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Economics References Committee
24/09/2015
Third-party certification of food

JAMIESON, Mrs Angela, National Manager, Compliance, AUSTRAC

ROBERTSON, Mr Craig, Acting National Manager, Intelligence, AUSTRAC

[09:30]

CHAIR: Welcome. I remind witnesses that the Senate has resolved that an officer of a department of the Commonwealth or a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Do you have any comments to make on the capacity in which you appear?

Mrs Jamieson : I am also acting deputy CEO of operations, AUSTRAC. We would like to thank you for inviting us to appear this morning. We would also like to make a brief opening statement.

CHAIR: I was about to ask you that.

Mrs Jamieson : Thank you. AUSTRAC's role is that of Australia's anti-money-laundering and counterterrorism financing regulator and specialist financial intelligence unit. In this role, there is our AML/CTF regulator. AUSTRAC oversees compliance of Australian businesses, with their obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and also the Financial Transaction Reports Act 1988. These businesses span financial sectors, including banking and remittance, but do not include entities conducting halal certification.

There have been various public claims that fees from certifying halal food may be funding terrorism. AUSTRAC has no information that indicates halal certification is linked to terrorism. AUSTRAC receives financial transaction reports from businesses providing designated services under our act. AUSTRAC monitoring of reported financial transactions allows analysts to make judgements about potential risks of terrorism financing or money laundering and refers relevant information to investigating agencies. AUSTRAC monitors reported financial transactions, including reports of suspicious financial activity and related transactions to identify money movements associated with halal certification. Of the information identified from this monitoring of reported financial transactions, none of these have been assessed as being related to the funding of terrorism, with regard to halal certification fees. AUSTRAC will continue to monitor reported financial transactions and analyse data related to halal certification to identify information that may be relevant to investigating agencies.

In addition to those activities, as a result of additional funding announced in August 2014, AUSTRAC has a dedicated team of 13, producing financial intelligence analysis to better understand terrorism financing in the context of foreign fighters traveling to Syria and Iraq and financial support to ISIL. As part of AUSTRAC's role in the national security environment, the dissemination of financial analysis aims to identify terrorism financing risk, including the misuse of reporting entities. This enables a unique capability of AUSTRAC to target the use of enforcement action to support whole-of-government efforts to disrupt terrorism financing.

AUSTRAC is contributing to global efforts to understand and combat the financing of ISIL, including operational financial intelligence sharing programs with partner financial intelligence units. AUSTRAC also represents Australia in multilateral engagement, including the anti-Daesh, counter-ISIL financing group and working directly with the collective European Union FIUs. Through the operational activities of AUSTRAC, including its international engagement and information exchange on foreign fighters and terrorism financing, there has been no evidence of links to halal certification fees funding terrorism. Thank you. We are happy to take some questions.

CHAIR: Thank you, Mrs Jamieson. I have only got a few minutes of questions; you have answered pretty much everything I was going to ask in your opening statement. But I just want to be clear, because this inquiry is looking at a lot of things, a lot of different matters, a lot of issues around certification and a lot of parts around a lot of issues that do not relate, at all, to AUSTRAC, about: what is the consumers' right to know, and should consumers be given more information so that, if they choose to, they could make more informed decisions? There is a whole scope and some fairly large terms of reference.

The bit that, I suppose, specifically relates to AUSTRAC is: there have been claims made in the very, very large number of submissions we have received—so, in fairness, it has not been in all submissions; it has been in a handful of submissions—that there is a link between certification and, in particular, halal certification and terrorism financing. You are saying: the view of the Australian government, through AUSTRAC, with the information that has been provided to you or that you have available, is that there is no link—no link—between halal certification and the funding of Islamic terrorism?

Mrs Jamieson : That is correct. I might defer to Mr Robertson in that regard.

Mr Robertson : There is not really much to add there, Senator. As you have stated it, that is correct.

CHAIR: I just want to understand how big the team you have here is. Obviously AUSTRAC monitors many things, but is it fair to say you currently have a particular focus, and the government has given you a mandate for a particular focus, on the issue of funding terrorism?

Mrs Jamieson : That is correct. And Mr Robertson actually leads that team; so, again, I will defer to Mr Robertson.

CHAIR: Okay. Mr Robertson, how big is your team?

Mr Robertson : The intelligence function within AUSTRAC is approximately 90 people. AUSTRAC's agency size is about 250 to 260. When we received additional funding last year to combat terrorism financing—

CHAIR: How much was that additional funding? It was in MYEFO, I think, but can you remind me of the figure.

Mr Robertson : Yes. It was $20 million over four years. That enables us to do two things: there is the people part of that, so we have actually got a team of 13 who have a dedicated focus around counter-terrorism financing and, as Mrs Jamieson said before, the focus around that work is to make referrals to our partners who can investigate things that look suspicious from a financial transaction perspective. In addition to the people funding that we have received, there is also some funding to help improve our systems in order to conduct the analysis and receive the information, if you like, in the front door of the agency from various parts of industry.

