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2002
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
THE HOUSE OF REPRESENTATIVES
EXPLANATORY MEMORANDUM
(Circulated
by authority of the Attorney-General,
the Honourable Daryl Williams AM QC
MP)
This Bill amends the Criminal Code Act 1995 (Criminal Code), the
Financial Transactions Reports Act 1988, the Mutual Assistance in
Criminal Matters Act 1987 and the Charter of the United Nations Act
1945 to enhance the Commonwealth’s counter terrorism legislative
framework by:
• creating an offence directed at those who provide or collect funds with the intention that they be used to facilitate terrorist activities;
• requiring cash dealers to report transactions that are suspected to relate to terrorist activities;
• enabling the Director of the Australian Transaction Reports and Analysis Centre, the Australian Federal Police Commissioner and the Director-General of Security to disclose financial transaction reports information directly to foreign countries, foreign law enforcement agencies and foreign intelligence agencies; and
• introducing higher penalty offences for providing assets to, or
dealing in assets of, persons and entities engaged in terrorist activities.
The measures in the Bill implement obligations under United Nations
Security Council Resolution 1373 and the International Convention for the
Suppression of the Financing of Terrorism. Australia has signed the Convention
and the Government intends to ratify the Convention in the near future, subject
to the usual consultation processes.
[The Proceeds of Crime Bill 2002
will give effect to the Article 8 of the Convention, which requires State
parties to take appropriate measures to provide for the forfeiture of property
that is the proceeds of terrorist activity or that it has been used, or is
intended to be used, in terrorist activity.]
There are no direct financial impacts from this Bill.
NOTES ON CLAUSES
This clause sets out the short title by which this Act may be cited.
This clause provides that the sections 1, 2 and 3, Item 3 of Schedule 1 and Schedule 2 commence on the day on which this Act receives the Royal Assent.
Item 1 of Schedule 1 commences on the day this Act receives the Royal Assent unless the Criminal Code Amendment (Espionage and Related Offences) Act 2002 or the Security Legislation Amendment (Terrorism) Act 2002 receive the Royal Assent the day before this Act, in which case it does not commence at all.
Item 2 of Schedule 1 commences on the day after this Act receives the Royal Assent unless the Security Legislation Amendment (Terrorism) Act 2002 receives the Royal Assent the day before this Act, in which case it does not commence at all.
The contingent commencement clauses for Items 1 and 2 of Schedule 1 are necessary to ensure that the same Chapter and Part headings and preliminary provisions are not inserted by more than one Act. For example, this Act, the Criminal Code Amendment (Espionage and Related Offences) Act 2002 and the Security Legislation Amendment (Terrorism) Act 2002 each contain an item inserting the heading “Chapter 5” into the Criminal Code. However, only the first of the three Acts to receive the Royal Assent would actually insert the heading “Chapter 5”. The other two Acts would simply insert provisions into the newly created Chapter.
The clause also provides that Schedule 3 commences on a day to be fixed by Proclamation. However, if the provisions of Schedule 3 do not commence within the period of 6 months beginning on the day which it receives the Royal Assent, the provisions commence on the first day after the end of that period. This will allow time to make the regulations necessary to give effect to the provisions in the Schedule.
This clause provides that each Act that is specified in a Schedule is amended
or repealed as set out in that Schedule.
This Schedule inserts proposed new Chapter 5 (The integrity and security
of the Commonwealth) and proposed new Part 5.3 (Terrorism) into the Criminal
Code. Proposed Division 103 of Part 5.3 contains a new offence directed at the
financing of terrorism.
This Item inserts proposed Chapter 5 of the Criminal Code ‘The
integrity and security of the Commonwealth’.
Item
2
This Item inserts proposed new Part 5.3 (Terrorism) into the
Criminal Code. Proposed Division 103 of Part 5.3 introduces a new financing of
terrorism offence. Proposed Division 100 contains definitions and application
provisions relevant to the new financing of terrorism offence and to proposed
terrorism offences in the Security Legislation Amendment (Terrorism) Bill 2002,
which will also be inserted into Part 5.3.
Proposed section 100.1
– Definitions
Proposed section 100.1 contains definitions of
terms used in proposed Part 5.3 of the Criminal Code.
Commonwealth
place is given the same meaning as in the Commonwealth Places
(Application of Laws) Act 1970 where it means a place (not being the seat of
government) with respect to which the Parliament, by virtue of section 52 of the
Constitution, has, subject to the Constitution, exclusive power to make laws for
the peace, order, and good government of the Commonwealth. The new financing of
terrorism offence in proposed section 103.1 will extend to actions that take
place in a Commonwealth place. This definition is one of the mechanisms that
aligns the ambit of the offence with the scope of Commonwealth legislative power
under the Constitution.
constitutional corporation is
defined to mean a corporation within the terms of paragraph 51(xx) of the
Constitution. Paragraph 51(xx) of the Constitution covers foreign, trading and
financial corporations. The new financing of terrorism offence in proposed
section 103.1 will extend to actions that affect constitutional corporations or
that are carried out by constitutional corporations. This definition is one of
the mechanisms that aligns the ambit of the offence with the scope of
Commonwealth legislative power under the
Constitution.
