Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Link to this | Hansard source

I am pleased to speak on the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008. Under the Financial Transaction Reports Act 1988, certain regulated businesses must report information about transactions to AUSTRAC, the Australian Transaction Reports and Analysis Centre. These obligations cease on 12 December 2008, when updated measures begin under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the AML/CTF Act. However, there is a 15-month grace period under the AML/CTF Act to allow businesses to make reasonable steps to improve their systems in order to comply with the new obligations. New systems must be in place by 11 March 2010.

The Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008 fixes an unintended loophole which was: during the grace period, companies would not be required to report transactions after 12 December 2008 until their new systems were in place. The bill requires that reporting bodies continue reporting transactions under their old systems until their new systems are in place, thereby ensuring that AUSTRAC maintains full records during the transition period. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is aimed at addressing the issue of money laundering in Australia, which is estimated to have a value of approximately $11.5 billion a year. The additional concern is the threat to national security posed by the financing of terrorism. The act also sought to implement Australia’s international obligations, including a commitment to bring Australian legislation in line with international standards, as set out by the Financial Action Task Force on Money Laundering.

The first tranche of reforms of the AML/CTF Act 2006 cover the financial sector, including banks, credit unions, building societies and trustees, and extends to casinos, TABs, wagering service providers and bullion dealers. The second tranche of the AML/CTF Act is for the expansion of designated services. On 13 July 2007, the Attorney-General’s Department released draft provisions setting out designated services which will be covered by the second tranche of the AML/CTF legislation. The sectors which will be affected by this second tranche legislation are: real estate agents, in relation to the buying and selling of real estate; dealers in precious metals and stones engaged in transactions above a designated threshold; lawyers, notaries, other independent legal professionals and accountants when preparing for or carrying out certain transactions; trust and company service providers when they prepare for or carry out for a client the transactions listed in the glossary to the FATF recommendations. AUSTRAC, the Australian Transaction Reports and Analysis Centre, plays an integral role as Australia’s anti-money-laundering and counterterrorism financing regulator and specialist financial intelligence unit. AUSTRAC is an essential partner in the global fight against crime. In its regulatory role, AUSTRAC oversees compliance with the reporting requirements of the AML/CTF Act and the FTR Act by a wide range of financial services providers, the gambling industry and other specified reporting entities, and cash dealers.

In its intelligence role, AUSTRAC provides financial transaction reports information to state, territory and Australian law enforcement, security, social justice and revenue agencies, as well as to certain international counterparts. The information from these reports is retained, compiled, analysed and disseminated by highly qualified AUSTRAC personnel using sophisticated tools. In collecting financial transaction reports information and ensuring signatories to accounts are identified, AUSTRAC assists its partner agencies in the investigation and prosecution of criminal and terrorist enterprises in Australia and overseas. The coalition recognises that Australia needs laws such as these to reduce the incidence and facilitate the tracking of money laundering and terrorism financing.

Due to the top-secret nature of terrorist investigations, including tracking their finances, we do not always hear about the successes that our agencies and organisations have. We have been fortunate enough not to have had a mass terrorist attack on Australian soil. It is a tribute to the skill, dedication and hard work of the AFP, our intelligence agencies and bodies such as AUSTRAC that we have prevented such attacks from taking place. These bodies are in many ways the quiet achievers and protectors of our society, and they deserve adequate support from the government.

There are currently five types of information that are reported to AUSTRAC: significant cash transaction reports, suspect transaction reports, international funds transfer instructions, cross-border movements of physical currency and cross-border movements of bearer negotiable instruments. AUSTRAC also acts as a primary source of information that identifies Australian taxpayers who may be engaged in tax evasion using tax havens. AUSTRAC routinely monitors domestic transactions over $10,000 as well as international transactions.

The laws that we are talking about bring Australian standards in line with international standards issued by the Financial Action Task Force on Money Laundering, FATF. The FATF is an intergovernmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The FATF was established in 1989 by the G7, and Australia was a founding member. The FATF currently has 33 members, two of which are regional organisations. In October 2005, the FATF evaluated the AML/CTF systems in place in Australia. The evaluation found that, despite some strength in Australian systems, there was still work which needed to be done. The recommendations provide the starting point for reforming Australia’s anti-money-laundering and counter-terrorism financing systems. The AML/CTF Rules address key issues raised in the evaluation report.

Each year vast amounts of funds are generated from illegal activities such as drug trafficking, theft, people smuggling, arms trafficking and other corrupt practices. The criminals who raise these funds need to bring them into legitimate financial systems without raising suspicion. ‘Money laundering’ is the name given to the process by which illegally obtained funds are given the appearance of having been legitimately obtained. This could mean legitimate businesses or charities are used as a front for otherwise illegal activities.

