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Legal and Constitutional Affairs Legislation Committee
Australian Transaction Reports and Analysis Centre

Australian Transaction Reports and Analysis Centre


CHAIR: Welcome. I ask you to tell us something about Vanuatu and the extent of any surveillance or interaction you might have with that country, which I understand is a sort of open economy. Of course I do not want you to tell me anything that may in any way prejudice any work you are doing, but I wonder if you could generally indicate to me any interaction you have with that and perhaps with other countries in the South Pacific as well.

Mr Jevtovic : Thank you. AUSTRAC obviously monitors a range of countries not only in our region but globally. We are one of only a few countries that monitor all international fund transfers both in and out of Australia, so that would put a number of countries, in the term you used, under our surveillance. In relation to our region in particular we do a lot of work through the Asia-Pacific Group on money laundering—not just in monitoring transactions but in helping build the capabilities of the financial intelligence units of countries in our immediate region and around the world. We engage at a number of levels. We are a founding member of the Egmont Group, which is 155-odd countries around the world. We represent Australia on that group. The group is broken up into regions around the world. We have again Asia-Pacific. We are a key contributor to the development of capabilities within our region. So we have both a monitoring role of financial transactions within the region as it affects Australia and a development role.

CHAIR: When you monitor transactions in other countries, do you need to have access to facilities or records in other countries? If so, how is that arranged?

Mr Jevtovic : We can monitor transactions that come in and out of our jurisdiction.

CHAIR: Your jurisdiction being Australia.

Mr Jevtovic : Yes. Having said that, we have over 77 memorandums of understanding with countries around the world. This enables us to exchange intelligence and information with those countries, and we do no a regular basis. It is through that mechanism that we can share and request information.

CHAIR: Again, do not tell me anything that would cause other countries to be less cooperative than they are now, but do you have good relationships with the authorities in Vanuatu?

Mr Jevtovic : We have productive relationships throughout the region, and Vanuatu is one of those countries.

CHAIR: I used to have some idea of how you worked from a previous committee I was involved in. Can you monitor transactions that really do not involve Australia?

Mr Jevtovic : No, we cannot. Our jurisdiction obviously relates to Australia. That does not mean that we cannot work in a global operation with a number of countries whereby transactions not necessarily coming into Australia may have an impact. As we know, organised crime is a global network, so we might be in partnership with two or three other countries on a particular investigation or intelligence operation where the transactions of themselves may not necessarily come in and out of Australia but the impact of their activities may well have an impact on Australia.

CHAIR: I think Vanuatu is a 'tax haven'. Is that correct?

Mr Jevtovic : I am probably not in a position to confirm whether it is a tax haven as such, but, like a number of countries, it too has challenges around money laundering and terrorism financing. Australia has done a lot of work to help build Vanuatu's capabilities over the years—I know from a law enforcement perspective as well. So, whether it is a tax haven, I think there are probably others more qualified than me to answer that.

CHAIR: The suggestion from that is that large amounts of money come and go to that country because of what are colloquially referred to as tax haven starters.

Mr Jevtovic : All over the world and in our own region there are large money flows, and some countries are more attractive for investment than others. Vanuatu may well be one of those countries.

CHAIR: Do we have any permanent operatives in Vanuatu from your agency?

Mr Jevtovic : Not from my agency, no. This might be something to check, but we may have an AFP presence in Vanuatu. I have not had to put my mind to that for a number of years. We do have Australian embassy representation there. As to any operatives, law enforcement officers, I could not confirm that now.

CHAIR: Do you need people on the ground in a place like Vanuatu to properly get the records, build relationships, or can that all be done from afar?

Mr Jevtovic : I think it is case by case. There are benefits in some instances in having feet on the ground to help build the relationship, to help train countries. For example, we have people on the ground in Indonesia and we have had for over 12 years now. That has resulted in an extremely productive partnership with Indonesia. We help develop their capabilities; we conduct joint operations into terrorism financing. Only in November last year, for example, we held a combined terrorism financing summit here in Australia—the first of its kind. That just goes to show that sometimes it is worth having people on the ground to help enhance the relationships. But it is not always necessary. We can engage with partners in other ways as well, but sometimes it is beneficial to have people on the ground.

CHAIR: If money were coming into Vanuatu from other areas that you may or may not be aware of and then were going from there into Australia, you would have fairly precise abilities to know what was going on?

Mr Jevtovic : There are two parts to that. The first is that, if money were coming through the legitimate financial sector, we would be aware of it. However, as we know, if criminal elements are at play, they may avoid the legitimate financial sector. They may smuggle the money or use other means.

CHAIR: So in that event it is difficult for you to know what is happening?

Mr Jevtovic : Absolutely. One of the challenges in trying to fight organised crime and terrorism financing is that they do not always use the legitimate financial sector, which we can monitor. They will use criminal enterprises, they will use other forms of money laundering—hawala, cash smuggling, for example—and obviously that places us at a disadvantage. Going back to your earlier question, that is where strong law enforcement partnerships are really important, because that is where we can exchange intelligence, share information and experiences and hopefully minimise the opportunities for criminals to use the black market money channels.

CHAIR: I cannot recall who it was, and I do not have any detail, so I should not really be raising this, but someone suggested to me that things were happening through Vanuatu that AUSTRAC should have been more closely involved in but were not. As I say, that is not something you can answer because it is so vague, but that was the reason for my question. I am wondering if there is any emphasis on that and other South Pacific nations that could benefit from greater activity from AUSTRAC.

Mr Jevtovic : We work very closely with a range of countries in the region. In fact, at the Counter-Terrorism Financing Summit last year, which was very much regionally focused, some 22 countries were represented, predominantly from South-East Asia. Also representing the Pacific was the Asia/Pacific Group on Money Laundering. So the engagement is strong. But of course our abilities to help all our counterparts everywhere is stretched so we focus on priorities, we focus on where the intelligence leads us. We are an intelligence led organisation and we respond to where the greatest risks and threats are.

CHAIR: I will leave it there. Thank you for the work that you and your people do. I am conscious of a number of very significant actions that have been taken by your organisation that have had very good results, so keep up the good work. Thank you for coming along.