Jason Wood (La Trobe, Liberal Party, Shadow Parliamentary Secretary for Justice and Public Security) Share this | Hansard source

I also rise to speak in support of the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008 and I thank all the other members for their participation. A bit of background about the bill itself: the anti-money-laundering legislation is administered by the Australian Transaction Reports and Analysis Centre, otherwise known as AUSTRAC, through the Financial Transaction Reports Act 1988. Its principal objective is the administration and enforcement of taxation laws. In 2006 the former government passed the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, also administered by AUSTRAC, to comply with the recommendations from the Financial Action Task Force—the FATF—an international organisation promoting policies to prevent money laundering.

In the first instance this was to look at tax avoidance. But, with the way crime has moved forward and in the fight against terrorism, terrorists have realised that the best way to move funds is by legitimate means. We heard the shadow minister for justice and customs talk about charities being set up to finance terrorism and crime. Sadly, criminals and terrorists will use any measures and any type of legitimate means to obtain money.

The bill amends several sections of the FTR Act, chiefly affecting reporting requirements, to close several unintentional loopholes that could jeopardise the comprehensiveness of AUSTRAC records. Section 7 requires cash dealers to report any significant cash transaction, defined as a transaction of $10,000 or more, except in certain circumstances, including if the transaction occurred after the commencement of division 3, part 3 of the AML/CTF Act. The bill will enable cash dealers to report transactions to AUSTRAC under existing FTR provisions until 11 March 2010. Further to this the bill will allow cash dealers to comply with either the old or the new reporting requirements. This will close a loophole that would otherwise mean that, when the old reporting requirements ceased on 12 December 2008, companies would not be required to report transactions after this date until their new systems were in place.

I can see businesses wondering why we have this bill. It will obviously require more work and it has more regulatory requirements. Sadly, as I said before, criminals will use any loophole to gain an advantage. Terrorists have the means to commit atrocities against what they call ‘the infidels’ and they do not care if they set up a charity organisation to move funding. They do not care who the innocent victims are at the end of the day. We come back to Australian business and the Australian people wondering why we need to do this and where the evidence for it is. I go back to the doomsday cult otherwise known as Aum Shinrikyo. Some may remember in March 1995 that we had the sarin gas attacks in the Tokyo subways. These attacks were very well coordinated. Gas was released on five different trains. Very sadly, 12 people died because of the sarin gas attacks and thousands were injured, including some suffering severe cases of eye damage.

You may be wondering where the connection is to Australia: from April 1993 to October 1994 the Aum Shinkrikyo cult actually had its members based in Western Australia. They purchased a 500,000-acre sheep farm 375 miles north-west of Perth. They formed two companies. One was called Clarity Investments and another called Maha Posya Australia. In June 1993 Maha Posya was used to import electrical equipment, including transformers, static converters, generators and cable, to Australia. The purpose was to set up a false company where they would use this to eventually undertake testing in Australia. They used the Maha Posya front company to purchase the Banjawarn station for approximately $400,000. To do this they had to transfer funds over the value which this bill is looking at—that is, over $10,000. So we saw a terrorist organisation using legitimate means, by setting up a company, to then transfer money.

When they first came to Australia the cult paid in excess of $20,000 for baggage fees. They tried to bring in a number of chemicals and other machinery, including gas masks. They were forced to pay an extra $15,000 to collect these items. They also tried to bring in hydrochloric acid and ammonium nitrate chloride, which has been used in terrorist attacks. So what they were trying to do was to bring chemicals into the country. Subsequently, all of their chemicals were seized. They set up another company to purchase chemicals from Australian chemical producers. I believe it was in Melbourne that they actually purchased some chemicals to start their testing on their property in Western Australia.

I will digress for just a minute or so and say that this is why it is so important that we have the CrimTrac database. The CrimTrac database is a national database. We can include on that database people buying, for example, high-consequence dangerous goods—being chemicals such as ammonium nitrate fertiliser. It also has listed shooters licences et cetera. So, if the Australian Federal Police or Customs contact AUSTRAC, they can find out if there has been a transaction over $10,000 which may be suspicious, and obviously this one was.

Eventually, in March 1995, after the Tokyo subway attack, the property was sold and the new owners of the property called the police in to have a look at the property, as they found all these chemicals. At the time, the Minister for Justice was Duncan Kerr. He said that the Aum members tested sarin in Australia before the Tokyo subway attack. The Hon. Duncan Kerr said also that sarin residue had been found near a group of about 29 dead sheep at the station. So terrorist organisations have very firm links to Australia going back to 1995. We also know that with JI quite often there would be transfers of money from Australia to Indonesia to terrorist related organisations. This is something which needed to be stamped out and resolved as a matter of urgency. Again, that is why this bill is so important.

When it comes to major criminal activity, the more drugs you want to import into Australia, the more money you need to purchase those drugs in the first place. That is the way it works. The same applies to terrorism. The bigger the terrorist attack you want, the greater the amount of money it requires. For example, in Jordan in April 2004 there was a plan to kill 80,000 people. I will say that again: we are talking about 80,000 people. The terrorist leader was Azmi al-Jayousi. He planned to use 71 lethal chemicals, including blistering agents, nerve gas and choking agents, and to crash these into government buildings including the US embassy in Jordan. The devastation would have been horrific. An attack like that was unprecedented. We have heard other members of the House talking about using false identification; that is precisely what these terrorists did. They used false identification to purchase trucks and set up companies to purchase the chemicals. Al-Jayousi actually received $170,000 from al-Zarqawi via messages from Syria to finance the truck-bomb plot. So, again, we are seeing terrorist organisations move large amounts of money to finance terrorist activity.

The only way Australian authorities can keep or try to keep ahead of the terrorists is by making sure we have the toughest legislation to ensure we have the best safeguards and the best intelligence services available. That is why this bill is so important: it again gives an extra tool to our law enforcement agencies via AUSTRAC to follow transactions which may be suspicious and may be made by terrorist groups or criminals.

I will make just one final point. We heard members of the government talk about the Australian Crime Commission and their great work when it came to prosecuting 64 people regarding financial transactions. The sad reality is this: the Australian Crime Commission have had a three per cent cutback and their staff have been reduced from 650 to 600. Any reduction in law enforcement agency staff must diminish the way we can deal with terrorism and deal with major crime. Remember that, just because there are cuts in our budgets, terrorists or criminals will use this to further their ends and look at this as a loophole which they can exploit. In conclusion, I support this bill very much and congratulate the government for bringing it on. Again, I congratulate all the law enforcement agencies for all the great work they do.

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