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Thursday, 30 April 1987
Page: 2317


Mr LIONEL BOWEN (Attorney-General)(4.55) —I move:

That the Bill be now read a second time.

This Bill contains a number of amendments to three Acts to ensure the effectiveness of the Proceeds of Crime Bill 1987. In the development of the Proceeds of Crime Bill 1987 the Government has been concerned to ensure that artificial devices cannot be used to defeat the operation of the legislation. One such artificial device which has the potential for defeating the operation of pecuniary penalty orders made against offenders is the mechanism of bankruptcy. During the currency of the bankruptcy all property of the bankrupt vests in the trustee of the bankruptcy and can therefore, in the absence of special provisions, be put beyond the reach of the Commonwealth and effectively laundered when the surplus property is returned to the bankrupt after the risk of confiscation proceedings has passed.

Bankruptcy Act 1966

One consequence of an offender becoming bankrupt prior to confiscation would be that any restraining order restraining all of an offender's property pending the making of a pecuniary penalty order would be likely to be revoked on application by the Official Trustee and no further restraining order in relation to that property could be put in place. The existence of a restraining order is a prerequisite to a court making orders for the examination of persons in relation to the affairs of a person under the Proceeds of Crime Bill 1987. To overcome this difficulty, which arises as a consequence of not being able to restrain a bankrupt offender's property, section 12 of the Bankruptcy Act is amended by clause 9 to specifically empower the Director of Public Prosecutions or persons entitled to bring applications for interstate pecuniary penalty orders to apply to the Inspector-General requesting that he exercise his powers to make inquiries and conduct investigations under the Bankruptcy Act.

Section 58 of the Bankruptcy Act is amended to enable pecuniary penalty orders and interstate pecuniary orders to be enforced against property of the bankrupt which does not vest in the trustee of the bankrupt. Section 60 of the Bankruptcy Act is amended to ensure that proceedings under the Proceeds of Crime Bill cannot be discontinued or stayed until all bankruptcy proceedings have been concluded. The amendment to section 82 of the Bankruptcy Act effected by clause 8 enables pecuniary penalties and interstate pecuniary penalty orders to be proved as civil debts payable to the Commonwealth in bankruptcy whether such orders are made before or during the bankruptcy.

Section 148 has been amended to enable the Director of Public Prosecutions, or persons entitled under State law to apply for an interstate pecuniary penalty order, to apply to a court for an order preventing the distribution of the surplus of a bankruptcy back to the bankrupt. Where an order has been made by the court preventing the distribution of the surplus and a pecuniary penalty order is subsequently made against the bankrupt defendant, the Commonwealth would be in the position to enforce the pecuniary penalty order by way of warrant execution against the surplus held by the Official Trustee. Clause 10 amends section 153 of the Bankruptcy Act to ensure that a pecuniary penalty order debt is not extinguished upon the bankrupt's discharge from the bankruptcy.

Cheques and Payment Orders Act 1986

The Proceeds of Crime (Miscellaneous Amendments) Bill 1987 amends the Cheques and Payment Orders Act 1986 to require the retention of cheques by financial institutions. The provisions of clauses 12 and 13 require financial institutions to retain cheques and payment orders in amounts in excess of $200 for a period of seven years. The provisions mirror clauses 77 and 78 of the Proceeds of Crime Bill, which require financial institutions to retain other documents necessary to reconstruct transactions conducted through the institution for the amount in excess of $200.

Crimes Act 1914

Part III of the Bill contains a number of amendments to the Crimes Act 1914. The majority of these amendments increase penalties prescribed for offences which are relevant to preserving of the money trail for the purposes of confiscation of assets. Clause 14 amends section 18a of the Crimes Act to ensure that pecuniary penalty orders made under the Proceeds of Crime Bill are enforced under the regime set up in that Act and are not treated as other pecuniary penalties and enforced in accordance with State laws as if they were fines imposed by the court.

The maximum penalty for offences against sections 36, 39 and 43 of the Crimes Act has been increased to five years. These offences deal with fabricating or destroying evidence and attempting to pervert the course of justice. It is likely that criminals will resort more frequently to activities constituting a breach of these provisions in light of the severe penalties which will flow from detection of criminal offences following the introduction of the proceeds of crime legislation. I commend the Bill to the House and I present the explanatory memorandum to the Bill.

Debate (on motion by Mr Spender) adjourned.