced the legislation. Labor did understand the reasoning for that, although we did not agree with or accept it.

Labor’s view on this has always been that the government has done this in a piecemeal way. I could go through the examples of where bandaid upon bandaid has been applied, but I will not take that course now. I think I have made those points a number of times. As best I can I will deal with these amendments in short form, given that I have spoken to them before. The minister at that time indicated that he was not going to look at any amendments. He would have had an opportunity to look at these amendments since we last moved them until now. Labor was not to know that the minister was going to move on to bigger and better things and that a new minister would take the reins. Given that, I think it would be helpful to now go through them again but in precis form. I am sure the staff have already advised the new minister of these amendments and that they have been considered before, but sometimes the opportunity of hearing them can persuade. It is a slim chance, Minister, but you might be persuaded to accept them—at least, if not now you might be persuaded at some future time to consider why you did not.

Amendment (1) on sheet 5199 is in line with recommendation 4 in the report of the Senate Standing Committee on Legal and Constitutional Affairs. It seeks to strike out clause 6(7), which gives the power through regulation to effectively override and amend the act. This is known as a Henry VIII clause. In putting forward recommendation 4 it is the view, and has been the view of many committees of the Senate, including both the Scrutiny of Bills Committee and the Legal and Constitutional Affairs Committee, that Henry VIII clauses should, from the point of view of good governance, be opposed unless very sound reasons are provided. Those sound reasons are not in this bill. It has not been well argued or put forward by the government to substantiate the need for a Henry VIII clause. In fact this process we are going through now, with technical amendments and the inclusion of ASIS, is a good example of where, if there are requirements to amend the principal act, you can undertake that in a relatively short time, bring them forward and amend the legislation accordingly. I think the government’s argument for flexibility is overstated in this instance.

Amendment (2) on sheet 5199 picks up recommendation 5 in the committee’s report that a separate register be set up for persons prohibited from supplying a designated remittance service. I do want the minister to consider this amendment a bit further. When you set up a register of designated remittance services and it stays as a continuously updated register, you put new designated remittance services providers on that list. For the sake of argument, let’s take the informal, traditional or ethnic based remittance services known as hawala and the like: you might find at certain times a person who has committed repeat offences against the act or who is otherwise an undesirable person to have channelling money overseas. Under the regime that will be set up under this bill such a person would simply remain on the list of designated remittance service providers. So even where you have an offender under the legislation or a person who might be undesirable in a broad sense—they might be associated with a range of members of the criminal underworld, for example—they still remain on the list. Of course, the argument was that you know where they are. I am not sure that is the retort I would want to hear. We think it is a pretty dumb idea to leave them on the list. Human nature being what it is there may be mistakes. It seems quite strange to us that you would have a regime in which persons can be enrolled or qualified to do a particular thing, in this case provide a designated remittance service, yet when it is no longer desirable for the person to retain that qualification, when you have come to a conclusion that they should not actually continue in that role, you have no power under the legislation to take them off. So they sit there as a designated remittance service provider. It seems to be half baked; it does not seem to be a full scheme.

What Labor proposed was to set up, in effect, a separate register of prohibited persons. That way the AUSTRAC CEO would have the power to strike off a registered person who breaks the law and move them across to a separate register of deregistered designated service providers. In that way, if you wanted to know where they were then they would be clearly known to people; they would be on a list of deregistered providers of remittance services. So they would not disappear into the ether either. The previous minister—wrongfully, in my view—rejected this approach because he was setting up a registration scheme and not a licensing scheme. However, no-one is suggesting that a licensing scheme can disavow the current minister of that view. It is just a matter of what we could say is common sense.

If you were to look at some of the experiences in overseas jurisdictions, it might also help. This problem—where people have set up registers in good faith and find, particularly in this area, that for a range of reasons you might want to strike them out but you have no power to—is not new. It seems sensible under a range of circumstances to have that power to be able to blueline them—or redline them, as the case may be—so that they are removed from the register. The argument is that they then disappear into the underworld, so to speak. Put them on a deregistered list and track that. In that way you are also providing a public service and know who you should not be dealing with because they are not a registered provider.

Amendments (4), (5) and (6) on sheet 5199 did not arise from an issue raised in the committee’s report but were raised in relation to the power given to Customs officers under the act. I can deal with them in short form. At present the act gives power to Customs officers to search persons for currency and bearer negotiable instruments when leaving Australia but does not appear to give them the right to seize anything other than the currency or bearer negotiable instrument. If there was a bearer negotiable instrument and with it a list of all of the bearer negotiable instruments and a document with signatures on it demonstrating that it was attached to the bearer negotiable instruments but not part of them or something which might otherwise describe them, that may not be able to seized as evidence in that way. It would seem sensible to ensure that bearer negotiable instruments can be seized as well as any evidence that might be attached to them.

