House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Justice, the Hon Michael Keenan MP)

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015

37. The Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. To the extent that the measures in the Bill may limit those rights and freedoms, such limitations are reasonable, necessary and proportionate in achieving the intended outcomes of the Bill.

Overview of the Bill

38. The Bill amends the following Acts:

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Proceeds of Crime Act 2002 (POC Act)

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Criminal Code Act 1995 (Criminal Code)

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Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

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AusCheck Act 2007 (AusCheck Act).

39. The Bill contains a range of measures to improve Commonwealth criminal justice arrangements, including amendments to:

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clarify the operation of the non-conviction based confiscation regime provided under the POC Act

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insert two new offences of false dealing with accounting documents into the Criminal Code

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amend the definitions of 'drug analogue' and 'manufacture' to remove ambiguities and ensure that the offences in Part 9.1 of the Criminal Code apply to all relevant substances and processes

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enhance the ability of designated officials and agencies to share information obtained under the AML/CTF Act, and allow the Independent Commissioner Against Corruption of South Australia to access AUSTRAC information

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clarify and extend the circumstances under which AusCheck can disclose AusCheck background check information to the Commonwealth and to state and territory government agencies performing law enforcement and national security functions.

40. Further details regarding the measures in the Bill and their human rights implications are set out below.

Schedule 1 - Proceeds of Crime

41. Schedule 1 will amend the POC Act to clarify the operation of the non-conviction based confiscation regime provided under that Act. The measures in the Bill make amendments to the POC Act to:

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clarify the principles a court may consider when granting an application for a stay of proceedings under the POC Act, including providing grounds on which a stay is not to be granted

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strengthen protections against disclosure and use of material related to the confiscation proceedings in subsequent criminal proceedings

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clarify that, where an exclusion application has been made pursuant to Division 3 of Part 2-1 (dealing with restraining orders) of the POC Act, this application must be heard and finalised prior to the hearing of a forfeiture application.

42. The POC Act provides for a scheme to trace, restrain and confiscate the proceeds and instruments of, and benefits gained from, Commonwealth indictable offences, foreign indictable offences and certain offences against state and territory law.

43. The non-conviction based forfeiture scheme is an essential tool under the POC Act, which is designed to target those who distance themselves from commission of offences, but profit as a result of illegal activity. Under the POC Act, a proceeds of crime authority may apply to restrain property reasonably suspected of being the proceeds of crime, without requiring any person to be charged. The restrained property may later be forfeited if the court is satisfied on the balance of probabilities that the property is proceeds of crime. Section 338 of the POC Act provides that the Commissioner of the Australian Federal Police and the Commonwealth Director of Public Prosecutions are proceeds of crime authorities.

44. The non-conviction based forfeiture scheme was introduced in 2002 in response to findings of the 1999 ALRC Report entitled Confiscation that counts, which concluded that Commonwealth conviction-based proceeds of crime laws were inadequate. Earlier laws had failed to impact at all upon those at the pinnacle of criminal organisations, who, with advancements in technology and globalisation, could distance themselves from the individual criminal acts, thereby evading conviction and placing their profits beyond the reach of conviction-based laws.

45. The non-conviction based scheme operates in addition to the conviction-based forfeiture scheme. Section 319 of the POC Act provides that the fact that criminal proceedings have been instituted or have commenced (whether or not under this Act) is not a ground on which a court may stay proceedings under the POC Act that are not criminal proceedings. This reflected the Parliament's intention that the non-conviction based scheme could operate even where criminal proceedings are on foot.

46. The High Court handed down its decision in Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 ('Zhao and Jin') on 12 February 2015. The High Court upheld the decision to stay non-conviction based forfeiture proceedings under the POC Act until criminal charges against the respondent had been determined. The Bill seeks to clarify the operation of the POC Act following this decision.

47. The Bill inserts a new section 319 which does a number of things.

48. Firstly, new subsection 319(1) clarifies that the court may grant a stay of civil proceedings under the POC Act if the court considers that it is in the interests of justice to do so.

