Thursday, 15 February 2018
Proceeds of Crime Amendment (Proceeds and Other Matters) Bill 2017; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
The Proceeds of Crime Amendment (Proceeds and Other Matters) Bill 2017 will make amendments to the Proceeds of Crime Act 2002to further enhance the proceeds of crime regime.
The amendments in the bill will allow proceeds authorities, such as the Australian Federal Police, to restrain and forfeit property where illicit funds are used to make payments on that property. The bill does this by amending key terms in the act, including 'lawfully acquired', 'proceeds', 'instruments', 'improvements' and 'derived from an offence'.
These amendments are necessary as developments in case law have indicated that a person's interest in property is fixed at the moment of initial acquisition, and that any subsequent payments on the property are irrelevant to determining if the property is lawfully acquired or derived from crime.
This loophole could allow organised crime groups to use a web of financial arrangements and asset protection structures to avoid forfeiture of property. For example: criminals may be able to avoid the current proceeds regime by funneling money into ongoing property maintenance and restoration costs, mortgage repayments and improvements.
The existence of this loophole is contrary to the central purpose of the act, which is to undermine the profitability of criminal enterprises.
The amendments in the bill support this central purpose by allowing proceeds authorities to restrain and forfeit property where illicitly obtained money is used to service repayments on loans taken out on the property or fund improvements to the property.
The amendments are designed to function alongside existing provisions in the act which protect individuals who unknowingly acquire proceeds of crime or do so lawfully. These individuals can continue to draw on robust protections which allow them to: exclude their property from forfeiture or restraint, transfer forfeited property back to themselves or obtain compensation for the proportion of the value of the property they obtained lawfully.
This bill demonstrates the government remains committed to making our communities safer by taking effective steps to combat the parasitic effect of serious and organised crime, which is estimated to cost Australia $36 billion every year.