It is estimated that up to $4.5 billion is involved in money laundering in Australia every year. Money-laundering risks will continue to increase with commercial and technological developments. It was therefore crucial that Australia’s anti-money-laundering laws were adapted to a changing international security and commercial environment. When Australia’s existing primary anti-money-laundering legislation, the Financial Transaction Reports Act 1988, was developed, most financial transactions were carried out face to face, over the counter at financial institutions. Banking services were offered through manual passbooks at branches that were generally open only from Monday to Friday. Electronic transactions, such as those conducted through ATMs, EFTPOS, and telephone and online banking, are rapidly replacing traditional banking and finance methods. In Australia today, fewer than 10 per cent of transactions are carried out in bank branches. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 takes into account the extensive changes which have occurred in banking and financial services in Australia and overseas in recent years.

The Howard government introduced the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 in order to ensure there was a proper regulation of financial transactions in a way that would help detect and prevent money laundering and terrorism financing. These laws meet higher international standards and are in place to protect Australian businesses from being used for money laundering and terrorism financing. These laws were designed to make it harder for criminals to use the profits of crime and terrorism to receive money to carry out terrorist acts.

It is important to note, however, that terrorist organisations do not necessarily require a lot of money to achieve disastrous results. Today we remember the Bali bombings, costing only A$60,000 to execute. The September 11 attack on the World Trade Centre cost A$600,000 to execute. The Madrid attack cost $12,000, and the London bombings cost less than A$18,000 to execute. Considering the small amounts of money required by these terrorist organisations to cause death and economic destruction, it is vital that we support bodies such as AUSTRAC, the AFP, ASIO and ASIS and continue to fund them appropriately. They need to be well resourced to be able to detect terrorist finances when they are in such small amounts that would not usually cause suspicion. Globally, trafficking in illicit drugs and weapons is a profitable means for terrorists to boost their funds. Terrorists have been involved in trafficking illicit drugs, as they are the most lucrative commodities to be traded. It is important to recognise the excellent work the Australian Customs Service does, in conjunction with the AFP, to prevent illegal drugs from entering Australia.

Australian law enforcement and intelligence organisations need to be supported in the effort to manage terrorist threats to Australia and our region. In East Asia, terrorist organisations have exploited trafficking in drugs and weapons, as well as engaging in organised crime, to finance their operations—serious international crimes. In South Asia, the al-Qaeda network is reported to have trafficked heroin to support its operations globally. Terrorists and their financial supporters frequently commit illegal fundraising, money laundering, tax evasion, fraud and international currency violations. Thus, prosecuting individuals for financial crimes can be effective in coordinating the efforts of law enforcement authorities such as the AFP and can facilitate international investigations and ultimately may lead to the detention of terrorists. Following on from the Howard government’s proactive approach towards combating global terrorism, the coalition supports the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008. The bill will enable regulated businesses to continue reporting information to AUSTRAC under the Financial Transactions Reports Act 1988, the FTR Act, as they make the transition to the new reporting arrangements under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, referred to as the AML/CTF Act. Because the reporting obligations under that act begin on 12 December 2008, the amendments need to be enforced before then. From that date, reporting entities must incorporate ongoing customer due diligence systems and processes in their AML/CTF programs. This means that, in order to maintain a proper understanding of their customers, reporting entities may need to collect and verify additional customer identification information if they deem it necessary. Ongoing customer due diligence is a key element of a reporting entity’s control framework in identifying, mitigating and managing any money-laundering or terrorism-financing risks that they may face.

The Australian Transaction Reports and Analysis Centre, AUSTRAC, is Australia’s anti-money-laundering and counterterrorism-financing regulator and specialist financial intelligence unit. AUSTRAC’s purpose is to detect and counter money laundering and the financing of terrorism. Its vision is to be seen as an essential partner in the global fight against crime and terrorism. It is therefore essential to the safety and defence of this country. In its regulatory role, AUSTRAC oversees compliance with the reporting requirements of the Anti-Money Laundering and Counter-Terrorism Financing Act, referred to as AML/CTF Act, and the Financial Transaction Reports Act 1988, or the FTR Act, by a wide range of financial service providers, the gambling industry and other specified reporting entities and cash dealers.

In its intelligence role, AUSTRAC provides financial transaction reports information to state, territory and Australian law enforcement, security, social justice and revenue agencies, as well as certain international counterparts. The information from these reports is retained, compiled, analysed and disseminated by highly qualified AUSTRAC personnel using sophisticated tools. In collecting financial transaction reports information and ensuring signatories to accounts are identified, AUSTRAC assists its partner agencies in the investigation and prosecution of criminal and terrorist enterprises in Australia and overseas.