CHAIR: This is the last question. I am simplifying the work that AUSTRAC does, and I am probably going to simplify what is a much more complex task, but, in simplistic, layman's language, the task that you perform, as I understand it, is watching the flow of money and seeing where money is flowing—effectively following the dollars—in particular, with this special focus. At the moment, Mr Robertson, you are trying to see the flow of money to see if any of it is going to fund Islamic extremism and terrorism, including the financing of foreign fighters to go overseas.

Mr Robertson : Yes, that is correct. And you correctly state, Senator, that there are a range of issues that we look at—different crime types. We often refer to the work that AUSTRAC does as having an all-crimes focus, because there is quite a breadth of things that financial activity might relate to. While AUSTRAC is an intelligence agency, the information—an important distinction—that it receives is that. So we receive a select number of reports about financial activity from the industry. It does not suggest that all of those reports are suspicious, but we have methods to look at the things that we know represent risk, whether it be terrorism financing or other crimes. We also look at things to detect patterns across that activity. We are talking, in terms of numbers, in excess of 85 million transfers overseas every year that we receive reports about, in addition to reports of suspicious matter activity, which was in the multitude of about 90,000 last year. So by no means can we look at every transaction, but we use some of our own knowledge and our partners' knowledge, things that we learn from overseas, as well as some of the things we build into our system—the IT smarts, if you like—to help us to monitor that activity.

CHAIR: And is it fair to say then, Mr Robertson, that what you are effectively saying here is: there obviously are different elements that you look at, in terms of the funding of terrorism, and that funding of terrorism and funding of Islamic extremism is obviously a serious issue and an issue you are investigating and have been resourced to investigate?

I do not want people to be left with the wrong impression—that what we are saying here is that there is not funding of Islamic extremism and terrorism through different channels. That is what you are monitoring. You are saying that, in the information that you have available to you, there is not a link between that funding and the halal certification processes.

Mr Robertson : That is correct.

Mrs Jamieson : That is correct.

Senator BERNARDI: AUSTRAC is responsible for tracking domestic and external and international money transfers—is that correct?

Mr Robertson : Yes, in a broad sense, although we have much more limited visibility of domestic financial activity by virtue of what is legislated in terms of what is reported to us. The vast majority of the information that we hold relates to the movements of funds in and out of Australia, regardless of their value. We do have some direct reports of domestic activity, normally when they are performed in cash and when they are above a threshold of $10,000. As I am sure you have seen when you have travelled, you also have the cross-border movement of physical currency and that gets reported to AUSTRAC as well. The fourth type of report is a suspicious matter report, which does not have a threshold or a particular type that requires that report to be made. It is upon a part of the industry that we regulate. When they form a suspicion, they would report that to us.

Senator BERNARDI: I want to deal with domestic issues for a moment. There are a number of halal certifiers which are not-for-profit bodies and which are involved in the establishment of mosques, schools, da'whas, bookshops—the whole thing. They receive halal certification funds which then flow through the system, and where they end up no-one really knows. But we do know that extremist organisations in Australia are funded by someone and they are linked, in many cases, back to those not-for-profit bodies, either by personnel or individuals or however it may be. Surely, then, there is a link between some of the funding that these not-for-profit bodies receive and the end outcome of extremism in some of their organisations.

Mr Robertson : An important distinction to make for clarification is that, when we are talking about extremism, it is a different category to terrorism, for example.

Senator BERNARDI: Maybe in the sophistry that you choose, but Islamic extremism is what is driving Islamic terrorism. We are talking about funding of foreign fighters and sending them overseas. They are linked, in many cases, to particular groups that have received funding, either directly or indirectly, from organisations that are halal-certifying organisations which derive substantial income from that.

Mr Robertson : As we were talking about before in the initial questions, we do not have any information that suggests that the entities we are aware of that provide halal certification are linked to the funding of those seeking to travel overseas to fight in Iraq or Syria or those who are onshore seeking to undertake any attack planning—

Senator BERNARDI: But you do not really track it, in essence, do you? You do not follow the certification money through a group like AFIC into a mosque or a bookstore where there are extremist materials and the conversion of people and the inspiring of jihadis is taking place.

Mr Robertson : The answer to that is: no, we do not follow those funds, particularly, for those entities who are engaged in halal certification. Our work has not taken us there. The monitoring of transactions that we do and the other information that we have received have not required us to prioritise that. There are other elements of the funding of all the things that present that current threat, which we do focus on, but the halal certification has not been one of those.