49. Secondly, new subsections 319(2)-(5) clarify where a court must not grant a stay. These principles are designed to clarify the intention that concurrent civil and criminal proceedings are possible, and require specific consideration of the individual circumstances and associated risks of prejudice. The amendments clarify that proceedings under the Act may only be stayed where the granting of a stay is the only means of addressing the circumstances (ie. the prejudice that may result to a concurrent or subsequent criminal trial). The proposed amendments are primarily designed to ensure that the court will consider the individual circumstances of the proceedings, including the nature of the overlap between the civil and criminal proceedings, and prevent the risk that a person need only claim a risk of prejudice but not provide evidence explaining the nature of that risk.

50. Thirdly, new subsection 319(6) provides that, in determining whether a stay of proceedings under this Act is justified, the court will be required to have regard to the following factors:

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that both civil and criminal proceedings should proceed as expeditiously as possible

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the cost and inconvenience to the Commonwealth of retaining property subject to proceedings under this Act and being unable to expeditiously to realise its proceeds

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the risk of a proceeds of crime authority suffering any prejudice (whether general or specific) in relation to the conduct of the POC Act proceedings if the proceedings were stayed

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whether any prejudice that a person (other than a proceeds of crime authority) would suffer if the POC Act proceedings were not stayed may be addressed by the court by means other than a stay of the proceedings, and

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any orders (other than an order for the stay of the POC Act proceedings) that the court could make to address any prejudice that a person (other than a proceeds of crime authority) would suffer if the proceedings were not stayed.

51. Recognising that there may be levels of overlap in individual cases, the Bill also includes supporting measures to strengthen the protection of sensitive information.

52. Firstly, amendments to section 266A of the POC Act clarify that information obtained under the POC Act cannot be shared with an authority where this would contravene a specific non-disclosure order by the court.

53. Secondly, the Bill inserts new section 319A into the POC Act to provide that a court may order that proceedings under this Act (other than criminal proceedings) be heard, in whole or in part, in closed court if the court considers that the order is necessary to prevent interference with the administration of criminal justice. This provides an additional option for the court to consider instead of a stay of proceedings.

54. The Bill also clarifies the order in which certain applications under the POC Act will be heard, following the decision in In the matter of an application by the Commissioner of the Australian Federal Police [2015] VSC 390 ('Zhang'). Schedule 1 makes amends to the POC Act to section 315A to clarify that, where an exclusion application has been made pursuant to Division 3 of Part 2-1 (dealing with restraining orders) of the POC Act, this application must be heard and finalised prior to the hearing of a forfeiture application. A restraining order is an interim measure aimed at preventing a respondent from dissipating property prior to the court having the opportunity to consider the forfeiture of the property. If an exclusion application in respect of a restraining order is not to be heard until after forfeiture has occurred, the more appropriate path would be to make an application for exclusion from forfeiture, as there would be no extant restraining order on foot once forfeiture had been ordered. The amendments do not affect the ability of an individual to make an application for exclusion of property from restraint or forfeiture.

Schedule 2 - False accounting

55. Schedule 2 will amend the Criminal Code to insert two new offences of false dealing with accounting documents.

56. The new offences implement Australia's obligation as a party to the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention). Article 8 of the Convention requires parties to create offences of false accounting for the purposes of concealing or enabling bribes to a foreign public official. Under Article 8, parties are required to:

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prohibit persons from using irregular accounting methods, such as maintaining off-the-books accounts, for the purpose of bribing foreign public officials or hiding such bribery, and

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provide effective, proportionate and dissuasive civil, administrative or criminal penalties for the prohibited conduct.

57. Australia's implementation of the Convention was reviewed most recently in 2012 by the OECD Working Group on Bribery (Working Group). The Working Group found Australia has not fully implemented the accounting obligations required under Article 8 of the Convention.

58. Australia has relied on s 286 (obligation to keep financial records) and s 1307 (falsification of books) of the Corporations Act 2001, and similar offences existing at the state and territory level to combat false accounting and demonstrate implementation of Article 8 of the Convention.

59. The Working Group found that these provisions either do not apply to a wide enough range of circumstances to appropriately criminalise false accounting for the purpose of enabling bribe payments, or do not apply adequate sanctions.