Recommendation 28 of the FATF provided:

When conducting investigations of money laundering and underlying predicate offences, competent authorities should be able to obtain documents and information for use in those investigations, and in prosecutions and related actions.

Section 199 of the act, which deals with unlawful cross-border movement of physical currency, and section 200, which deals with unlawful cross-border movement of bearer negotiable instruments, as presently constructed, in Labor’s view, fails to meet that test. Recommendation 28 has not been implemented in total. Presently, when you look at sections 199 and 200, you see that they permit an officer—for example, a Customs officer—to seize physical currency and bearer negotiable instruments that afford evidence of the offence under sections 53(1) to 59(3). They do not allow an officer to seize any other thing which may afford evidence of the offence under sections 53(1) to 59(3).

To put it another way, when an officer forms a reasonable suspicion that an offence has been committed, they may only seize the physical currency or the bearer negotiable instrument itself and not any other evidence of the commission of that offence. It would seem sensible to have that logical extension. It might be that the government advisers say that there is a general power under the Customs legislation to seize that evidence. I cannot find that general power, so if it is there then perhaps you could direct me to it. But, in this instance, even if there were a more general power, you would need a specific power to ensure that evidence could be obtained. It is also one of those ways in which you can avoid having an argument about whether the additional document that was taken at that time was legitimately taken or not.

It is easy to imagine instances in which a power would be required. As I have said, all of the instructions which might go to how you conceal that there are negotiable instruments—where you put them or where they are now hidden, for instance—might be helpful to demonstrate that the excuse given by the person as to why they have got the bearer negotiable instruments is not a valid one. (Extension of time granted) As I have said, the government may argue that there is a general power. I do not think the general power exists but I am happy to be corrected.

Amendment (7) on sheet 5199 is based on committee recommendation 13 to reduce the review time from seven years to four. Labor’s view is that for a piece of legislation such as this one, where we have already seen amendment upon amendment, a technical correction and an addition, seven years is too long. The argument that has been put in response to that by the government is that by the time the rules, regulations and guidelines are put in place and the scheme gets under way, seven years might be about the right balance. By that time, I suspect that it will have gone too far if any substantive issues arise that the government does not want dealt with. Early is better for the business, the financial institutions and AUSTRAC to make sure that everything is on track, that it is operating effectively and efficiently, that it is not creating a burden on business and that is not creating a burden on government in terms of the regulatory scheme.

It makes more sense to ensure an early review to get the balance right, because in Labor’s view we do not want a situation where a raft of issues jam up and wait and do not get resolved until the seven-year point. Bureaucracy as it is often responds to businesses by saying, ‘The review is in seven years’—or such and such a date—‘so we’ll put it on tick and wait until then.’ In the business world it needs to be resolved early, and the earlier review will give that opportunity. The other matters and the sheer amount of delegated authority this regime imposes militate against a long review. The capacity for regulations to amend the legislation, where you may then take that opportunity of amending the legislation, means that you should take that course. AUSTRAC are relatively inexperienced, and let us not underestimate their task. They have grown and doubled in size, effectively overnight. I understand the CEO is pleased in that sense and takes the challenge well, and I have full confidence—and Labor has full confidence—in his ability. But it is still a bureaucracy that he has to manage as a regulator. Going from financial intelligence, or FIU, to being a regulator-enforcer, he has to undertake a range of other tasks, as well as having to deal with the legislation and the legislative process. The problem is the ill-effects for business if you get it wrong.

10:46 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

I rise to speak to the six opposition amendments to the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007, which are being moved together on sheet 5199. Before doing so, I wish to briefly remark on the earlier debate to say that the Democrats have also recognised the difficulties that exist with a possible overreach with respect to this legislation. In a military sense you might describe it as collateral damage—in other words, it was not intended but it occurs. I thought that the point made indirectly by the minister is the accurate one. The obligation is on the Inspector-General in his or her annual report to ensure that a sensitive eye is kept on the application and implementation of this legislation.

The broad policy principle that lies behind this act and this amending bill is supported by the Democrats, because we think this is a public interest matter which needs to be pursued. But of course we are not blind to the dangers that exist with privacy, and we hope the government is not blind to that. The government cannot ensure, cannot guarantee, that every single individual intelligence agency will act properly at every single moment—that is not possible in human affairs—so the only device we have is in fact the device of review. I would simply ask the minister to confirm that the government will ask the Inspector-General to be as diligent in this area as possible, bearing in mind the legitimate concerns that have been raised in that regard.