funds is defined as property and assets of
every kind and legal documents or instruments in any form. The definition is
broad in scope and is derived from Article 1 of the International Convention for
the Suppression of the Financing of Terrorism. The breadth of the definition
will ensure that the financing of terrorism offence applies regardless of
whether a person facilitates a terrorist act through the provision of money,
equipment or weapons.
organisation is defined as a body
corporate or an unincorporated body, whether or not it is based in Australia,
consists of persons who are not Australian citizens, or is part of a larger
organisation. The definition of organisation is relevant to the proscribed
organisations offence in Schedule 2 to Security Legislation Amendment
(Terrorism) Bill 2002. The definition is included to defeat any argument that a
group of persons is not an organisation because it does not have a particular
formal attribute or structure.
terrorist act is defined to
mean a specified action or threat of action that is made with the intention of
advancing a political, religious or ideological cause. The types of actions
covered by the definition of “terrorist act” are set out in proposed
subsection 100.1(2) and include actions involving serious harm to persons,
serious damage to property and interference with essential electronic systems.
The new offence in proposed section 103.1 will apply to the financing of actions
which fall within this definition.
Lawful advocacy, protest and dissent,
and industrial action are expressly excluded from the ambit of the definition.
Proposed subsection 100.1(2) sets out the types of action
referred to in the proposed subsection 100.1(1) that can constitute a
“terrorist act”. The types of actions listed involve serious harm,
damage or disruption. A terrorist act includes action that involves serious harm
to a person or serious damage to property, endangers life, creates a serious
risk to the health or safety of the public or a section of the public, or is
designed to seriously interfere with, seriously disrupt, or destroy, an
electronic system. Electronic systems include information systems;
telecommunications systems; financial systems; and systems used for essential
government services, essential public utilities and transport
providers.
Proposed subsection 100.1(3) provides that a reference in
proposed Division 100 to any person or property is a reference to
any person or property within or outside Australia. It also provides that a
reference to the public includes a reference to the public of a
foreign country.
Proposed section 100.2 – Constitutional basis
for offences
Proposed section 100.2 provides a broad constitutional
basis for the new financing of terrorism offence in proposed section 103.1 and
the proposed terrorism offences in the Security Legislation Amendment
(Terrorism) Bill 2002, which will also be inserted into Part 5.3. An action or
threat of action will give rise to an offence under Part 5.3 where it is within
the scope of the Commonwealth’s legislative power under the Constitution.
Proposed subsection 100.2(2) draws on the various bases of Commonwealth
legislative power in section 51 of the Constitution to specify particular
circumstances in which an action or threat of action will give rise to an
offence.
These include circumstances where the
action:
• affects the interests of the Commonwealth, a Commonwealth
authority, or a foreign, trading or financial corporation;
• disrupts
foreign or interstate trade or commerce, banking or insurance;
• takes
place outside Australia; or
• is an action in relation to which the
Commonwealth is obliged to create an offence under international law (for
example, United Nations Security Council Resolution 1373 obliges Australia to
criminalise the collection and provision of funds for terrorist
acts).
Item 3
This Item inserts proposed Division 103 of
the Criminal Code ‘Financing terrorism’. This contains the
financing terrorism offence in proposed section 103.1
Proposed section
103.1 – Financing terrorism
Proposed section 103.1 makes it an offence for a person to provide or collect funds where the person is reckless as to whether those funds will be used to facilitate or carry out a terrorist act (as defined in proposed section 100.1). The maximum penalty for the offence is imprisonment for life. The maximum fine is $220,000 for a natural person and $1,100,000 for a body corporate under the existing $110 value for a penalty unit in section 4AA of the Crimes Act, and the provisions for calculating maximum fines in section 4B of that Act.
The maximum penalty of life imprisonment is consistent with the penalties
applicable to the proposed terrorism offences in the Security Legislation
Amendment (Terrorism) Bill 2002. Financing terrorism warrants a penalty
comparable to engaging in a terrorist act because financing is central to
organised terrorist activity and influences both the extent and the seriousness
of those activities.
The offence implements Article 2 of the Convention
for the Suppression of the Financing of Terrorism and paragraph 1(b) of United
Nations Security Council Resolution 1373, and draws on the language used in
those international instruments.
Proposed subsection 103.1(3) applies
Category D geographical jurisdiction, as set out in section 15.4 of the Criminal
Code, to an offence against subsection 103.1(1). Category D jurisdiction is
unrestricted. Its application to the financing of terrorism offence means that
the offence will be committed whether or not the conduct or the result of the
conduct constituting the offence occurs in Australia. In view of the very
serious nature of this offence and the depth of international concern regarding
the financing of terrorism it is appropriate for Australia to criminalise this
conduct regardless of where it occurs.
However, where the conduct
constituting the offence occurs wholly in a foreign country and the person
charged or to be charged is not of Australian nationality, section 16.1 of the
Criminal Code will require that the Attorney-General's consent be obtained for a
prosecution for an offence against proposed section 103.1.
The consent
requirement enables the Attorney-General to decide in his or her discretion
whether it is appropriate that a prosecution should proceed having regard to
considerations of international law, practice and comity, international
relations, prosecution action that is being or might be taken in another
country, and other public interest considerations. However, an arrest may be
made and charges laid before consent is given.
