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

I table a supplementary memorandum relating to the government amendments to be moved to the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007 and a correction to the explanatory memorandum. The memorandum was circulated in the chamber on 20 March 2007. I seek leave to move government amendments (1) to (4) on sheet QS416 together.

Leave granted.

I move:

(1)    Clause 2, page 2 (table item 6), omit the table item, substitute:

(2)   Schedule 1, page 8 (after line 32), after item 23, insert:

23A  Paragraph 127(3)(b)

Omit “or 133”, substitute “, 133 or 133A”.

(3)    Schedule 1, page 11 (after line 22), after item 40, insert:

40A  At the end of Division 4 of Part 11

Add:

133A  When the Director-General of ASIS may communicate AUSTRAC information to a foreign intelligence agency

        (1)    The Director-General of ASIS may communicate AUSTRAC information to a foreign intelligence agency if the Director-General is satisfied that:

             (a)    the foreign intelligence agency has given appropriate undertakings for:

                   (i)    protecting the confidentiality of the information; and

                  (ii)    controlling the use that will be made of it; and

                 (iii)    ensuring that the information will be used only for the purpose for which it is communicated to the foreign country; and

             (b)    it is appropriate, in all the circumstances of the case, to do so.

        (2)    The Director-General of ASIS may, in writing, authorise an ASIS official to access the AUSTRAC information and communicate it to the foreign intelligence agency on the Director-General’s behalf.

Note:   For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(4)    Schedule 1, page 15 (after line 12), before item 58, insert:

57A  Subsection 3(1) (at the end of paragraph (c) of the definition of non-reportable cash transaction)

Add “that occurred after the commencement of Division 3 of Part 3 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006”.

The government amendments are very straightforward. These are two substantive amendments: (1) and (4) are related and (2) and (3) are related. As I have said, amendment (1) is consequential on amendment (4). Amendment (1) amends the commencement clause table in clause 2 of the bill. The amendment relates to item 57A of the schedule to the bill. Amendment (1) will give amendment (4) retrospective commencement from 13 December 2006. I will explain the justification for this retrospective commencement when discussing amendment (4).

Amendment (2) is consequential upon amendment (3). Amendment (3) permits disclosure of the AUSTRAC information under a new section 133A of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Amendment (2) ensures that disclosure of the AUSTRAC information under the new section 133A is an exemption to the prohibition on disclosure pursuant to the terms of section 127 of the act.

Amendment (3) inserts a new item, item 40A, into the amendment bill. Item 40A inserts a new section, section 133A, into the Anti-Money Laundering and Counter-Terrorism Financing Act, permitting the Director-General of the Australian Security Intelligence Service, ASIS, to communicate AUSTRAC information to a foreign intelligence agency. ASIO has a similar power and we are simply mirroring that provision. This amendment is to ensure that ASIS, as a designated agency, can use AUSTRAC information to fulfil its functions. As I said, proposed section 133A mirrors section 133, which gives the Director-General of Security power to communicate AUSTRAC information to foreign intelligence agencies.

Amendment (4) removes the unintended outcome—and this is almost housekeeping—from the earlier amendment of the definition of ‘non-reportable cash transaction’ by item 56 of the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006. Item 56 of the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act narrowed the definition of ‘non-reportable cash transaction’ under the Financial Transactions Reporting Act to a transaction under that act. This was to ensure that there were not two identical provisions running at the same time. The restriction is not necessary, as the provisions of the Anti-Money Laundering and Counter-Terrorism Financing Act were not to commence until December 2008. Accordingly, an error has been made, and we seek to make the provision retrospective for the intervening months between December and now such that those offences will be offences pursuant to the Anti-Money Laundering and Counter-Terrorism Financing Act.

Amendment (1) thereby makes the amendment in amendment (4) retrospective. As I said, the reasons for that are set out in the supplementary explanatory memorandum that I have tabled. Retrospective application is justified because the offence of structuring was a pre-existing offence in the Financial Transactions Reporting Act. It was always intended that such conduct remain illegal, notwithstanding the provisions in the Anti-Money Laundering and Counter-Terrorism Financing Act being proclaimed as not to commence until December 2008. Retrospective application in those circumstances will remove any gap in time in the ability to prosecute such conduct, which was an unintended effect of the original amendment. The period of retrospectivity will only be for the period 13 December last year to the date of commencement of this bill, which we anticipate being not too long after it passes the Senate.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

Thanks for going through that process. Hopefully, we can vote on the amendments separately because the Australian Greens do not have any objection to the technical corrections that the minister outlined but, as I raised in my second reading debate speech, we have questions about the power for ASIS to have access to AUSTRAC that is proposed in this legislation. So I have questions for the minister about how this has come to be in place. As I said in my second reading debate speech, ASIS was not mentioned at the time that we dealt with the first piece of anti-money-laundering legislation as an organisation to which it was intended to provide access to AUSTRAC.

My questions relate to when it became apparent that ASIS needed that access. There was no discussion at that time that ASIS needed that access. Now we have this proposal, but we have not had any explanation as to why there is this need for ASIS to have that access. Perhaps the minister is able to explain how this came about. Was it something that ASIS asked for? Was it something that the government identified?