60. The new offences are inserted in a new Division of the Criminal Code, titled 'Division 490-False dealing with accounting documents' in a new Part, titled 'Part 10.9-Accounting records'. The first of the two new offences, at section 490.1 of the Criminal Code, applies where a person makes, alters, destroys or conceals an accounting document, or where a person fails to make or alter an accounting document that the person is under a duty to make or alter, with the intention that the person's conduct would facilitate, conceal or disguise the receiving or giving of a benefit that is not legitimately due, or a loss that is not legitimately incurred. The second offence, at section 490.2, applies in the same circumstances as the first offence, but where recklessness (rather than intention) attaches to the fact that the benefit or loss would arise. In order to establish either of these offences, it will not be necessary to prove that a benefit was actually received or given or a loss actually incurred, or that the defendant intended that a particular person would receive or give a benefit or incur a loss.

61. Schedule 2 imposes penalties that are proportionate to the gravity of each offence. For the offence at section 490.1, to which the fault element of intention attaches, the maximum penalty for an individual is 10 years' imprisonment, a fine of 10 000 penalty units ($1.8 million), or both. The maximum penalty for a body corporate is the greater of: (a) 100 000 penalty units ($18 million); (b) (where the court can determine the value of the benefit) three times the value of the benefit obtained by the body corporate and any related body corporate from the offence; and (c) (where the court cannot determine the value of the benefit) 10 per cent of the annual turnover of the body corporate during the 12 months ending at the end of the month during which the conduct constituting the offence occurred.

62. For the offence at section 490.2, to which the fault element of recklessness attaches, the penalties are half of the penalties for the offence at section 490.1. The maximum penalty for contravention of the offence at section 490.2 for an individual is five years' imprisonment, a fine of 5 000 penalty units ($900 000), or both. The maximum penalty for a body corporate is the greater of: (a) 50 000 penalty units ($9 million); (b) (where the court can determine the value of the benefit) one and a half times the value of the benefit obtained by the body corporate and any related body corporate from the offence; and (c) (where the court cannot determine the value of the benefit) five per cent of the annual turnover of the body corporate during the 12 months ending at the end of the month during which the conduct constituting the offence occurred.

63. The new offences apply both within Australia and overseas, in prescribed circumstances where constitutional power permits. Section 490.6 provides that it is necessary to seek the Attorney-General's consent to commence proceedings where the alleged conduct occurs outside Australia and where the alleged offender is not an Australian citizen, an Australian resident or a body corporate incorporated by or under a law of the Commonwealth or of a state or territory. The requirement to seek the Attorney-General's consent seeks to ensure that where the nexus between the alleged offending conduct and Australia may not be obvious, the Attorney-General is given the opportunity to review relevant considerations concerning international law and comity prior to deciding at his discretion whether to consent to the commencement of proceedings. It is intended that the Office of International Law in the Attorney-General's Department would be consulted prior to seeking the Attorney-General's consent.

Schedule 3 - Criminal Code amendments

Drug analogues

64. The serious drug offences in Part 9.1 of the Criminal Code apply to substances listed as controlled and border controlled drugs, plants and precursors in the Criminal Code Regulations 2002. Controlled and border controlled drugs are listed by their chemical structure.

65. The offences relating to controlled and border controlled drugs also apply to substances that are structurally similar to a listed drug, called 'drug analogues'. Section 301.9 of the Criminal Code sets out the circumstances in which a substance will be a drug analogue of a listed drug. In part, this is to ensure that manufacturers of listed controlled and border controlled drugs cannot alter their chemical structure in order to avoid prosecution under the Criminal Code.

66. The amendments to section 301.9 in Schedule 3 will remove ambiguities in the section and ensure the serious drug offences in Part 9.1 continue to apply to all relevant substances. The amendments will clarify that the terms 'addition' and 'replacement' have their ordinary meaning. They will also clarify that a substance may be a drug analogue of a listed controlled drug even if that substance is also listed as a border controlled drug (and vice versa).

Manufacture

67. Division 305 of Part 9.1 of the Criminal Code contains offences relating to the manufacture of controlled drugs. Subsection 305.1(1) defines 'manufacture' to be any process by which a substance is produced, other than the cultivation of a plant. The subsection states that the processes of extracting or refining a substance, and of transforming a substance into a different substance are included in the meaning of 'manufacture'.

68. In Beqiri v R (2013) 37 VR 219, the Victorian Court of Appeal found that, in order for a process to fall within the meaning of 'manufacture' under subsection 305.1(1), the process had to produce a new substance.

