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Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011



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Contents

Purpose .................................................................................................................................................... 2

Background information .......................................................................................................................... 2

Chapter III and courts with federal jurisdiction .................................................................................. 2

The International Finance Trust Company case ................................................................................. 3

Summary ........................................................................................................................................ 3

Findings .......................................................................................................................................... 3

Committee consideration ........................................................................................................................ 4

Financial implications ............................................................................................................................... 5

Key provisions .......................................................................................................................................... 5

Section 156 of the International Criminal Court Act .......................................................................... 5

Section 45 of the International War Crimes Tribunal Act ................................................................... 6

Subdivision A Division 2 of Part VI of the Mutual Assistance Act ....................................................... 8

Concluding comments ........................................................................................................................... 10

BILLS DIGEST NO. 142, 2010-11 21 June 2011

Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

Sharon Scully Law and Bills Digest Section

2 Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

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Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

Date introduced: 26 May 2011

House: House of Representatives

Portfolio: Justice

Commencement: On Royal Assent

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/bills/. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose

The Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011 (the Bill) amends the following Acts:

• Mutual Assistance in Criminal Matters Act 1987 (Mutual Assistance Act)

• International War Crimes Tribunal Act 1995 (International War Crimes Tribunal Act), and

• International Criminal Court Act 1995 (International Criminal Court Act)

so as to address issues raised in the High Court case of International Finance Trust Company Ltd. v New South Wales Crime Commission relating to the constitutional integrity of courts under Chapter III of the Australian Constitution.1

Background information

Chapter III and courts with federal jurisdiction

Chapter III of the Constitution (sections 71-80) provides for the establishment of the High Court of Australia and other courts invested with federal jurisdiction.

1. Explanatory Memorandum, Mutual Assistance in Criminal Matters (Registration of Foreign Proceeds of Crime Orders) Bill 2011, p. 1. International Finance Trust Company Ltd. v New South Wales Crime Commission [2009] HCA 49; (2009) 240 CLR 319.

Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011 3

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In particular, section 71 provides:

The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction.

In addition to their original jurisdiction, State Supreme Courts also exercise federal jurisdiction in particular matters.2

The International Finance Trust Company case

Summary

The case of International Finance Trust Company Ltd. v New South Wales Crime Commission (the International Finance Trust Company case) involved an appeal to the High Court from the Court of Appeal of the Supreme Court of New South Wales (the Supreme Court). The basis of the appeal was that the Criminal Assets Recovery Act 1990 (NSW) (the CAR Act) imposed upon the Supreme Court functions which distorted the Court’s institutional integrity inconsistent with its status conferred pursuant to Chapter III of the Constitution.

The International Finance Trust Company case involved a situation in which, among other things, the then section 10 of the CAR Act enabled the New South Wales Crime Commission (the Crime Commission) to apply to the Supreme Court for a restraining order in relation to some or all property of someone who is suspected of having committed a serious offence. On receipt of such applications, section 10 required the Supreme Court to hear and determine such applications made ex parte by the Commission, without notice to respondents affected by the application.

Ex parte orders are those made following an application in judicial proceedings, without notice to the affected person(s). The justification for ex parte orders is that the situation is so urgent that there is no time to notify the respondent.

In this particular case, there was also no provision in the CAR Act allowing the respondents to challenge the restraining order.

Findings

The majority of the High Court found that section 10 of the CAR Act was invalid as it directed the Supreme Court as to the manner and exercise of its jurisdiction and restricted the application of

2. Supreme Courts’ original jurisdiction generally includes major civil litigation and serious criminal cases: see Supreme Court of New South Wales, About us, viewed 10 June 2011, http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_aboutus

4 Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

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procedural fairness in the judicial process, which is said to lie at the heart of the judicial function.3 According to French CJ:

Procedural fairness or natural justice lies at the heart of the judicial function. In the federal constitutional context, it is an incident of the judicial power exercised pursuant to Ch III of the Constitution. It requires that a court be and appear to be impartial, and provide each party to proceedings before it with an opportunity to be heard, to advance its own case and to answer, by evidence and argument, the case put against it. According to the circumstances, the content of the requirements of procedural fairness may vary. When an ex parte application for interlocutory relief is made the court, in the ordinary course, has a discretion whether or not to hear the application without notice to the party to be affected. In exercising that discretion it will have regard to the legitimate interests of the moving party which have to be protected, whether there is likely to be irrevocable damage to the interests of the affected party if the order is made, and what provision can be made for the affected party to be heard to have the order discharged or varied after it has been made. In so saying, it is not intended to suggest that an official cannot validly be authorised by statute to bring an application ex parte to a federal court or to a State or Territory court capable of exercising federal jurisdiction.