As the minister also indicated—and as I mentioned in my second reading debate speech—ASIO and AFP already have access to AUSTRAC. I do not understand why, therefore, it is necessary for ASIS to have access to AUSTRAC as well. In all of the information that is available about ASIS—which is quite limited in the public realm—it is clearly indicated that their job is to be Australia’s overseas spy agency rather than spying on Australians. This has been the history of ASIS for a long time. The government’s reports on what the various different intelligence organisations do quite clearly indicate that ASIS is not a law enforcement organisation. With respect to the financing of terrorism, which we want to crack down on, the AFP is able to do that. So if the minister is able to indicate how it came to be that the government thought there was a need to add ASIS, that would be appreciated.

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

The situation is that AUSTRAC is not a law enforcer; it is an intelligence-gathering agency and a regulator. In the circumstances of having ASIO have the information, there is a lot of synergy between ASIO and ASIS. ASIS carries out a number of similar functions. It was always intended that there would be a capacity to provide the sort of intelligence gathered by AUSTRAC through its monitoring and anti-money-laundering capability to foreign governments. In some circumstances, it is the case that ASIS has a better capacity to provide that intelligence and to utilise that intelligence. We are simply expanding the capacity and capability to disseminate the information to the benefit of fighting money laundering.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

My question is not just about amendments (2) and (3) on the government sheet about communications to foreign intelligence agencies. In relation to that specifically, why is it necessary, given that under the present act ASIO, AFP and the Australian Crime Commission have access to AUSTRAC and the capacity to provide such information to a foreign intelligence agency? That is my understanding. Perhaps the minister can correct that. I understand that AFP, ASIO and the Australian Crime Commission, who already have access to AUSTRAC, can communicate that to foreign intelligence agencies. Perhaps the minister can check for me whether that is correct. If that is correct then why the need for ASIS to have access?

But my questions are more general than that because, whilst we are dealing at the moment with just these government amendments, a substantial part of the actual legislation that we are dealing with is about the granting to ASIS of access to AUSTRAC. That is a more general question that is not specific to these amendments. Why is that the case, effectively? How did this come into play?

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

ASIS has a function to perform and has relationships with sovereign governments and the intelligence services of sovereign governments. The genesis of money laundering which would affect Australia occurs inside these sovereign nations. We have no capacity to carry out enforcement et cetera in such countries. ASIS simply provides the intelligence, and in order to provide the intelligence it has to have the same level of access as set out in 133. So we have given ASIS that power such that it may pass on the information necessary to enable that sovereign power to arrest—and I use that word generally—money laundering or the beginnings of money laundering using the information we provide.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I ask the minister: how can the government ensure that any information from AUSTRAC passed on by ASIS—or, indeed, by any of the agencies—to foreign intelligence services will not be used by such foreign intelligence agencies in the abuse of human rights? This is a question I have asked in a number of other realms. What systems are in place to ensure that any information from AUSTRAC, which goes to whichever of the intelligence organisations that then passes it on to foreign intelligence agencies, will not be used in the abuse of human rights overseas? I accept what the minister is saying. Your answer was, ‘We have no control over what they do.’ What about the information that we pass on about the finances of Australians or Australian businesses? How can we make sure that that is not used in human rights abuses overseas?

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

If we tailored all of the legislative framework that we seek to enact such that we can monitor and assist sovereign nations upon the basis that they will not exercise their sovereign power, rightly or wrongly, we will receive no benefit from these enactments. Whether they will choose to use the information in the abuse of human rights—which I think, with great respect to Senator Nettle, is extraordinarily remote, given that this is about money accounts and flows of money to the protection of Australia—I think is a question which is extraordinarily moot and obscure. If the senator would like to give me an example, I am sure I can take you through it. But the point of the exercise is that this intelligence agency is going to receive information from AUSTRAC pursuant to the terms of the act and provide it in the intent of protecting Australia from money laundering. I am not sure that the purview of human rights comes into that question at all, and I would be interested to hear an example of how you anticipate that would apply.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I will explain it. I understand what the government is proposing in terms of passing over information around financial transactions of Australians or Australian businesses. The question is about when that information is handed over to foreign intelligence agencies; it is about how they use it. I am not making a claim about how Australians may use that information; I am talking about when it is handed over. As we know, there are a whole range of different types of foreign intelligence agencies of varying degrees which Australia would support or raise questions about, so it is about that. I suppose it is in a number of defence arrangements with other countries—for example, we might put in provisions to say we are going to export this equipment but it will not be used in the abuse of human rights. The government has sought to do that in a range of circumstances, and this question is about whether there is anything in place to ensure that could occur with the information that is handed over. I am not questioning the Australian authorities; I am talking about when a foreign intelligence agency has been provided with information from Australia. Are there any guidelines in place about how that information is used? Maybe the answer is no. I am just asking and trying to understand because we have that capacity in other arenas—such as with defence. Can we do it in this arena?