Senator BERNARDI: I will turn internationally, then. In a report published last year, Terrorism financing in Australia, AUSTRAC said:

The risks associated with the misuse of charities and NPOs are high as these organisations offer the capacity for groups to raise relatively large amounts of money over time.

I understand there are national security issues at play here, but how far do you track the funds that are used by international charities?

Mr Robertson : There is a challenge in that. We can see when money leaves Australia and goes offshore to the first point of recipient, if you like. To put a broader scenario: if you were in the UK, for example, and I sent money to you, Senator, we can see the transaction. Where that money goes next is a difficult challenge for us because it is not part of what is reported to AUSTRAC. If we identified that the transaction was suspicious, we have a number of arrangements with our counterpart type units in different countries. We could ask the question of those counterparts: what happened to those funds next? We would not do that for all the transactions. As I mentioned, we would only do that in cases where we formed a suspicion or one of our partner agencies has asked us to assist them in looking at those transactions and to engage our international partners.

The delivery of funds that go overseas for charitable purposes are often devolved into goods or cash, which are not part of what we are able to track. In recent times, we have worked with our partner agency the Australian Charities and Not-for-profits Commission to engage those charities in Australia who perform that sort of activity. They deliver their aid, if you like, overseas. The importance of that outreach is so they are aware of the risks and, from their perspective, perform the right diligence on the recipients of the money to ensure that it is used for the right purposes. I would suggest in the case of NPOs or charities that the work and the regulation around the charities themselves is the governance around that as opposed to the monitoring of the financial activity.

Senator BERNARDI: Let me give you an example: Human Appeal International. It is an international organisation that has ties to Hamas. Hamas is not a prescribed organisation in Australia, but the Hamas brigades are. You can track the money from Human Appeal International that sends out to Hamas. Is that right? They have to send it to an end recipient, so you know that it is going to Hamas or whatever their organisation is.

Mr Robertson : If Human Appeal International has a bank account in Australia and they send funds, yes, we would see where that money was.

Senator BERNARDI: But you cannot then track what Hamas does with the funding?

Mr Robertson : Based on what is reported to us, no.

CHAIR: A group like Human Appeal International—I am not familiar with this group, so I cannot speak to this—if they are a charity, would be governed by the rules around the ACNC. Is that correct? Is that your understanding?

Mr Robertson : That is correct. If they were a charity and they sought charitable status to collect funds, then—

CHAIR: There is the question about where their money is going and whether or not they have breached their own requirements. Again, I do not know about this group, so I use the broad 'a charity'. You follow money trails. The question about whether or not they are acting appropriately as a charity is an ACNC question. Is that correct?

Mr Robertson : That is correct. Under our legislation, we have various entities that we regulate and charities are not one of those.

CHAIR: When money goes to, say, a questionable place overseas, that is when you work with partner agencies, be it in the US, in the UK—international agencies.

Senator BERNARDI: I want to come back to this. In the report it says:

... charities and NPOs are one of the more significant Australian terrorism financing channels ...

Do you stand by that?

Mr Robertson : As per the report, yes, that is right. We highlighted that as a channel among two others that are the highest risk.

Senator BERNARDI: If a halal certifier boasts about supporting an organisation like Human Appeal International, which is directly linked to Hamas and has personnel on their international body that are linked to Hezbollah, which is not a good group of people, it is not too long a bow to draw and say, 'The profits of halal certification are linked to organisations that are not acting in Australia's interests?

Mr Robertson : That is when AUSTRAC does not have that investigative mandate in terms of an agency. If we were to see a scenario like that where funds do move, we would need to refer that to a partner agency who would investigate the offences of terrorism financing—they are not offences under our legislation, as you are no doubt aware—and/or then we could work with partner agencies to engage with the country overseas where that money has gone so that we can understand more about it.

Senator BERNARDI: I can find this out through a Google search, effectively. We have a bloke who is boasting and is contributing to a charity which is directly linked to those types of organisations. How can you not conclude that the profits of halal certification, which this man openly boasts runs into millions of dollars for him, are contributing to extremist organisations?

Mrs Jamieson : We look at the financial transaction reports that come in. As we said, halal certification, the business, does not fall under our legislation. So we revert back to the transaction reports that we then receive, which are the international funds transfers. Mr Robertson has explained to you what we do with that information when we receive it.

Senator BERNARDI: If I give money to a charity, AUSTRAC really only see the sum of money and who the recipient is when the charity distributes it. It really does not have any knowledge of my contribution to the charity—or does it? You do not have to answer that aspect of it.

Mr Robertson : It is easy to answer that in one sense. If you donated less than $10,000 to a charity in Australia and you put it into their bank account, it would not be reported to us; but if it was more than $10,000 and you put it into their bank account, it would be reported to us.

Senator BERNARDI: In the same report, you said terrorism financing in Australia has been limited to a handful of charities and NPOs. Are you able to tell me which charities and NPOs they are?

