Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

My question is to the Minister for Justice and Customs. Can the minister confirm that the report of the Financial Action Task Force on Money Laundering found that Australia met none of the nine best-practice standards to combat terrorist financing while the AWB kickbacks scandal was occurring? Is this the reason why AWB’s corrupt payments to Saddam Hussein were not detected by Australian authorities? Can the minister confirm that, because of his negligence in failing to tighten Australia’s counter-terrorist financing laws to ensure compliance with the financial action task force best-practice standards, Australian companies have been able to channel funds to foreign dictators?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

Senator O’Brien fails to advise the Senate that the report and evaluation by the financial actions task force found that, in relation to the nine special recommendations on terrorist financing, Australia is largely compliant with special recommendations 1, 2, 3, 4 and 5. In relation to 6 and 8, it said that it was partially compliant—and it said that in relation to 9 as well. So it was saying that Australia had done a great deal in relation to complying with those nine recommendations.

In the recent legislation that we passed we took further action in relation to terrorist financing, which was after the evaluation by the financial action task force. In that report, the financial action task force acknowledged the work that Australia had done. The former director of FinCEN, William Fox, recently acknowledged that AUSTRAC was world’s best practice in a financial intelligence unit. He acknowledged the work that was being done in Australia in combating money laundering, be it in the fight against transnational crime or in relation to terrorism.

Australia has a very proud record internationally. It is a co-founder and co-chair of the Asia-Pacific Group on Money Laundering. It is also a co-founder of the financial action task force. Australia was one of the first countries to be evaluated under the 40 recommendations and the nine special recommendations, and there are other Western countries now being evaluated. We look forward to seeing what FATF will say in relation to those countries. But what must be borne in mind is that Australia was among the first of the Western countries to be so evaluated.

This gives me an opportunity to advise the Senate of the progress we have made in relation to our anti money laundering regime. We have released an exposure draft of our anti-money-laundering bill, which was done in December last year, and I met with the financial sector in late January this year. They have acknowledged the very constructive approach this government has taken in relation to reforms dealing with anti-money-laundering. In fact, they have acknowledged that we are cognisant of the fact that, whilst we want to have security and measures in place against the financing of transnational crime and terrorism, we do not want to also provide an undue burden on the financial sector of this country which would make Australia uncompetitive in the international market. It is extremely important that, when we do this, we do so by having a balanced approach.

I said that I would welcome this exposure draft being subject to review by a Senate committee. Indeed, it was Senator Murray who raised that issue. I think it is a good suggestion; I think it is one that the Senate would do well to take up. Of course, when the bill is finalised, it will be subject to further scrutiny, and I am confident that in this process we have got the right balance between achieving security for Australia and an approach which accommodates the financial sector of this country in a very practical way.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Would the minister advise the Senate whether he considers almost, partly or somewhat meeting only some of the nine financial action task force best practice standards is good enough. Does the minister recall promising, as long ago as 2002, that Australia would update its laws to meet the nine financial action task force best standards? That was four years ago. Are you going to meet them all to counter terrorist financing? Wouldn’t these tougher laws have enabled Australian authorities to detect the AWB’s corrupt payments sooner? Doesn’t this mean that AWB—an Australian company—was able to go on channelling money to a terrorist regime unabated because of the minister’s negligence or, indeed, inaction?

Chris Ellison (WA, Liberal Party, Minister for Justice and Customs) Share this | Link to this | Hansard source

Senator O’Brien fails to recognise yet again that the work on security is always a work in progress. It is always work which you are engaged in to make things better and also to meet emerging threats. This exposure draft which we released happened after the evaluation by the financial action task force. The financial action task force issued its report prior to the exposure draft, and I can tell you that we are confident that this bill will meet the requirements of FATF. But one thing we make very clear is that we are not going to bind up the financial sector of this country so that it remains uncompetitive internationally. We are going to approach this issue, which is a complex one, in a balanced fashion.