In May this year, AUSTRAC took significant steps in expanding its global reach by adding four more countries to its international financial intelligence network. AUSTRAC is an active member of the Egmont Group of financial intelligence units, which consists of 106 FIUs and encourages international cooperation. At an Egmont Group meeting in Seoul, South Korea, AUSTRAC signed a memorandum of understanding with the financial intelligence units of the Czech Republic, Germany, Mexico, and St Kitts and Nevis. This brings the total number of countries with which Australia has an MOU to 53. These memorandums allow Australian law enforcement and other government agencies to receive vital financial intelligence from these countries via AUSTRAC. It is vitally important that this international network continues to grow so that we can track this money in overseas accounts as well. It is not something that can be done in isolation. Therefore, it is very important that we continue to look to sign these memorandums of understanding with overseas countries. AUSTRAC’s Chief Executive Officer, Neil Jensen, said at the time:

The sharing of financial intelligence with other countries strengthens Australia’s ability to detect and prosecute money laundering and other serious crimes such as drug trafficking and fraud.

There is little doubt, as Mr Jensen said:

Through globalisation and the increasing use of advanced technology, transnational crime syndicates now have new opportunities by which they can exploit legitimate businesses to conceal dirty money. International cooperation is needed to combat this heightened threat.

As we all know, keeping up with rapidly advancing technology is in itself one of our biggest ongoing challenges.

AUSTRAC works bilaterally with its international counterparts to detect and prevent money laundering and the financing of terrorism. AUSTRAC holds memorandums of understanding with many European countries as well, and also has memorandums of understanding with the United States, Canada, Indonesia, Malaysia, the Philippines, Hong Kong, Singapore, Japan, South Korea, Brazil, Argentina and Chile. The ability to exchange financial intelligence with overseas investigating units significantly supports Australian law enforcement agencies. For example, AUSTRAC was involved in the Australian Crime Commission’s successful Task Force Gordian, which investigated the money-laundering activities of several Asian crime syndicates. This investigation resulted in 64 prosecutions for money laundering, narcotics trafficking and related offences.

While narcotics offences provide a substantial source of proceeds for crime in Australia, the majority of illegal proceeds are derived from fraud related offences. One Australian government estimate suggested that the amount of money laundered in this country ranges from $2 billion to $3 billion per year. Australia recognises and is responding to the continuing challenges posed by increasingly well-resourced and well-organised transnational crime networks.

Criminals use a range of techniques to launder money in Australia. Generally, money launderers seek to exploit the services offered by mainstream retail banks, larger financial services and gaming providers. Visible money laundering is predominantly carried out by using the regulated financial sector, particularly through the use of false identities and falsely named bank accounts, facilitated by forged documents, to structure and transact funds. Over the past five years or so, those in the regulated financial sector have made various moves towards making it tougher for false identities and false names to be provided. Money launderers often move funds offshore by using international funds transfers and also move funds through smaller or informal service providers such as alternative remittance dealers.

Australian authorities also identified other methods that served as money-laundering vehicles. Examples include cash smuggling into and out of Australia and the use of legitimate business to mix proceeds of crime with legitimately earned incomes or profits. Law enforcement has also recognised a growing trend in the use of professional launderers and other third parties to launder criminal proceeds.

A wide range of financial institutions exist in Australia. These include depository corporations such as banks, building societies and credit cooperatives. There are financial markets, insurance corporations and pension funds such as life insurance, general insurance and superannuation funds. As well, we have financial corporations, including financial intermediaries such as financial unit trusts and investment companies, and financial auxiliaries such as security brokers, insurance brokers and floatation corporations. There are also foreign exchange instrument dealers, money remittance dealers and bureaux de change. The full range of designated non-financial businesses and professions exists in Australia. Casinos, which are mainly supervised at the state or territory level, as well as dealers in precious metals and stones, and lawyers are subject to some AML/CTF requirements. Money is also handled by notaries, real estate agents, accountants, and trust and company service providers.

The Financial Transactions Report Act was Australia’s original anti-money-laundering legislation. Importantly, the act provided for reporting of certain transactions and transfers to AUSTRAC. Many of the obligations in the FTR Act will soon be replaced with updated measures under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Catching money launderers and financers of terrorists would certainly have been a lot more difficult in days gone by, especially if designated non-financial businesses and professions were used for such criminal activities. For a start there was no specific obligation for financial institutions generally to monitor all complex or unusually large transactions and transactions with no visible economic purposes, or to further examine such situations and to set out any findings in writing. The monitoring obligation was only implied and indirect and it did not cover the full range of monitoring situations. For some years many firms operating in Australia did not have the mandatory customer due diligence. They did not have record-keeping and other obligations as required under recommendations in a 2005 Financial Action Task Force report.

The Financial Action Task Force is an intergovernmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. In that same document, it was reported that there were no specific requirements for most of the designated non-financial businesses and professions to pay special attention to complex and unusual transactions. Suspicious transaction reporting provisions were generally adequate, but there was a limitation of the ‘cash dealer’ definition, which did not apply to all financial institutions.

