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Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity
23/03/2012
Integrity of overseas Commonwealth law enforcement operations

ATKINS, Ms Jane Elizabeth, Executive General Manager, Intelligence, AUSTRAC

BECKER, Mr David, Director, International Technical Assistance and Training, AUSTRAC

BROWN, Mr Bradley Stuart, Acting General Manager Policy, AUSTRAC

[13:44]

CHAIR: Welcome. You have lodged a public submission with the committee, which we have numbered as submission 3. Would you like to make any amendments or additions to that submission or a brief opening statement.

Ms Atkins : No, I do not wish to make an opening statement but only to note that AUSTRAC's operations, if you want to call them that, overseas are predominantly technical assistance and training. A number of us travel overseas to various international meetings, but we do not get involved directly in investigations or law enforcement operations overseas. We also exchange information with other countries.

CHAIR: In your submission, you have provided three specific risks associated with the sharing of intelligence. For the committee's benefit, could you elaborate on those three risks—for example, with scenarios and whether there are additional integrity measures applied to cover those additional risks.

Ms Atkins : In terms of the overseas exchange of information, I would note that we only operate where we have what we refer to as an exchange instrument. We have such instruments with 63 countries—I think. On rare occasions we will exchange otherwise, but our legislation requires our CEO to be satisfied of certain matters before we will provide information overseas.

Obviously, there is always a risk about unauthorised access to intelligence and information held on persons subject to investigations, but we do a great deal of due diligence around countries, their systems, what legislation our counterparts in various countries might operate under. One of the requirements we have is that foreign financial intelligence units, with which we exchange information, are members of an organisation called Egmont, which is a grouping of financial intelligence units that has standards that you must meet in order to be able to become a member and its own rules and protocols around exchange and use of information from other countries. We to try to ensure that we are dealing with people who will have in place similar rules and legislation as we do.

We exchange mainly with our counterparts. Other agencies have the ability to exchange our information with their counterparts—for instance, the Federal Police could exchange with a foreign police service—but we mainly restrict ourselves to dealing with our counterparts so that we have a relationship with them and some idea of who we are dealing with.

In terms of electronic or physical interception of intelligence and information, we disseminate our information to other countries and receive it from other countries over something called the Egmont Secure Web. It is a special secure communications system which protects our information. I am not qualified to speak about the specialist types of security in those sorts of things that are relevant there, but that is the way we all deal with each other.

The only time that would occur will be in extremely rare instances where we exchange with a non-Egmont member and then we would have to take action to ensure that things are physically delivered to a country in a way that we are satisfied with and is not able to be intercepted. For instance, we might do it through the department of foreign affairs or something like that.

CHAIR: Do you have a copy of Egmont rules?

Ms Atkins : Yes. I am pretty sure they are available on the Egmont website and I do not think there is any reason why we cannot provide those. If they turn out to be confidential, we will provide them in a confidential submission.

Senator PARRY: It is not an operating system, is it? It is a set of protocols.

Ms Atkins : It is an operating system. It is a sort of email system. Is it on a stand-alone computer? Brad is a former member of our intelligence branch, so he will be able to answer you directly.

Mr Brown : I am just conscious of not actually saying where it might be housed.

Senator PARRY: No, do not do that if you do not want to.

Mr Brown : Certainly it is maintained by one of our international partners as a stand-alone communication system.

Senator PARRY: So it is like a separate web, another web?

Mr Brown : Yes. It is a web portal that was established specifically for members of the Egmont Group of Financial Intelligence Units, which I think is 127 countries around the world, following the rules and protocols that are required, which we hope to provide the committee with. That is how the information gets passed.

Senator PARRY: That is fine. Thanks, Chair. I just wanted to understand what the system was.

CHAIR: Your submission says:

AUSTRAC conducted an agency-wide internal fraud risk assessment report which focused on identifying risks associated with staff adherence to internal policies and related administrative procedures. The report identified a moderate level of fraud-related risk which could potentially occur within the scope of AUSTRAC’s current TA&T—

technical assistance and training—

programs. Key areas of identified risk were associated with the following:

purchase and distribution of goods and services by staff, associated with the delivery of in-country training workshops and events

general staff conduct and interaction with international stakeholders in locations of differing cultural customs and values.

You then refer to some controls that were put in place. Do you want to talk about that a little bit?

Ms Atkins : It is probably a bit difficult to talk in general terms without some specific questions.

CHAIR: Well, to mitigate those identified risks.

