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Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007

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2004-2005-2006-2007

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM

FINANCING AMENDMENT BILL 2007

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Justice and Customs,

Senator the Honourable Chris Ellison)

 

 

Anti-money Laundering and Counter-Terrorism Financing Amendment Bill 2007

GENERAL OUTLINE

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2007 (the Bill) makes technical amendments to the legislation affected by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The Bill addresses technical issues, as well as taking into account concerns raised by Reports of the Standing Committee on Legal and Constitutional Affairs and the Senate Standing Committee for the Scrutiny of Bills.

The Bill makes technical amendments to the following legislation:

·          Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act);

·          Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 (AML/CTF Consequentials Act);

·          Administrative Decisions (Judicial Review) Act 1977 (AD(JR) Act);

·          Commonwealth Electoral Act 1918 (Electoral Act);

·          Financial Transaction Reports Act 1988 (FTR Act);

·          Inspector-General of Intelligence and Security Act 1986 (IGIS Act); and

·          Surveillance Devices Act 2004 (Surveillance Devices Act).

 

FINANCIAL IMPACT STATEMENT

There are no anticipated financial impacts from these amendments.



NOTES ON CLAUSES

Clause 1  

This clause provides that the Act may be cited as the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2007.

Clause 2

Clause 2 details the commencement of each provision of the Bill in a table contained in the clause.  This part of the explanatory memorandum only refers to the commencement aspects of the items in the table.  The explanatory memorandum on the substance of each of these items is contained later in this document.

Clause 2(1) contains a table stating when various clauses and items in the Schedule of the Bill will come into effect. Column 1 specifies provisions in the Bill and column 2 states when those provisions commence or are taken to have commenced. Column 3 contains additional information that is not part of this Act. Such additional information may be added to or edited in any published version of the Bill.

Clause 3

This clause explains the operation of the Schedule to the Bill and provides that each Act specified in the Schedule is amended as set out in the Schedule.  Any other item in the Schedule in the Bill has effect according to its terms.

 

Schedule 1 - Amendments

 

Part 1 - Amendments

 

Administrative Decisions (Judicial Review) Act 1977 [AD(JR) Act]

Item 1             Paragraph (qa) of Schedule 1          Exemption from review

 

This item amends paragraph (qa) of Schedule 1 of the AD(JR) Act to restrict the decisions under the AML/CTF Act that are exempt from review to those made under sections 176 and 248 of that Act. This item removes the general exemption currently applying to decisions under the AML/CTF Act.

 

Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

 

Item 2             Section 5 (paragraph (a) of the definition of applicable customer identification procedure)        

 

This clause inserts after the words “section 6 in the definition of “ applicable customer identification procedure ” the words “and there is no joint anti-money laundering and counter-terrorism financing program that applies to, and has been adopted by, the reporting entity.”

 

This item means that financial service providers covered by item 54 of table 1 in section 6 who have adopted a “ joint anti-money laundering and counter-terrorism financing program will be included in paragraph (b) of the definition rather than paragraph (a).  This amendment is consequential on the amendment in item 20 which removes the restriction on reporting entities that exclusively provide services under item 54 of Table 1 in section 6 from adopting a “ joint anti-money laundering and counter-terrorism financing program under section 85 of the AML/CTF Act.

 

Item 3             Section 5 - Definition of ASIS

 

This item inserts a definition of “ ASIS to mean the “Australian Secret Intelligence Service.” This amendment is consequential upon item 6 which amends the definition of “designated agency in section 5 by adding ASIS to the list of designated agencies.

 

Item 4             Section 5 - Definition of ASIS Minister

 

This item defines the phrase “ ASIS Minister .” This amendment is consequential upon item 6 which lists ASIS as a designated agency and upon item 26 which inserts new subsection 128(12A).  

 

Item 5             Section 5 - Definition of ASIS Official

 

This item defines the phrase “ ASIS official . ” This amendment is consequential upon item 6 which lists ASIS as a designated agency and upon item 26 which inserts subsection 128(12A). 

 

Item 6             Section 5 (after paragraph (g) of the definition of designated agency )

 

This item inserts new paragraph (ga) into the definition of “ designated agency and thereby makes ASIS (see definition in item 3) a designated agency for the purposes of the AML/CTF Act. As officials of a designated agency, ASIS officials will be able to obtain access to AUSTRAC information.