I turn now to the opposition amendments—and I will deal with all seven, if I may, in the brief. They have been well motivated by the shadow minister, and I do not need to repeat that. His item (1) is an amendment that was proposed by the Democrats last time the bill was before the Senate. It was supported by the official opposition, and of course the Democrats again support this amendment. I suspect that, in the usual course of the Senate since 2005, the government are likely to oppose the opposition amendments. If they do so, I would urge them to reconsider these matters. This is an amendment which arises from committee consideration. From memory, it was unanimously supported and it is a valid one. Similarly, we think that item (2) is a sensible technical amendment which will make the working of the legislation smoother. Item (3) extends the application of this subdivision to the United Nations and, given the primary role the United Nations is now taking in coordinating these matters, might well be worthy of consideration by the government. On the information available to us at present, we think that is probably the right move, unless the government can articulate strong reasons why it would not be.

Item (4) relates to the application of subsections to apply to things other than simply physical currency. It means that the police can also seize a thing as described in the legislation. Presumably the thinking is that if someone has a computer with information on it that shows currency transactions then that is the sort of thing that will be useful to us to seize. People often do not carry physical currency and collating evidence of money laundering requires a sophisticated and flexible approach. It could also refer to negotiable instruments, but the opposition has attempted to allow a broad net. It seems to me, unless the government can articulate some real reasons why it is not sensible, to be an amendment that provides necessary flexibility.

Items (5) and (6) are attached to the same approach. Item (7) is that the act be reviewed in four years, rather than seven, which reflects recommendation 13 of the committee report. In view of the sensitivities of moving into an area in which privacy may be a concern or in which unintended collateral damage might occur to individuals in some circumstances, I urge the government to consider a shorter review period. Even if you are minded to reject it at this time, there is nothing to stop you bringing that period forward. I think it is a legitimate recommendation—it is a unanimous recommendation from the committee—which should be respected.

10:52 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I am obliged to Senator Murray for his assistance and contribution with those remarks, and I am also very much obliged to Senator Ludwig for his hard work on this subject. The government has previously expressed its view on these amendments, as I am sure Senator Ludwig anticipates. We are not in a position to accept them. We take on board everything that is being said. I can see that the amendments are presented in a spirit of seeking to further enhance and preserve privacy and to do the sorts of things that they do, which I respect. The situation with the Henry VIII clause is one which, obviously, concerns all senators. That is not to say that there are not times when a Henry VIII clause has no legitimate function. This is an instance when one is minded to say that the response of government to a very versatile, dynamic financial system needs to be extremely responsive and quick and equally dynamic and innovative. Accordingly, we must be able to respond to the mechanisms and devices of the financial services industry which facilitate the rapid movement of large sums of money.

The question that springs to mind is, ‘What are the safeguards?’ The safeguards are that such regulations made to respond to the products, mechanisms and devices are simply disallowable in parliament. I think that answers the need for the clause. I think the clause is a legitimate use of an extraordinary power. It is not used without considerable consideration. This is one of the rare occasions when the power is legitimate and should be used.

The government, noting the detail that has gone into it, does not accept the amendment on deregistration. As I am sure Senator Ludwig has heard, the act of 2006 instituted a registration regime, not a licensing scheme. It is important that the registration system captures all providers of remittance services and maintains the capacity on one database to revisit the previous intelligence as gathered. I think that is a very important point that, respectfully, has not been considered with respect to this amendment. Taking information off has the potential, almost on a commonsense basis, to undermine the integrity of the system.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

We’re not taking them off.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Well, deregistering them.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

We’re flagging them on the computer. What sort of computer are you running?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

A very good one.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

Order! Senator Ludwig, you can respond when the minister is seated.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

The government does not see that the amendments regarding the search powers are necessary. To use a phrase used by Senator Ludwig, I am giving a precis because I know that my predecessor has provided all these arguments, but both for the sake of the record and respecting the mover of the amendments, the government does not see these amendments as necessary; should operational experience demonstrate that such amendments are necessary—bear in mind it is a three-year roll-out package with a seven-year review—this can be considered when the legislation is reviewed in accordance with section 251. Bear in mind also that there is a further tranche with respect to other modes of financial transactions coming.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

Really?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Well, it is coming. I am sure, given the intense legislative program, Senator Ludwig and I will be almost the first to know.