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

I am obliged to the departmental officers who have provided me with two basic explanations for that. As an intelligence service, ASIS is controlled by the Intelligence Services Act 2001—and I am sure Senator Nettle is well aware of the provisions as to how that intelligence service conducts its operations, as to how the privacy of Australians is protected and as to how it uses the information that it obtains in the nature of doing its business. The second aspect is that the Intelligence Services Act also controls and prescribes obligations on the agencies with whom ASIS does business. Under section 13, the approval of the foreign affairs minister is required before ASIS can cooperate with authorities of other countries—you will have to forgive me; my knowledge of that act is not as good as it should be. It seems to me it is very unlikely that the foreign minister is going to empower ASIS to hand information over in circumstances where there is likely to be some abuse. Again, I would be interested to hear some examples. I think your defence example, with respect, is not entirely relevant to information or intelligence relating to the movement of moneys.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

Thank you to the minister for raising the issue of the Intelligence Services Act because it was an issue that I addressed in my second reading debate speech and I have some questions on it. Section 11(1) of the intelligence act talks about the functions of ASIS—and this is what I talked about in my second reading debate speech. It says they are:

... to be performed only in the interests of Australia’s national security, Australia’s foreign relations or Australia’s national economic well-being and only to the extent that those matters are affected by the capabilities, intentions or activities of people or organisations outside Australia.

My question is: will the foreign minister have to amend, or make any new rules regarding ASIS’s use of information about Australians through their financial transactions as proposed in this legislation, this section of the Intelligence Services Act? Perhaps I can flag the two sections for the officials and the minister: section 11(1) of the Intelligence Services Act and section 15, which I mentioned in my second reading debate speech and which I have got questions about now. The first question is about section 11(1) of the Intelligence Services Act. Will the foreign minister need to make any new rules regarding ASIS’s use of the information that is being proposed in this legislation under the Intelligence Services Act?

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

To go on with your issue of safeguards generally, before agreeing to the communication of AUSTRAC information to overseas agencies, the Director-General of ASIS—and this is within the legislation itself—would need to be satisfied that the foreign intelligence agency has given appropriate undertakings for protecting the confidentiality of the information, controlling the use that will be made of it and ensuring that it is only used for the purpose for which it is communicated. In addition, the director-general would need to be satisfied that the communication of the information is appropriate in all of the circumstances of the case.

Further to this, there is oversight by the Inspector-General of Intelligence and Security, IGIS. As you well know, Senator Nettle, this is an important accountability mechanism which operates independently of government and has extensive investigative mandatory powers. Further to that, the Parliamentary Joint Committee on Intelligence and Security is another oversight body and accountability mechanism for ASIS.

I note that you have suggested in the past that the IGIS is underresourced and understaffed. In recent years the government has considerably enhanced the appropriations for those bodies, particularly ASIS and the IGIS. There has been a substantial boost in the resources of the office of the inspector-general in line with its increasing function and the operational intensity of the agencies it oversights.

It is quite untrue to suggest that the inspector-general has to wait for complaints in order to be an effective oversight and accountability mechanism. My understanding is that the inspector-general is very proactive in this area. He is an independent person who is completely separate from the agencies and, as I said, from government. He takes his role seriously and provides independent assurance to the Australian government, the parliament and the community that the security intelligence agencies conduct their activities according to the law, behave with propriety, obey ministerial guidelines and directives, and respect human rights. In the scheme of what I have asked you to explain—the mischief—I feel very comfortable that there is no problem with respect to this aspect of your complaint.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I will move on to the Intelligence Services Act, which the minister raised. The question that I asked was: under that act, will the foreign minister have to make any amendments or new rules regarding ASIS’s use of information under this legislation? You raise the issue of the Inspector-General of Intelligence and Security, IGIS. My understanding is that the access to AUSTRAC information by not only ASIS, under this legislation, but also ASIO, under the previous legislation, is not something that a person knows is occurring. If those agencies have access to information, through AUSTRAC, about somebody’s financial transactions, it is secret in the sense that that person or that business does not know that it is occurring. The way I understand the role of IGIS is that people can make complaints to IGIS about the activities of ASIO. If they do not know that ASIO or ASIS is accessing information about their financial transactions then how can they make a complaint to IGIS? If the minister could address that, that would be appreciated.

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

With respect to the foreign minister, I think the answer to your question is that there is no need for any legislative amendment that would enable him to further carry out those powers. He is able to do that on the basis of the legislative framework as it now stands. If, Senator Nettle, you think that notice should be provided prior to accessing accounts, I suggest that your opposition to the bill is so fundamental as to mean that you do not agree that we should be pursuing anti-money laundering at all. That is the essence of what you seem to be saying.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I could give my speech from the second reading debate again if the minister wants to hear what the concerns of the Australian Greens are. I note that in the minister’s contribution to the second reading debate he did not address any of the issues that I raised. In my speech I said that the Greens do not have a concern. Obviously we do not—and I have said this many times before. Everyone wants to ensure that we do not have the financing of terrorism going on, but we want to ensure that any legislation that we bring in to implement that proposal is designed to deal with the financing of terrorism.

