Bernie Ripoll (Oxley, Australian Labor Party) Share this | Hansard source

Thank you for the opportunity to make a few short comments on this very important bill, which I think is a highly attractive bill to many people in the community and to those who deal in financial transactions—be they accountants, solicitors, cash dealers, lawyers or a whole range of other people. In speaking in support of the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008 I want to make a couple of comments. The history in Australia of ordinary people doing the right thing is well established and, as the previous speaker, the member for Blair, just said there is this great ethic across the Australian community of people maybe begrudgingly but certainly willingly paying their taxes and meeting their obligations. It is well and truly part of the Australian culture. For that reason, and for a range of others in terms of Australia playing its role in a global market where many tens of billions of dollars, or even trillions of dollars, shift from one place to another—sometimes specifically for the purposes of money laundering or tax evasion or for other reasons, including terrorist activities or financing terror—it is important that the Australian parliament and the Australian people have sound legislation which ensures that the regulatory frameworks that we have here mean that we can do everything in our power to prevent those things happening.

This bill in particular will enable amendments to be made to the Financial Transaction Reports Act and it will shift existing financial transactions and their subsequent reporting arrangements from their current position, which is under the Financial Transaction Reports Act, through to the new arrangements which are covered under the Anti-Money Laundering and Counter-Terrorism Financing Act. So it is really a shifting of responsibilities from one particular act through to another act. As always, any shift from one particular set of rules to another has consequences—some of them intended, some of them unintended—and sometimes that just means that not everybody who participates in those particular areas is fully prepared for what those changes will mean. It is also important to note that there will be no financial impact caused by these changes, so there will be no financial impact for this place and there should not be any costs for anyone else involved.

This is about easing the transition of reporting standards and assisting those businesses that are directly affected by this change from the FTR Act to the AML/CTF Act. It is also about protecting these regulated businesses from being exposed to legal implications past the 12 December 2008 implementation date. The intention of these transitions is not to catch out the people who transact or report these transactions in terms of their reporting obligations, but to ensure that during the transition, during the implementation, they can have either the old act or the new act apply in a correct manner. These amendments must be in force before 12 December this year so that regulated businesses can continue reporting information to AUSTRAC. The importance of that is that we want people to continue in their current roles of reporting significant or suspicious transactions, whether it is under the old mechanism, as they currently do, or whether it is under the new act, which will be implemented on 12 December this year.

Australia has a long history of having legislation in place to deal with money laundering. The Financial Transaction Reports Act 1988 was Australia’s original anti-money-laundering legislation. Over the years, there have been a number of updates in recognition of money laundering particularly relating to terrorism. The FTR Act provided for the reporting of certain transactions and transfers to AUSTRAC, the body responsible for monitoring and keeping tabs on money as it moves from one place to another.

Currently, in order to assist businesses that are making the transition to the new reporting arrangements, the AUSTRAC CEO may take action against a reporting entity for a breach of the AML/CTF Act only if he is satisfied that it has not taken reasonable steps to comply with its obligations under that act. Basically, that means that the person in charge has to be satisfied that reasonable action was not taken, that it is not meeting its obligations under the act, and not merely that there is some confusion as to the transition from one act to another. We have put in place a grace period to ensure that the system continues to operate smoothly. That grace period will end on 11 March 2010.

Between the commencement of the new AML/CTF Act obligations on 12 December 2008 and the end of the grace period, there is likely to be a significant number of businesses not fully compliant with the new reporting obligations. It is important that those businesses be permitted to continue reporting relevant transaction information to AUSTRAC under the FTR Act until such time as they become compliant with the AML/CTF Act. In no way do we want to limit the ability of people to report because of the transition to the new act. Whether or not they are compliant, we want to ensure that parties can still report transactions. We do not want to add more red tape or additional paperwork. We want to ensure that it happens in an efficient manner.

Business will also have the added advantage, through this new mechanism, of not having to submit duplicate reports—one pertaining to the original act and one pertaining to the new act. This is about delivering assistance for businesses until they become fully compliant with the new reporting regime. The amendments will establish transitional provisions to, in particular, authorise certain cash dealers to continue reporting suspicious transactions, international funds transfers and significant cash transactions to AUSTRAC under the FTR Act up until the end of 11 March 2010 or until they become compliant with the AML/CTF Act, whichever comes first.

The amendments will authorise solicitors, solicitor corporations and partnerships of solicitors to continue to provide AUSTRAC with cash transaction reports under the FTR Act up until the end of 11 March 2010 or until they become compliant with the AML/CTF Act, whichever comes first. It will also authorise certain cash dealers to enter transactions into their exemption register up until the end of 11 March 2010, a significant part being that we continue to allow those who would be exempt to continue to record those exemptions in the register until that period, so that certain transactions are not missed because of the transition from one act to another.

This bill anticipates that certain cash dealers and solicitors may not be fully prepared for the commencement of the AML/CTF rules and obligations which commence later this year. The AML/CTF regime has significant compliance rules and obligations. It was never the intent to penalise parties or groups if they could not meet the compliance obligations. They can continue to use the old rules until the transitional period is over and they are able to comply with the new rules.

The bill is a sensible, non-controversial move. It fulfils our obligations and allows more time for those moving from one set of arrangements to new arrangements. It has wide support across the parliament and I commend the bill to the House.

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