House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Justice and Customs Senator the Honourable Chris Ellison)

General Outline

This Bill supplements the provisions of the Proceeds of Crime Bill 2002 by providing transitional provisions and making consequential amendments to other Commonwealth legislation. The Bill repeals the existing money laundering offences in the Proceeds of Crime Act 1987 and replaces them with new provisions in the Criminal Code which are graded both in terms of the mental element required to be established and the value of the property the subject of the dealing which constitutes money laundering.

The Mutual Assistance in Criminal Matters Act is also amended not only to reflect the provisions of the new proceeds regime but also to move many of the provisions which relate to foreign orders and offences from the Proceeds of Crime Act 1987 into that Act. These provisions will also enable the enforcement of civil forfeiture related orders in relation to prescribed countries. It is envisaged that only those countries would be proscribed which provide reciprocity and where there is confidence that the confiscation regime is fair, adequately supervised by an independent judiciary and provides adequate safeguards for innocent third parties.

The Financial Transaction Reports Act 1988 is amended to include the record retention provisions previously included in the Proceeds of Crime Act 1987.

The Bankruptcy and Family Law Acts are amended to clarify the relationship between proceedings under those Acts and proceedings under the Proceeds of Crime Bill 2002.

Consistent with the recommendations of the Australian Law Reform Commission proceeds of crime proceedings will normally take precedence over those other proceedings.

The Taxation Administration Act is amended to expand access by authorised law enforcement agencies to taxation information for the purpose of civil forfeiture investigations and proceedings. The Telecommunications (Interception) Act 1979 is amended to enable the NCA to pass information gained through telephone interception to the Commonwealth DPP and state and territory equivalents in conviction-based proceeds of crime proceedings.

The Administrative Decisions (Judicial Review) Act 1977 is amended to ensure that decisions by the DPP and an approved examiner relating to the conduct of a compulsory examination under the Proceeds of Crime Act are not subject to that Act. The AFP Act is amended to specifically confer powers under the Proceeds of Crime legislation on the AFP.

The amendments to other legislation are purely consequential.

Schedule 7 to the Bill contains the transitional provisions for the phasing out of the confiscation regime in the Proceeds of Crime Act 1987. Generally speaking after the commencement of the new legislation the existing information gathering powers can only be used to execute existing warrants or orders. All orders and warrants are to be sought under the new provisions and information already obtained under the 1987 Act is to be treated as if it were obtained under the new regime. In relation to confiscation action if no restraining order exists at the time of commencement all orders must be sought under the new legislation. Where a restraining order exists all action and enforcement continues under the 1987 Act.

Financial Impact

There is no financial impact flowing directly from the provisions of this Bill. However, as these provisions will render the confiscation regime more effective both in its international operation and in avoiding abuse of bankruptcy and family law proceedings to dissipate assets the impact should be to significantly increase Government revenue. There may be some effect on creditors and divorcing couples as proceeds of criminal activity can no longer be used to satisfy bankruptcy creditors or to support former spouses.

Abbreviations used in the Explanatory Memorandum

NOTES ON CLAUSES

Clause 1 Short Title

This is a formal clause which provides for the citation of the Bill.

Clause 2 Commencement

This clause sets out when each provision in this Act commences, or is taken to have commenced.

Clauses 1 to 3 commence on the day on which the Bill receives Royal Assent.

The provisions relating to money laundering (Schedule 1); foreign proceeds of crime orders and requests by Australia for orders in foreign countries (Schedule 2); the retention of financial transaction documents (Schedule 3); and bankruptcy (Schedule 4) all commence on the day specified in a proclamation as the day on which sections 3 to 332 of the Proceeds of Crime Act 2002 commence.

Schedule 5 relates to property settlement and spousal maintenance proceedings. Items 1 to 9 of this schedule similarly commence on the day specified in a proclamation as the day on which sections 3 to 332 of the Proceeds of Crime Act 2002 commence. Item 10 of this schedule commences either on the above-mentioned day or immediately after the commencement of section 5 of the Family Law Legislation Amendment (Superannuation) Act 2001, whichever is the later.

Schedules 6 and 7, which covers all other amendments, also commence on the day on which sections 3 to 332 of the Proceeds of Crime Act 2002 commence.

Clause 3 Schedule(s)

This clause makes it clear that each Act which is specified in one of the Schedules to this Act is amended or repealed in accordance with the relevant provisions.