Schedule 2 – Amendments relating to the reporting
of financial transactions
Part 1 of this Schedule introduces amendments to the Financial
Transaction Reports Act 1988 (FTR Act) and Mutual Assistance in Criminal
Matters Act 1987 (Mutual Assistance Act) to require cash dealers to report
suspected terrorist-related transactions and streamline the procedures for the
disclosure of financial transaction reports information (FTR information) to
foreign countries. Part 2 of the Schedule provides for a review of the proposed
amendments to be conducted two years after their commencement.
Part 1
– Amendments relating to the reporting of financial
transactions
Financial Transaction Reports Act
1988
This Item inserts proposed subsection 16(1A) into the FTR Act.
Subsection 16 (1A) requires a “cash dealer” to report a transaction
to the Director of the Australian Transaction Reports and Analysis Centre
(AUSTRAC) if he or she has reasonable grounds to suspect that the transaction is
preparatory to the commission of a financing of terrorism offence or that
information he or she has concerning the transaction may be relevant to the
investigation or prosecution of such an offence. “Cash dealer” is
defined in section 3 of the FTR Act to include financial institutions, financial
corporations, insurers, securities dealers, futures brokers, trustees and
persons who collect, hold, exchange, remit or transfer cash and non-cash funds
on behalf of others.
Cash dealers are currently required to report other
types of suspicious transaction, including transactions relevant to the
investigation or prosecution of Commonwealth offences. This amendment makes it
clear that cash dealers also have an obligation to report transactions that they
suspect are related to terrorist activity. The amendment is consistent with
Article 18 of the International Convention for the Suppression of the Financing
of Terrorism.
These Items insert references to proposed subsection (1A) into section 16
of the FTR Act consequent upon the insertion of proposed subsection (1A) into
that section by Item 1. This ensures that the provisions in section 16that
specify the details to be included in reports, prevent cash dealers from
disclosing information contained in reports and prohibit the use of reports in
legal proceedings, apply to reports made under proposed subsection (1A).
This item inserts a definition of financing of terrorism
offence into subsection 16(6) of the FTR Act. A “financing of
terrorism offence” means an offence under section 103.1 of the Criminal
Code or section 20 or 21 of the Charter of the United Nations Act 1945
(UN Charter Act). A cash dealer’s reporting obligations under proposed
subsection 16(1A) relate specifically to these offences (see Item 1).
The offence in section 103.1 of the Criminal Code applies to persons who
collect or provide funds to facilitate terrorist activities (see Item 3 of
Schedule 1). The offences in sections 20 and 21 of UN Charter Act prohibit
dealings in the assets of proscribed persons or entities engaged in terrorist
activities (see Item 1 of Schedule 3).
This Item repeals existing paragraph 27(1)(d) of the FTR Act, which
entitles the Attorney-General to access FTR information for the purpose of
dealing with a request from a foreign country for assistance with a criminal
matter. The existing paragraph 27(1)(d) is replaced by a new paragraph, which
gives the Commissioner of the Australian Federal Police power to access FTR
information for the purpose of communicating that information to a foreign law
enforcement agency.
The repeal of the existing paragraph 27(1)(d), in conjunction with other proposed amendments to the FTR Act and the Mutual Assistance Act made by this Schedule, removes the current requirement for foreign country requests for FTR information to be dealt with by the Attorney-General in accordance with the provisions of the Mutual Assistance Act. The proposed amendments instead give the Director of AUSTRAC general responsibility for disclosure of information outside of Australia. The Australian Federal Police Commissioner and the Director-General of Security will also be able to communicate FTR information directly to foreign law enforcement and intelligence agencies (see Items 14 and 17).
The Director of AUSTRAC currently has the responsibility for disclosure of FTR information within Australia. By enabling the Director to also disclose information to foreign countries both spontaneously and upon request, the proposed amendments will make the procedures for sharing information with other countries significantly faster and more efficient. The current mutual assistance procedures for communicating FTR information are unnecessarily cumbersome and hamper the rapid exchange of information. In the context of international investigations and intelligence gathering, delays in the transmission of information can have significant consequences. Australia’s current requirements were adopted because of the strict secrecy attaching to FTR information but they are not geared to enabling urgent sharing of financial intelligence.
The proposed amendment will give effect to Recommendation 32 of ‘The Forty Recommendations’ of the Financial Action Task Force on Money Laundering (FATF), which is an inter-governmental body whose purpose is the development and promotion of policies to combat money laundering. FATF Recommendation 32 states that 'each country should make efforts to improve a spontaneous or upon request international information exchange relating to suspicious transactions, persons and corporations involved in those transactions between competent authorities. Strict safeguards should be established to ensure that this exchange of information is consistent with national and international provisions on privacy and data protection.” Most FATF members do not require foreign country requests for FTR information to be processed via the mutual assistance channel as Australia currently does.
The amendment is also consistent with paragraph 3(a) of United Nations Security Council Resolution 1373, which calls upon States to “find ways of intensifying and accelerating the exchange of operational information, especially regarding actions or movements of terrorist persons or networks...”.
The confidentiality of the information disclosed to a foreign country will be
protected by the requirement that the Director be satisfied that the foreign
country has given appropriate undertakings for protecting the confidentiality,
and controlling the use, of that information (see Item 14). There would also be
a review of the proposed amendments to be conducted two years after their
commencement, which would consider whether the privacy of persons identified in
FTR information is adequately protected (see Part 2 of this
Schedule).