69. The amendments to section 305.1 in Schedule 3 will clarify the meaning of the term 'manufacture' where it is used throughout Part 9.1, including in Division 305 (commercial manufacture of controlled drugs) and section 308.4 (possessing substance, equipment or instructions for commercial manufacture of controlled drugs). These amendments will make it clear that a process which converts a substance from one form into another will fall within the meaning of manufacture. The amendments are intended to capture processes that change the form of the substance (for example, from powder to liquid or from powder into a pill), but that do not necessarily create a new substance or change the chemical structure of the existing substance.

Schedule 4 - Anti-Money Laundering and Counter-Terrorism Financing amendments

70. Item 1 of Schedule 4 will amend the definition of 'designated agency' in section 5 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to include the Independent Commissioner Against Corruption of South Australia (ICAC SA). ICAC SA is a statutory body established under the Independent Commissioner Against Corruption Act 2012 (SA) (ICAC Act). It is charged with identifying and investigating corruption in public administration, and referring corrupt conduct for prosecution. Adding ICAC SA as a designated agency will enable it to access the financial intelligence holdings of the Australian Transaction Reports and Analysis Centre (AUSTRAC), bringing it into line with the abilities of similar statutory bodies in all other states.

71. Item 2 of Schedule 4 will amend the definition of 'foreign law enforcement agency' in section 5 of the AML/CTF Act to specifically include the International Criminal Police Organisation (INTERPOL) and the European Police Office (Europol). Under the current definition, AUSTRAC information is only able to be shared with a government body that has responsibility for law enforcement in a foreign country or a part of a foreign country. This does not extend to international law enforcement coordination and cooperation bodies that are comprised of multiple member countries. The amended definition will also provide for a regulation-making power that is intended to enable additional international bodies, including those with multijurisdictional law enforcement coordination and cooperation functions, to be prescribed. As regulations are a disallowable instrument, the prescription of any additional bodies will remain subject to Parliamentary scrutiny.

72. Item 3 of Schedule 4 will amend subsection 22(1) of the AML/CTF Act to clarify that for the purposes of the AML/CTF Act, an 'official' of a designated agency includes a person appointed as the 'Independent Commissioner Against Corruption' under the ICAC Act or acting in that office; a person appointed as the Deputy Commissioner under that Act or acting in that office; and a person appointed as an examiner or investigator under that Act.

73. Item 4 of Schedule 4 will amend subsection 122(3) of the AML/CTF Act to ensure that 'entrusted investigating officials' (as defined in subsection 122(1) of the AML/CTF Act, and excluding the Commissioner of Taxation or a taxation officer, who are subject to their own disclosure regime pursuant to paragraphs 122(3)(g) and (ga)) have clear authority to make external disclosures of information and documents obtained under section 49 of the AML/CTF Act, where such disclosure is done for the purposes of, or in connection with, the performance of the duties and functions of their office.

74. Section 49 of the AML/CTF Act enables certain designated persons to obtain further information and documents by written notice, based on a Suspicious Matter Report, Threshold Transaction Report, or International Funds Transfer Instruction report made under the AML/CTF Act. This section implements international standards set by the Financial Action Task Force (FATF) requiring competent authorities to be able to obtain documents and information for use in investigations, prosecutions and related actions in relation to money laundering, underlying predicate offences, and terrorist financing.

75. Section 122 sets out what an entrusted investigating official may do with section 49 information. The amendment in Item 4 of Schedule 4 will clarify the operation of subsection 122(3) of the AML/CTF Act in relation to the onward disclosure of section 49 information. In particular, the amendment makes explicit the ability of section 49 information to be disclosed onward by a prescribed official, provided that such disclosure is done for the purposes of, or in connection with, the performance of the duties and functions of their office, including for investigative purposes such as disclosure in applications for warrants. Legislative certainty is required to support the proper performance of investigative and law enforcement functions. Any other disclosures will continue to remain subject to the relevant restrictions on the use of section 49 information set out in Part 11 of the AML/CTF Act.

Schedule 5 - Disclosure etc. of AusCheck scheme personal information

76. Schedule 5 to the Bill will make amendments to Part 1 and Division 3 of Part 1 of the AusCheck Act 2007 ('the AusCheck Act') to clarify and extend the circumstances under which AusCheck can share AusCheck scheme personal information. Specifically, the amendments in Schedule 5 will enable AusCheck to directly share AusCheck scheme personal information with state and territory agencies and a broader range of Commonwealth agencies performing law enforcement or national security functions. AusCheck scheme personal information includes information relating to the individual's identity and information obtained as a result of an AusCheck national security background check - such as criminal history information, matters relevant to a security assessment under the Australian Security Intelligence Organisation Act 1979 and information relating to an individual's citizenship status, residency status and entitlement to work in Australia.