There is a technical difficulty with the proposed amendment (4), which seeks to empower a police officer or Customs officer to seize further evidence which might be relevant to the commission of an offence against section 59(3) of the act. An offence against section 59(3) can only occur if a person has first been required to produce a bearer negotiable instrument to a police or Customs officer under section 200 or if the police or Customs officer has found a bearer negotiable instrument during a search of the person under section 200. Section 59(1) provides that if a bearer negotiable instrument is produced under section 200 or found during such a search then the police or Customs officer may require the person to give the AUSTRAC CEO a report about the bearer negotiable instrument that has been produced or found. The offence in section 59(3) is for failing to provide a report when required to do so under section 59(1), which would necessarily occur after the person has been searched under section 200. It is unlikely in those circumstances that any other evidence could be found on the person pursuant to the search under section 200 which will assist in the prosecution for failing to report under section 59(3).

The general power of search flows from the Crimes Act 1914, as amended, and the ability to seize evidence is upon a suspicion of an offence under part 1AA of the Crimes Act 1914, as amended—as I have said. That is the general powers of search and seizure, where if there is a legitimate suspicion of an offence such powers can be used.

With respect to the argument which I think was also raised by Senator Murray, the government does not support the reduction of the review period. As I have said, the legislation will not be operational until 12 March 2015. Reducing the period in section 251 to four years will result in a full-scale review of the act after only nine months of fully implemented operation. We clearly say that that would be unreasonable and that you would require a longer period to analyse and assess the operation or capacity and outcomes of the capability.

I think I have answered Senator Murray’s question. I do not believe there are any other matters, other than to say that this is about the third time, with respect, that we have been through why the government proposes to enact these enactments as they are and why the government is not minded to go with the opposition’s amendments.

11:00 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I thought I would have another go at the deregistration and registration scheme. Minister, I will put it simply: you have excellent computers. You can actually have all the information on the same computer. You do not need a separate list. You can simply flag the information. I am sure your computers are sufficiently modern that you can differentiate on one list, both a checked and unchecked listing, as to whether a remittance service provider is registered or deregistered.

The beauty of having a registered and deregistered list—and I will use a common example—is that you have a list of people: some ‘good’ and some ‘bad’. Your view is to put them all on the one list without differentiating them. My view is that, especially in providing this service, you could put them on one list and flag those people who were ‘bad’ people. Your view is to put them all on a list but have no way of differentiating them. I am sure that your computers are capable of providing that differentiation. You will find that agencies in Australia’s jurisdiction and also those in the jurisdictions of many other countries are struggling with this issue. If you cast your net to the UK, you will find that agencies dealing with remittance service providers in implementing FATF are having the same problem as has arisen in other jurisdictions. In fact, I will go so far as to say that, when you come back to this place with a solution, I will not be surprised if you try not to look as though you have simply picked up Labor’s amendment. That will be the more interesting thing to watch.

As you said, Minister, you have responded to most of these issues before so I will not deal with these matters any further, other than to encourage you to support them or at least to have a look at them.

11:03 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

We have had a look at them. We cannot support them and, with respect to the actual nuts and bolts of the register and the deregister list, we have put the matter to AUSTRAC and the agency has indicated that it prefers the legislative framework and model as laid out. To that extent, we have to go with what it thinks is the most efficient.

Photo of Grant ChapmanGrant Chapman (SA, Liberal Party) Share this | | Hansard source

The question is that opposition amendments (1), (2), (4) to (7) be agreed to.

Question negatived.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I move amendment (3) on sheet 5199:

(3)    Schedule 1, page 11 (after line 22), after item 40, insert:

40A  After section 132

Insert:

132A  United Nations deemed to be a foreign country

                 For the purposes of this Subdivision, the United Nations is deemed to be a foreign country and its constituent bodies are deemed to be a foreign law enforcement agency.

Before I deal with the amendment—which will not take long—I have a couple of questions on which I seek clarification. Firstly, does AUSTRAC share financial intelligence information with Interpol and, if so, on what lawful basis under the present act does it share this information? It is a simple point.

11:04 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Interpol is not a designated agency, as I am instructed, and there is no sharing of information with that agency. I cannot take it any further.

11:05 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

It begs the question as to why you would not share financial information with Interpol. Secondly, does any other Commonwealth agency share financial intelligence information with supranational or multilateral bodies and, if so, could the minister explain the lawful basis of that? I am trying to follow which supranational, multinational or lateral bodies—to give a broad range of bodies—are currently sharing information with AUSTRAC. You said no in relation to Interpol.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Only those agencies that are designated agencies as defined under section 5 of the act can receive the information.

