Joe Ludwig (Queensland, Australian Labor Party, Manager of Opposition Business in the Senate) Share this | Hansard source

by leave—I move opposition amendments (3), (4), (5), (6) and (7) on sheet 5147:

(3)    Page 122 (after line 24), after clause 79, insert:

79A Deregistration and register of deregistered providers

132A United Nations deemed to be a foreign country

Officer may seize other evidence

Amendment (3) on sheet 5147 picks up an idea out of recommendation 5 in the committee report that a separate register be set up for persons prohibited from supplying a designated remittance service. It goes further by extending it beyond mere consideration into the actual legislation. The present bill sets up a register of designated remittance services—for example, an informal, traditional and ethnic based remittance service known as the hawala network. Labor has no problem with that per se. But what happens in the instance of a person who has committed repeated offences under the act or is otherwise a person known to be channelling money overseas for perhaps an illicit purpose? Under the regime set up by the bill, such a person simply remains on the list of designated persons. We think that to not have the ability to remove someone from the list, to deal with it in that way, is pretty dumb, quite frankly. It may be that a process where they can be removed from the list is needed. This was a matter mentioned in a UK court, where they perceived that that in fact could not happen and they were frustrated that it could not. It is one of those issues that is commonsense, but it is not an issue that was picked up by the government.

Labor proposes setting up in effect a separate register—because, of course, the way it might work is open—of prohibited persons. This way the AUSTRAC CEO would have the power to strike off a registered person who offends the law and move them across to a separate register of deregistered providers. That way you then know where they are. Of course they may be able to, at some point, indicate that they can pass a fit and proper person test or some such way of getting back from one list to the other, so there is still an incentive to remain known and within the overall system. That is a matter that I would urge the government to consider. I know they will not pick it up at this point. Clearly they have the numbers, but I think the current system does have its deficiencies. If you look at the UK report, which I think I tabled for the Senate committee, it does point to certain problems with the way the register as currently drafted works. They recommended in fact a range of changes. One of them is highlighted in this amendment.

Amendment (4) on sheet 5147 does not arise from the committee but really goes to the Howard government’s running of interference for its damaged ministers, AWB Ltd and its various National Party cronies. How did this sorry story come to prominence? The AWB and the oil for food program scandal that rocked Australia came through originally from the United Nations Volcker inquiry. Did the government cooperate with the Volcker inquiry? In his own words, Mr Volcker described the level of cooperation offered by the Howard government as ‘beyond reticence, even forbidding’. Apparently, when Mr Howard himself found out about the ‘reticence and forbidding’ conduct of his ministers in relation to cooperating with the inquiry, he ordered on 8 February 2005 that there be maximum cooperation and transparency and that there must be full disclosure and cooperation. But, like in all these things, he did not follow it up very well at all—in fact, he failed.

Let me give an example. Senator Kirk asked the Minister for Justice and Customs on 27 March this year a question without notice. She asked:

Minister, do you agree with AUSTRAC’s claim that it was unable to assist the UN inquiry because the UN is not a country? Can the minister now identify for the Senate what section of the Financial Transaction Reports Act 1988 precludes AUSTRAC from sharing information with the UN inquiry? Isn’t it actually the case that this was just another lame excuse for the Howard government to turn a blind eye to the truth?

Senator Ellison responded:

Sections 25 and 27 of the Financial Transaction Reports Act 1988 include secrecy and access provisions that protect financial transaction reports information from dissemination other than to prescribed personnel and agencies involved in the enforcement of Commonwealth, state and territory laws. That protection is an important part of ensuring that the privacy of individuals’ and entities’ financial transactions is maintained and that financial transactions reporting information are not released for use in a manner that is inconsistent with the act. That answers the question.

I do not believe for one minute that that is an excuse for not cooperating. I ask the minister: if what you say is true, do you claim that AUSTRAC cannot cooperate with FATF or the OECD, which are not countries either? Therefore what you have is a situation where if it is not a country then you cannot cooperate with it. If you had cooperated with the UN Volcker inquiry properly—although I suspect, with the ministers of this government, we would probably still be in this mess—you would not have that excuse to be able to deny it.

If the minister does stand by his statement, and if he was in fact not misleading the Senate at the time, then surely he can move to pick up Labor’s amendment to enable AUSTRAC to share information with the UN and its agencies so that there can be no repeat of the shabby treatment of Mr Volcker. That would be the sensible thing to do: to pick it up, admit you are wrong and move on. Because this is imperative. There are a range of other sanction regimes in place and the UN may continue to oversee them. You will then repeat the same error. Maybe you want to—that is the real question. We can then ask you to strike that course out by at least picking up the ability for AUSTRAC to be able to share information with a UN inquiry such as the Volcker one. That would make perfect sense.

I turn now to amendments (5), (6) and (7) on sheet 5147. These amendments did not arise from an issue raised in the committee’s report but are raised in relation to powers given to Customs officials under the act. At present the act gives powers to Customs officers to search persons for currency and bearer negotiable instruments when leaving Australia. But here is the issue: it does not appear to give them the right to seize anything other than currency or bearer negotiable instruments. In other words, it is limited to bearer negotiable instruments or currency. This amendment will ensure that the legislation is clear, insofar as Customs officers will have the right to seize any evidence of the offence. There may be documents associated with the currency and/or bearer negotiable instruments which become evidence. That would then be a thing that Customs would need to seize. Otherwise they would have no general power to seize those things and therefore you would have another hole. It appears that at least you might be able to remedy that.

Recommendation 28 of the FATF says:

When conducting investigations of money laundering and underlying predicate offences, competent authorities should be able to obtain documents and information for use in those investigations, and in prosecutions and related actions.

Clause 199 of the bill, which deals with unlawful cross-border movements of physical currency, and clause 200, which deals with unlawful cross-border movement of bearer negotiable instruments, as presently constructed fail to meet this test. As presently constructed, both clauses 199 and 200 permit an officer—for example, a Customs officer—to seize physical currency and bearer negotiable instruments that afford evidence of an offence under clause 53(1) or 59(3). It seems to me that there is a flaw in the construction of clauses 199 and 200 in that they do not allow for an officer to seize any other thing which may afford evidence of an offence under clause 53(1) or 59(3). There is no general power for Customs to seize documents.

To put it another way, when an officer forms a reasonable suspicion that an offence has been or is about to be committed under clause 53(1) or 59(3), they may only seize the physical currency or the bearer negotiable instrument itself, and not any other thing that affords evidence of an offence. It is easy to imagine a situation where that could arise, where they then would lack power, or where, at least, you would end up with a dispute about the evidence itself—about whether or not it could be admitted in any court and whether you could rely on it. That certainly would cause significant grief if that were to occur and that evidence was excluded, but it did assist and point to a clear prosecution and the prosecution failed on the primary point that the evidence was included. So it does need a remedy there as well.

There are also savings provisions made for powers outside the bill—at the very least, the construction of clauses 199 and 200 appear to create specific sets of circumstances where the power is to be limited to seize anything but the physical currency or bearer negotiable instrument. It seems to me that you have again missed some points. But I suspect, given the time available, there are other points you have missed as well.