When the task force wrote their evaluation in 2005, there was a requirement to report transactions suspected of being related to a terrorist-financing offence; however, the evaluation team’s concern regarding the scope of the terrorist-financing offence led the team also to be concerned that this could limit the reporting obligation. At the time the team also stated that legislative amendments were required to oblige financial institutions to have in place institutionalised AML/CTF internal controls and policies. Those obligations were to include requirements for financial institutions to have a designated AML/CTF compliance officer at the management level, have an adequately resourced and independent audit function, establish ongoing employee training and put in place adequate screening procedures.

Most of the financial institutions and professions were not legally required to report suspicious transactions to AUSTRAC. They also were not required to develop internal policies, procedures and internal controls, and ongoing employee training and compliance in respect of AML/CTF. For a long time there were no adequate, enforceable measures to pay special attention to transactions involving certain countries, make their findings available in writing or apply appropriate countermeasures. But all that has changed or is certainly well on track to being tightened up.

This bill will help businesses that are making the transition to the new reporting arrangements. The AUSTRAC Chief Executive Officer may only take action against a reporting entity for a breach of the AML/CTF Act if he or she is satisfied that it has not taken reasonable steps to comply with its obligations under that act. This grace period ends on 11 March 2010. Between the commencement of the new AML/CTF Act obligations on 12th December 2008 and the end of the grace period, there are likely to be a significant number of businesses that are not fully compliant with the new reporting obligations. It is important that these businesses are 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.

The bill contains amendments to the FTR Act. The amendments will establish transitional provisions to authorise certain cash dealers to continue reporting suspicious transactions, international funds transfer instructions 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. It 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 cash dealers to enter transactions into their exemption register up until the end of 11 March 2010.

The amendments maintain the regulatory status quo under the FTR Act. They do not impose any additional regulatory burden on business. The Office of Best Practice Regulation has granted a regulatory impact statement exemption. If the amendments are not in force by 12 December 2008, regulated businesses will have no legal authority to report relevant transactions to AUSTRAC under the FTR Act and will have no legal protection if they continue to do so. That is why it is vital this bill is passed. Primary responsibility for compliance with the requirements of the FTR Act and the AML/CTF Act rests with each reporting entity’s own board—if they have one—and senior management. It is anticipated that most entities will seek to comply with their obligations. However, there will be some who do not comply with the law through ignorance, failure of their systems, lack of effort or even, on occasion, a wilful or dishonest intention.

As the regulator, AUSTRAC is responsible for promoting compliance with legislative requirements. To this end, AUSTRAC has been given powers to monitor the level of compliance being achieved by the entities. Through its monitoring activities, AUSTRAC aims to foster an environment of continuous voluntary compliance. The agency also aims to identify the level and extent of any noncompliance for the purposes of formulating a rectification plan that is proportionate to and appropriate for the problem and ensuring that the integrity of the FTR Act and the AML/CTF Act is upheld.

Just three weeks ago AUSTRAC released a reporting implementation policy to assist reporting entities with new obligations under the AML/CTF Act, which takes effect from 12 December 2008. Reporting entities will need to report suspicious matters and, if applicable, threshold transactions and international fund transfer instructions to AUSTRAC. AUSTRAC has throughout the staggered implementation of the AML/CTF Act focused on supporting reporting entities in understanding and complying with their new obligations. That support has included developing new tools and systems and providing education and guidance such as the policy released three weeks ago. The policy outlines the seven new reportable details forms and the four reporting methods AUSTRAC has designed to meet the size and technology requirements of reporting entities. The policy also provides information for new reporting entities, as well as those entities who have been reporting to AUSTRAC as cash dealers under the FTR Act.

The reforms under the Anti-Money Laundering and Counter-Terrorism Financing Act are aimed at addressing the risk of money laundering in Australia and the threat to national security caused by the financing of terrorism. The first instalment of reforms, covering the financial sector, includes banks, credit unions, building societies and trustees and extends to casinos, TABs, wagering service providers and bullion dealers. The second group of reforms covers real estate agents, dealers in precious metals, dealers in precious stones and a range of non-financial transactions provided by accountants, lawyers and trust and company services providers.

This is a very important bill for ensuring that those laundering money for either criminal or terrorist purposes are tracked both internationally and here in Australia. It is therefore important that this parliament pass it as quickly as possible. I commend the bill to the House.

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

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in support of the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008. The aim of the bill is to help business, and I am confident that it will assist the regulating entities during the transition to the new reporting format by allowing them to continue to report to the Australian Transaction Reports and Analysis Centre, commonly known as AUSTRAC, as they have done under the Financial Transaction Reports Act 1998.