 

Item 7                         Subsection 6(2) (item 18)

 

This item amends item 18 in table 1 in subsection 6(2). The amendment limits the coverage of item 18 to an account held with an ADI, bank, building society, credit union, or a person specified in the rules. This is to limit accounts covered by the AML/CTF Act to those held with a financial institution. Without this amendment item 18 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.

 

Item 8             Subsection 6(2) (new item 18A)

 

Item 8 inserts new item18A into table 1 in subsection 6(2). This amendment will make the issuing of a debit card to an additional cardholder a designated service under the AML/CTF Act.  The customer of the service is the signatory who receives the card.  See the definition of “ signatory in section 5 of the AML/CTF Act.

 

Item 9             Subsection 6(2) (item 19)

 

Item 9 repeals the cell at item 19 in the table in subsection 6(2), and replaces it with a new cell which provides that it is a designated service where a building society or credit union issues a debit card enabling a building society or credit union account holder to debit an account which the building society or credit union holds with an ADI, bank, or person specified in the AML/CTF Rules. Without this amendment, item 19 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.

 

Item 10           Subsection 6(2) (new item 19A)

Item 10 of the Bill inserts new item 19A in table 1 in subsection 6(2) providing that the list of designated services includes issuing a debit card to a signatory to an account held with a building society or credit union where the debit card allows access to an account held by the building society or credit union with an ADI, a bank or a person specified in the AML/CTF Rules.  The customer of the service is the signatory who receives the card.  See the definition of “ signatory in section 5 of the AML/CTF Act. This provision is consistent with new item 18A in table 1 in subsection 6(2) added by item 8 of the Bill.

 

Item 11           Subsection 6(2) (item 20)

Item 11 of the Bill repeals the existing cell at item 20 of table 1 in subsection 6(2) and replaces it with a new cell which specifies that the item is limited to where a trustee or manager of a trust, issues a debit card that enables the holder of a beneficial interest in the trust to debit an account held by the trustee or manager of the trust, held with an ADI, a bank, a building society, a credit union or a person specified in the AML/CTF Rules .  Without this amendment item 20 captures accounts with non-financial institutions which were not intended to be covered by the AML/CTF Act.

 

Item 12           Subsection 6(2) (new item 20A)

 

Item 12 inserts new item 20A in table 1 in subsection 6(2) which will mean that a designated service is provided when a trustee or manager of a trust issues a debit card that enables a signatory authorised by the holder of a beneficial interest in the trust to debit an account held by the trustee or manager of the trust held with an ADI, a bank, a building society, a credit union or a person specified in the AML/CTF Rules.  The customer of the service is the signatory who receives the card.  See the definition of “ signatory ” in section 5 of the AML/CTF Act.           

 

Item 13           Section 6(2) (after paragraph (b) of the cell at table item 35, column headed “Provision of a designated service”)

 

Item 13 amends item 35 in table 1 in subsection 6(2) by inserting paragraph (ba) which provides an exemption for government bodies issuing a security of the government body. This exemption gives government bodies the same exemption as the one provided for companies in paragraph (b) in item 35. See definition of government body in section 5 of the AML/CTF Act.

 

Item 14           Subsection 42(6) - Exemptions

 

Item 24 repeals subsection 42(6) of the AML/CTF Act. Subsection 42(6) exempts a holder of an Australian financial services licence who provides a designated service under item 54 of table 1 in subsection 6(2) from the reporting obligations under Division 2 (Reports of Suspicious Matters) of Part 3 of the AML/CTF Act. This amendment means that reporting entities providing designated services under Item 54 of table 1 in subsection 6(2) will have to report suspicious transactions. This is consistent with all other reporting entities being required to report suspicious transactions.

 

Item 15           Subsections 66(4) and (5) - Electronic funds transfer instructions - only one institution involved in the transfer

 

This item repeals the offence provision in subsection 66(4) and the application of strict liability to this offence in subsection 66(5). This amendment brings section 66 in to line with other sections of the Act which provide for civil penalties for failure to comply with regulatory obligations under the Act.