4

It is important to emphasise that it was not merely the making of ex parte orders that was at issue. In fact, it was acknowledged that ex parte applications can be made in every jurisdiction.5 However, what was at issue was that the Supreme Court was restricted from according procedural fairness to people affected by the orders as it was compelled to make the order applied for in the Crime Commission’s application and did not have ensuing discretion as to whether to order that the respondent be notified. Instead, the question of whether notice be given to the respondent was left at the Crime Commission’s discretion.

Importantly, some members of the High Court also found that the provision had the effect such that the Executive Branch of the New South Wales Government in fact directed judicial process.6

Committee consideration

At the time of writing, the Bill had not been referred to any parliamentary committee for inquiry and report.

However, the Senate Scrutiny of Bills Committee did review the Bill and made no comment on it.7

3. See International Finance Trust Company Ltd. v New South Wales Crime Commission, op. cit., at [4], [49]-[50], [54]- [56], [59] per French CJ; [88] and [98] per Gummow and Bell JJ; and [159]-[160], [165] per Heydon J. 4. Ibid., at [54]. 5. See, for example, ibid., [34] per French CJ and [156] per Heydon J. 6. See, for example, ibid., [4] per French CJ. 7. Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 5 of 2011, 15 June 2011, p. 30, viewed 16 June

2011, http://www.aph.gov.au/senate/committee/scrutiny/alerts/2011/d05.pdf

Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011 5

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Financial implications

The Government states that the Bill has no financial impact on Government revenue.8

Key provisions

As mentioned previously, the Bill proposes amendments to legislation, including the following, to address issues raised in the International Finance Trust Company case relating to the constitutional integrity of courts:

• section 156 of the International Criminal Court Act

• section 45 of the International War Crimes Tribunal Act, and

• Division 2 of Part VI of the Mutual Assistance Act.

Section 156 of the International Criminal Court Act

The main aim of the International Criminal Court Act is set out in section 3 of the Act, which provides:

The principal object of this Act is to facilitate compliance with Australia’s obligations under the Statute. 9

Section 156 relates to situations where the International Criminal Court requests the Attorney-General to arrange for the enforcement of forfeiture orders made in relation to property suspected of being located in Australia. The Attorney-General would then request the Director of Public Prosecutions (the DPP) to apply to a court for registration of the forfeiture order.

Currently, subsection 156(1) provides:

If the DPP applies to a court for registration of an order in accordance with an authorisation under section 155, the court must register the order.

Item 1 of the Bill proposes to amend subsection 156(1) so that the provision would state:

If the DPP applies to a court for registration of an order in accordance with an authorisation under section 155, the court must register the order, unless the court is satisfied that it would be contrary to the interests of justice to do so.

The Explanatory Memorandum explains:

8. Explanatory Memorandum, op. cit., p. 1. 9. The Statute, also referred to as the Rome Statute, means the Statute of the International Criminal Court adopted at Rome on 17 July 1998: see International Criminal Court Act 1995 section 5. For a copy of the Rome Statute, see ibid., Schedule 1.

6 Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

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The principal object of the ICC Act is to facilitate compliance with Australia’s obligations under the International Criminal Court Statute (as articulated in section 3 of the ICC Act). The provision will maintain a presumption in favour of registering the foreign proceeds of crime order by providing that the court must register the order, unless satisfied that it is contrary to the interests of justice to do so. Australia’s continued ability to register an order issued by the International Criminal Court will ensure Australia meets its international obligations under articles 93 and 109 of the Rome Statute of the International Criminal Court to provide assistance in enforcing forfeiture orders issued by the Court.

10

Existing subsection 156(3) also requires the court to consider the application without notice being given to affected persons, if the DPP requests the court to do so.