In the last few weeks we have witnessed extraordinary circumstances globally, and, whilst geographically we are an island, and a very big one at that, financially we are interwoven with the world system—we are inextricably linked—and money goes back and forth at the click of a button and the lifting of a telephone. This bill is important because it maintains the regulatory status of the Financial Transaction Reports Act and does not impose any regulatory burden on business. At this particular time the businesses in my area, the federal electorate of Blair, are concerned about what is happening globally, as they are across the country. It is important that we allow our businesses to remain viable and prosperous and to keep employment as full as we possibly can, to ensure that the working families and those who are struggling in our electorates are looked after. Keeping businesses profitable is crucial in the circumstances that we currently face financially. In many ways this bill is about allowing business more time to develop the necessary compliance systems. It is important that entities comply with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, commonly known as the AML/CTF Act, and the reporting requirements necessary under that piece of legislation.

The bill that is before us applies to threshold transactions, international funds, transfer instruction and suspicious matter reports. It is going to be welcomed by businesses—I know it will be welcomed by businesses in my area—because there are businesses, small and large, that move money across the country and overseas. There will be an end to the grace period, and many businesses that are not yet compliant will eventually move to that compliance. The AML/CTF Act replaces the Financial Transaction Reports Act, which, as Bob Debus, Minister for Home Affairs, announced in his second reading speech, was Australia’s original anti-money-laundering legislation.

This piece of legislation before us today has been introduced to improve our nation’s existing anti-money-laundering and counterterrorism financing system. These new laws will meet higher international standards to protect Australian businesses from being sued for money laundering and terrorism financing. The greater the quality, accuracy, and timeliness of reports from business entities, the greater the value they have in terms of detection, deterrence and the destruction of any criminal terrorist activity and money laundering. This new law will make it harder for criminals to use the profits of crime, and it will make it far more difficult for terrorists to receive moneys, to use those moneys and to transfer moneys across international borders to engage in nefarious terrorist activities.

This act is a major reform towards enabling our financial sector to maintain international business relationships with countries in our region, with Europe and with the Americas. It prevents and detects money laundering and terrorism financing by meeting the needs of law enforcement agencies for targeting information, which is so crucial, about possible criminal and terrorist activities. It brings us as a country into line with international standards in this regard, including the standards set by the Financial Action Task Force. The reforms in this piece of legislation enhance Australia’s anti-money-laundering and counterterrorism financing legislation. It will provide law enforcement agencies with the highest quality financial intelligence to assist in the detection and prevention of terrorist activity and the laundering of the proceeds of crime. It is absolutely crucial that we engage in this sort of thing. It is absolutely vital that we have the best quality and increasing excellence of reporting to regulators to ensure they detect the instances of crime.

In my previous life as a lawyer, I can assure you that there were many occasions when clients of mine talked to me about money going between Australia and overseas and how they did it. It is difficult for law enforcement agencies to get to the point where they can actually detect how much money is being transferred between Australia and overseas. There are a lot of legitimate financial transactions in terms of gambling, bullion activities and other business related activities, but there are a lot of transactions that are simply money laundering and used for criminal activities. We have to be in the position of knowing when it happens and of being able to detect it and prevent it from happening in the best possible way.

This bill amends the Financial Transaction Reports Act and establishes transitional provisions to authorise certain cash dealers to continue reporting suspicious transactions, international funds transfer instructions and significant cash transactions to AUSTRAC under the Financial Transaction Reports Act up to the end of 11 March 2010 or until they become compliant under the AML/CTF Act, whichever comes first. It authorises solicitors, solicitors corporations—and there are many of those around the country these days—and partnerships of solicitors to continue to report to AUSTRAC with respect to cash transactions under the Financial Transaction Reports Act until the end of 11 March 2010 or until they become compliant with the new act, whichever comes first. It also authorises certain cash dealers to enter transactions into their exemption register until the end of 11 March 2010. It will enable regulated businesses to continue reporting important information to AUSTRAC as they make the transition to the new reporting regime.

AUSTRAC is Australia’s anti-money-laundering and counterterrorism financial regulator, and it is the specialist when it comes to financial intelligence. AUSTRAC was initially established under the Financial Transaction Reports Act 1988, and its role is continued under the AML/CTF Act 2006. In its regulatory role, AUSTRAC oversees compliance with the requirements of the legislation by a wide range of financial service providers, including the gambling industry and others. In its intelligence role it provides to state, territory and Commonwealth government law enforcement, social security, social justice and revenue agencies information which is crucial to the detection of crime and the prevention of terrorism. Transaction reporting obligations under the AML/CTF Act will come into effect on 12 December 2008 and from this date reporting entities will be required to report international funds transfer instructions, threshold transactions and suspicious matters.