 

Item 16           Section 67(2A) - Exemption

 

This new subsection excludes from the requirements of Part 5, instructions that arise from the use of a debit or credit card at a branch of a financial institution, in circumstances in which the number of the card is included in the instruction, the card is not of a kind specified in the AML/CTF Rules and the use does not take place in circumstances of a kind specified in the AML/CTF Rules. “ Financial institution is defined in section 5 of the AML/CTF Act.

 

It was not intended that debit and credit card transactions at a branch of a financial institution would be subject to reporting requirements for “ electronic funds transfer instructions ” under Part 5. This amendment ensures that these services will not be subject to the reporting requirements of Part 5. The exemption is consistent with the other exemptions in section 67. “ Electronic funds transfer instructions is defined in section 5 of the AML/CTF Act.

 

Item 17           Subsection 67(4) - Exemption

 

This new subsection excludes instructions given by way of a merchant terminal from the requirements of Part 5, in circumstances in which the operation is authorised by a financial institution, the merchant terminal is not of a kind specified in the AML/CTF Rules and the operation does not take place in circumstances of a kind specified in the AML/CTF Rules.

 

This amendment is to bring merchant terminals in line with the exemption for use of debit and credit cards in Automated Teller Machines. It covers, for example, the use of a card in an EFTPOS terminal at a supermarket. The exemption applies even if a person obtains cash out at the same time.

 

Item 18           Sub-paragraph 71(b)(v) - Complete payer information

 

The words “the date and place of birth of the payer” are to be omitted from subparagraph 71(b)(v) and replaced with “ the payer’s date of birth, the country of the payer’s birth and the town, city or locality of the payer’s birth.”  The purpose of the amendment clarifies the details required by 71(b)(v) to satisfy the requirements under this Part to collect and pass on “ complete payer information .  This amendment will make it clear that place of birth requires more than just a country or town.

 

Item 19           Section 79A - Evidentiary matters

Item 19 inserts new section 79A into the AML/CTF Act to allow the AUSTRAC CEO to provide a certificate stating that a person’s registrable details were not on the “ Register of Providers of Designated Remittance Services . The certificate will be prima facie evidence of the matters in the certificate.  This is to ensure that the AUSTRAC CEO will not be required to attend court to give evidence of what appears on the Register in a prosecution for a specified offence or for proceedings for a civil penalty order. A defendant will be able to challenge the contents and validity of the certificate by bringing evidence to the contrary.

This power does not limit the operation of section 155 of the Evidence Act 1995 in relation to the AML/CTF Act.

 

Item 20           Subsection 85(6) - Joint anti-money laundering and counter-terrorism financing program

 

This amendment repeals subsection 85(6) of the AML/CTF Act. Repealing subsection 85(6) will allow a reporting entity that only provides designated services under Item 54 of table 1 in subsection 6(2) to adopt a joint anti-money laundering program if it is a member of a designated business group.

Item 21           Subsection 123(5A) - Offence of tipping off

This item inserts a new subsection 123(5A) that will prohibit a person to whom information has been disclosed under subsection 123(5) from disclosing the information to another person. Subsection 123(5) allows an exemption from the subsection 123(2) tipping off prohibition for reporting entities that make a disclosure to a legal practitioner for the purpose of obtaining legal advice.

Item 22           Subsection 123(8A) - Offence of tipping off

This item inserts a new subsection 123(8A) that will prohibit a person to whom information has been disclosed under subsection 123(8) from disclosing the information to another person. Subsection 123(8) allows an ADI to disclose the matters, which would otherwise be subject to the prohibition in subsection 123(2), to an owner-managed branch of an ADI, but a person to whom such a disclosure is made is prohibited from disclosing the information to another person.

(See section 12 - Owner-managed branches of ADIs ).

Item 23           Paragraph 123(11)(a) - Offence of tipping Off     

This item amends subsection 123(11) to create offences for a breach of an obligation under new subsections 123(5A) and 123(8A) (see items 21 and 22 above).

