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Combating the Financing of People Smuggling and Other Measures Bill 2011

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2010 - 2011

 

 

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

SENATE

 

 

 

 

COMBATING THE FINANCING OF PEOPLE SMUGGLING AND OTHER MEASURES BILL 2011

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

 

Amendments to be moved on behalf of the Government

 

 

 

(Circulated by authority of the Minister for Justice,

the Honourable Brendan O’Connor MP)

 

 

 

 

 

 

 

 

 



 

GENERAL OUTLINE

 

The Combating the Financing of People Smuggling and Other Measures Bill 2011 amends the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (AML/CTF Act), the Financial Transaction Reports Act 1988 and the Privacy Act 1988 .

 

The primary purpose of the Bill is to reduce the risk of money transfers by remittance dealers being used to fund people smuggling ventures and other serious crimes by introducing a more comprehensive anti-money laundering and counter-terrorism financing regulatory regime for the remittance sector.  The measures in the Bill will improve intelligence and protect against criminal infiltration of the remittance sector which is recognised both internationally by Australian law enforcement agencies as posing a high money laundering and terrorism financing risk. 

 

The Bill will also expand the list of designated agencies with which the Australian Transaction reports and Analysis Centre (AUSTRAC) can share financial intelligence, enable reporting entities to use credit reporting data to verify the identity of their customers, and allow the AUSTRAC CEO to grant exemptions from obligations in the FTR Act.

 

These Government amendments insert new subsections 49(1A) and 49(1B) into the AML/CTF Act to incorporate changes to the expanded information gathering power introduced in the Bill and address recommendations made by the Senate Scrutiny of Bills Committee in its report on the Bill. 

 

The amendments introduce controls over the information gathering power currently in the Bill.  Firstly, the ability to seek further information from a reporting entity or any other person is subject to the decision maker holding a reasonable belief that the person has knowledge, control or possession of the information or document.  Secondly, it introduces a requirement that a person from whom information is sought (other than a person who is the reporting entity who made the initial report to AUSTRAC) must be given 14 days to comply with the notice to produce, unless it is necessary and reasonable in the circumstances to impose a shorter period.

 

FINANCIAL IMPACT

 

The proposed amendment in the Bill has no financial impact on Government revenue. 



NOTES ON AMENDMENTS

 

Proposed subsections 49(1A) and 49(1B)

 

In response to the inquiry of the Senate Scrutiny of Bills Committee, this amendment inserts new subsections 49(1A) and 49(1B) after section 49(1) of the AML/CTF Act.

 

Section 49 of the AML/CTF Act empowers the AUSTRAC CEO to request further information from a reporting entity when the reporting entity has communicated information to the AUSTRAC CEO about a suspicious matter (section 41), a threshold transaction (section 43), or an international funds transfer instruction (section 45).  Request for further information must be by written notice.

 

Items 16-18 of the Bill amend subsection 49(1) and paragraphs 49(1)(h) and (i) to enable the AUSTRAC CEO to request further information from a reporting entity or any other person.  The proposed amendments introduce some controls around this extended information gathering power.

 

Subsection 49(1A) provides that a notice requesting further information or documents may only be issued if there are reasonable grounds to believe that the recipient has knowledge of the information, or possession or control of the document sought.  This government amendment will ensure that a person is not subject to this coercive power without proper justification and is in keeping with broad government policy and the recommendation of the Senate Scrutiny of Bills Committee.

 

In addition to the safeguard offered by subsection 49(1A), paragraph 49(1B)(a) also introduces a minimum 14 day compliance period, providing the recipient is not the reporting entity who initially communicated the suspicious matter, threshold transaction or international funds transfer report to AUSTRAC.  The distinction between the treatment of reporting entities and other persons is appropriate because the reporting entity that made the initial report would already be aware of the matter (having brought it to the attention of AUSTRAC) and information sought would be more readily accessible due to the record keeping obligations they have as a reporting entity.  In contrast, where a notice to produce is issued to another person they are likely to need more time to comply with the notice, and 14 days is generally considered as the minimum time in which a response can reasonably be expected.

 

However, the ability to require a shorter timeframe under paragraph 49(1B)(b) recognises that AUSTRAC and law enforcement will often require prompt responses so that they can effectively carry out investigations.  Instances where it may be necessary and reasonable for a section 49 notice to require a person to provide further information in less than 14 days would include situations where there was imminent harm to the person, for example terrorism or kidnapping investigations.