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Tuesday, 5 December 2017
Page: 12729


Mr THISTLETHWAITE (Kingsford Smith) (17:22): This bill amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The bill implements the first phase of reforms arising from recommendations of the Report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations. That report was tabled in the parliament on 29 April 2016.

The AML/CTF Act provides the basis for regulation of certain businesses by the Australian Transaction Reports and Analysis Centre, AUSTRAC. The regulatory framework established under the AML/CTF Act and the FTR Act provides for the collection of information from the private sector, and from inbound and outbound travellers, about the movement of money and other assets. AUSTRAC shares this information with associated financial intelligence and designated agencies, non-designated Commonwealth agencies and AUSTRAC's international counterparts in order to combat money laundering, terrorism financing and other serious crimes. This bill aims to strengthen some of those provisions that exist in Australia at the moment, specifically by expanding the objects of the AML/CTF Act to reflect the domestic objectives of such regulation, to bring digital currency exchange providers into the regime, to provide regulatory relief for industry, to strengthen AUSTRAC's investigation and enforcement powers, and to give police and customs officers broader powers to search and seize physical currency and bearer negotiable instruments and establish civil penalties for failing to comply with questioning and search powers. The proposals also revise the definitions of 'investigating officer', 'signatory' and 'stored value card', and they expand the rule-making powers of the AUSTRAC CEO across a number of areas.

The importance of a strong AML/CTF regime in counterterrorism financing cannot be overstated. Money laundering and terrorism financing are relentless threats. The criminal networks that lie beneath impact on all levels of society, from the state to the individual. The Paradise Papers recently have shown how easily money can be moved and held overseas in opaque corporate structures away from regulatory scrutiny. These methods can be utilised readily by criminals seeking to clean their cash, finance terrorism or prop up corrupt regimes.

Earlier this year, the country was rocked by money-laundering allegations and actions that were aimed at the Commonwealth Bank after AUSTRAC alleged, in August, that the bank had failed to properly report more than 53,000 large cash transactions through its intelligent deposit machines between 2012 and 2015. Basically, these machines allow people to deposit up to 200 notes at a time, and often they are able to do that multiple times, onto a key card or a particular card from which an individual can't be identified. The actions that have been taken by AUSTRAC are unprecedented, and the alleged nature of the breaches of any money-laundering laws really highlights the necessity for a banking royal commission and also for the strengthening of associated laws in banking.

Despite this, the government has been attempting to avoid a royal commission into the banks for some months now in Australia. They've been eager to ensure that proper scrutiny wasn't entered into in terms of bank behaviour, particularly in some of the big four banks and the scandals and rip-offs that we've seen there. For the last 600 days, the Prime Minister has been saying: 'No, we won't be having a royal commission. There's no need for one.' He's been ignoring the pleas of the victims of the banks, the whistleblowers and the people who've said that we need a royal commission in this country, including many members of parliament and senators, particularly those senators who were involved in the initial Commonwealth Bank inquiry into wealth management scandals who recommended, on a bipartisan basis through a Senate committee report, that there should be a royal commission in this country. The Prime Minister denied that. Yet, when the big four banks write to the Prime Minister and say, 'We want a royal commission,' the Prime Minister rolls over and gives them exactly that. This, of course, came not from the realisation of the extent of some of the shonky actions and the rotten culture of the big banks but from a request from the banks themselves. If ever there has been any evidence that the government was acting in the interests of the banks, this backflip is it.

The anti-money-laundering and counterterrorism financing regime is long overdue for an update. In 2015, the Financial Action Task Force, the global body responsible for setting and monitoring international standards on combatting money laundering and the financing of terrorism, found that Australia's AML/CTF regime was non-compliant with six international AML/CTF standards. The FATF called on our regulator, AUSTRAC, to pursue a more aggressive enforcement agenda, recommending that Australia should focus more on effective supervision and enforcement of individual reporting entities and compliance with AML/CTF obligations within various sectors.

In the same year that these recommendations were made, AUSTRAC sustained a $7 million budget cut. It was the Abbott Liberal government that has been cutting funding for AUSTRAC over the forward estimates. AUSTRAC sustained a $7 million budget cut under the Abbott government's 2014-15 budget. When Australia was being told to ramp up our AML/CTF enforcement, the Liberal government had cut eight per cent of AUSTRAC's budget. Breaches of our AML/CTF regime are an issue of international and national security and we can't afford to take that threat lightly. In this time of heightened anxiety and international alarm, and being aware of and on notice about terrorism incidents, we need to ensure that the regulators, principally those bodies that are working to uncover terrorism financing and money laundering, are adequately resourced to do their job.

Unfortunately, yet again this government is cutting funding for AUSTRAC. The 2016-17 budget contains a $19 million cut to AUSTRAC's work protecting the financial system from criminal abuse. As I said, in the context of what's going on internationally this defies belief. It absolutely defies belief that as a nation we face increased threats from global terrorism and sophisticated criminal syndicates seeking to move their ill-gotten gains around the globe for nefarious purposes, and yet this government is cutting resources from the regulatory bodies that are charged with tracking down this behaviour and protecting our country.

In conclusion, Labor does support this bill and the elements that will strengthen the AML/CTF regime, particularly giving the AUSTRAC CEO the power to issue infringement notices for a greater range of regulatory offences and allowing the CEO to issue remedial direction to a reporting entity to retrospectively comply with an obligation that has been breached, and giving police and Customs officers broader powers to search and seize. The bill will also bring digital currency exchange providers such as Bitcoin into the AML/CTF regime. However, the government has taken a particularly light touch approach to this reform. Under the government's proposal, digital currency exchange providers would only need to report transactions on physical currency of $10,000 or more. This is despite the fact that their own consultation paper on digital currencies proposed that a threshold of zero dollars apply to digital currency exchange providers and disclosure. So it's a lighter touch than would otherwise be the case. Nonetheless, Labor do support this bill because we recognise the need for strong laws in this space and the increased threat posed by ever-advancing criminal syndicates, and I commend the bill to the Federation Chamber.

Debate interrupted.