Items 24 and 25         Paragraphs 128(3)(a) and (6)(a) - When AUSTRAC information can be passed on by an official of a designated agency

These items add an additional sub-paragraph to paragraphs 128(3)(a) and 128(6)(a) respectively.  The new sub-paragraph expands the existing exemptions which allow disclosure of “ AUSTRAC information by officials of a designated agency for the purposes of court or tribunal proceedings or proposed or possible court or tribunal proceedings, to also allow disclosure for the purposes of obtaining legal advice.  See definition of “ AUSTRAC information in section 5 of the AML/CTF Act .

Item 26           Subsection 128(12A) - When AUSTRAC information can be passed on by an official of a designated agency

 

This item inserts subsection (12A) into section 128 of the AML/CTF Act.  Subsection (12A) provides that in addition to the situations in which an ASIS official may disclose AUSTRAC information under the general provisions in section 128 allowing disclosure of AUSTRAC information by officials of designated agencies an ASIS official may disclose AUSTRAC information in the following circumstances:

    (a)             to an IGIS official (short for “Inspector -General of Intelligence and Security”, see definition of “IGIS official” in section 5) for the purposes of the IGIS official performing his or her duties in relation to ASIS or an ASIS Official

   (b)             to the ASIS Minister ( see definition of “ ASIS Minister ” inserted into section 5 by item 4) where the disclosure is for the purposes of or in connection with the ASIS Minister’s performance of his or her responsibilities in relation to ASIS, and

    (c)             to a Minister who under section 9A of the Intelligence Services Act 2001 is empowered to issue an authorisation in relation to ASIS, if the disclosure is for the purposes of, or in connection with, the exercise of that power.

 



Section 9A of the Intelligence Services Act 2001 provides:

9A   Authorisations in an emergency

Despite subsections 8(1) to (4) and any direction given under subsection 8(1), if:

         (a)              an emergency situation arises in which an agency head considers it necessary or desirable to undertake an activity or a series of activities; and

         (b)              a direction under subsection 8(1) requires the agency to obtain an authorisation under section 9 before undertaking that activity or series of activities; and

         (c)              the Minister referred to in the direction is not readily available or contactable;

the Prime Minister, the Minister for Defence, the Minister for Foreign Affairs or the Attorney-General may, subject to the requirements of section 9, issue an authorisation under that section in respect of that activity or series of activities.

Section 9 permits the Minister to give an authorisation in relation to:

         (a)              an activity, or class of activities, specified in the authorisation; or

         (b)              acts of a staff member or agent, or a class of staff members or agents, specified (whether by name or otherwise) in the authorisation; or

         (c)              activities done for a particular purpose connected with the agency’s functions

 

New subsection (12B) makes it clear that the disclosures authorised by subsection 128(12A) does not limit the general power of disclosure under section 128. This item is consequential upon item 6 whereby ASIS becomes a designated agency for the purposes of the AML/CTF Act. See definition of “ AUSTRAC information ” in section 5 of the AML/CTF Act.

 

Item 27           Subsection 128(13)(d) - When AUSTRAC information can be passed on by an official of a designated agency

 

This item amends subsection 128(13) by adding paragraph 128(13)(d) which allows an ASIO official to disclose AUSTRAC information to a Minister who, under section 9A of the Intelligence Services Act 2001, is empowered to issue an authorisation in relation to ASIS, if the disclosure is for the purposes of, or in connection with, the exercise of that power.  See Explanatory Memoranda on item 26 for details of section 9A of the Intelligence Services Act 2001. This item is consequential upon item 6 whereby ASIS becomes a designated agency for purposes of the AML/CTF Act.  See definition of “ AUSTRAC information ” in section 5 of the AML/CTF Act .

Item 28           Subsection 128(13A) - When AUSTRAC information can be passed on by an official of a designated agency

Item 28 inserts after subsection 128(13) of the AML/CTF Act a new subsection 128(13A) which provides that subsection 128(13) does not limit the generality of any other provision in section 128. This is to ensure that 128(13) does not limit the general power of disclosure under section 128.

Item 29           Subsection 128(14A) - When AUSTRAC information can be passed on by an official of a designated agency

Item 29 inserts after subsection 128(14) of the AML/CTF Act a new subsection 128(14A) which provides that subsection 128(14) does not limit the generality of any other provision in section 128.

