Gai Brodtmann (Canberra, Australian Labor Party) Share this | Hansard source

The Combating the Financing of People Smuggling and Other Measures Bill 2011 is part of the government’s commitment to tackling the financing of people smuggling and terrorism. Over the last two budget cycles, the government has invested almost $2 billion to fund a strategy to combat people smuggling and to enhance border protection. This bill presents measures to enhance the current provisions relating to money laundering and counter-terrorism financing in the alternative remittance sector. It also introduces measures to enhance the sharing of information between the Australian intelligence community and the Australian Transaction Reports and Analysis Centre or AUSTRAC.

People and businesses wanting to transfer funds can make these transfers in a number of ways. In our community and Western society, in general this is most commonly achieved through banks and other conventional financial institutions. However, money can also be transferred through so-called remittance services. Originating in South-East Asia and India, users of these systems transfer funds through the use of agents. These agents enter into an agreement with each other to receive money from overseas, typically from foreign workers, and pay that money to a nominated relative or friend.

By way of example, I cite an Australian Institute of Criminology case study. In the case study, person A in Australia wants to transfer $1,000 to person B in India. Person A pays the alternative remittance provider in Australia and is given a code or number to relay to person B in India. The Australian alternative remittance provider instructs a counterpart in India to pay the $1,000 to person B upon receipt of the number or code. The funds are paid in India to person B, although money has not left Australia. Now the provider in Australia owes the provider in India a debt to be paid at a later date.

This is seen as ideal for these people as it can occur without the use of modern or established banks or electronic funds transfers, which in many cases do not exist in these regions. These dealers sometimes operate within large networks and this has been called alternative remittance, underground or parallel banking. It is legal in many countries. However, it has been found that this system could be used to fund criminal activity and terrorism. Certainly there is evidence to suggest that in the Australian context this service has been used to pay for the services of people smugglers. There is also evidence to suggest that it is also used to fund or launder funds from other serious crimes.

In recognition of this, currently all alternative remittance providers are required to apply to become registered with AUSTRAC before they can provide services. Failure to do so carries up to two years in prison, a $55,000 fine or both. There are some limitations to this current arrangement. Firstly, as registration is automatic upon application, there is no provision to deny a person registration, to cancel their registration or to impose conditions. Secondly, there are only limited sanctions available to AUSTRAC to take action against those providers who breach their obligations under the law.

This bill goes some way towards addressing these issues. It expands the provisions for those who need to be registered—from individual providers to those businesses that operate as providers of remittance networks. It also requires that providers of remittance networks, their affiliates and individual providers must re-apply every three years for registration. It further requires those individuals to provide information relevant to their suitability. The bill also gives the CEO of AUSTRAC the ability to obtain information from other persons for the determination of suitability. The bill further allows the CEO of AUSTRAC to refuse, suspend or cancel the registration of a provider or impose conditions on them.

Beyond the enhanced regulation of alternative remittance providers, this bill will also allow AUSTRAC to share information with the Australian intelligence community. This is part of the government’s plan to ensure a holistic approach to Australia’s national intelligence effort so that we can come down hard on organised crime and protect our national security. For example, adding the Department of Foreign Affairs and Trade as a designated agency recognises the important work it does in combating the financing of terrorism and in monitoring the various UN sanction regimes.

As it stands, financial intelligence is not recognised in the current arrangements, despite the important role it plays in the enforcement of laws and regulations and in the prevention of terrorism. Deep Throat said in All the President’s Men, which I saw recently, and swooned again over Robert Redford, to ‘follow the money’.

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