Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

I rise to speak on behalf of Senator Brandis on the Combating the Financing of People Smuggling and Other Measures Bill 2011. The purpose of the bill is to reduce the risk of money transfers by remittance dealers being used to fund people-smuggling ventures and other serious crimes by introducing a more comprehensive regulatory regime for the remittance sector. The bill also introduces measures to permit the sharing within the Australian intelligence community of financial intelligence prepared by the Australian Transaction Reports and Analysis Centre, AUSTRAC, and makes a number of amendments to that effect.

In schedule 1, the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is amended to strengthen the Commonwealth legislative framework on the regulation of remittance dealers and the providers of remittance networks. Schedule 2 amends the same act to expand the list of agencies with which AUSTRAC can share financial intelligence. It enables AUSTRAC to share intelligence with the Department of Foreign Affairs and Trade, the Defence Imagery and Geospatial Organisation, the Defence Intelli­gence Organisation, the Defence Signals Directorate and the Office of National Assessments. Schedule 3 amends the same act and the Privacy Act 1988 to enable reporting entities to use credit reporting data to verify the identity of their customers. Schedule 4 amends the Financial Transaction Reports Act 1988 to enable the CEO of AUSTRAC to exempt a person from one or more provisions of that act. This will allow the CEO to provide regulatory relief in circumstances which otherwise would result in unnecessary or unduly onerous obligations being imposed.

The bill seeks to reduce the risk that remittance dealers will be involved in financing people smuggling, money launder­ing or the financing of terrorist activities. One of the newer and more sophisticated methods of money laundering is the use of bank accounts of unsuspecting third parties. The term used for this practice is an exotic and curious one. It is known as 'cuckoo smurfing'. It was coined by international authorities after the nesting behaviour of the cuckoo bird and the tiny blue figures of a popular Belgian cartoon—of which I have never heard but is apparently well known in Belgium. Birdwatchers have long noted the cuckoo's practice of laying its eggs in the nests of other birds, who then hatch the chicks as their own. Smurfing refers to the division of large sums of criminal money into smaller amounts. 'Cuckoo smurfing' is described in the AUSTRAC Money laundering methodologies report in the following way:

Cuckoo smurfing begins when a legitimate customer deposits funds with an alternative remitter in a foreign country for transfer into another customer's Australian bank account. This is a legitimate activity and is often a cheaper and faster alternative to using a mainstream bank.

Unbeknown to the customer, the alternative remitter is part of a wider criminal syndicate involved in laundering illicit funds. This criminal remitter, while remaining in the foreign country, provides details of the transfers, including the amount of funds, to a criminal based in Australia. This includes the account details of the intended recipient in Australia.

The Australian criminal deposits illicit cash profits from Australian crime syndicates into the bank account of the customer awaiting the overseas transfer.

The cash is usually deposited in small amounts to avoid detection under transaction threshold reporting requirements. After an account balance check, the customer believes that the overseas transfer has been completed as legitimately arranged.

The Australian criminal travels overseas and accesses the legitimate money that was initially deposited with the alternative remitter.

The illicit funds have now been successfully laundered—the criminal owes nothing but a commission to the money launderer for its work.

One other issue worth noting was brought up by the Australian Crime Commission in its submission to the Senate Legal and Constitutional Affairs Legislation Committee inquiry into this bill. The ACC stated:

A potential consequence of increased regulation may be where illegitimate remittance providers might become more covert and move into a more unregulated and non-reporting environment than currently exists. This 'black market' would need to be carefully monitored over an extended period of time to identify what, if any, emerging methodologies might be used to facilitate financial crimes including money laundering activities or the financing of people smuggling activities.

That is the effect of this legislation and it is, with respect to that effect, quite supportable. It does need to be recorded, though, that the very title of this bill was a matter of some contention within the Legal and Con­stitutional Affairs Legislation Committee. Liberal senators on that committee wrote a minority report and they put the view:

… the title of the Bill does not relate to either its content or intended purpose. While the key measure in the Bill deals with the enhanced regulation of the remittance sector … the title of the Bill focuses only on one aspect of the possible misuse of the remittance sector, namely the financing of people smuggling … The title of the Bill is clearly uninformative and misleading …

Certainly a hard-hitting title like Combating the Financing of People Smuggling and Other Measures Bill 2011 may well carry that sort of connotation. We are by now, of course, quite accustomed to this govern­ment's commitment to spin and its desperation to be seen to be doing anything on border protection, as we recall from the debate just finished. But apparently, in this case, it cannot even introduce a rather routine update of money-laundering legisla­tion without spinning it into a people-smuggling initiative.

The methods of organised crime are in a state of constant evolution. It is therefore imperative that our front-line agencies are adequately equipped to deal with their increasing sophistication. This is what the bill seeks to achieve and therefore, notwith­standing the rather Orwellian deceit in the bill's short title, it has the support of the coalition.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I want to take a few moments of the Senate's time to highlight the difficulties of the refugee problem around the world and, in passing, repeat how the Gillard government has exacerbated a difficult situation with its mismanagement of the illegal boat arrival situation in recent years. I will not repeat what was said in the previous debate. I think it was clearly demonstrated by the coalition speakers in that debate that the Gillard government is floundering in inconsistency. There is a solution, but unfortunately our Prime Minister is too proud to acknowledge her mistake and to accept the solution that is sitting there staring her in the face. Instead, she struggles around with all of these other crazy schemes, most of which have been determined to be non-goers, as many of us believe the Malaysian situation will be as well, and yet there is a solution there. I do not want to dwell too much on that. This bill does help in some way address the illegal people-smuggling business. For that reason, as my colleague Senator Humphries has said, the coalition will be supporting it.