Ms Atkins : Sorry; are you asking me about what the controls are?

CHAIR: Yes.

Ms Atkins : Sorry; I misunderstood what you were asking. We have noted some of the controls in our submission. There is the internal governance working group, which is intended to identify and develop strategies associated with areas of operational practice that may pose a risk. That group operates along with our agency-wide risk adviser. Our procurement and contracts unit and our financial services units work very closely with our staff when they are developing procurements for in-country services. We have a number of SOPs, standard operating procedures, which have been developed for our technical assistance and training staff, to ensure that they are following procedures consistently. We have a number of processes in place as ways we do things, if you like, as well as all the formal processes of submitting project briefs which outline everything, including the comprehensive budget for a project.

We do not always send the same two officers overseas together when they are going in country for courses and suchlike. Until quite close to the time, they do not necessarily know who they are going with. I am going to ask David to add to this, but generally we would not send a single individual. The one place where we do have people who are consistently there together is in Jakarta. We have two people who are on a long-term posting into the financial intelligence unit there. Most of our funding is AusAID funding for these projects, so we have some processes in place with AusAID, where they have a role in approving some of the spending as well, to ensure that our people are not put in a position where anybody could accuse them of anything. I will see if David wants to add anything to the way we deal with our staff.

Mr Becker : I think the key thing is that, for most of the countries we deal with, we have a staff member who manages the relationship with that country, because usually you need to have close relationships with the financial intelligence units and the like to identify what training or capacity building they need and how we can best support them. But, whether that person is the person who goes in country is not always confirmed, because, depending on what the program is, it is all about getting the subject matter experts who are best placed to deliver it. That is where the variety comes in. With regard to Indonesia expenditure, AusAID in fact hold most of the expenditure in a fund for a number of government agencies. We do procurement in Indonesia because the size and scope of the program is quite challenging. We get project briefs that breakdown the budgets and then, once we approve it, the funds that were initially approved by AusAID in the funding they provided then get released to pay for hotels, travel and things in country.

CHAIR: How long have the Indonesian based staff been there?

Mr Becker : Since 2009.

CHAIR: In AUSTRAC's annual report there was no disclosure of any staff based overseas—at least from the information I have here.

Ms Atkins : I will have to check on that, because we certainly have people posted there. I am very surprised that—

CHAIR: That is just according to the information I have in front of me. I do not know if that is correct.

Ms Atkins : I will have to check. We definitely have two people who are in Indonesia. Unless there is some special definition of staff based overseas that our people do not fall within—

CHAIR: May that be a possibility?

Ms Atkins : At times we have had people up there who might have been up there for a couple of months and then they come home for a month. The two people who are up there are the moment, though, are up there reasonably long term, are covered by the Department of Foreign Affairs and Trade's terms and conditions for overseas posted staff. So I am very surprised, and we will take that on notice and check as to what the annual report says and whether or not they should have been reported on—

Senator PARRY: It is page 161 of your annual report—to give you a reference point.

Ms Atkins : Thank you.

CHAIR: So they are the only two based overseas?

Ms Atkins : Who are based in a longer term sense overseas. We have a lot of people—and when I say ' a lot', David can tell you the numbers in our TA and T area—who tend to go in country for a week or two weeks. They are usually away for about two weeks. Even in the regions closer to us it can be difficult to get to say, Samoa or Tonga or somewhere like that. So they will be away for a week or two weeks at a time. All procurements for that sort of thing are all signed off on in Australia. All the moneys are controlled in Australia for those processes.

CHAIR: What would be the number, Mr Becker?

Mr Becker : We have 17 people in the team. Of that, there are about 14 who would travel at different times for programs, and that 17 includes the two based in Jakarta. For a number of programs we will approach other partner agencies, other government agencies, for subject matter experts depending on what the topic matter is. There have been occasions where they have sent someone with one of our staff. On occasion, if it is a very specific type of content, we might get someone from the core side of AUSTRAC's business, the supervision compliance workshop, to co-facilitate with our team to give the subject matter expertise.

CHAIR: I note that there have not been any investigations or allegations relating to corruption or fraudulent activity associated with the TA and T programs. Does that apply domestically for AUSTRAC as well? Have there been allegations or investigations of any corrupt conduct?