The proposed new paragraph 27(1)(d) will enable the Australian
Federal Police (AFP) Commissioner to access FTR information for the purpose of
communicating it to a foreign law enforcement agency, where access has been
authorised in writing by the Director of AUSTRAC. In practice, the written
authority will take the form of a Memorandum of Understanding between AUSTRAC
and the AFP, which address issues relating to notification protocols and
procedures to protect privacy.
The AFP currently has access to FTR
information for the purpose of performing its functions. However, in order to
provide foreign law enforcement agencies with FTR information relevant to their
investigations (see Item 14), the AFP Commissioner also needs to be able to
access information for that purpose. Permitting the AFP Commissioner to
communicate FTR information directly to foreign law enforcement agencies will
enable relevant information to be exchanged, without delay, at an agency level.
The spontaneous exchange of information between the AFP and foreign law
enforcement agencies will enhance the ability of those agencies to act rapidly
in response to international terrorism and transnational crime.
The notes
in Item 9 insert headings in section 27 for clarity.
This Item repeals subsection 27(3A). Subsection 27(3A) enables the
Attorney-General to communicate FTR information to a foreign country under the
Mutual Assistance Act where the Attorney-General is satisfied that the country
has given appropriate undertakings as to confidentiality and use.
The
repeal of subsection 27(3A), in conjunction with other proposed amendments to
the FTR Act and the Mutual Assistance Act made by this Schedule, will remove the
current requirement for foreign country requests for FTR information to be dealt
with by the Attorney-General in accordance with the provisions of the Mutual
Assistance Act. The proposed amendments will instead give the Director of
AUSTRAC the general responsibility for disclosure of information outside of
Australia. (See the discussion at Item 9).
This Item includes a reference to proposed subsection (11D) in subsection
27(6) consequent upon the insertion of proposed subsection (11D) into section 27
by Item 14.
Item 12
This Item omits “and” and
substitutes “or” at the end of subparagraph 27(6)(a)(ii) consequent
upon the addition of proposed new subparagraph 27(6)(a)(iii) at the end of
paragraph 27(6)(a) by Item 13.
This Item adds proposed new subparagraph 27(6)(a)(iii) at the end of
paragraph 27(6)(a). The new subparagraph will permit the AFP Commissioner, or
an AFP member authorised by the Commissioner, to communicate FTR information to
a foreign law enforcement agency in accordance with proposed subsections 27(11B)
to (11D).
Permitting the AFP Commissioner to communicate FTR
information directly to foreign law enforcement agencies will enable relevant
information to be exchanged, without delay, at an agency level. The spontaneous
exchange of information between the AFP and foreign law enforcement agencies
will enhance the ability of those agencies to act rapidly in response to
international terrorism and transnational crime.
This Item inserts proposed subsections (11A), (11B), (11C) and (11D) into
section 27. These subsections stipulate the conditions upon which the Director
of AUSTRAC and the AFP Commissioner may communicate FTR information to a foreign
country or a foreign law enforcement agency. The conditions are intended to
safeguard privacy and confidentiality and ensure that information is used only
for proper purposes. There would also be a review of the proposed amendments to
be conducted two years after their commencement, which would consider whether
the privacy of persons identified in FTR information is adequately protected
(see Part 2 of this Schedule).
Proposed subsection (11A) provides that the Director may communicate FTR
information to a foreign country if it is appropriate in all the circumstances
to do so and if the Director is satisfied that the foreign country has given
appropriate undertakings for protecting the confidentiality of the information
and ensuring it is properly used.
Proposed subsection (11B) provides
that the AFP Commissioner may communicate FTR information to a foreign law
enforcement agency if it is appropriate in all the circumstances to do so and
the Commissioner is satisfied the foreign law enforcement agency has given
appropriate undertakings for protecting the confidentiality of the information,
and for ensuring that it is used in the performance of the foreign law
enforcement agency’s functions. The Commissioner may authorise a member
of the AFP to communicate FTR information to a foreign law enforcement agency on
his or her behalf (proposed subsection (11C)).
When considering whether
it is appropriate to grant a request by a foreign country or foreign law
enforcement agency for FTR information, the Director and Commissioner may need
to take into account a range of issues, including whether the request was made
for the purpose of persecuting or punishing a person on the ground of sex, race,
nationality or religion and whether the granting of the request would prejudice
the sovereignty, security or national interest of Australia.
Proposed
subsection (11D) provides that if the Commissioner of the AFP accesses FTR
information for the purpose of communicating it to a foreign law enforcement
agency and that information is not relevant to the performance of the
AFP’s functions, neither the Commissioner, nor a person authorised by the
Commissioner to communicate the information, may record, communicate or divulge
the information except for the purpose of communicating the information to a
foreign law enforcement agency. This provision is designed to ensure that where
the AFP obtains FTR information for the purpose of communicating it to an
overseas agency, it cannot make use of that information for its own purposes
where it would not currently be able to do so.
The reasons for enabling
the Director and the Commissioner to exchange information directly with foreign
agencies are discussed at Item 9 and Item 13.
This Item inserts proposed subsection 27(20), which provides that a
reference in this section to a foreign law enforcement agency is a
reference to an agency that has responsibility for law enforcement in a foreign
county. The amendment is consequent upon the insertion of paragraph 27(1)(d),
subparagraph 27(6)(a)(iii) and subsections 27(11B), 27(11C) and 27(11D) by Items
9, 13 and 14, which enable the AFP Commissioner to disclose FTR information to
foreign law enforcement agencies.