11:06 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

The question arising harks back to the ASIO-ASIS debate—that is, could a designated agency that gets this information from Australia then in turn give that information to a non-designated agency such as Interpol? In other words, how do you cut off information you are given from one agency going to another with which they may have an agreement?

11:07 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

All I can say is that, in order to receive the information, it has to be a designated agency. My instructions are that Interpol, for example, is not a designated agency and therefore would not be able to be the beneficiary of any information. I simply reiterate all of the fail-safes that I went through yesterday. That is, the application has to come from the CEO of, in this instance, ASIS, for the government’s amendments. He has to be satisfied of certain things, namely that the information is necessary in the fulfilment of his role and powers. The CEO of AUSTRAC must then make a similar assessment. The information must be designated, no other information must pass, and the agency itself must be a designated agency from the beginning of the chain. If it is not a designated agency, it cannot access the information. I think that indicates that the concept of an onshore agency, as designated, passing to a non-designated agency in a sort of third person type event would render the initial assessment process such that the information would not be permitted to flow.

11:08 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

The minister may misunderstand my question. It seems to me that Australia may exchange information under this legislation with a foreign intelligence agency, for instance. How does the minister suggest that, if a foreign intelligence agency wants to pass it on to Interpol, Australia would be able to interfere with that? I do not think they would. There may be no good reason why Interpol should not get the information but, as far as I can see, a foreign intelligence agency which has a relationship with Interpol would be able to pass on information which it received from Australia. That would seem to be possible.

11:07 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Sections 133(1)(a)(i) and 133A talk about the confidentiality of the information. I want to clarify that the CEO of the Australian Federal Police or the CEO of the Australian Crime Commission can pass on AUSTRAC information to a foreign law enforcement agency under section 132 if authorised by the AUSTRAC CEO—and we come back to the powers and duties of the CEO on that basis.

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

So Interpol could get it?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Interpol is not a foreign law enforcement agency.

11:10 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

I am sorry, Minister; I am not trying to be obtuse, but a foreign law enforcement agency with which Australia legitimately deals, in terms of this legislation, may itself pass on that material to Interpol. You have no means of stopping that, monitoring that, reviewing that or preventing that, surely.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

What there seems to be, Minister, is a massive hole in how you actually address sharing of financial intelligence information with overseas jurisdictions. What we have now discovered is that AUSTRAC cannot, with its relevant safeguards, share it with Interpol—which is effectively a very large organisation designed to assist in intelligence sharing and information sharing and be able to assist others. But it is not only Interpol; it is other bodies as well, it seems. What you seem to have is a situation where AUSTRAC can share it with a foreign intelligence organisation but not with Interpol, with a supranational multilateral body—with the relevant safeguards; we are not talking about open access. We are talking about where there is a properly constituted, demonstrated reason for sharing intelligence. One example that comes to mind is AWB Ltd.

What you have got is this hole where you want to be able to insulate AUSTRAC—and your government, it seems—to ensure that, if the Volcker inquiry wants information, it cannot get it. It may be necessary for the United Nations, in a properly constituted inquiry, to have that relevant information or at least be able to access it with the relevant safeguards. The other position you would have is that, if you do not want to cooperate with bodies such as Interpol, you would hide behind that legislation. Mr Volcker himself described the level of cooperation offered by the Howard government as ‘beyond reticent, even forbidding’. That is how Volcker described this government in terms of providing information. I interrupted Senator Murray’s train of thought; but I will come back to this shortly.

11:13 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Just so that senators are clear with the way the legislative framework operates, we have defined designated agencies, and there are (a) through (x) of them, including, amongst others: the Australian Crime Commission, ASIO, the Australian Commission for Law Enforcement Integrity, the Australian Competition and Consumer Commission, the Customs Service, the Federal Police, the Prudential Regulation Authority, the Treasury Department, the New South Wales Crime Commission, the Crime and Misconduct Commission of Queensland, any state and territory royal commission, and so on. I have attempted to give a flavour by enumerating those agencies that may access AUSTRAC information.

Section 132 clearly sets out that the CEO may communicate AUSTRAC information to the government of a foreign country if he is satisfied that:

(a)
the government of the foreign country has given appropriate undertakings for:
(i)
protecting the confidentiality of the information; and
(ii)
controlling the use that will be made of it; and
(iii)
ensuring that the information will be used only for the purpose for which it is communicated to the government of the foreign country ...