Item 2 of the Bill proposes to amend subsection 156(3) to give the court discretion as to whether to consider such applications on the DPP’s request without notice having been given—the court would no longer be compelled to do so.

The Explanatory Memorandum states:

It is intended that the court will take account of the object of the ICC Act when determining whether to exercise the discretion to not hear a matter on an ex parte basis. 11

Section 45 of the International War Crimes Tribunal Act

The aims of the International War Crimes Tribunal Act are set out in section 3 of the Act, which provides:

The objects of this Act are to enable the Commonwealth to co-operate with a Tribunal in the investigation and prosecution of persons accused of committing Tribunal offences, and, in particular:

(a) to enable the Tribunal to make requests for assistance (see Part 2); and

(b) to provide for persons accused of Tribunal offences to be surrendered to the Tribunal (see Part 3); and

(c) to provide the Tribunal with other forms of assistance in the investigation and prosecution of Tribunal offences (see Part 4); and

(d) to enable the Tribunal to sit in Australia (see Part 5); and

(e) to enable forfeiture orders of the Tribunal to be enforced (see Part 6). 12

10. Explanatory Memorandum, op. cit., p. 4. 11. Ibid.

Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011 7

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Section 45 relates to situations where either the former Yugoslavia Tribunal or the Rwanda Tribunal, as defined in this Act, requests the Attorney-General to arrange for the enforcement of forfeiture orders made in relation to property believed to be in Australia. Where the Attorney-General is satisfied of specific matters under the Act, it may authorise the DPP to apply to a court for registration of the forfeiture order.

Currently, subsection 45(1) provides:

If the Director of Public Prosecutions applies to a court for registration of an order in accordance with an authorisation under this Part, the court must register the order and must direct the Director of Public Prosecutions:

(a) to give notice of the registration, in the manner and within the time the court considers appropriate, to specified persons (other than a person convicted of an offence in respect of which the order was made) the court has reason to believe may have an interest in the property; or

(b) to publish notice of the registration in the manner and within the time the court considers appropriate.

Item 3 of the Bill proposes to amend subsection 45(1) so the provision would state:

If the Director of Public Prosecutions applies to a court for registration of an order in accordance with an authorisation under this Part, the court must register the order unless the court is satisfied that it would be contrary to the interests of justice to do so.

This is consistent with the amendment proposed in item 1 of the Bill.

The Explanatory Memorandum states:

In considering whether registration of the order would be contrary to the ‘interests of justice’, it is not intended that Australian courts will entertain challenges to the validity of the foreign order. Issues relating to the validity of the foreign order are matters most appropriately dealt with by the tribunal that issued the order. This is consistent with the objective of the Act set out in section 3(e) to enable Australia to give effect to forfeiture orders issued by specified international war crimes tribunals.

13

In addition, item 4 of the Bill proposes to insert new subsections 45(1A) and (1B) into the Act. The effect of these amendments is that the DPP would be required to give notice of the application to anyone that it suspects may have an interest in the relevant property and anyone else as directed by the court. In addition, as with item 2 above, the court would have discretion as to whether it would

12. Under section 4 of the International War Crimes Tribunal Act 1995, ‘the Tribunal’ refers to the Former Yugoslavia Tribunal; or (b) the Rwanda Tribunal. Both tribunals are further defined in section 4 of that Act. 13. Explanatory Memorandum, op. cit., p. 5.

8 Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

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proceed to consider the application without notice having been given if requested by the DPP to do so—the court would no longer be compelled to do so.

The Explanatory Memorandum states:

The new subsection will ensure those with an interest in the property subject to the order receive notice of the application to register the order, rather than notice once the order has been registered.

...

This amendment is consistent with the amendments to the ICC Act (in item 2) and to the MA Act (in item 7). 14

Subdivision A Division 2 of Part VI of the Mutual Assistance Act

The aims of the Mutual Assistance Act are set out in section 5 of the Act, which provides:

The objects of this Act are:

(a) to regulate the provision by Australia of international assistance in criminal matters when a request is made by a foreign country for any of the following:

(i) the taking of evidence, or the production of any document or other article, for the purposes of a proceeding in the foreign country;

ii) the issue of a search warrant and the seizure of any thing relevant to a proceeding or investigation in the foreign country;

(iii) the forfeiture or confiscation of property in respect of a foreign serious offence;

(iv) the recovery of pecuniary penalties in respect of a foreign serious offence;

(v) the restraining of dealings in property that may be forfeited or confiscated, or that may be needed to satisfy pecuniary penalties imposed, because of the commission of a foreign serious offence; and

(b) to facilitate the provision by Australia of international assistance in criminal matters when a request is made by a foreign country for the making of arrangements for a person who is in Australia to travel to the foreign country to give evidence in a proceeding or to give assistance in relation to an investigation; and

(c) to facilitate the obtaining by Australia of international assistance in criminal matters.