This Item omits “and” and substitutes “or” at the
end of subparagraph 27AA(4)(a)(iii) consequent upon the addition of proposed new
subparagraph 27AA(4)(a)(iv) at the end of paragraph 27AA(4)(a) by Item
17.
Item 17
This Item inserts proposed new subparagraph
27AA(4)(a)(iv) at the end of paragraph 27AA(4)(a). The new subparagraph will
permit the Director-General of Security, or an Australian Security Intelligence
Organisation (ASIO) employee authorised by the Director-General, to communicate
FTR information to a foreign intelligence agency in accordance with proposed
subsections 27AA(5A) and (5B).
Permitting the Director-General of
Security to communicate FTR information directly to foreign intelligence
agencies will enable relevant information to be exchanged, without delay, at an
agency level. The spontaneous exchange of information between ASIO and foreign
intelligence agencies will enhance the ability of those agencies to act rapidly
in response to international terrorism and other national security
issues.
In contrast to the AFP, ASIO does not require a provision
expressly enabling the Director-General to access information for the purpose of
communicating it to a foreign intelligence agency. ASIO is currently able to
access information for the purpose of performing its functions (subsection
27AA(1)). As ASIO’s functions include the provision of information to
foreign countries in relation to security matters, it is able to access
information under subsection 27AA(1) for the purpose of communicating it to a
foreign intelligence agency. However, the Memorandum of Understanding between
AUSTRAC and ASIO, under which ASIO currently accesses FTR information, will be
revised to take account of the amendments permitting the Director-General to
communicate FTR information to foreign intelligence agencies.
The notes
in Item 17 insert headings in section 27AA for clarity.
Item
18
This Item inserts new subsections (5A) and (5B) into section 27AA.
These subsections stipulate the conditions upon which the Director-General of
Security may communicate FTR information to a foreign intelligence agency. The
conditions are intended to safeguard privacy and confidentiality and ensure that
information is used only for proper purposes. There would also be a review of
the proposed amendments to be conducted two years after their commencement,
which would consider whether the privacy of persons identified in FTR
information is adequately protected (see Part 2 of this
Schedule).
Proposed subsection (5A) provides that the Director-General of
Security may communicate FTR information if it is appropriate in all the
circumstances to do so and the Director-General is satisfied the foreign
intelligence agency has given appropriate undertakings for protecting the
confidentiality of the information and ensuring that it is used in the
performance of the foreign intelligence agency’s functions. The
Director-General may authorise an ASIO employee to communicate FTR information
to a foreign intelligence agency on his or her behalf (proposed subsection
(5B)).
When considering whether it is appropriate to grant a request by a
foreign intelligence agency for FTR information, the Director-General may need
to take into account a range of issues, including whether the request was made
for the purpose of persecuting or punishing a person on the ground of sex, race,
nationality or religion and whether the granting of the request would prejudice
the sovereignty, security or national interest of Australia.
This Item replaces the existing Note 2 in subsection 27AA(7) with a new
note, consequent upon the insertion of subsections (11A) to (11D) into section
27 by Item 14.
This Item inserts a definition of foreign intelligence
agency in subsection 27AA(8). Foreign intelligence agency means an
agency that has responsibility for intelligence gathering for a foreign country
or the security of a foreign country. The amendment is consequent upon the
insertion of subparagraph 27AA(4)(a)(iv) and subsections 27AA(5A) and 27AA(5B)
by Items 16 and 17, which enable the Director-General of Security to disclose
FTR information to foreign intelligence agencies.
This Item provides that the amendments made by Items 1-8 above apply to
transactions completed on or after the day on which this Schedule commences.
This means that the amendments requiring cash dealers to report suspected
terrorist-related transactions will not apply to transactions that are finalised
before the amendments commence.
Mutual Assistance in Criminal
Matters Act 1987
This Item repeals Part VIA of the Mutual Assistance Act. Part VIA
provides that where a foreign country asks the Attorney-General for information,
the Attorney-General may direct the Director of the AUSTRAC to give the
Attorney-General access to FTR information for the purpose of enabling the
Attorney-General to deal with the request.
The repeal of Part VIA, in
conjunction with the proposed amendments to the FTR Act made by this Schedule,
will remove the current requirement for foreign country requests for FTR
information to be dealt with by the Attorney-General in accordance with the
provisions of the Mutual Assistance Act. The proposed amendments will instead
give the Director of AUSTRAC the general responsibility for disclosure of
information outside of Australia. (See the discussion at Item
9).
Part 2 – Review of effectiveness of
amendments
Item 23
Independent
Review
This Item requires the Attorney-General to cause a review of
the amendments made by Part 1 of this Schedule to be undertaken as soon as
possible after the second anniversary of the commencement of the amendments.
The review will consider the extent to which the amendments made by Part 1 of
the Schedule have contributed to the enforcement of financing of terrorism
offences, whether the amendments sufficiently regulate the sharing and use of
FTR information and whether the privacy of persons identified in that
information is adequately protected.