We have to make an assumption here as to the integrity and veracity of the foreign government. They have given an undertaking that the information will be used only in accordance with what is required to access that information, so the CEO has a jurisdictional threshold question. It goes on:

(b)
it is appropriate, in all the circumstances of the case, to communicate the information to the government of the foreign country.

I respect the concerns of Senator Murray in this, but we must have the capacity to use the information to our benefit. We are confronted with the almost philosophical question of, ‘What if the country breaches its undertakings?’ That is just a circuitous nonargument that everything we do has to confront. Indeed, we have sought to put the obligation upon the CEO to make a thorough and detailed investigation weighing up what the request is for, how vital the information is and also the benefits to his system and the national interest. It goes on:

(2)
The AUSTRAC CEO may, in writing, authorise the Commissioner of the Australian Federal Police to have access to AUSTRAC information for the purposes of communicating the information to a foreign law enforcement agency under subsection (3).

You would say, ‘How is that going to work?’ The answer is:

(3)
The Commissioner of the Australian Federal Police may communicate AUSTRAC information to a foreign law enforcement agency if the Commissioner is satisfied that:
(a)
the foreign law enforcement agency has given appropriate undertakings for:
(i)
protecting the confidentiality of the information; and
(ii)
controlling the use that will be made of it; and
(iii)
ensuring that the information will be used only for the purpose for which it is communicated to the foreign law enforcement agency; and
(b)
it is appropriate, in all the circumstances of the case, to do so.

It strikes me that it would be very difficult to go any further in charging the commissioner and the CEO of AUSTRAC with a more clear duty to ensure that there is a nexus, there are undertakings and it is in the national interest to proceed with the dissemination of information to those agencies. We have said that the AFP Commissioner carries a similar burden. I think the framework, with respect, is very thorough, is robust and is in the national interest such that we can in terms of money laundering and counterterrorism go into parts of the world where we suspect money is flowing across our borders for the ill-gotten ends of money laundering and financing terrorism.

11:18 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

I thank the minister for that lengthy response. But it actually highlights a difficulty. I do not take a restrictive view of these arrangements; I take a more expansive view. I think it is appropriate, as you would gather from my support for the Labor Party’s amendment, for international bodies such as the United Nations and Interpol to be in the frame, if you like, of anti-money-laundering cooperation internationally periodically, as appropriate and where the circumstances warrant it.

Minister, I think your answer unnecessarily limits the prospects that will be before our own law enforcement agencies and the realities of world money laundering. Let me give you an example, which I suggest might not be hypothetical but might actually be very common. The British government are the foreign government we are dealing with, and they make a request to us. But on the same money-laundering issue they are dealing with, for instance, the United States government—and we would have no qualms about cooperation with them—the French government and Interpol. I cannot conceive of a situation where the Chief Executive Officer of AUSTRAC would say to the British government: ‘Thank you for application. You can use this information as requested by you to interact with the French and the United States governments with respect to these particular targets. But, by the way, we are prohibiting you from using Interpol,’ or, ‘We are prohibiting you from interacting with the United Nations.’ That just does not make sense to me.

So, whilst you may not have formally designated them, I would think there is very little likelihood of those sorts of restrictions being put in writing to a government which is interacting with a number of other governments and which might want to interact with an international agency such as Interpol where that ties into the money-laundering circumstance. So, unless you are going to confirm to me that the Chief Executive Officer of AUSTRAC will in each case prohibit each foreign government from dealing with the United Nations or Interpol, if that was part of the web, I will assume that it is likely to happen.

11:21 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

The reason that I read out the section, for the benefit of the Senate, was to indicate that there is a responsibility upon the CEO. He may make a determination. We have subsections (1)(a) and (b). Subsection (1)(b) enables the CEO to make an independent determination appropriate in all the circumstances of the case to communicate the information to the government of the foreign country. Guided, as he would be, by the provisions of (a), he may do that. He may make the discretionary decision that he wants the information to go through the channel as you have described. Now, the consideration would obviously be the national interest. The government takes the view that that is appropriate.

11:22 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

Is it not in the national interest to cooperate with the Volcker inquiry? That is the reverse of your argument. What you are effectively saying is that the AUSTRAC CEO can cooperate with the government of a foreign country, but it cannot provide information to a multilateral body such as the United Nations or a body that is otherwise juxtaposed, where you then have to ask which government you have to go to in order to talk to the body. It is a supranational body. Your arguments earlier about ASIS wanting direct access are apposite here. It is the same argument you put then. The reason you have amended it to include ASIS—and we have agreed to it—is that you want direct access to financial intelligence. That makes sense.