Item 30           Subsections 128(15) and (17) - When AUSTRAC information can be passed on by an official of a designated agency

 

This item amends subsections 128(15) and (17) by replacing the words “that law” with “so much of that law as relates to the agency”.  This amendment is to cover the situation where an Act may be administered by two or more Ministers.  Disclosure will only be permitted to the Minister administering that part of the Act that applies to the agency for the purposes of the Minister performing his or her responsibilities in relation to the agency.  Subsection 128(15) applies to Commonwealth agencies and subsection 128(17) applies to State and Territory agencies.

Item 31           Paragraph 128(19)(a) - When AUSTRAC information can be passed on by an official of a designated agency

 

This item amends paragraph 128(19)(a) by including a reference to ASIS and ASIS employees.  This item is consequential upon item 6 whereby ASIS becomes a designated agency and is to ensure that IGIS can fulfil its obligations in relation to ASIS.

Item 32           Paragraph 128(19)(b) -  When AUSTRAC information can be passed on by an official of a designated agency

 

This item adds paragraph 128(19)(ba) which allows IGIS officials to disclose AUSTRAC Information to the Director-General of ASIS in a draft report under section 21 of the Inspector-General of Intelligence and Security Act 1986 in relation to ASIS or employees of ASIS.  This amendment is to ensure that IGIS can perform its functions in relation to ASIS under the Inspector-General of Intelligence and Security Act 1986.  The amendment is consequential upon item 6 whereby ASIS becomes a designated agency.   See definition of “ AUSTRAC information ” in section 5 of the AML/CTF Act.

Item 33           Paragraph 128(19)(c)

This item repeals paragraph 128(19)(c) which was a duplication of the general provision permitting disclosure of “ AUSTRAC Information ” by an official of a designated agency. See definition of “ AUSTRAC information ” in section 5 of the AML/CTF Act.

Item 34           Subsection 128(19)(d) - When AUSTRAC information can be passed on by an official of a designated agency

This amendment removes the words “in a written response to a complainant” so that an IGIS Official is not limited in this regard. This is necessary because, for example, under section 23 Inspector-General of Intelligence and Security Act 1986 ( IGIS Act”) an IGIS official may disclose “ AUSTRAC information” when consulting with the head of a relevant agency to ensure that the response given to a complainant does not prejudice security.  In addition an IGIS Official may disclose AUSTRAC information when the official gives a copy of a section 23 response to the responsible Minister. See definition of “ AUSTRAC information ”in section 5 of the AML/CTF Act .

Item 35           Paragraph 128(19)(d) - When AUSTRAC information can be passed on by an official of a designated agency

This item includes a reference to ASIS or employees of ASIS in paragraph 128(19)(d) to ensure that IGIS can perform its duties in relation to ASIS. The amendment is consequential upon item 6 whereby ASIS becomes a designated agency.

 

Item 36           Paragraph  128(19)(ea)

 

This item adds paragraph 128(19)(ea) to section 128.  The new paragraph will allow an IGIS official to disclose “ AUSTRAC information ” to the Director-General of ASIS in a report about ASIS or an ASIS employee under section 25A of the Inspector-General of Intelligence and Security Act 1986.  The amendment is to ensure that IGIS can carry out its functions in relation to ASIS. The amendment is consequential upon item 6 whereby ASIS becomes a designated agency.  See definition of “ AUSTRAC information” in section 5 of the AML/CTF Act.

Item 37           Paragraph 128(19)(f)

This item repeals paragraph 128(19)(f). This amendment is to remove duplication with the general provisions in section 128 applying to designated agencies.

Item 38           Paragraph 128(19)(g) - When AUSTRAC information can be passed on by an official of a designated agency

This item substitutes a reference to section 22 for the reference to subsection 22(4) of the Inspector General of Intelligence and Security Act 1986 (IGIS Act).  This is to ensure that IGIS officials can fulfil their obligations under section 22 of the IGIS Act.

Item 39           Paragraph 128(19)(h) - When AUSTRAC information can be passed on by an official of a designated agency

Item 39 of the Bill adds new paragraph (h) at the end of subsection 128(19) of the AML/CTF Act to ensure that an IGIS official may disclose “ AUSTRAC information ” to the Attorney-General if the disclosure is for the purposes of, or in connection with, the performance of the Attorney-General’s functions under the IGIS Act This amendment will ensure that the requirements in the IGIS Act can be met where an IGIS official is required to report to the Attorney-General under section 12 of the IGIS Act. See definition of “ AUSTRAC information ” in section 5 of the AML/CTF Act.