We have raised concerns before about the definition of terrorism that is used, because we think it is too broad. Our concern in relation to this legislation is something that I dealt with in the debate on the first round of the anti-money-laundering legislation, which was that it allows the banks to set up a system of risk management. It is their responsibility to make sure that they are not involved in the financing of terrorism. It outsources that responsibility to the banks. Then the banks are exempt from antidiscrimination legislation, which means that they can set up a system whereby anybody who has an unusual or ethnic sounding name can legitimately be caught up in the banks’ risk management assessment and the assumption can be made that they are financing terrorism.

I have raised examples of this before. One was the Iranian woman who was running a restaurant. The banks assumed, because she had regular payments going to Iran—to get dates for her restaurant that she runs here—that she was financing terrorism. The assumption was that she was financing terrorism. The other example that I raised was the record store in Melbourne which is called the Shining Path—the same name as the Peruvian organisation. The owner’s finances were shut down and frozen for months. It was only when he went to the media that he could get any action from the government to unfreeze those resources. Nobody is saying that we do not want to ensure that we stop the financing of terrorism, but we want to have laws that are designed specifically for that purpose. Our concern has been that these laws are not narrow enough. That is the general concern that I have had about both this piece of legislation and, most importantly, the earlier anti-money-laundering legislation.

My concern about this legislation, which I addressed in my speech in the second reading debate, was why ASIS should now have access to AUSTRAC. There are 30 other organisations that have access to AUSTRAC. That happened under the previous legislation. This piece of legislation has been billed by the government as being technical amendments. Apart from this issue, they are technical amendments, and the Greens are happy to support them. We think that the changes to do with liability are an improvement, but our question is: why does ASIS have access to AUSTRAC? This is a technical amendment bill. Were they forgotten? Was it intended that they would have access or has it been requested subsequently? Given the information that is available in the public realm and given the fact that—as you have said yourself, Minister—they are an organisation for spying overseas, not for spying on Australians, how does that responsibility link in with having access to the financial records of Australians? It is not obvious, and that is why I am asking the questions.

In answer to the question on IGIS, in these circumstances the government’s response is often that we can ensure that things are operating properly because of IGIS. I accept what the minister says about the capacity for IGIS to initiate an inquiry. If the minister were able to elaborate on that at all, that would be appreciated.

One of the other rationales that is often put up is that people can complain to IGIS. But if you do not know that you are being treated in this way then you are not able to complain. So this is my question: how can IGIS provide that genuine oversight if people cannot make complaints to them because they do not know? I am not saying that they should not be able to; I am questioning the government’s logic around saying that IGIS is a safeguard. How can IGIS be the safeguard if people do not know that they are the subject of intelligence organisations’ scrutiny and therefore able to make a complaint to IGIS? That is the way IGIS has been proposed: as a complaints forum. How can that operate if you do not know and therefore are unable to make a complaint?

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

Senator Nettle, if a person comes under the scrutiny of AUSTRAC and the movement of the money is legitimate, they will probably never know because they will never be charged. If they do know, how are they any better advanced? The end result is that this system depends upon the capacity to record data. AUSTRAC intelligence will be used in criminal investigations by a range of law enforcement agencies, including the Australian Taxation Office, the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority, the Australian Security Intelligence Organisation and now ASIS et cetera. Its information will not support a prosecution. At best, it will lead to a further investigation. So this is an intelligence-gathering mechanism. If you disclose that you are gathering intelligence, it ceases to have any meaningful contribution to the overall inquiry; I suggest to you.

With respect, I have told you of the safeguards. I have sought to allay your fears, and I know that you have raised these issues before. Mr Temporary Chairman, I suggest to the senator that her opposition is to the fundamentals of this bill, given that it provides for ASIO to do the same thing already and that we are simply completing the circle of intelligence services that can utilise AUSTRAC information and provide it to other sovereign powers to our benefit. If the senator cannot come to terms with those matters, I respectfully suggest that she is opposed to the fundamentals of the collection of data in the fight against money laundering. I am still waiting to hear of an example in which the human rights issue has occurred or there has been some abuse. The senator can attend committee meetings and the senator can ask questions at question time on these matters. I note that I do not think any of that has occurred. I suspect, with respect, that we are taking a point here that is so obscure as to really suggest, Senator Nettle, that you are simply opposed to the direction and object of the bill.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

As I have indicated, there were two examples that I gave in my speech in the second reading debate on the first tranche of the anti-money-laundering legislation. I will briefly, off the top of my head, outline what they were. There is a record store in Melbourne which is called the Shining Path. They have the same name as a Peruvian group. The store had all of their finances frozen and they were not able to access those finances for many months when they were going through a process of trying to get government agencies to unfreeze them. They were a record store, and I suspect that with some investigation it would become reasonably obvious how they had come about. They had all of their finances frozen, and there was no process for going to government agencies to get them to reopen and unfreeze the finances of the record store so that the small business operator could continue on with his business.