Ms Atkins : Not of corrupt conduct. I have been at AUSTRAC since 2000. It might depend on what you mean by 'corruption'. We have code of conduct issues going on at any given time. We have been very lucky in the sense that we have not had any findings about misuse of our information, given that our business on one side of the agency is about access to some quite important personal information. We have not had any misuses of information. But, when it comes to code of conduct investigations, we have some of those going on. They may be related to fraud in a more general sense. So, yes, there are those sorts of things. But I would not say that there is anything that somebody would point to as corruption in the sense that we are perhaps talking about here.

CHAIR: What is your overall view of your own agency's integrity arrangements? Do you feel that they are very robust?

Ms Atkins : Yes, indeed they are. Everybody who works at AUSTRAC has at least a protected security clearance. Quite a number of us have higher security clearances. We do security and risk training. We have compulsory security training every year. We also have compulsory code-of-conduct training. I think we have a culture that is very aware of security issues in terms of the work we do and the partner agencies that we work with, who range from most of the intelligence agencies these days to revenue and policing agencies. So I think our culture is very much focused on the fact that we hold information and we know about various investigations, whether they are about tax or organised crime. We are aware of the importance of security and of our people being of high integrity. It is very much a part of our culture.

Everybody is reviewed on a regular basis in terms of their security clearances. We have all those sorts of things. We have a culture where people are encouraged to self-report in the same way as police officers are if they come into contact with anyone. When we travel overseas we all do a report back. Those of us who have particular levels of security clearances report before we go about what countries we are going to. We have processes in place for people to advise if they have been approached by officials of other countries or others in any way that they feel uncomfortable about.

Senator PARRY: Just following on from where the chair left off, do you have to report interests—significant change in wealth, for example—at your level and, in particular, by officers who go overseas and return?

Ms Atkins : Certainly at the SES level we provide a declaration of our interests every year, both in terms of our financial interests and other interests. We are expected, even aside from that, if we have some significant change in our circumstances, to put in a change-of-circumstances notification.

We all have to put in place conflict-of-interest notifications as well and it is made very clear to our staff about cases where that might apply to them. It does not matter what level you are, if there is some conflict of interest you must declare it.

Senator PARRY: You indicated that there is some report or briefing upon return, but is there an examination of officers who have returned from overseas, whether it be a short deployment or a longer deployment?

Ms Atkins : I will ask David to answer that. I do not know that we have a formal process.

Mr Becker : Every time we give technical assistance and training overseas the officers come back and give a comprehensive report, both against the learning and the objectives of the program. They report back on the financial components in regard to budgets, lessons learnt, and any issues that have arisen.

Also, because we often plan 12 months in advance, significant issues with any countries will determine whether or not they are priority countries that we will focus on. The main thing is that we want to make sure that there is a willingness, in a positive sense, for them to be involved.

There is a component of the report that we send off to AusAID or whoever has funded it to give them an update of what we did, what we achieved and if there were any significant issues. Linked to that is the fact that before we go off shore we always send a cable to the post to inform them of what the program is: 'We are coming into the country. This is what we are covering. This is who it is for.' Then generally post the visit we also give them feedback. We say, 'Look, it all went according to plan; no known issues.'

Senator PARRY: So apart from the human-to-human contact overseas the biggest risk really is a technical risk if someone can penetrate the computer network. Would that be a fair assessment?

Ms Atkins : Yes, I think that is true. We have noted in our submission that the people who are going overseas for TA and T purposes do not have access to our systems or anything like that while they are there, in terms of our databases. They may have access to our email and that sort of thing while they are away. We would say that the use of the Egmont secure web is something that mitigates that risk of someone penetrating. We do have, as most agencies would do, testing of our systems—perhaps not the Egmont secure web because that is not our responsibility, but of our own systems. We have the normal testing, that all government agencies have, to see how easy it is to break into our systems and all those sorts of things, if that is what you are referring to. So we certainly mitigate our risks there.

CHAIR: We have located the annual AUSTRAC report from last year. In relation to that issue of how many overseas staff there are, the number of staff in each office, in Australia, has been noted but there is not a category for internationally based staff. The secretary deduced from this that there were no overseas staff. I think we have got to the bottom of that, but perhaps that might be something you would include in future annual reports.

Ms Atkins : Yes. it is quite possible. I do not have the annual report in front of me but it is quite possible that we note it somewhere in the text in relation to our work in Indonesia. I am not saying we definitely did last year but we will take that on board for our annual report this year.

CHAIR: I thank the AUSTRAC officers for taking the time to give evidence today. We may come back to you with further questions during the course of our inquiry.