Item 40           Subsection 128(20) - When AUSTRAC information can be passed on by an official of a designated agency

Item 40 of the Bill inserts at the end of section 128 of the AML/CTF Act new subsection (20) which provides that subsection (19) does not limit the generality of any other provision of section 128.

Item 41           Subsection 136(4) - False or misleading information

This item amends subsection 136(4) so that strict liability will apply to the element of the offence in paragraph 136(1)(c) rather than absolute liability.  Strict liability is provided because paragraph 136(1)(c) involves a knowledge of law issue. “Knowledge of law” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 136(1)(c).

Item 42           Section 137 - Producing false or misleading documents

This item amends subsection 137(3) so that strict liability will apply to the element of the offence in paragraph 137(1)(c) rather than absolute liability.  Strict liability is provided because paragraph 137(1)(c) involves a knowledge of law issue.  “Knowledge of law” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 137(1)(c).

Item 43           Section 139 - Providing a designated service using a false customer name or customer anonymity

This item amends subsection 139(2) so that strict liability will apply to the element of the offence in paragraph 139(1)(d) rather than absolute liability.  Strict liability is provided because paragraph 139(1)(d) involves a knowledge of law issue.  “Knowledge of law” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 139(1)(d).

Item 44           Section 139 - Providing a designated service using a false customer name or customer anonymity

This item amends subsection 139(4) so that strict liability will apply to the element of the offence in paragraph 139(3)(d) rather than absolute liability.  Strict liability is provided because paragraph 139(3)(d) involves a knowledge of law issue.  “ Knowledge of law”  is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 139(3)(d).

Item 45           Section 140 - Receiving a designated service using a false customer name or customer anonymity

This item amends subsection 140(2) so that strict liability will apply to the element of the offence in paragraph 140(1)(c) rather than absolute liability.  Strict liability is provided because paragraph 140(1)(c) involves a knowledge of law issue.  “ Knowledge of law ” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 140(1)(c).

Item 46           Section 140 - Receiving a designated service using a false customer name or customer anonymity

This item amends subsection 140(4) so that strict liability will apply to the element of the offence in paragraph 140(3)(c) rather than absolute liability.  Strict liability is provided because paragraph 140(3)(c) involves a knowledge of law issue.  “ Knowledge of law” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 140(3)(c).



Item 47           Section 141 - Customer commonly known by 2 or more different names-disclosure to reporting entity

This item amends subsection 141(2) so that strict liability will apply to the element of the offence in paragraph 141(1)(e) rather than absolute liability.  Strict liability is provided because paragraph 141(1)(e) involves a knowledge of law issue.  “ Knowledge of law” is one of the justifications for strict liability indicated in the Report 6/2002 of the Senate Standing Committee for the Scrutiny of Bills: Application of Absolute and Strict Liability Offences in Commonwealth Legislation at 285: 

strict liability may be appropriate to overcome the ‘knowledge of law’ problem, where a physical element of the offence expressly incorporates a reference to a legislative provision; in such cases the defence of mistake of fact should apply

The defence of mistake of fact will be available in relation to the physical element of the offence in paragraph 141(1)(e).

Item 48           Subsection 145(1) - Appointment of authorised officers

Item 48 of the Bill inserts in subsection 145(1) of the AML/CTF Act, after the words “staff of AUSTRAC”, the words “or a person whose services are made available to the AUSTRAC CEO under subsection 225(3)”.  This amendment will allow the AUSTRAC CEO to appoint a person seconded to AUSTRAC to be an authorised office for the purposes of the AML/CTF Act.  Subsection 225(3) spells out the bodies which may assist the AUSTRAC CEO whose services are made available to the AUSTRAC CEO in connection with the performance of any of the AUSTRAC CEO’s functions.  Such bodies include officers and employers of agencies or authorities of the Commonwealth, a State or Territory and members of the Australian Federal Police or members of a police service of a State or Territory.