The legislation before us allows a period of grace, as I said. It covers the financial sector, the gambling sector, bullion dealers and other professionals and businesses. It will provide particular information when it comes to designated service. The reporting obligations under the AML/CTF Act come into effect on 12 December 2008. Though it is expected that many of the reporting entities will be compliant, it is recognised that, in the challenging times we find ourselves, for a variety of reasons not all of them will be compliant by that date. With this in mind, a 15-month period of compliance—that is, until 12 March 2010—is appropriate. It is crucial that we get this right.

The previous speaker spoke a lot about terrorism, but I want to concentrate for just a few minutes on offshore tax evasion because AUSTRAC plays an important role in that regard. It is crucial that we monitor regularly all domestic transactions and all international funds transfers over $10,000. AUSTRAC records the particulars of customers ordering and beneficiaries. It also records the amount being transferred, the accounts debited and credited and the financial institutions. The OECD in 2007 estimated that globally US$5 trillion to US$7 trillion is held offshore. A considerable amount of this money is held, sadly, in tax havens—and that is a major problem for many countries. In the financial year 2007 about $16 billion was sent to tax havens from Australia and about $18 billion was sent directly from tax havens to Australia, according to the Australian Taxation Office submission to the US Senate Committee on Homeland Security and Governmental Affairs for its 17 July 2008 hearing on tax haven banks and US tax compliance. The Australian Taxation Office in its submission said:

… the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s Financial Intelligence Unit (FIU), has sophisticated capabilities to track international fund flows.

But what worries me is that the Australian Taxation Office also said in its submission that it was:

… not aware of an effective way to estimate precisely the amount of tax at risk.

This was confirmed by the Commissioner of Taxation on 3 October 2008, in his fourth biennial meeting with the Joint Committee of Public Accounts and Audit. We simply have to find better ways to track this. We need to look at how we can do this. I am not suggesting, Madam Deputy Speaker, you have all the province in your mind as to how we do this, but we simply have to find better ways to track money that goes overseas from Australia and back into Australia. We have to find ways to estimate just how much is going into tax havens and beyond.

In fairness, the Commissioner of Taxation has said that there are a number of mitigating factors in Australia that help us in this regard. He said that the following play a role: geography; the existence of AUSTRAC itself; our own vigilance in the area; the lack of an inheritance tax or gift duty; the relative size of the flow of funds from Australia to tax havens compared to other countries; simply, the law-abiding ethic of most Australians; and the message that the Australian Taxation Office has sent with Project Wickenby and other activities. But we really must be vigilant in this regard. I commend the Australian Taxation Office for their involvement in the multiagency task force known as Project Wickenby, which was formally funded in 2006 to investigate internationally promoted tax arrangements, alleged tax avoidance or evasion and, in some cases, large-scale money laundering. The project has $305 million in funding over seven years and its focus is really on detecting these problems. We know it has led to a number of arrests and charges—and I will not go into detail about those. The ATO is looking at a number of tax havens as well. The use of Lichtenstein entities and bank accounts in these circumstances is also a worry to everyone. The Australian Taxation Office is conducting about 20 tax audits and, according to the ATO, it is likely to raise in excess of $1 million.

So these are real problems for us as a country. We need to be vigilant. This particular piece of legislation we have before us today is crucial in that regard. Audits by the Australian Taxation Office, the issuing of information and production notices domestically and offshore, formal interviews and informal interviews, accessing premises: all of those things are important for the Australian Taxation Office, but having this type of legislation in front of us today that will deal with preventing these problems is simply vital in the circumstances. It is vital for business and it is vital for the taxpayers of Australia who pay tax, although they all think they pay too much, in my experience, or they think that we do not use it as wisely as they would like. The truth is that we need to be extremely careful when it comes to money laundering and we need to be vigilant always to ensure that money that leaves or comes into this country is not used for domestic or international terrorism.

I commend this piece of legislation to the House because I think it will play an important role in helping us to be ever aware and ever keen to prevent these problems from flourishing on our shores. The vast majority of Australians are law-abiding citizens who love their country and pay their taxes—sometimes grudgingly, but always willingly in the circumstances—and they would not ever dream of engaging in the kinds of activities that this piece of legislation deals with. But for identifying those engaged in criminal activities and activities that go against the heart of our society, that go against the lifestyle that we believe is important and appropriate for Australia—that is, one of the rule of law, of freedom of association, of the right for the people of Australia to determine the kind of government we have and for that government to run the country efficiently, effectively and democratically—this type of legislation is so important. It is probably not the sexiest piece of legislation that you could imagine, but it has a very important role in preventing the kind of criminality that Australians abhor. I commend the bill to the House.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to 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.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008 for a number of reasons. This bill seeks to amend the Financial Transaction Reports Act 1988 and extends the transition period of the 2006 amendments to that act to 11 March 2010, enabling businesses which are not yet compliant with the 2006 reporting obligations additional time in which to become compliant. They will be required to report financial transactions in accordance with their obligations under the 1988 FTR Act until such time as they can comply with the 2006 amendment or until 2010, whichever comes first. The 1988 FTR Act targets money-laundering activities often used to transfer the proceeds of criminal activities or to fund terrorist activities. In March this year, the Minister for Home Affairs stated that, according to the Australian Institute of Criminology, some $4½ billion are laundered in Australia each year.