In that instance, it was months later and only when he went to the media that he managed to get the government agencies that he had been dealing with to unfreeze his small business finances so that he could continue on with his record store. That is one example that I am interested in. What are the safeguards, what are the mechanisms in place, for people with legitimate business activities who get caught up in this legislation? As I have raised before, we have concerns about the net being thrown too wide. I want to make sure that there are safeguards for those people with legitimate businesses.

The other example that I gave was in the media. It was in the Sydney Daily Telegraph at the time of the discussion around the first tranche of legislation. It was of a woman who was from Iran and who ran a number of restaurants. She was importing food from Iran, so she had regular payments going to Iran. She went through a similar circumstance with her bank. It is understandable that her bank made the assumption, because the way the legislation is designed is that the risk is put on to the bank so they need to prove that their customers are not financing terrorism. The whole system is designed so that the banks need to make sure that they are covered. They are exempt from antidiscrimination legislation, they can make an assumption and then it is up to the person to prove that it is not the case.

They are two examples of people with legitimate business activities who have been caught up by this legislation because, as the Greens say, the net has been thrown too wide. We are very happy to be involved in stopping the financing of terrorism; everyone is. But if you throw the net too wide and you catch legitimate people, where are the safeguards for them? How do they get through the maze to get their finances unfrozen so that they can continue with their operations?

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

I am obliged, as always, to my departmental officers. The Shining Path assets, in the example that the good senator raises, were frozen under part 4 of the Charter of the United Nations Act, which was inserted by the Suppression of the Financing of Terrorism Act, implementing UN Security Council resolutions. Neither ASIS nor ASIO was involved. The list of names that are subject to that act are published by the Department of Foreign Affairs and Trade. That is not a matter that falls under the umbrella of what is intended by this legislation. It is an intelligence-gathering mechanism. What is done with the intelligence is not within the purview of this legislation.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I am just trying to make sure that I have it clear. The minister’s comments about intelligence gathering relate to ASIS—except this model of legislation has 30 organisations being able to have access to AUSTRAC and using it.

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

Yes.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I accept what you are saying about ASIC being intelligence gathering. I absolutely accept that. But some of those other organisations—

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

AUSTRAC.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I thought your comments about intelligence gathering related to ASIS. The Australian Federal Police, for example, who have access to the AUSTRAC records, are a law enforcement body. So, under this or other legislation, their activities may see people having their bank accounts frozen, because the assumption is that they are financing terrorism. What safeguards are in place through this legislation around anti-money laundering for legitimate people who get caught up—not through the intelligence but through the criminal investigation, or it could have an element of intelligence in it as well—and have their bank accounts frozen because the assumption is that they are financing terrorism? If they are a legitimate business, what do they do?

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

The question is not one for this legislation; the question is one for the provisions of other legislation. We have a chain of resources. AUSTRAC gathers and monitors the information. It is used by all 30 agencies for intelligence purposes. Under the legislation now before the chamber, no information that is provided by AUSTRAC can freeze accounts. What the enforcement agencies do with the information is a matter for them. I am sure the senator knows of the powers and the abilities of the enforcement agencies—from the Australian Federal Police to the Australian Crime Commission et cetera.

This legislation simply says that the information obtained by AUSTRAC can be passed to ASIS. I have suggested to the senator the safeguards as to what happens with the information then. The Minister for Foreign Affairs must approve it and the director-general of the agency must be satisfied that it is reasonable. Your question is about the next step beyond this legislation. This is simply about the raising of intelligence and its dissemination.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I thank the minister for that explanation. In an earlier comment that the minister made, he talked about ASIO already having access to the AUSTRAC information and said that the idea behind this is to include ASIS. I think ‘complete the circle’ was the language that he used in including ASIS in this. Maybe the minister can explain something for me. My understanding is that ASIO and ASIS are different. ASIO’s purview is to spy on Australians and ASIS’s job is overseas activities.

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

Senator Johnston interjecting—

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I am going on the public guidelines. We do not have very much information about what ASIS do. But if you look on the website, you see that it says, ‘ASIS is Australia’s overseas human intelligence collection agency.’ The legislation that defines what ASIS do talks about ASIS operating outside of Australian territory. So they are different. So, on what we have in the legislation about ASIO already having access to that information, it is their job to spy on Australians. I am using simple language because I think it helps us understand what we are talking about. If ASIS’s job is to spy outside Australia, why do they need this access? I see them as different and I would like an explanation as to why ASIS, given what I understand to be their different role, need this access.