Item 49           Section 164A - Review of Decisions

Item 49 inserts new section 191A at the end of Division 5 of Part 15 of the AML/CTF Act.  This new section permits a reporting entity to apply to the Administrative Appeals Tribunal for review of a decision by the AUSTRAC CEO requiring the reporting entity to appoint an external auditor to carry out an external risk management audit under section 161.  Proposed subsection 164A(2) provides that “ decision has the same meaning as in the Administrative Appeals Tribunal Act 1975.

Item 50           Section 191A  - Review of Decisions

Item 50 inserts new section 164A at the end of Division 7 of Part 13 of the AML/CTF Act. This new section permits a reporting entity to apply to the Administrative Appeals Tribunal for review of decisions by the AUSTRAC CEO to issue a remedial direction to the reporting entity under section 191 (Remedial Directions).  Proposed subsection 191A(2) provides that “ decision” has the same meaning as in the Administrative Appeals Tribunal Act 1975.



Item 51           Subsection 197(5) - Acceptance of undertakings

This item deletes existing subsection 197(5) and replaces it with a new subsection 197(5), and inserts new subsection 197(6). The new subsection 197(5) provides that the AUSTRAC CEO may publish a copy of an undertaking on the AUSTRAC internet site, but that the AUSTRAC CEO much first delete from the copy information that the AUSTRAC CEO is satisfied is commercial in confidence, would be against the public interest to release or consists of personal details of an individual. Sub-clause 197(6) requires that if the AUSTRAC CEO publishes a copy of an undertaking on the AUSTRAC internet site, and the copy has information deleted from it, the copy must include a note stating that information has been deleted.

Item 52           Subsection 228(5) - Directions by Minister

This item adds a new subsection 228(5) which will require the Minister to table a direction to the AUSTRAC CEO made under section 228 in each House of the Parliament within 15 sitting days after giving the direction.

 

Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Act 2006 (AML/CTF Consequentials Act)

 

Item 53           Item 43 of Schedule 1

 

Item 53 of the Bill repeals item 43 of Schedule 1 of the AML/CTF Consequentials Act.  Item 43 presently repeals the definition of “ APRA officer ” in subsection 3(1) of the Financial Transaction Reports Act 1988 (FTR Act).  That item was inserted in error (the term “ APRA officer ” is not used in the FTR Act).

Commonwealth Electoral Act 1918 (the Electoral Act)     

Item 54           Subsection 90B(4) - Provision of information on Rolls

This item amends the Commonwealth Electoral Act 1918 by inserting a new item 7 within the table in 90B(4) of the Electoral Act . This table specifies who the Electoral Commission may give information to regarding the Electoral Roll. The new item will ensure that a prescribed person or organisation, who under an arrangement with a reporting entity or the agent of a reporting entity, provides information for the purpose of facilitating the carrying out of the applicable customer identification procedures under the AML/CTF Act, will have access to the Electoral Roll.

Item 55           Paragraph 90B(9)(b) - Electoral Roll access

The new item will amend Paragraph 90B(9)(b) of the Electoral Act by replacing the reference to “5” with “5, 6 or 7”. Paragraph 90B(9)(b) allows the Electoral Commission to charge a fee that covers the cost to the Electoral Commission of providing information under subsection 90B(4) of the Electoral Act.  This item ensures that the Electoral Commission is able to charge a fee that covers the cost of providing information under items 5, 6 or 7 of the Table in 90B(4).

 

Item 56           Subsection 91A(2E) - Use of information from Roll and habitation index - permitted purpose

 

This item inserts a new paragraph (2E) into section 91A of the Electoral Act. This provision is consequential upon item 54, and provides that for information provided under item 7 of the table in subsection 90B(4), a permitted purpose for a prescribed person or organisation is to be facilitating the carrying out of an applicable customer identification procedure under the AML/CTF Act 2006.

 

Item 57           Subsection 91B(3) - Electoral Roll Access

Item 57 inserts “, 6 or 7” after the words “item 5” in subsection 91B(3) of the Electoral Act. Subsection 91B(3) prohibits the use of protected information under the Electoral Act for a commercial purpose, other than information provided under item 5 of the table in subsection 90B(4) that is used for a permitted purpose.  The addition of items 6 and 7 to the exception in subsection 91B(3) will ensure that information provided under items 6 and 7 will also be included in the exemption.