The FTR Act can also be effective in identifying white-collar crime activities such as tax evasion, fraud or scams where the money is transferred overseas into the fraudster’s bank account. I note the comments of the member for Blair in respect of tax evasion. The contribution he made is one which I endorse. I will not repeat the argument he put but he certainly made the case very strongly that tax evasion is an important issue that needs to be responded to in this country and, for that matter, across the world.

The area that I want to focus my remarks on in respect of this bill is the area relating to the use of scams, which are regularly taking place and stripping millions of dollars from hardworking victims. It is a serious issue which sometimes perhaps tends to be sidetracked because of the emphasis placed on money laundering for criminal purposes or terrorist activities and so on. Sadly, it is a very real issue that occurs on a daily basis out there in the community and affects so many people. Sadly, many of the victims who are affected lose their life savings or their retirement provisions, leaving them devastated or ruined. More frustrating is that most of the funds lost can never be traced and therefore are never recovered.

According to information provided by the Parliamentary Library, in 2007 Australians lost $980 million through scams and personal fraud. The most common types of scams were lottery scams, with some 84,100 victims recorded; pyramid schemes, which affected 70,900 victims; and phishing, a term which I have not heard before and which I may have mispronounced, which affected about 57,800 people. Phishing, which is spelled with a ‘ph’, is where victims are tricked into handing over bank account or credit card details. These figures only reveal part of the problem. According to the first national personal fraud survey, commissioned by the Australian Bureau of Statistics and released in June of this year, a total of 806,000 Australians reported that they were victims of at least one incident of personal fraud in the previous 12 months, and around six million Australians had been exposed to a range of selected scams. Of these, 453,100 Australians lost an average of $2,160 as a result of personal fraud.

Many of these frauds or scams originate from overseas and where scams are perpetrated from within Australia in many cases it is very likely that scam funds are then transferred to overseas bank accounts. In one international case reported by the Australian Competition and Consumer Commission in August 2007 more than $316,936 was recovered from a North American based scam operation after a joint investigation between the Australian Competition and Consumer Commission, the Queensland Police Service and the Competition Bureau of Canada. This was a common scam method where victims receive correspondence advising them that they have won a lottery or come into some other type of financial benefit or prize. The victims are told that, before the funds can be transferred to them, they must pay an upfront fee. In the North American scam case, authorities were alerted by a vigilant employee of the Adelaide based Powerstate Credit Union. In this case the joint action disrupted the operations of 37 scam promoters. Regrettably, there are many other scam methods being perpetrated every day where the funds are never recovered. The Nigerian based scams that most people are familiar with, where upfront fees are paid, are estimated to raise up to $680 million per year globally.

But the scams are not limited to unsuspecting individuals. In one case that I am aware of, the scams have also targeted Australian charities that rely on the goodwill and generosity of individuals and on community donations. Our charities often receive bequests both large and small from within Australia and also from overseas. It is unfortunate that our own Australian charities are a target. The charity is notified that someone has left a large bequest to the charity foundation, usually several million dollars. The scammer begins to groom the charity by requesting that the charity officially apply in writing as to what they propose to do with the bequest funds. Once the charity’s proposal for the bequest is approved—this is by the scammer—they then ask for a transfer fee. They say that funds to cover those fees must be transferred into an overseas account prior to any bequest funds being transferred to the Australian charity’s bank account. They say that once they have the transfer funds, they will then request the charity’s bank account number so that they can transfer the bequest funds. The bequest funds never come because they do not exist. This then leaves the charity vulnerable to internet fraud. In the particular case that I am familiar with, the scam originated in Nigeria but the funds were transferred to a bank in the USA. Nigeria, however, is not the only country that is known as being the origin of global scam operators, with Britain, the US and Germany often being mentioned.

Over the years there have equally been numerous cases of tax evasion or corporate crime where funds have undoubtedly been transferred to overseas safe havens, leaving investors or creditors with huge losses. The case of Heinrich Kieber, the whistleblower who exposed the activities of the Liechtenstein LGT Banking Group, highlighted the extent of tax evasion throughout the world—and what he highlighted was possibly just the tip of the iceberg. In that very small country of Liechtenstein there are, I understand, some 15 banks in operation that currently hold assets in the order of $200 billion. One wonders just how extensive this issue of tax evasion—and corporate fraud, for that matter—is globally. We may never know, because in many cases the activities and transactions are illegal and therefore not properly recorded anywhere for us to get a true understanding of the significance of this very serious crime issue.