77. The disclosure of information will continue to be protected by robust safeguards including criminal offences in section 15 of the AusCheck Act for the unlawful disclosure of AusCheck scheme personal information, the use of privacy notices to inform applicants and acquire consent for the collection and disclosure of their personal information, the accreditation process for agencies seeking access to information and requirements relating to disclosure under the AusCheck Guidelines; and memoranda of understanding with relevant authorities.

Human rights implications

Schedule 1 - Proceeds of Crime

Schedule 1 engages the following rights:

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right to a fair hearing in Article 14 of the International Covenant on Civil and Political Rights (ICCPR)

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the prohibition on retrospective punishment in Article 15 of the ICCPR

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the right to privacy in Article 17 of the ICCPR.

Article 14 - Right to a fair hearing

78. The amendments in Schedule 1 of the Bill engage the right to a fair trial and public hearing guaranteed by Article 14 of the ICCPR.

79. Article 14 of the ICCPR provides two separate sets of obligations. Article 14(1) provides for the right to 'a fair and public hearing by a competent, independent and impartial tribunal established by law', both in the cases of a 'criminal charge' and the determination of one's rights and obligations in 'a suit at law'. Article 14(2) to (7) then provide the minimum guarantees which apply to criminal proceedings only.

80. Asset recovery actions under the POC Act make no determination of a person's guilt or innocence, but are civil actions designed to complement criminal laws that criminalise conduct such as drug trafficking, corruption and terrorism. This Bill aims to clarify only the POC Act's non-conviction based asset recovery scheme. These proceedings cannot in themselves create any criminal liability, do not result in any finding of criminal guilt and do not expose people to any criminal sanction. The POC Act authorises the imposition of penalties that aim to confiscate the proceeds of offences, the instruments of offences and the benefits derived from offences. These are stand-alone penalties aimed at preventing the reinvestment of illicit proceeds and unexplained wealth amounts in further criminal activities. These penalties are not able to be commuted into a period of imprisonment, and are separate and less severe from the criminal penalties imposed by a court with respect to a person's conduct.

81. These amendments clarify the civil court procedures applicable to POC Act proceedings that may be used by the court to reduce the risk of prejudice to criminal trials. The amendments do not impact on the processes for hearing of criminal trials.

82. It is possible that a person may be subject to the civil non-conviction based asset recovery scheme and also be charged with a criminal offence. Given the civil nature of the non-conviction based asset recovery scheme, this does not engage the protections against double jeopardy in Article 14(7).

83. Accordingly, the Bill engages the right to a fair and public hearing in Article 14(1) of the ICCPR for both civil and criminal matters but does not engage rights in Article 14(2)-(7) relating to minimum guarantees in criminal proceedings.

84. Analysis about compatibility on points arising from Article 14(1) is outlined below:

Article 14(1) - right to a public hearing

85. Article 14(1) provides that 'everyone shall be entitled to a fair and public hearing' and that any judgement rendered in criminal or civil proceedings should be made public, except in limited circumstances. Article 14(1) of the ICCPR also expressly provides that the press and the public may be excluded from all or part of a trial for reasons set out in the Article, including 'to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice'.

86. Courts within Australia already have the ability to make orders which limit open justice. For example, section 17 of the Federal Court of Australia Act 1976 provides that the court may make an order to close the proceedings to the public if it is considered in the interests of justice.

87. New section 319A provides an additional discretion for the court to order that proceedings under the POC Act be heard, in whole or in part, in closed court if the court considers that the order is necessary to prevent interference with the administration of criminal justice. Preventing interference with the administration of criminal justice is designed to meet the legitimate interests of justice in the circumstances of the POC Act. The discretion is designed to protect the interests of a respondent, where they are also a defendant in a criminal trial ensuring that the court may exercise its discretion to protect a respondent's fair trial rights in that criminal trial. In addition to discretion about whether closure is necessary, the court will also have discretion about the extent to which a closed court is appropriate in the individual circumstances. This will allow the court to close only where, for example, it is hearing particular evidence.