Financial Transaction Reports Act 1988 (FTR Act)

Item 58

Item 58 amends subparagraph 7(1)(f)(ii) of the FTR Act by inserting the correct cross-reference to the AML/CTF Act. This cross reference is to Division 3 of Part 3 of the AML/CTF Act and not to Division 1 of Part 2.

Items 59, 60, and 61           Paragraph 28 (1)(a) and subsections  29(1) and 30(1) AUSTRAC CEO

These items amend paragraph 28(1)(a) and subsection 29(1) and 30(1) respectively by inserting “AUSTRAC CEO” in place of the former title of “Director”

Inspector-General of Intelligence and Security Act 1986 (IGIS ACT)

Item 62           Subsection 22(3)

Item 62 of the Bill repeals existing subsection 22(3) and substitutes new subsection (3) to provide that if the Inspector-General has prepared a report upon completion of an inquiry under the IGIS Act which includes information that was acquired by the Commissioner of Taxation under the provisions of a tax law within the meaning of section 3E of the Taxation Administration Act 1953 , then the Inspector-General must prepare another version of the report that does not disclose the tax information.  This amendment removes the previous requirement that AUSTRAC information (within the meaning of the AML/CTF Act) is not disclosed in such reports.

Surveillance Devices Act 2004 (SD Act)

Item 63           Subsection 6(1) (paragraph (ca) of the definition of relevant offence.

Item 63 of the Bill will amend paragraph 6(1)(ca) of the SD Act by omitting the reference to section 34 of the AML/CTF Act from the definition of “ relevant offence ” in subsection 6(1) of the SD Act. Section 34 is a civil penalty provision and should not be referred to in the SD Act definition of “relevant offence ”.

Item 64           Subsection 6(1)(paragraph (ca) of the definition of relevant offence

Item 64 of the Bill will amend paragraph 6(1)(ca) of the definition of “ relevant offence ” in subsection 6(1)SD Act to make offences against section 141 of the AML/CTF Act relevant offences for the purposes of the SD Act.  Section 141 makes it an offence for a person who is commonly known by two or more different names, to receive a designated service from a reporting entity using one of those names if the person has not previously disclosed the other name or names to the reporting entity.

Part 2 - Application and transitional provisions 

 

Item 65           Judicial review of decisions made under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006

This item provides that the amendment in item 1 of Part 1 of the schedule to the Bill applies retrospectively. Item 1 amends paragraph (qa) of Schedule 1 to the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) by removing the general exemption for the AML/CTF Act, and replacing it with an exemption only for decisions under sections 176 and 248 of the AML/CTF Act. The provision is retrospective in order to ensure that all decisions other than those made under sections 176 and 248 of the AML/CTF Act will be subject to merits review since the commencement of the AML/CTF Act. The retrospectivity is justified because the provision is beneficial and includes a transitional provision allowing extra time for applications for judicial review.

 

Item 66           Application of amendment - section 71 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006

 

This item provides that the amendment of paragraph 71(b)(v) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 applies in relation to an electronic funds transfer instruction given after the commencement of this item.

 

Item 67           AAT review of decisions made under section 161 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006

This item provides that section 164A (inserted by item 49) will apply retrospectively.  Section 164A is to have retrospective effect so as to allow a reporting entity to a challenge a decision made between 13 December 2006 when the AML/CTF Act commenced and the commencement of item 49. The retrospectivity is justified because the provision is beneficial and includes a transitional provision allowing extra time for applications for judicial review.

 

Item 68           AAT review of decisions made under section 191 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006

This item provides that section 191A (inserted by item 50) will apply retrospectively. Section 191A is to have retrospective effect so as to allow a reporting entity to a challenge a decision made between 13 December 2006 when the AML/CTF Act commenced and the commencement of item 50. The retrospectivity is justified because the provision is beneficial and includes a transitional provision allowing extra time for applications for judicial review.

 

Item 69           Application of amendment - section 22 of the Inspector-General of Intelligence and Security Act 1986    

 

This item provides that the amendment of section 22 of the Inspector-General of Intelligence and Security Act 1986 (IGIS Act) is to apply in relation to a report prepared under subsection 22(1) after the commencement of this item.