The review will be conducted by a
committee consisting of members nominated by the Attorney-General, the AFP
Commissioner, the Director-General of Security, the Inspector-General of
Intelligence and Security, the Director of AUSTRAC and the Federal Privacy
Commissioner. However, the Attorney-General may reject a nomination on the
grounds that a the person nominated does not possess the requisite
qualifications or an appropriate security clearance.
A written report of
the review must be given to the Attorney-General, who is required to table the
report in each House of Parliament within 15 sitting days of its receipt by the
Minister. However, the Attorney-General must remove information from the report
if, on advice given by the AFP Commissioner or Director-General of Security, the
Attorney-General is of the view that it may endanger a person’s safety,
prejudice an investigation or compromise the operational activities or
methodologies of ASIO or the AFP.
If the review identifies any
inadequacies, a further review would have to be undertaken within two years to
ascertain whether those inadequacies had been dealt with.
The provision
for review of the proposed amendments was included to address the privacy
considerations that they raise. They will provide an opportunity to ensure that
the regulation of the use of FTR information under legislation, memoranda of
understanding and guidelines is adequate and appropriate. The involvement of
the Privacy Commissioner in the review will ensure that privacy interests are
represented.
There is a precedent for such a review in section 23YV of the
Crimes Act 1914, which requires an independent review of the operation of
the provisions in the Act dealing with forensic procedures.
Schedule 3 – Amendment of the Charter of the United
Nations Act 1945
This Schedule introduces amendments to the UN
Charter Act to prohibit dealings in the assets of persons and entities involved
in terrorist activities and to prevent others from making assets available to
those persons or entities.
The provisions in proposed Part 4 implement
paragraph 1(c) of the United Nations Security Council Resolution 1373.
Paragraph 1(c) requires States to:
“freeze without delay funds and other financial assets or economic
resources of persons who commit, or attempt to commit, terrorist acts or
participate in or facilitate the commission of terrorist acts; of entities owned
or controlled directly or indirectly by such persons; and of persons acting on
behalf of, or at the direction of such persons and entities, including funds
derived or generated from property owned or controlled directly or indirectly by
such persons and associated persons or entities”.
The amendments to
the UN Charter Act will supersede the existing provisions in the Charter of
the United Nations (Anti-terrorism Measures) Regulations 2000. New
simplified regulations giving effect to these amendments will be made to
commence at the same time as the amendments. Moving the provisions relating to
the freezing of assets from the regulations to the Act will enable the penalty
for the offences to be increased.
Item 1
This Item inserts
proposed new Part 4 (Offences to give effect to Security Council decisions) into
the UN Charter Act. Part 4 creates new offences directed at those who provide
assets to, or deal in the assets of, persons and entities involved in terrorist
activities. The Part also contains associated provisions that, amongst other
things, provide for the Minister for Foreign Affairs to list persons and
entities for the purpose of the offences, to revoke a listing and to permit a
specified dealing in a freezable asset.
Proposed section 14 –
Definitions
Proposed section 14 contains definitions of terms used in
proposed Part 4 of the Charter.
asset is defined as
property and assets of every kind and legal documents or instruments in any
form. The definition is broad in scope and is derived from Article 1 of the
International Convention for the Suppression of the Financing of Terrorism. The
breadth of the definition will ensure that the requirement to freeze an asset
applies regardless of whether that asset is money, equipment or a
weapon.
freezable asset means an asset that is listed by
the Minister for Foreign Affairs or owned or controlled by a person or entity
listed by the Minister or proscribed by regulations, or is derived or generated
from such an asset.
listed asset means an asset listed by
the Minister under proposed section 15. Proposed section 15 provides for the
Minister to list assets if satisfied of the matters prescribed by the
Governor-General in regulations. The prescribed matters must give effect to a
United Nations Security Council decision related to terrorism and dealing in
assets (eg, Resolution 1373).
proscribed person or entity
means a person or entity listed under proposed section 15 or proscribed by
regulation under proposed section 18. Proposed sections 20 and 21 make it an
offence to provide assets to, or deal in the assets of, proscribed persons and
entities.
superior court means the Federal Court of
Australia or the Supreme Court of a State or Territory. These courts are able
to grant an injunction under proposed section 26 to restrain a person from
engaging in conduct which would constitute an offence against proposed section
20 or 21.
Proposed section 15 – Listing persons, entities and
assets
Proposed section 15 provides that the Minister must list a
person or entity, and may list an asset or class of assets, if satisfied of
certain prescribed matters. The Governor-General may make regulations
prescribing the matters of which the Minister must be satisfied. A matter may
only be prescribed if it would give effect to a United Nations Security Council
decision that Article 25 of the Charter of the United Nations requires Australia
to carry out and that relates to terrorism and dealings with assets. A person,
entity or asset is listed by notice in the Gazette.
The listing of
a person, entity or asset by the Minister will attract the application of the
offences in proposed section 20 and 21. The offences will apply to a person who
makes an asset available to a listed person or entity or who deals in a listed
asset or an asset owned by a listed person entity.
Proposed section 16
– Minister may revoke the listing
Proposed section 16 provides
for the Minister for Foreign Affairs to revoke a listing of a person, entity or
asset by notice in the Gazette if he or she is satisfied that the listing
is no longer necessary to give effect to a United Nations Security Council
decision that Article 25 of the Charter of the United Nations requires Australia
to carry out and that relates to terrorism and dealings with assets. The
revocation may be made at the Minister’s own instigation or on application
by a listed person or entity (see proposed section 17).