88. Article 14(1) in respect of public hearings is also engaged by new subsection 319(6). The effect of subsection 319(6) is to require the courts to consider making any other orders, including the exercise of its discretion to close proceedings, to address any prejudice to a person, as an alternative to a complete stay of the non-conviction based proceeds of crime proceedings. Accordingly, subsection 319(6) does not impose further limits on Article 14(1) in respect of the right to a public hearing. The measures are compatible with the right to a fair and public hearing as the right is only affected to the extent necessary to reduce the risk of prejudice to any criminal trial and accordingly enable the interests of justice to be met in this context.

Article 14(1) - Independence of courts and judicial discretion

89. Article 14(1) of the ICCPR also provides that criminal trials and suits at law must be heard by a 'competent, independent and impartial tribunal established by law'. The Human Rights Committee has confirmed that requirement of independence principally relates to systemic safeguards to ensure the independence of judges, such as security of tenure and fixed and transparent rules around remuneration and promotion, to avoid undue political influence.

90. New section 319 specifies grounds that will not warrant the exercise of the court's discretion to stay proceedings and requires the court to consider particular factors when exercising this discretion, and new section 315A will require the court to resolve matters related to a restraining order (an interim order under the POC Act) before hearing applications related to final forfeiture of the property. While these amendments direct the court to consider particular factors and manage proceedings in a particular order, this is not a situation where the functions and competencies of the judiciary and the executive are not clearly distinguishable, nor where the latter is able to control or direct the former. For these reasons, new section 319 and 315A do not interfere with the independence of the judiciary and are compatible with Article 14(1) of the ICCPR.

Article 15 of the ICCPR - Prohibition against retrospective punishment

91. Article 15 of the ICCPR prohibits the retrospective operation of criminal laws, including the imposition of a heavier penalty than was applicable at the time when a criminal offence was committed. This prohibition does not extend to civil proceedings, such as the determination of a person's rights in non-conviction based asset recovery proceedings under the POC Act.

92. The following information is provided with respect to the application provisions in the Bill.

93. Item 8 of the Bill contains application provisions for the amendments. The amendments will apply to hearings under the POC Act after commencement. The effect of this is that a court in considering a stay application in confiscation proceedings, or considering an application for exclusion from a restraining order, would do so in accordance with the amended procedures regardless of whether the proceeding was initiated before or after the commencement of the POC Act.

94. The application provisions do not change the basis on which restraint has occurred, and does not allow for the making of any new confiscation order retrospectively. As provided for by section 7 of the Acts Interpretation Act 1901 (Cth) the amended Act would not affect any legal proceeding that has already taken place and would not affect remedies, rights and privileges that have been acquired or incurred following this proceeding.

95. Requiring the court to conduct a proceeding in accordance to the amended procedures from the date of commencement will not result in any detriment, or unfairness to a person, whose property or assets are already restrained and subject to the relevant orders made under the POC Act. In these circumstances, proceeds of crime authorities must have already satisfied a court that the property should be restrained, and of the basis on which this restraint should occur. The amended procedure would only apply to the hearing of future applications of exclusion from this order, or future considerations of whether or not the proceedings should be stayed.

Article 17 of the ICCPR -Right to privacy

96. Article 17 of the ICCPR among other things prohibits unlawful or arbitrary interferences with a person's privacy, including personal information, and provides that persons have the right to the protection against such interference.

97. Section 266A of the POC Act engages the right to privacy as it governs the circumstances in which information obtained through use of POC Act powers can be shared which will generally have the effect of limiting the right to privacy.

98. The Bill clarifies on the face of section 266A that information obtained by law enforcement agencies cannot be disclosed where a court has made an order which prevents disclosure to an authority for a particular purpose. In this way, the amendments promote the right to privacy.

Conclusion

99. Schedule 1 is compatible with human rights because they promote the protection of the right to privacy in Article 17 and, to the extent that they may limit human rights in Article 14(1), those limitations are reasonable, necessary and proportionate.

Schedule 2 - False accounting

100. Schedule 2 is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act.

Schedule 3 - Criminal Code amendments

101. Schedule 3 removes ambiguities and clarifies existing definitions in Part 9.1 of the Criminal Code. It does not engage any of the applicable rights or freedoms.