I do want to point out that, since our nation was first created, Australia has accepted some 750,000 people on refugee and humanitarian bases. The 13,770 refugees and humanitarian visas issued during 2009-10 were divided between 9,236 offshore refugee and humanitarian visas and 4,534 onshore visas, of which the majority were asylum seekers who had entered Australia by boat. Australia received 9.85 per cent of refugees resettled in 2009, but resettlement continues to be a difficult problem. More than half the world's refugees—that is, 5.47 million people—are what the UNHCR classifies as 'protected refugee situations'. Only 24 per cent of the world's refugees are living in camps, with the rest dispersed in often very difficult conditions in urban and rural areas. The 2009 UNHCR statistics record that another 7.95 million people of concern are not in countries of citizenship; they are asylum seekers, stateless people and others in need of protection. Around two-thirds of these people are in Asia; the largest group being stateless people in Thailand, Nepal and Burma.

I only mention these statistics again to say what the underlying principle is. I have to relate that I was at a gathering, a discussion—as were you, Madam Acting Deputy President Moore—put on by the Left Right Think-Tank. They are a group of young, active, forward-thinking, energetic and enthusiastic people—strange name, good people. They had a session in Toowoomba about youth problems. There I met a lady who appeared to me to be of Middle Eastern descent, who said to me, 'Why do you Liberals hate refugees?' I was rather taken aback by that. I explained to her, as I want to explain to the Senate, that we do not hate refugees. We as Liberals have one of the most sensitive, most welcoming refugee and humanitarian policies going. What we do not like is people who are jumping the queue, people who, more often than not, are wealthy. They have to be wealthy or they have to have wealthy contacts to be able to pay the people smugglers the $15,000, or whatever it is, to get them into Australia. When they come in, they take the place of others in the Australian quota that has been set by governments in Australia since time immemorial. So we have these relatively recent, relatively wealthy people—and some may say 'economic refugees'—taking the place of some of the 7.95 million people who are living in absolutely squalid conditions in camps and in other places around the world.

As I said to the Refugee Council: if the argument is whether Australia should take more refugees, let's have that argument. Quite frankly, I for one—I do not talk about anyone else's policy here—would not mind taking more refugees. But they should come through the UNHCR process, not through people who get on a boat, come here and effectively end up staying—and thanks to the Labor Party you can be assured of it. I know a lot of people—relatives of third-generation Italians, people in my home town—who say to me: 'We have a cousin who is skilled and wants to get into Australia but they cannot get in through the migration system. What can you do?' I say to them: 'Give them your tinny, take them offshore, let them come in and they will be accepted under the current government.' I say that partly in jest, but it is partly truthful. It just shows the absolute dysfunctional nature of the current government's situation.

We have a set number of refugees. I do not disagree with the element of the recent arrangements that have increased that by 1,000. That is the Gillard government's assessment; 14,770 is apparently the right number. Perhaps there is a debate to be held about what is the right number. But, whatever it is, it should be filled by people who come through the UNHCR process, people who are genuine refugees and have been so determined by the UNHCR before they set foot in Australia. That is why I am so distressed with the mismanagement and dysfunctional nature of Australia's dealing with the so-called or illegal boat people, people who come to our country illegally at the present time. We have really got to address these issues. We on the coalition side understand that. We are as sympathetic, we are sensitive, we are as humanitarian as any other group of people in Australia, but we want to be fair about it. We do not want those who can jump the queue to push out those who have been waiting in squalor for many years. As I mentioned, I support—as our spokesman Senator Humphries has said—this attempt to further make it more difficult for people smugglers to ply their ugly trade.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

I table an addendum to the explanatory memorandum to the Combating the Financing of People Smuggling and Other Measures Bill 2011. I thank Senator Humphries and Senator Macdonald for their contributions to this debate and more particularly for their support for this important government legislation. The Australian law enforcement agencies are aware that the international cash transfer services provided by alternative remittance dealers are used by individuals in Australia to pay the organisers of people-smuggling ventures. The bill introduces measures to strengthen existing anti-money-laundering and counterterrorism financing regulation of the alternative remittance sector. These measures are threefold: introducing controls over the registration process, expanding the enforcement options available to AUSTRAC for dealing with noncompliance in the alternative remittance sector and introducing the AML/CTF regulation of providers of remittance networks.

Through two further measures, the bill also introduces reforms that will reduce the compliance burden on businesses regulated by the AML/CTF regime. Firstly, it enables businesses to use credit reporting data to fulfil customer verification obligations and enables the AUSTRAC CEO to grant exemptions from the Financial Transaction Reports Act. The bill also includes measures that will enable AUSTRAC to share financial intelligence more broadly within the Australian intelligence community. This will ensure a more holistic approach to Australia's national intelligence efforts on national security and organised crime issues.

This bill demonstrates the government's commitment to breaking the people-smuggling model and targeting criminal groups which organise, participate in and benefit from people-smuggling activities. The government amendments introduce controls over the information-gathering power set out in the bill to ensure that a person is not subject to this coercive power without proper justification. The amendment that I shall be moving when we go into committee is in keeping with the broad government policy and with the recommendation of the Senate Committee for the Scrutiny of Bills. I commend this bill to the Senate.

Question agreed to.

Bill read a second time.