The proposed
section will ensure that the legislation provides an express mechanism for
listed persons and entities to have their listing reviewed and, if appropriate,
revoked.
Proposed section 17 – Listed person or entity may
apply to have the listing revoked
Proposed section 17 enables listed
persons and entities to apply in writing to the Minister for Foreign Affairs to
have the listing revoked. However, the Minister is not required to consider an
application if the person or entity has already made an application within the
previous 12 months.
The application must set out the circumstances
justifying a revocation of the listing, For example, evidence that the person is
not associated with a terrorist organisation or involved in terrorist
activities.
Proposed section 18 – Proscription by
regulation
Proposed section 18 provides a means of proscribing
persons and entities by reference to a decision of the United Nations Security
Council that identifies persons and entities to which the decision relates.
Security Council decisions often list the persons or entities against whom
sanctions should be applied. Enabling those lists to be directly incorporated
by the regulations as they exist from time to time is more expedient than
requiring the Minister to list each person and entity by notice in the
Gazette. However, the ability for the Minister to list persons and
entities by notice in the Gazette is necessary to cover Security Council
decisions, like Resolution 1373, which do not specifically identify persons or
entities to which sanctions should be applied.
Proposed section 19
– Effect of resolution ceasing to bind Australia
Proposed
section 19 provides for the listing of a person or entity under proposed section
15 to be automatically revoked when the Security Council decision to which the
listing gives effect no longer binds Australia. The section also provides that
regulations proscribing a person or entity under proposed section 18 cease to
have effect when the Security Council decision to which the regulations give
effect no longer binds Australia.
The section makes it clear that the
offences cease to apply in relation to persons, entities or assets listed by the
Minister or proscribed by regulation from the time the Security Council decision
to which the listing or proscription gives effect ceases to bind Australia,
without the need for the Minister to revoke the listing or for the regulations
to be repealed.
Proposed section 20 - Offence-dealing with freezable
assets
Proposed section 20 provides that a person who holds a
freezable asset is guilty of an offence if the person uses or deals with the
asset, or allows or facilitates a use or dealing, and is reckless as to whether
the asset is a freezable asset, and the use or dealing is not in accordance with
a notice under section 22. The maximum penalty for dealing with a freezable
asset is 5 years imprisonment. The maximum fine will be $33,000 for a natural
person and $165,000 for a body corporate under the existing $110 value for a
penalty unit in section 4AA of the Crimes Act, and the provisions for
calculating maximum fines in section 4B of that Act.
The penalty for
the existing offence against the regulations is only $5,500, which is clearly
inadequate. Under section 12 of the UN Charter Act, this is the maximum penalty
that may be applied to offences against the regulations. Moving the offence to
the Act will enable the penalty to be significantly increased.
Strict
liability applies to the fact that the use or dealing with the asset is not in
accordance with a notice under section 22. The application of strict liability
means that the prosecution does not have to prove any fault element, such as
knowledge or recklessness, in respect of this element of the offence. However,
the defence of mistake of fact is still available.
The application of
strict liability is necessary to ensure that a defendant who uses or deals with
an asset which he or she knows to be a freezable asset cannot escape liability
by demonstrating that they were not aware that the use or dealing was not in
accordance with a notice under section 22. A person wishing to deal in a
freezable asset will have to ensure that the dealing has been permitted by a
notice given under section 22. However, it is a defence to a prosecution for an
offence against section 20, if a person shows that he or she dealt with a
freezable asset in the mistaken but reasonable belief that the dealing was in
accordance with a notice. It is also a defence if the person can show that the
use or dealing was solely for the purpose of preserving the value of the
asset.
Category A geographical jurisdiction, as set out in section 15.1
of the Criminal Code, will apply to an offence against subsection 20(1).
Category A geographical jurisdiction is satisfied if (i) the conduct
constituting the offence occurs wholly or partly in Australia, or wholly or
partly on board an Australian aircraft or an Australian ship; (ii) a result of
the conduct occurs wholly or partly in Australia or wholly or partly on board an
Australian aircraft or an Australian ship; or (iii) at time of the alleged
offence the person charged with the offence was an Australian citizen or body
corporate. Where the conduct constituting an offence occurs wholly in a foreign
country and only a result occurs in Australia, there is a defence available if
there is no corresponding offence in that foreign country. However, that
defence is not available if jurisdiction is to be exercised on the basis of the
person's nationality.
The application of Category A jurisdiction to the
offence will mean that a person (including a body corporate) who uses or deals
with a freezable asset in Australia or an Australian citizen or corporation who
uses or deals with a freezable asset in a foreign country will commit an offence
against section 20. The offence would not apply to foreign citizens or
corporations that engage in a use or dealing with a freezable asset in a foreign
country as those persons and corporations could not be expected to act with
regard to a listing made under Australian law.
Proposed section 21 -
Offence-giving an asset to a proscribed person or entity
Proposed
section 21 makes it an offence for a person to directly or indirectly make an
asset available to a proscribed person or entity, if the person is reckless as
to whether the person or entity is a proscribed person or entity and the making
available of the asset is not in accordance with a notice under section 22. The
offence carries a maximum penalty of 5 years imprisonment. The maximum fine
will be $33,000 for a natural person and $165,000 for a body corporate under the
existing $110 value for a penalty unit in section 4AA of the Crimes Act, and the
provisions for calculating maximum fines in section 4B of that Act.