Interestingly, in today’s Australian, in a story by journalist Michael Pelly, it is reported that the Director of Public Prosecutions, Chris Craigie SC has called for tougher penalties for corporate criminals, who appear to be judged leniently because of factors such as personal humiliation, loss of social status and ruined careers. It is reported that Chris Craigie believes that more emphasis should be placed on the lasting harm and economic hardship caused to victims when sentences are handed down. I use the quotations from Chris Craigie because his is a view that I strongly share.

I recall that many years ago Ralph Jacobi, a former member of this place, raised the issue of white-collar and corporate crime in this House on several occasions, effectively arguing the very same case, that there are almost two standards in our society: one for what you might refer to as ‘everyday criminals’ and one for ‘corporate criminals’, who always appear to be treated somewhat differently. I believe that that needs to stop because the victims of criminal activities in both cases suffer equally.

There is one other matter I want to refer to in respect of this bill. It is a matter that has been brought to my attention by constituents in my electorate in recent weeks. I have been contacted by constituents who receive a German pension payment. For the first time, they are being charged a $3.50 transaction fee each time the payment is credited to their account. In each case the pension is from Germany and the bank referred to has been the Commonwealth Bank. The Commonwealth Bank has advised its German pension clients that the $3.50 fee has become necessary as a result of the bank’s compliance costs relating to the FTR Act. I want to quote part of a letter from the Commonwealth Bank sent to one of the constituents that I refer to. It says:

Dear valued client,

Due to the introduction of Anti-Money Laundering and the Suppression of Terrorist Financing Legislation, the Commonwealth Bank has recently made changes to the way overseas payments (including German pension payments) are processed.

These changes have imposed additional processing costs on the Commonwealth Bank and as a consequence, a fee of $3.50 will be deducted from your German pension payments from 01 August 2008.

I took the matter up with the Minister for Home Affairs and he quite rightly pointed out that banks are entitled to charge these fees. I accept that, and $3.50 may not be a large amount but, to a pensioner, it is important.

Interestingly, as a result of other inquiries I have made, I have found that it appears that no other bank is charging this same fee. My concern here is this: whilst the Commonwealth Bank of Australia is well within its rights to charge this fee, I would like to think that this particular legislation is not being used by banks or any other financial institutions as an excuse to charge additional fees. I certainly accept that, as a result of this legislation, there is greater imposition being placed on banks in order to carry out the monitoring that they are obliged to in the reporting of transactions that they are expected to report on. But in this particular case the money is coming from the German government to a pensioner and has been coming for years and years and it would seem unnecessary to be charging a fee, and I am surprised that there are additional costs incurred in monitoring this particular transaction. So I appeal to the Commonwealth Bank to drop the $3.50 fee that it charges recipients of the German pension here in Australia because, as I have stated, I believe that the $3.50 does matter to the recipients of that pension.

I support this legislation for all of the reasons outlined by other speakers who have spoken on it. It is an important piece of legislation. In effect, it is legislation that assists the Australian government in fighting crime, terrorism, corruption, fraud and scam operations. The victims of all of those activities are inevitably the Australian people and sometimes those victims have their lives destroyed as a result of any one of those activities that I have referred to. I therefore commend the bill to the House.

Bob Debus (Macquarie, Australian Labor Party, Minister for Home Affairs) Share this | Link to this | Hansard source

in reply—I thank all members for their contributions to the debate on the Financial Transaction Reports Amendment (Transitional Arrangements) Bill 2008. I believe each contributor supported it. The bill, as has been indicated, contains a number of amendments that ensure that businesses can continue to report to AUSTRAC as they work towards compliance with the new reporting obligations that are contained in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

I do emphasise that amendments will not create any duplication in reporting obligations. To the contrary, the purpose of the legislation is to ensure that the simplest possible reporting arrangements remain in place. As Australia’s specialist financial intelligence unit, AUSTRAC of course plays an integral role in identifying, dismantling and disrupting criminal activity and, through the collection and analysis of financial transaction reports, AUSTRAC is able to provide assistance of a most profoundly important sort to law enforcement and national security agencies in the identification and investigation of criminal and terrorist enterprises.

The scale of reporting, I think, is not widely understood. AUSTRAC presently receives around 69,000 reports in relation to suspicious transactions and other transactions every day. So the passage of this bill will ensure that the intelligence gathering role of AUSTRAC is not hindered during the transitional reporting period and that the government, with the assistance of AUSTRAC, can continue to confront money laundering and terrorism financing. I commend the bill to the House.

Question agreed to.

Bill read a second time.