Dan Tehan (Wannon, Liberal Party, Minister for Education) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Crimes Legislation Amendment (Economic Disruption) Bill 2020 is a significant step forward in the Morrison government's fight against transnational, serious and organised crime groups.

Transnational, serious and organised crime—or TSOC ('tee-soc')—harms our communities, our economy and our national security.

TSOC groups pursue criminal profit at the expense of the health, prosperity and safety of ordinary Australians. Whether this is done through the importation of illicit substances, or through tax evasion, market distortion or money laundering, the direct cost to Australia is estimated to be $47.4 billion per year. When the indirect social and economic impacts are factored in, the full cost is immeasurable.

TSOC groups operate as sophisticated and compartmentalised businesses generating huge profits from their criminal pursuits. In order to 'clean' their proceeds of crime and realise these profits, the TSOC business model relies on money laundering. This allows profits to be concealed and reinvested in further criminal activity, or used to fund lavish lifestyles.

These organisations are well financed and are intent on retaining their profits through any means necessary. As such, Australia needs a tough regime aimed at destroying their business model.

The bill demonstrates the Morrison government's continued commitment to combatting TSOC and giving honest Australians a fair go.

Key features of the bill include an overhaul of the Commonwealth's money-laundering offences in the Criminal Code to address the increasingly complex methods employed by TSOC actors. In addition, the bill includes crucial amendments to the Proceeds of Crime Act to strengthen and clarify provisions to ensure that law enforcement agencies can restrain and forfeit the profits gained by TSOC actors.

Money laundering networks are becoming increasingly complex and more difficult for law enforcement agencies to disrupt. The networks are typically led by 'controllers' who issue directions to others to launder criminal profits, while keeping themselves at arm's-length to avoid criminal liability. The person who physically deals with the money or property is intentionally kept ignorant of its criminal origins.

The bill ensures that the Commonwealth's money-laundering offences can effectively target the controllers at the heart of the operation by treating them as though they dealt with the criminal money or property themselves, and are punished accordingly.

These reforms also target individuals who are wilfully ignorant to the criminal nature of money or property they deal with, by creating new offences which remove the need to link money or property to knowledge of a kind of indictable offence. The bill also amends the defence of 'mistake of fact' as to the value of money or property, ensuring that potential loopholes in the current defence cannot be exploited.

The bill also creates an additional tier of offences for the highest-level money launderers, who deal with money or property valued at $10 million or more. This ensures that penalties keep pace with the increasing scale of money-laundering operations.

Together these amendments will make it harder for offenders to evade the reach of law enforcement. They will support increased prosecution and sentencing outcomes for serious money-laundering offences, severely degrading the ability of TSOC actors to realise the profits of their offending.

Schedule 2 of the bill clarifies that undercover operatives are exempt from the obligations imposed on investigating officials under part IC of the Crimes Act, and brings the definition of the term 'investigating official' into line with the Commonwealth Evidence Act.

These measures ensure that any lawfully obtained evidence gained by undercover operatives is admissible, subject to the court's ultimate discretion regarding admissibility of any evidence.

Schedule 3 tightens the circumstances in which a person can apply for a 'buy back' order under the Proceeds of Crime Act. This is to prevent criminals or their associates from buying back their forfeited property.

In order to ensure that forfeited property is not repurchased using illicit funds or unexplained wealth, this measure also provides law enforcement with appropriate information-gathering powers to confirm the money used to purchase a property is 'clean'.

Schedule 4 ofthe bill clarifies the definition of the term 'benefit' under the Proceeds of Crime Act to include the avoidance, deferral or reduction of a debt, loss or liability. This reinforces that the act can be used to confiscate the benefit a person gains through the criminal evasion of import duties, excises or taxation, ensuring that a person does not profit from this criminal behaviour.

And schedule 5 clarifies that all courts with jurisdiction under the Proceeds of Crime Act are able to make orders in relation to property located overseas.

This amendment makes it clear that TSOC actors cannot simply move their tainted property offshore to avoid the reach of Australian law enforcement.

The bill also seeks to enhance the ability of law enforcement to enforce compliance with the information-gathering powers in the Proceeds of Crime Act. These powers provide law enforcement with valuable information about an individual's property and its potential links to crime.

Operational experience has demonstrated a willingness by suspects to obstruct the information-gathering process meaning that the offences for noncompliance are currently impractical to enforce. These amendments will greatly assist law enforcement agencies to target offenders and their tainted property, and also allow for enhanced information sharing between law enforcement agencies.

In addition, the bill strengthens the powers of the Official Trustee in Bankruptcy. It enhances the ability of the trustee to manage property that has been forfeited under the Proceeds of Crime Act. It seeks to remedy an existing limitation which prevents the trustee from effectively dealing with property which has already vested absolutely in the Commonwealth.

Further, the bill contains measures to enhance the official trustee's cost-recovery powers.

The Commonwealth's partnership with the states and territories is crucial in the fight against TSOC. To this end, the bill provides a more efficient mechanism to make grants from the Confiscated Assets Account to the states and territories for crime prevention, law enforcement, drug diversion and drug treatment measures.

I urge members to support the passage of this critical legislation. Together, we can ensure that the flow of illicit funds that enables the devastating harm caused by TSOC in this country can be switched off. Permanently.

I commend the bill to the House.

Debate adjourned.