The
penalty for the existing offence against the regulations is only $5,500, which
is clearly inadequate. Under section 12 of the UN Charter Act, this is the
maximum penalty that may be applied to offences against the regulations. Moving
the offence to the Act will enable the penalty to be significantly increased.
Strict liability applies to the fact that the making available of the
asset is not in accordance with a notice under section 22. The application of
strict liability means that the prosecution does not have to prove any fault
element, such as knowledge or recklessness, in respect of this element of the
offence. However, the defence of mistake of fact is still available.
The application of strict liability is necessary to ensure that a
defendant who makes an asset available to a person whom he or she knows to be a
proscribed person cannot escape liability by demonstrating that they were not
aware that the making available of the asset was not in accordance with a notice
under section 22. A person wishing to make an asset available to a proscribed
person or entity will have to ensure that the making available has been
permitted by a notice given under section 22. However, it is a defence to a
prosecution for an offence against section 20, if a person shows that he or she
made an asset available to a proscribed person or entity in the mistaken but
reasonable belief that the making available was in accordance with a
notice.
Category A geographical jurisdiction, as set out in section 15.1
of the Criminal Code, will apply to an offence against subsection 21(1).
Category A geographical jurisdiction is satisfied if (i) the conduct
constituting the offence occurs wholly or partly in Australia, or wholly or
partly on board an Australian aircraft or an Australian ship; (ii) a result of
the conduct occurs wholly or partly in Australia or wholly or partly on board an
Australian aircraft or an Australian ship; or (iii) at time of the alleged
offence the person charged with the offence was an Australian citizen or body
corporate. Where the conduct constituting an offence occurs wholly in a foreign
country and only a result occurs in Australia, there is a defence available if
there is no corresponding offence in that foreign country. However, that
defence is not available if jurisdiction is to be exercised on the basis of the
person's nationality.
The application of Category A jurisdiction to the
offence will mean that a person (including a body corporate) who makes an asset
available to a proscribed person or entity in Australia or an Australian citizen
or corporation who makes an asset available to a proscribed person or entity in
a foreign country will commit an offence against section 21. The offence would
not apply to foreign citizens or corporations that make an asset available to a
proscribed person or entity in a foreign country as those persons and
corporations could not be expected to act with regard to a listing made under
Australian law.
Proposed section 22 – Authorised
dealings
Proposed section 22 provides that the owner of an asset may
apply in writing to the Minister for Foreign Affairs for permission to make the
asset available to a proscribed person or entity or, if the asset is a freezable
asset, to use or deal with the asset in a specified way. The Minister, or a
delegate, may grant permission by written notice. The notice may be subject to
conditions and must be given to the owner of the asset as soon as practicable
after it is made.
The provision will allow the Minister to exempt a
particular dealing in an asset from the application of the offences in proposed
section 20 and 21. This power would only be exercised in exceptional
circumstances, for example, to protect the rights of third parties.
Proposed section 23 – Part prevails over conflicting legal
obligations
Proposed section 23 provides that the provisions of Part
4 prevail over Commonwealth, State or Territory laws that would otherwise
require a person to act in contravention of this part. The section makes it
clear that Commonwealth, State and Territory employees are covered by the
offences in Part 4 and should not comply with any statutory obligation or
exercise any statutory power to make a payment to a person or entity (eg, a
social security payment) where the making of the payment is prohibited by Part
4. This underscores the general point that Commonwealth officers, servants and
agents of the Crown have no immunity from the ordinary criminal law: see, eg,
Jacobsen v Rogers (1995) 182 CLR 572 at 587.
Proposed section
24 – Indemnity for holder of assets
Proposed section 24
provides that a person is not liable to an action, suit or proceeding for
anything done or omitted to be done in good faith and without negligence in
compliance or purported compliance with this Part.
Proposed section 25
– Compensation for persons wrongly affected
Proposed section 25
provides for the Commonwealth to compensate the owner of an asset where the
holder of the asset refuses, in good faith and without negligence, to deal with
the asset in accordance with the owner’s instructions, on the basis that
the asset is a freezable asset, when it is not in fact a freezable asset. For
example, if a bank freezes the funds in a person’s account in the mistaken
but honest belief that the person is a listed person or entity, that person will
be entitled to compensation from the Commonwealth for any loss he or she suffers
as a result.
Proposed section 26 - Injunctions
Proposed
section 26 provides for a superior court to grant an injunction restraining a
person from engaging in conduct where the person has engaged, is engaging, or
proposes to engage conduct involving a contravention of Part 4 (ie, dealing in a
freezable asset or making an asset available to a proscribed person or entity).
An injunction may only be granted on application by the
Attorney-General.
A superior court may grant an injunction by consent of
all parties to the proceedings even if it is not satisfied that the person has
engaged, is engaging, or proposes to engage in conduct involving a contravention
of Part 4. A court may grant an interim injunction pending its determination of
an application and may discharge or vary an injunction it has granted.
Injunctions are currently available under section 13 of the UN Charter Act for
conduct involving a contravention of the regulations. Proposed section 26 will
enable an injunction to be granted in relation to conduct that would constitute
an offence against section 20 or 21.