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

I present a revised explanatory memorandum to the bill and move:

That this bill be now read a second time.

The primary purpose of the Financial Transaction Reports Amendment Bill 2006 is to vary the amendments to the Financial Transaction Reports Act 1988—the FTR Act—made by schedule 9 of the Anti-Terrorism Act (No 2) 2005. Schedule 9 comes into force on 14 December 2006. The bill also needs to come into operation by that date.

The bill amends the definition of ‘account’ for the purposes of division 3A of part II of the FTR Act. The new definition of ‘account’ will only apply to division 3A of part II of the FTR Act.

The bill amends the definition of ‘customer information’ in sections 17FA and 17FB of the FTR Act.

The bill restricts the application of division 3A of part II of the FTR Act to authorised deposit taking institutions—ADIs—to ensure that division 3A of part II of the FTR Act does not apply to non-bank money remittance businesses.

The bill will now ensure, by means of new section 17FC, that the provision of customer information in an international funds transfer instruction—IFTI—is not required where the IFTI is transmitted from a place outside Australia to another place outside Australia and merely passes through Australia.

The bill will also ensure, by means of new subsection 17FA(1A), that there is no gap in the legislation if an Australian bank that is asked to send a funds transfer instruction to a foreign bank is not able to deal directly with the foreign bank but has to go through an intermediary bank in Australia. The intermediary bank will be able to act on any information it receives from the originating bank. It will not have to make its own inquiries of the original customer.

The bill amends paragraph 29(4)(ba) of the FTR Act to refer to ‘an ADI’ rather than ‘a cash dealer’ to ensure consistency with the amendment to restrict division 3A of part II of the FTR Act to ADIs only.

Finally, the bill amends section 42A of the FTR Act to include a reference to schedule 3AA.

Division 3A of part II of the FTR Act brings Australia into closer compliance with Financial Action Task Force special recommendation VII. The changes in the bill will ensure that the practical concerns raised by industry have been addressed and resolved before division 3A comes into operation.

I commend the bill to the House.

See this speech in context