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

ASIO is an intelligence agency onshore within Australia and ASIS is an intelligence agency offshore, as you have described. It is not about onshore spies and offshore spies; it is simply about intelligence. The good senator would be aware that the movement of money nowadays is done electronically across sovereign borders. Where intelligence indicates that sums such as would trigger the thresholds as set out in the legislation are moved offshore into a sovereign nation, obviously the jurisdiction with respect to intelligence changes from ASIO onshore to ASIS offshore. In those circumstances, in order to have any value to Australia, we must have an agency offshore that can utilise that intelligence and use its good officers and rapport with sovereign nations such that they can endeavour to respond to the threat of money laundering in that sovereign country. That is the explanation as to why we have ASIS involved in the legislation. In a nutshell, the reason is that there is an awful lot of intelligence relating to money being moved offshore.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I thank the minister for the answer. In the existing Anti-Money Laundering and Counter-Terrorism Financing Act, section 127(3)(a) allows ASIO officials to disclose information obtained from AUSTRAC if:

(a)

the disclosure is for the purposes of, or in connection with, the performance of the official’s duties …

Does that, as it currently stands in the existing AMLCTF legislation, allow ASIO to disclose information to ASIS ‘for the purposes of, or in connection with, the performance of the official’s duty’?

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

The senator needs to look at the ASIO legislation. I think I have mentioned to her the Intelligence Services Act; I think the answer would be found there. But may I say that it is not a question that is relevant to this legislation.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I believe it is relevant to this legislation, because the existing anti-money-laundering legislation allows ASIO access to AUSTRAC information. This legislation that we are dealing with right now is about giving ASIS access to AUSTRAC, and you have given explanations around circumstances in which you think that that may be appropriate.

I am going to what is currently there, which is about ASIO’s existing access to AUSTRAC, whereby ASIO can disclose information that they got from AUSTRAC to other people for the purpose of their work. If what is currently there allows ASIO to disclose information they got from AUSTRAC to ASIS officers, then why do we need, in this next piece of legislation, to specifically give ASIS access to AUSTRAC information? That is what I am trying to understand. What I read in the existing legislation is that they can already do that. Perhaps I am wrong. If they can already do that, why do we need to give ASIS specific access to the AUSTRAC information? They can already get it, when they need it, through ASIO.

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

I might be able to help with some of this. If you think about it in a broad sense, ASIS looks after the external—in other words, not Australian citizens. They effectively look after intelligence offshore. ASIO looks after intelligence onshore. Therefore, the remit of ASIS is for offshore intelligence gathering, and the remit of ASIO is for onshore intelligence gathering. It would then be inappropriate if you had ASIO, dealing with onshore intelligence, supplying intelligence to an offshore intelligence-gathering organisation. So you could understand why ASIS would want access to AUSTRAC and its intelligence about transactions that are going offshore. It would then make sense. It would be, in my view, inappropriate for ASIO to be the conduit for offshore. You would then have ASIO effectively operating outside their remit, because they would then be dealing with offshore intelligence gathering, which they are not entitled to do. Therefore, the need for this amendment is clear. ASIS does require access to AUSTRAC and the various money information and financial intelligence that AUSTRAC has.

The other point that was not raised is that there is independent oversight by the inspector-general. They do not have to act on complaint; therefore, they do have the ability to go in and look at the procedures, the safeguards and all those matters that ensure that they both are operating within their respective remits in that area.

While I am on my feet I might as well deal with the technical matters that are referred to in the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007, which Labor supports. They are clearly matters that need to be addressed, as is the amendment dealing with ASIS. Clearly, it is necessary for ASIS to have access to AUSTRAC and the information that AUSTRAC has, but I will be following that up, perhaps a little later this evening—but not in the vein of what we have been pursuing to date.

The other matter that you raised was the Shining Path; I think that has been dealt with. It is not within this. The minister did make the point that AUSTRAC looks after intelligence. Under this act it also has a wider remit, as we know. It now has both an intelligence remit and an enforcement remit, but that is obviously under another act as well. AUSTRAC is not only a body that gathers financial intelligence; it also has an enforcement role under another act. I hope that helps.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

That contribution raises a couple of things for me. One is about ASIS being the overseas spy agency and ASIO doing the work here. Senator Ludwig said that ASIS are not spying on Australians, which has been an issue of contention before, but it was actually out of the royal commission when Gareth Evans said, ‘But they do keep records and files on Australians,’ and that is an issue of concern for Australians.

With respect to the explanation that ASIS should have access to the AUSTRAC records so that they can be involved in overseas activities rather than going through ASIO, you could extrapolate from that argument that this amendment we are dealing with right now is about giving foreign intelligence agencies access to information through ASIS. If the argument is that it should not go from ASIO through to ASIS, you could mount an argument to say the foreign intelligence agencies should have that direct access rather than going through ASIS, as is proposed.

Minister, in the explanations that have been given in the chamber to date, would it be appropriate to limit ASIS’s access to AUSTRAC to that information which relates to overseas financial transactions? If the idea is that we have ASIO and AFP doing the domestic transactions, with oversight under the existing legislation, and ASIS is for overseas, why then not just limit ASIS’s access to AUSTRAC information to overseas transactions?

