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Thursday, 7 December 2017
Page: 10157


Senator O'NEILL (New South Wales) (18:57): I rise to speak on the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 on behalf of the opposition. At the outset, I wish to advise the Senate that the opposition is supporting this bill. Labor believes that Australia's anti-money-laundering and counter-terrorism-financing regime must be strengthened. In recent years there have been deeply concerning instances of money laundering and terrorism financing occurring right here in Australia. These include significant allegations against a major Australian bank, reports of digital currencies being used to disguise payments for child exploitation material, and fake charities being used to launder money for terrorists. There is genuine concern in the community about the strength of our laws to tackle this issue. The experts are worried too.

In 2015 the Financial Action Task Force found that Australia's anti-money-laundering and counter-terrorism-financing regime was non-compliant with six international anti-money-laundering and counter-terrorism-financing standards. In 2016 the government's own statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations provided 84 recommendations as to how our anti-money-laundering and counter-terrorism-financing regime should be strengthened. There is a lot to do.

Unfortunately this bill barely scrapes the surface of what is needed in this space. It only implements the first part of the first phase of reforms, what the government itself has described as the easier parts of the anti-money-laundering and counter-terrorism-financing reform. It does not deal with many of the critical issues outlined by the Financial Action Task Force, and it does not even tackle half of the statutory review's recommendations. So, whilst the opposition supports measures to strengthen our anti-money-laundering and counter-terrorism-financing regime, we are disappointed by the lack of progress in this space.

This bill would expand the objects of the Anti-Money Laundering and Counter-Terrorism Financing Act. It would give the AUSTRAC chief executive officer the power to issue infringement notices for a greater range of regulatory offences. It would allow the AUSTRAC chief executive officer to issue a remedial direction to a reporting entity to retrospectively comply with an obligation that has been breached, and it would give police and customs officers broader powers to search and seizure powers for anti-money-laundering and counter-terrorism-financing breaches.

The most significant change contained in this bill is the inclusion of digital currency exchange providers, such as Bitcoin, into the anti-money-laundering and counter-terrorism-financing regime. The statutory review found that digital currencies are being used as a tool for criminals and terrorist financiers to move and store illicit funds beyond the reach of law enforcement and other authorities and to purchase illicit goods and services. There is a pressing need for the regulation of digital currencies to prevent money laundering and terrorism financing, so we are glad to see digital currency exchange providers brought into the AMLCTF regime. However, the government has taken a particularly light-touch approach to regulating digital currencies in this bill. Under this bill, digital currency exchange providers would only need to report transactions of physical currency of $10,000 or more. This means that 99 per cent of cash transactions would not be captured by the anti-money-laundering and counter-terrorism-financing regime. While the opposition supports the government's decision to bring digital currency exchange providers into the anti-money-laundering and counter-terrorism-financing regime, we are also disappointed by the approach that they have taken.

Equally disappointing is the government's decision to exclude a number of key recommendations of the statutory review from this bill which were meant to be included in the first phase of reform. These include recommendation 3.2, which called for the insertion of principles into the act, including a privacy principle; recommendation 5.9, which called for a prohibition on providing a service if customer due diligence cannot be completed; and recommendation 4.8, which called for digital currency wallets to be brought into the anti-money-laundering and counter-terrorism-financing regime.

Like much of the government's work in this area, there has been a lot of talk about cracking down on criminals, but, sadly, little follow-through. The measures contained in this bill are welcome but are small steps towards improving Australia's anti-money-laundering and counter-terrorism-financing regime. This bill alone will not have a significant impact on Australia's ongoing issues with money laundering or terrorism financing. There are many areas that the government has left untouched. Whilst the opposition supports this bill before the Senate today, there is more to be done. The opposition is willing and eager to work with the government on the more significant challenges Australia faces in responding to money laundering and terrorism financing.