Can you then confirm that AUSTRAC has never provided information to FATF, the Financial Action Task Force—the body that we then deal with in terms of their responsibilities to be able to make recommendations and deal with anti-money laundering? This is about whether this government is serious about cooperating in anti-money laundering not only nationally but also internationally, and not only with foreign governments but also with other bodies, including the UN, especially given what Volcker said about this government’s attitude when he tried to inquire. It could have been put to bed then if we had an international perspective. You are still now arguing against it. I am amazed.

11:25 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Until I just now heard Senator Ludwig, I was of the opinion that he had a thorough and deep grasp of what AUSTRAC was doing with the information. The exchange of financial intelligence is designed to enable effective action to be taken to prevent the commission of an offence. The post facto AWB analysis is in the margin, irrelevant and takes the argument in the wrong direction. This legislation is about information being gathered and used to prevent the commission of a crime, not to run around and be an evidence base to be called on and given in court. The forensic use of this information is precisely what it is not for.

In all of the debate that has gone on on this, the misconception keeps bubbling to the top. Let me be the first to stand on it now: this is an intelligence-gathering and crime prevention mechanism. It is not something where you call witnesses from AUSTRAC who gather information, bring their hard copy information to court, are sworn and give evidence. That is not what they do. The primary function is to prevent the commission of money-laundering offences and the financing of terrorism. The enforcement, the evidence gathering and the case are for later. Your comments with respect to Volcker, as interesting and politically topical as they may be, are totally irrelevant to this debate.

11:27 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

Let me understand this: you are not using this for Operation Wickenby? Can you rule it out? Operation Wickenby does not use financial intelligence from AUSTRAC on your analysis.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

For the shadow Attorney-General to ask such a question in an ongoing inquiry discloses a complete lack of understanding and a misconception of what is ever going to be answered with respect to the ongoing investigation and prosecution. The short answer is: don’t go there.

11:28 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I am not asking about operational matters. You went there first by limiting the role of AUSTRAC to an area. I am simply giving you an example of where information may or may not be used. You confirmed in your earlier speech that it could not be used and that I was somehow wrong. It seems to be that, when you look at predicate offences and all of that information on which AUSTRAC can provide financial intelligence, you can ensure that financial intelligence is used appropriately in a range of investigations domestically. I am simply trying to establish why you do not use it internationally and you limit it in such a way that you rule out FATF, the OECD, Interpol, the United Nations and other bodies with appropriate safeguards. I do not know the reason. You have not been able to enlighten me as to why you will not. I am waiting for an explanation of that. If you are going to provide it, provide it now. If you do not know, say so—‘I don’t know.’ If you do have an answer, I would be keen to understand it.

11:29 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

It may assist this particular aspect of the debate to refer to the Bills Digest No. 105 with respect to this bill. On its penultimate page, in the subsection entitled ‘Amendment to the Inspector-General of Intelligence and Security Act 1986’, it refers to item 62 in that paragraph and then follows it with:

Note that the Tax Laws Amendment (2007 Measures No. 1) Bill 2007 introduced on 15 February 2007 amends the secrecy and disclosure provisions in the Taxation Administration Act 1953 to allow the Commissioner of Taxation to make disclosures of taxpayer information to Project Wickenby taskforce officers and to officers in other taskforces that may be prescribed in the regulations. Project Wickenby is a multi-agency taskforce—

and the minister will be able to confirm whether AUSTRAC is on that task force—

addressing alleged tax avoidance and evasion involving the use of offshore entities, which may also entail other features such as large-scale money-laundering, fraud, or breaches of the law relating to the regulation of financial markets or corporations.

Now, self-evidently, the Parliamentary Library is not an agency of the government; it is an agency of the parliament and its views are not those of the government, but it clearly has the view that AUSTRAC has a part to play, not only in the prevention of the commission of money-laundering crimes but in following up crimes which have already been committed. I must say very clearly that I have absolutely no objection to AUSTRAC information being used in that way. I think it is perfectly proper and, in fact, highly desirable. I will support Project Wickenby facilities being enlarged to maximise the prosecution of anyone who has been engaged in money laundering for criminal or tax avoidance purposes.

I will repeat that my understanding of the minister’s earlier response is that the chief executive officer of AUSTRAC may, on application, allow appropriate information in appropriate circumstances to be distributed via a foreign government to a multilateral agency, which I would assume for internal investigations would be something like the Project Wickenby task force, or externally might include agencies such as Interpol.