Mr Robertson : It would be difficult to comment in an open session on which charities they are, although we have highlighted examples of cases that have gone through the courts previously that have been prosecuted here by law enforcement agencies. The one that stands out related to the LTTE, the Tamil organisation, some years ago. Aside from that, it is difficult in an open session to comment as to the specific entities that might be involved.

Senator BERNARDI: Once again, I come back to this: have you specifically looked at the use of funds by organisations that conduct halal certification?

Mr Robertson : The answer to that is no, we are not looking specifically at the use of those funds. As Mrs Jamieson outlined in our opening statement, we do monitor for movements that relate to those activities. We use either names of entities or keywords, as we do for a range of things, in order to surface any information that we would then need to assess. But aside from those regular types of monitoring activities we do not have any active work against those movements of funds.

Senator BERNARDI: I have learned not to rely on ABC Fact Check. ABC Fact Check said, 'A spokesman for AUSTRAC told Fact Check it had no information to indicate that there are links to terrorism financing from halal certification fees.' That may be entirely accurate but it is because you have not investigated halal certification fees and the use of that.

Mr Robertson : Again, for clarity, we do not conduct the investigations per se—and I know it is terminology. On the basis that a third party outside of AUSTRAC has not been able to refer us to information that provides that evidence to look at it—and our own detection and monitoring systems of what we know about how terrorism financing occurs has not surfaced that information—the short answer is no.

CHAIR: You have a team of 13 people working under you at this point in time and $20 million of extra funding over the last four years to investigate the funding of Islamic terrorism. Correct?

Mr Robertson : Correct.

CHAIR: What you do specifically, because you are AUSTRAC, is follow the money. I assume then your investigations, and what you look at, are based on two separate things. The first thing is your own inquiries and investigations as you follow the money, see where the money is coming in and trace it back and forth. And I assume that the Crime Commission, the AFP and the other agencies will come to you and say: 'Hey, you're the experts when it comes to following the money. Help us follow the money in this space.' Correct?

Mr Robertson : Correct.

CHAIR: The proceeds of halal certification do fund Islamic organisations. That is a matter of fact. The money goes into organisations. That is a statement of fact. I do not want to leave the impression that AUSTRAC does not look at any of these things. You have had no information that would allow you to believe there is any direct link between the funding of Islamic terrorism and halal certification?

Mr Robertson : That is correct.

Senator BERNARDI: Because they have not investigated halal certification.

CHAIR: They have. They have a team of 13 people, they have $20 million and their job is to track down and look at the funding of Islamic terrorism. You have the government agency responsible for finding the money here telling us that they believe there is no link between the two. What more do you want, Senator Bernardi?

Senator BERNARDI: You obviously have not read their report, where they talk about the commingling of funds and the ease with which it is done. They have not investigated halal certification at all and they do not investigate domestic transfers. You are cherry-picking. I know you are doing it for the cameras—you always do it.

CHAIR: No—

Senator BERNARDI: It is simply—

CHAIR: This whole thing is about discrediting an entire industry.

Senator BERNARDI: We know you. You regard the inquiry into halal certification as some racist dog whistling, because that is what you have established. What has happened is you have compromised yourself, because you are not interested in the facts. You are actually interested in grandstanding and discrediting.

CHAIR: Senator Bernardi, you have been running a campaign against this for the past several months. You can whip up whatever hates and views you have, but the ACC are about to come and we have AUSTRAC here in front of us.

Senator BERNARDI: The Senate has approved an inquiry into certification schemes and you have compromised yourself already because you are not interested in the facts. You are only interested in getting your agenda out there. That is what the problem is.

CHAIR: Senator Bernardi, you have been running a three-month campaign. You have done Four Corners

Senator BERNARDI: No, I have been talking about this for four years, mate—four years, not three months.

CHAIR: Your views on this have not exactly been kept secret. You are entitled to your views, as I am entitled to mine, and we are sitting here getting evidence.

Senator BERNARDI: We are establishing the facts and you do not want to listen to the facts. You distort what is—

CHAIR: We were just clearly given the facts. The facts were clearly presented to us by AUSTRAC.

Senator BERNARDI: No.

CHAIR: Anyway, the witnesses are not needed here. We can do this without you!

Mrs Jamieson : I just want to clarify, Senator Bernardi, that we do not investigate, and I think that is a key point. When you mentioned that AUSTRAC investigates, really what we do is receive financial information that we then analyse. We then work with our partner agencies in providing that information.

Senator BERNARDI: Thank you, and my apologies for our conduct just then. I think it is probably inappropriate. I apologise for you too, Chair.

CHAIR: I apologise. Perhaps some of this should be restrained and kept for the floor of the Senate. I am sure we will have these debates there as well. Thank you.