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

I am not sure that the senator understands how the legislation works. AUSTRAC information covers transactions in or coming into Australia by Australians and/or foreign nationals. It is a mistake to assume that AUSTRAC information is used only to detect money laundering by Australians. If the senator understands that ASIO deals with internal transactions and that ASIS would receive information relating to money that originates in or has come into Australia but has a nexus to a foreign sovereign power, she can understand that is why the information goes to ASIS. ASIS is not told of onshore Australian-to-Australian transactions. ASIS is never advised of Sydney-to-Melbourne transactions unless there is some nexus, because it would be a completely vestigial and futile exercise to disseminate intelligence that was not relevant to an ASIS agency in any particular country. There has to be a nexus. To some extent, Senator, it is a matter of common sense and logic.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I thank the minister for that. Can you point me to any piece of legislation that states that ASIS is not told of transactions between Sydney and Melbourne unless they relate to an overseas activity? Can you point me to where that is?

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

While the minister prepares to do that, it might be worth reflecting that ASIO then would not act as the clearinghouse for ASIS. It may not know what ASIS wants because it may not be part of the overall plan or investigation; it may just be providing information. However, do not forget also that, under the anti-money-laundering and counterterrorist financing legislation, the Director-General of Security may communicate AUSTRAC information to a foreign intelligence agency, which is at 133. The Director-General of Security may communicate AUSTRAC information to a foreign intelligence agency if the director-general is satisfied that the foreign intelligence agency has given appropriate undertakings for—these are some of the matters that you were concerned about earlier—protecting the confidentiality of the information, controlling the use that will be made of it and ensuring that the information will be used only for the purpose for which it is communicated to the foreign country and it is appropriate in all the circumstances of the case to do so. That provides that scheme.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I wonder whether the minister could help with the earlier comment, which was that ASIS is not told of transactions between Sydney and Melbourne unless they relate to some overseas investigation that it is involved in. Can the minister point me to where that is in either of these two pieces of legislation or in any other piece of legislation?

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

The information must fall within—we have heard the word ‘remit’ used by the learned opposition spokesperson; I would use the word ‘jurisdiction’—the jurisdiction of ASIS. In order for it to fall within the jurisdiction of ASIS, you need to understand the objects, powers and duties of ASIS, as described in its enacting and enabling legislation. If there were a foreign element that would trigger those thresholds in a Sydney-Melbourne piece of information, that piece of information would lawfully fit within the remit or jurisdiction of ASIS. Subject to what my learned friend on the other side has said with respect to section 133A, AUSTRAC would then appropriately be able to provide information to a foreign intelligence agency and then authorise it as an authorised communication to such agency from AUSTRAC via ASIS.

I think it is very clear that there is a clear legislative framework here that has as its basic motivation plain old common sense. We would not wish to provide information or to burden an intelligence service with information unless it was relevant to the functions and powers of that service, as described in its enabling legislation.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I do not have the Intelligence Services Act with me to enable me to understand who decides whether it is within the purview of ASIS. Perhaps the minister can run me through how that would work. Does it have access to all of the AUSTRAC information and then make a decision about whether it falls within its purview? I just want to understand that explanation. I think you are saying that it looks at it only if it is within its jurisdiction. Who decides that it falls within its jurisdiction? Does it decide that itself? In a practical sense, does that work such that it has access to all the information around AUSTRAC and then it decides what of that information is relevant to its jurisdiction and then its investigations?

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

I remain indebted to my departmental officials. I can say to Senator Nettle that section 126 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 provides that the Australian Transaction Reports and Analysis Centre’s CEO may authorise specified officials or classes of officials of a specified designated agency to have access to AUSTRAC information for the purpose of performing the agency’s functions and exercising the agency’s powers. This is in line with the point I was endeavouring, albeit unsuccessfully, to make, with respect.

The AUSTRAC CEO must exercise this discretion for the purposes of the legislation and must exercise his discretion competently and without negligence by reference to the normal rules of lawful decision making. Section 126(3) provides that the AUSTRAC CEO may only authorise access for specified state and territory designated agencies if the officials of the designated agencies comply with the information privacy principles set out in section 14 of the Privacy Act. It is a criminal offence under section 127(2) of the act for an official from a designated agency to disclose AUSTRAC information unless the disclosure is in connection with the performance of the official’s duties or the disclosure is authorised by, or in connection with, communicating AUSTRAC information for official purposes.

That is an onshore example, but the same applies with respect to ASIO. It has to be a matter that falls within the agency’s function and the exercising of the agency’s powers. So there has to be that nexus between money in, money out or money movement with the function and power of ASIS in a particular country before it would be a legitimate piece of information going to ASIS. I think that is clear. I think that is a logical evaluation of the legislative framework.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

Thank you for pointing that out in legislation. Does the AUSTRAC CEO determine whether it falls within functions of ASIS and its exercise of power? I want to understand in a practical sense how it works. Does the AUSTRAC CEO make that decision? It just seems weird that the AUSTRAC CEO will make that decision. Presumably, they would then need to be given an understanding of all the activities of ASIS in order to make those kinds of decisions. Is that the way that it would work? Would the AUSTRAC CEO make the decision about whether it fits within the purview of ASIS? How would that work in a practical sense? What information would they be given access to? I imagine that, if the AUSTRAC CEO is the person who is deciding this, they are not going to know the bounds of the investigation. Does the AUSTRAC CEO decide whether it fits within the jurisdiction of ASIS? How does the handing-over of information work in a practical sense? Do they hand over all the information? I cannot imagine that they would be able to have access only to what relates to their investigation, because the AUSTRAC CEO is not going to know what the ASIS investigation involves.

