David Johnston (WA, Liberal Party, Minister for Justice and Customs) Share this | Hansard source

Thank you, Madam Acting Deputy President, for those very kind words. In summing up this second reading debate, I want to take up a few points before I generalise about this important bill. This is a very complex matrix of terms, provisions, clauses and approaches to what is a very versatile, robust, innovative financial system in Australia. We have some of the world’s most efficient financial agencies in the nature of banks, building societies and other financial institutions that are continually evolving modes and methods of dealing with large sums of money and moving them around the country. The object of this legislation is to accurately obtain data and analysis of what is happening with those large sums of money being moved around. We have the amendment bill of 2006 and the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007. The amendment bill of 2007, of course, is largely only technical in nature and has for some time been foreshadowed.

Senator Ludwig made some points with respect to the amending regulations regarding clause 6.7. The reason the legislation has what is called a Henry VIII clause is because the financial institutions which I have spoken of have disclosed a capacity to make ready and quick alterations to their processes such that they can avoid the provisions of legislation of this place. I point to cash management trusts as being a very real example of what evolved in response to previous legislative requirements and frameworks. That is not to suggest they are doing anything wrong; they simply order their affairs in an expeditious and convenient way to include a minimal amount of reporting and inconvenience. That is their wont and that is what they are very likely to do. Having the provisions as we do enables us to respond quickly to close off that avenue before a hole in the database collection methodology occurs.

Senator Ludwig also raised the Department of State’s International Narcotics Control Strategy Report. I want to make the point that all of what he said was, with some great respect to him, misconceived. The report assesses the level of risk of money laundering rather than the effectiveness of the country’s response. Given that we are a sovereign nation with a high-valued currency and a reliable reporting and electronic transfer system, the risk underlying money laundering in this country is very high. That is the point the report makes—and I think the report well makes the point. The onus upon the legislators, namely the government, is to make sure that we provide a robust, foolproof, reliable system of keeping track of what is going on with respect to the movement of large sums of money.

Turning to summarising where we are with respect to this legislation, the reforms implemented by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 strike an important and appropriate balance between the government’s law enforcement and national security objectives on the one hand, which are of course a very important priority for this government, and the needs and operational reality for business on the other as well as the need to maintain a relatively low-cost, viable, workable regime for financial institutions.

This amendment bill should come as no surprise. In the speech and reply during the debate on those bills in December 2006, my friend and colleague Senator Ellison—and, of course, I endorse the remarks of Senator Ian Macdonald, as Senator Ellison did a magnificent job in the position that I now occupy—foreshadowed that he would introduce a technical amendments bill in the 2007 autumn parliamentary sittings to address the recommendations of the Senate Standing Committee for the Scrutiny of Bills and the Senate Standing Committee on Legal and Constitutional Affairs. This course was adopted, as the recommendations of those committees were made only a short time before the second reading debate in the Senate. Amendments caused by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007 address some of those issues raised by these committees as well as some other relatively minor technical matters. I emphasise that this is a technical matrix of provisions that has been very carefully and thoroughly reviewed.

The opposition know the importance of the anti-money laundering legislative package in the fight against money laundering and the financing of terrorism. The opposition have acknowledged the significance of the legislation and, in debate in the House of Representatives on this amendment bill, supported amendments such as the one that will allow ASIS access to AUSTRAC information. In spite of their general agreement on the policy, the opposition have chosen to use this debate to reiterate the same criticisms raised in the debates on the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006. In fact, in the House of Representatives debate on 28 February this year, the notice of motion for the amendment bill, moved by the honourable member for Brisbane, Mr Bevis, was effectively the same as the notice of motion he moved during the debate on the Anti-Money Laundering and Counter-Terrorism Financing Billin the House of Representativeson 28 November 2006.

The opposition alleges on the one hand that the process has been too slow and in the next breath that there was not enough consultation. The facts are that the government has undertaken extensive consultation, and this process has taken time. Indeed the bill and the committee’s report acknowledge the inordinate amount of consultation because, effectively, this legislation does require a substantial degree of cooperation from financial institutions. That is not to say that it does not have enforcement provisions, but the best way to go with legislation such as this—and I am sure Senator Ludwig understands this—is to have a degree of cooperation from financial institutions.

I reject the suggestion that the government has taken too long to implement the recommendations of the Financial Action Task Force on Money Laundering. These important reforms respond to increased and more sophisticated criminal and terrorist activity across a wide range of sectors delivering complex products and services. The need for thorough deliberation of these issues can be illustrated by the progress of the Financial Action Task Force on Money Laundering. Following its adoption of the revised 40 recommendations in June 2003 and the finalisation of the nine special recommendations on terrorist financing in October 2004, the FATF has moved carefully to develop interpretative notes and guidelines. The last of these interpretative notes was released in February 2006.

Given the importance and the complexity of the issues involved, the government has moved with appropriate speed to introduce comprehensive, well thought out legislation. I do emphasise that it is comprehensive and it is complex. The breadth and responsiveness of the consultation process has been widely acknowledged and applauded by affected businesses. The Senate Standing Committee on Legal and Constitutional Affairs has also acknowledged these consultation efforts. The government does not apologise for the time spent in achieving this balance and limiting the burden on Australian business. This has been time well spent. The ultimate objective will be one that hopefully generations in Australia will appreciate as we continue to maintain a very strong fight against money laundering and terrorism financing.

An important element in the success of the fight against money laundering and terrorism financing is the collaborative approach between government and business stakeholders. I thank industry for their contributions throughout the consultation process on this bill and on the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. This cooperation continues as various obligations of the act are implemented and various rules under the act are finalised. The financial and gaming sectors are to be commended for their commitment to the important goal of fortifying the Australian financial sector against money launderers and those who would seek to use the Australian financial sector to fund terrorism. As I have said, it is a very internationally renowned reliable sector that provides high-value currency and efficiency. Accordingly, we must make it robust against the threat of money laundering and terrorism financing.

I thank the Senate Standing Committee on the Scrutiny of Bills and the Senate Standing Committee on Legal and Constitutional Affairs. The work of these committees was carefully considered when preparing the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007. I have pleasure in commending this bill to the Senate.

Debate (on motion by Senator Johnston) adjourned.