11:32 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I respect Senator Murray’s concerns on this but the point I made needs to be clear, because Senator Ludwig has this misconception. This is a financial intelligence unit. AUSTRAC is a financial intelligence unit; it data mines for information. It acquires intelligence. It does not prosecute; it does not enforce.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

Yes, it does.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

With respect to reporting it may—in order to access the information. There is that other aspect; you are quite right. In terms of prosecution—and you can talk about Wickenby or any other prosecution—it provides intelligence to the enforcement agencies. The enforcement agencies then, using that information, go forward and accumulate the case. It may be that they revert back to AUSTRAC in the future, during the investigation, but the information is intelligence information. They take the intelligence and, if it was a bank account transaction, the AUSTRAC information would not necessarily be relevant to that. It would identify it but the bank records would be seized and the bank records would be, under the best evidence rule, the evidence that would be produced to substantiate the case—not the fact that there was some data on the AUSTRAC database. Do you follow what I am saying here?

The information flows from the intelligence gathering agency, AUSTRAC, to the enforcement agencies. Just keep that in mind. That is the way the system is designed to work. Indeed, there may be some obscure circumstances where evidence is required—I would not want to predict what can happen in cases—but it is not intended to be like that. It is simply to provide intelligence. The enforcement agencies would then go forward and on the basis of what they had received the designated agencies would prepare a case that was suitable for prosecution. That is the way it works.

11:35 am

Photo of Andrew MurrayAndrew Murray (WA, Australian Democrats) Share this | | Hansard source

As I understand the questions from the shadow minister, he is of the view that the legislation, to use an example, would prohibit the provision of information to the Volcker inquiry—let us assume that it is current and not historical. That is what he assumes. My assumption from your responses, and from my understanding of the legislation, is that the Chief Executive Officer of AUSTRAC—if, for instance, asked by the United States government to provide information which was in turn to go to Mr Volcker—could make that determination. Or, to use another example, if the British government wanted information which was to be transferred to Interpol for a different operation, the Chief Executive Officer of AUSTRAC could make that determination. Or, internally and domestically, if the intention was that Project Wickenby needed information he could make a determination to pass on that information. That is my understanding. Although the legislation is explicit with respect to foreign governments and in terms of certain designated agencies it does not prohibit multilateral transfers of information in appropriate circumstances as determined by the Chief Executive Officer of AUSTRAC. That is my understanding. Unless you are going to say I am wrong I therefore would assume the legislation is as open-ended as it needs to be.

11:37 am

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I think that is right; that is correct. In your example, the CEO would have to be satisfied that the use to be made by the government of another country—the United States in your example—was within all the consideration thresholds of the CEO. He would ask, ‘What is this information for?’ The information would not be provided to the Volcker inquiry. The information would be provided to the government, and they would be required to specify what it was going to be used for. Bear in mind that it is intelligence and in all three systems we have talked about here—the United Kingdom, the United States and Australia—there is no evidentiary capacity in the foreign use of that information. It is purely intelligence. If all you had was the intelligence and you were unable to substantiate it with admissible adducible evidence, you would have very little.

11:38 am

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | | Hansard source

I understand the government’s position. They are making their case, I guess. One of the earlier questions asked was whether AUSTRAC shares financial intelligence with FATF. I did not quite catch whether you answered that particular question.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

I am obliged to Senator Ludwig for revisiting that. I have an answer. FATF, as I am sure the senator is aware, is a body established to set global standards. It does not have any investigative functions apart from monitoring the member nations to ensure compliance with the standards as set out. AUSTRAC is a financial intelligence regulator. Its function is to share information, but FATF is not a beneficiary of that function.

11:39 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

We are coming towards the end of the committee stage, and I wanted to check whether the minister had any more information about whether or not ASIS is currently able to access AUSTRAC or has done so in the past. The crux of the issue that we have been dealing with is about giving them access. Have you had the opportunity to get any more information about that?

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

That is why we are enacting what we are enacting. It is not a designated agency and it has not accessed the information. That is what I am instructed.

11:40 am

Photo of Kerry NettleKerry Nettle (NSW, Australian Greens) Share this | | Hansard source

I addressed this before. One would assume that, given this legislation is about setting up a system for ASIS to access AUSTRAC, ASIS have not previously had access to AUSTRAC, but I thought it was worth asking the question. Senator Ludwig was indicating previously—and if I am misrepresenting him, I ask him to please correct me—that he thought that they already had that access. That is the reason I asked the question. I understand what the legislation is about and what follows from it. But I thought it was worth asking whether that meant that up until now ASIS have never had access to AUSTRAC information.

Photo of David JohnstonDavid Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | | Hansard source

Yes.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.