14. Ibid., pp. 5-6.

Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011 9

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Item 5 of the Bill proposes to insert new section 33A into the Act, relating to specifying the object of Subdivision A—Enforcement of foreign orders as being to facilitate international cooperation in recovery of property through registration and enforcement of foreign orders in Australia. The amendment also clarifies that the validity of foreign orders would not be examined for the purposes of achieving that object.

The Explanatory Memorandum explains:

Australia is a party to a number of international agreements that aim to ensure countries take expeditious action in response to requests by foreign countries to identify, freeze, seize and confiscate laundered property or proceeds from criminal offences.

...

The new object clause and the clause stating the intent of Parliament are designed to ensure that when interpreting the provisions in the Subdivision, courts will have due regard to the overall objective of the Subdivision which is to give effect to foreign orders in situations where property related to serious foreign offences is located in Australia. It is not the intention of the regime in Subdivision A that issues relating to the validity of the foreign order be considered by Australian courts. These matters are most appropriately dealt with by the foreign court (either at the time the order is issued, or on application for review of the order).

...

This is consistent with the principle of international comity and recognises the fundamental importance of reciprocity in international cooperation in criminal matters. 15

Currently, section 34A relates to situations where a foreign country asks the Attorney-General to arrange for enforcement of foreign forfeiture or foreign pecuniary penalty orders, made in relation to a serious offence against a law of the foreign country, in respect of property reasonably suspected of being located in Australia.

Currently, subsection 34A(1) provides:

If the DPP applies to a court for registration of a foreign order in accordance with an authorisation under this Subdivision, the court must register the order accordingly.

Item 6 of the Bill proposes to amend subsection 34A(1) so that it would provide:

If the DPP applies to a court for registration of a foreign order in accordance with an authorisation under this Subdivision, the court must register the order accordingly unless the court is satisfied that it would be contrary to the interests of justice to do so.

This is consistent with amendments proposed in both items 1 and 3 of the Bill.

15. Ibid., p. 6.

10 Mutual Assistance in Criminal Matters Amendment (Registration of Foreign Proceeds of Crime Orders) Bill 2011

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The Explanatory Memorandum explains:

The effect of the amendment will be to give the court discretion to refuse to register a foreign proceeds of crime order if the court is satisfied it would be contrary to the interests of justice to register the foreign order. The provision will maintain a presumption in favour of registering the foreign proceeds of crime order by providing that the court must register the order, unless satisfied that it is contrary to the interests of justice to do so. This presumption reflects the overall objective of the MA Act to enable Australia to assist other countries effectively and expeditiously with direct enforcement of foreign orders made in respect of benefits derived from criminal activity.

Consistent with principles of statutory interpretation, as set out in section 15AA of the Acts Interpretation Act 1901, in interpreting what might be ‘contrary to the interests of justice’, judges are able to take account of the purpose of the Act and Subdivision A of Division 2, Part VI in particular. The objective of the Subdivision, as confirmed by item 5, is to facilitate international cooperation in the recovery of property through the registration and enforcement of foreign orders in Australia. In considering what might be ‘contrary to the interests of justice’, an Australian court should not consider issues surrounding the validity of the foreign order. Challenges of this nature should be left to the issuing foreign court to consider as the most appropriate forum.

16

Item 7 of the Bill proposes to amend subsection 34A(3) of the Act so that, as with items 2 and 4 above, the court would have discretion as to whether to consider such applications on the DPP’s request without notice having been given—it would no longer be compelled to do so.

Concluding comments

The amendments proposed in the Bill, which are consistent with each other, appear to address the concerns raised in the International Finance Trust Company case, whilst recognising the objects of the respective legislation.

16. Ibid., p. 7.

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