Andrew Giles (Scullin, Australian Labor Party, Shadow Minister for Cities and Urban Infrastructure) Share this | Hansard source

I rise to make a contribution to the debate on the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 and set out the position of the opposition on this bill. It is significant legislation which amends a number of Commonwealth acts, including the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the Australian Federal Police Act 1979, the Criminal Code Act 1995, the Inspector-General of Intelligence and Security Act 1986, the Proceeds of Crime Act 2002 and the Surveillance Devices Act 2004. This bill, which has taken some time to make its way into this place, would implement a second phase of reforms arising from recommendations of the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations, which were tabled in the parliament on 29 April 2016. Again, this is consistent with a broader pattern under this government of there being some delay in dealing with very significant matters, and, of course, the matters this bill responds to are extremely significant. That said, I acknowledge and we acknowledge that this is a bill that is fundamentally designed to improve Australia's anti-money-laundering and counterterrorism financing laws, and this is an objective—and, indeed, a bill—which Labor supports. But we do call on the Morrison government to take anti-money-laundering and counterterrorism financing laws more seriously and to deal with these matters more expeditiously.

The basis for these changes rests in very large part in the work of the Financial Action Task Force which is an intergovernmental body established by the then G7 back in 1989 and of which Australia has been a member since 1990. From that time, the recommendations of the task force have set international benchmarks for measures that respond to money laundering and terrorist financing. These were revised in 2012. While these are not binding under international law, they are supported by very significant global institutions: the G20, the United Nations, the World Bank and the IMF. This is positive globalism—a very important cooperative framework which operates via a system of evaluations and the provision of incentives so that these recommendations can be given full effect to by a state party such as Australia. It was a mutual evaluation report of this nature in 2015 which identified deficiencies in Australia's anti-money-laundering and counterterrorism financing provisions. This bill will address some of the deficiencies identified in that report. However—and it is crucial that members note this—this bill does not address all of these deficiencies. Australia's anti-money-laundering and counterterrorism financing regulatory framework will remain non-compliant or only partly compliant with many of the recommendations made by the Financial Action Task Force in its 2015 mutual evaluation report.

There is more to be done. That is the responsibility not only of this government but of all members, and that is the contribution that Labor will be making in support of the provisions contained within the bill.

The bill contains a wide range of measures to address money laundering and terrorism financing risks. The aims are: to expand the circumstances in which reporting entities may rely on customer identification and verification procedures undertaken by a third party; to reform cross-border reporting requirements so that, in addition to travellers declaring $10,000 or more of physical currency, travellers will now also have to declare bearer negotiable instruments, such as travellers cheques, at the border where the combined amount of physical currency and bearer negotiable instruments is $10,000 or more; to strengthen protections on correspondent banking by prohibiting financial institutions from entering into a correspondent banking relationship with another financial institution that permits its accounts to be used by a shell bank and by requiring banks to conduct due diligence assessments before entering and during all correspondent banking relationships; to simplify secrecy provisions to make clearer the prohibitions on tipping off in order to permit reporting entities to share suspicious matter reports and related information with external auditors and foreign members of corporate and designated business groups; to provide a simplified and flexible framework for the use and disclosure of financial intelligence to better support combating money laundering, terrorism financing and other serious crimes; to create a single reporting requirement for the cross-border movement of monetary instruments; and to address barriers to the successful prosecution of money laundering offences by clarifying that the existence of one Commonwealth constitutional connector is sufficient to establish an instrument of crime offence and deeming money or property provided by undercover law enforcement as part of a controlled operation to be the proceeds of crime for the purpose of prosecution.

I note also that the bill would make it an offence for someone to falsely claim that they have received a police award. Obviously it's disappointing that there needs to be such a provision, but this is a provision that Labor strongly supports.

Of course, money laundering and terrorism financing are not just problems for Australia. They are global problems that require effective global engagement and cooperation. They threaten Australia's national security and the integrity of Australia's financial system. That's why Australia's anti-money-laundering and counterterrorism financing frameworks must continue to evolve to keep pace with evolving challenges. Otherwise, Australia will become a weak link in the global financial system and a soft touch for organised crime around the world seeking to launder its proceeds.

Unfortunately, since 2013 this government has repeatedly missed deadlines in its own anti-money-laundering and counterterrorism financing timetable. Such was the government's failure to implement reports according to its own schedule that the world's watchdog, the Financial Action Task Force, expressed serious concerns about the regulatory framework in this country. The Financial Action Task Force's 2015 mutual evaluation report made clear that Australia is an attractive destination for foreign proceeds of crime, particularly corruption related proceeds flowing into real estate. This is troubling to read, at the very least. It is even more troubling when we reflect that this was a report handed down in 2015—five years ago.

So, while Labor welcomes efforts by the government to belatedly strengthen our anti-money-laundering and counterterrorism financing laws, this latest legislation comes more than four years after the then Minister for Justice tabled the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations, which first called for these changes in March 2016. Yet, much more than four years later, this legislation that is before the House right now fails to implement many of those 2016 recommendations.

The fact is that the Morrison government has dropped the ball on this critical national security issue. Other jurisdictions have moved ahead of Australia, with much stronger anti-money-laundering and counterterrorism financing protections. This means that there are growing risks to Australia—and they should concern every Australian—including this government's failures to fully implement either the Financial Action Task Force or the statutory review's recommendations. Accordingly, I will be moving a second reading amendment to this bill—

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