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

The answer is that both have to be satisfied. In carrying out its obligations under its own legislation, the requesting agency—in this example, ASIS—also has to be satisfied. I believe that in seeking the information the CEO or the senior official has to certify that it is acting in furtherance of its powers. Each of those officers from the requesting agency is himself bound to ensure that the information is properly used by them in the performance of the functions of that agency. So there is a duality of responsibility here. The requesting agency has to ensure that the information is relevant to its functions and powers, and obviously that would convert to a current investigation. The providing CEO of AUSTRAC has to be satisfied that that information is such that it triggers, as we say, section 126(3) of the act where he may only authorise access for specified state, territory or designated agencies. So each of the officials in the interaction that Senator Nettle has discussed has to be satisfied that they are acting within their powers.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

Minister, thank you for that answer. The next part of the question is: how does it work practically? If you are getting access to information that relates to your jurisdiction, do you get access to all of the information of AUSTRAC and pull out what is relevant to your investigation? Is that the way that it would work? I presume that would have to be the way that it would work, otherwise how will the AUSTRAC CEO know what is relevant to your investigations? If they decide your investigation is correct, you and they both decide that it is appropriate under your powers. How in a practical sense does that work? Do they give you access to all of the information and then you—ASIO, ASIS or whichever intelligence organisation it is—determine what information you need? In a practical sense, how would that work?

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

The requesting agency would designate the information it seeks and it would then, through that designation, seek to satisfy AUSTRAC that in so designating it is within its powers. AUSTRAC would then respond specifically to the designation, and information held relating to the designation would then be disclosed to the requesting agency—in this example, ASIS.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

I have two other questions following on from that. ASIS needs to work out what is within its purview and to know its act. It seems like a pretty big ask for the AUSTRAC CEO also to understand the full purview of the ASIS act and its jurisdictions. What is in place to ensure that they have all the information that they need to make an assessment about whether or not an ASIS request is legitimate and within their powers? ASIS people can argue the powers of ASIS in determining that; it is probably something that someone like the Inspector-General of Intelligence and Security also knows quite well. What is in place to ensure that the AUSTRAC CEO is in a position to have that information and to make the decision about whether the request from ASIS is an appropriate one within the powers of ASIS?

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

In terms of practical operation, I am advised that what happens is that each instrument of authorisation specifies the class of AUSTRAC information that will be available for a specified class of official. Access is only granted for the purpose of performing the agency’s functions and exercising the agency’s powers, as I have said, on the specific request. The AUSTRAC CEO determines whether access is appropriate having regard to all the circumstances considered in the negotiation process and in the authorisation process. So each of the officers understands that they are only entitled to give and/or receive information directly within the statutory powers of the agency—namely, the objects, functions and powers as set out by the legislation. There is a scrutiny process. Information that is outside or irrelevant to that specific designation of information cannot be provided.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

Thank you for that answer in relation to the practical aspect. I just go to the other question. It is a big job for the AUSTRAC CEO to determine whether or not the ASIS or other intelligence agency request is within the purview. What information do they have to assist them in making the assessment about whether the request from ASIS is appropriate?

I accept the answer you have given about how it would work in a practical sense, but it is a big job to have them do. What information and expertise does the AUSTRAC CEO have in order to make the assessment about whether or not the ASIS request is appropriate to the purview of ASIS?

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

I was interested in giving you a practical way of looking at it, and perhaps even a recent example. The UN or the US government—we will call it the Volker inquiry—says, ‘We’re interested in the Australian Wheat Board arrangements and money that has gone from Australia overseas’—or money that has gone from overseas to Australia, more generally, if we use AUSTRAC as an example. So ASIS asks AUSTRAC to take the name ‘Australian Wheat Board Ltd’ and run it through the AUSTRAC database, or use a data-mining software to query the various databases that they may have and see what matches come out the other end.

Had it been in place at that time, the match might have come out the other end to show that there was a figure of $300 million being transferred. That is the practical application of it and that is how you can use it for financial intelligence information. It holds financial intelligence. Why they want to run a particular company, financial institution or person through the system will sometimes be unknown to the AUSTRAC CEO. They put those things in place to ensure that they know that there is a relationship and the AUSTRAC CEO has an entrusted official in place. You can see how they could use the information advantageously. It would have been very helpful if that had been run back then, but it was not, as far as we are aware—or as far as we are told. That is the practical way these things work.

It does not necessarily mean that ASIS might be swimming around in AUSTRAC’s database unguided. But in this instance—if we can use the example—ASIS would be conducting an investigation into those overseas transactions and then use the names and various information it has in place to create a picture by searching the database in a variety of ways using a variety of analytical tools to come up with answers. Those answers then fit into a bigger picture of the money trail—where the money has gone, how the money has gone, who the money has gone with, and who the entities are that it might be associated with. That is the purpose of it. That might help.

Progress reported.