Conclusion

102. Schedule 3 of this Bill is compatible with human rights as it does not raise any human rights issues.

Schedule 4 - AML/CTF Act amendments

103. Schedule 4 of the Bill engages the right to privacy and reputation under Article 17 of the ICCPR. Article 17 of the ICCPR prohibits unlawful and arbitrary interference with a person's privacy, family, home and correspondence. It also prohibits arbitrary attacks on a person's reputation.

104. Collecting, using, storing, disclosing or publishing personal information without a person's consent amounts to an interference with privacy. The right to privacy can be limited to achieve a legitimate objective where the limitations are lawful and not arbitrary. In order for an interference with the right to privacy to be permissible, the interference must be authorised by law, be for a reason consistent with the ICCPR, and be reasonable in the circumstances. The United Nations Human Rights Committee has interpreted the requirement of 'reasonableness' as implying that "any interference with privacy must be proportional to the end sought and be necessary in the circumstances of any given case." ^[1]

105. To the extent that the measures in Schedule 4 of the Bill limit the rights protected under article 17 of the ICCPR, these limitations are not arbitrary, and are reasonable, necessary and proportionate to the achievement of legitimate objectives in fulfilling Australia's international obligations to combat money laundering and the financing of terrorism, and enhance Australia's relations with foreign countries and international organisations.

106. These amendments are consistent with this objective, in that they will assist designated agencies to carry out their functions more effectively, including to combat money laundering and terrorist financing, and will enhance cooperation with relevant international organisations.

107. Schedule 4 of the Bill interacts with the right to privacy and reputation in a number of ways, each of which are considered in further detail below.

Access to AUSTRAC information by ICAC SA

108. The proposed amendment including ICAC SA in the definition of 'designated agency' in section 5 of the AML/CTF Act will enable it to access AUSTRAC information, which may include personal information. The collection, disclosure, storage or use of personal information without a person's consent will engage, and limit, the protection from arbitrary and unlawful interference with privacy in Article 17 of the ICCPR.

109. The amendment seeks to address a legitimate objective by enabling ICAC SA to access AUSTRAC information, which will enhance its capacity to fulfil its statutory mandate to investigate corruption in public administration and bring it into line with the abilities of similar statutory bodies in other states.

110. Use and disclosure of AUSTRAC information by ICAC SA will be subject to the secrecy and access regime set out in Part 11 Division 4 of the AML/CTF Act. In addition, in accordance with the requirements of section 126(3) of the AML/CTF Act, ICAC SA will be required to comply with the Australian Privacy Principles (APPs) under the Privacy Act 1988 (Privacy Act) in its dealings with, and use of, personal information.

111. To the extent that an individual's right to privacy is affected by these provisions, the impact is not arbitrary. As outlined above, the amendments and existing provisions provide that information can only be accessed and disclosed in particular circumstances and only for particular purposes, consistent with the requirements of the AML/CTF Act, the Privacy Act, and APPs. Further, these measures are reasonable, necessary and proportionate to the achievement of the legitimate objective of assisting to fulfil Australia's international obligations to combat money laundering and combat financing of terrorism, and, to enhance Australia's collaboration with international organisations.

Disclosure of AUSTRAC information to foreign law enforcement agencies

112. The proposed amendment to the definition of 'foreign law enforcement agency' in section 5 of the AML/CTF Act will engage, and limit, Article 17 of the ICCPR by allowing the Australian Federal Police (AFP) and the Australian Crime Commission (ACC) to disclose AUSTRAC information to international agencies such as INTERPOL and Europol.

113. The amendment seeks to address a legitimate objective by removing an operational constraint that limited the AFP and the ACC's ability to fulfil Australia's international obligations to combat money laundering and terrorism financing. The amendment will also beneficially affect Australia's relations with foreign countries and international organisations by enabling timely and effective cooperation in the investigation of transnational and multi-jurisdictional crime.

114. To the extent that an individual's right to privacy is affected by these provisions, the impact is not arbitrary. As outlined above, the amendments and existing provisions provide that information can only be accessed and disclosed in particular circumstances and only for particular purposes, consistent with the requirements of the AML/CTF Act, the Privacy Act, and APPs. Disclosure of information to foreign law enforcement agencies is subject to the restrictions on dissemination set out in subsections 132(3) and (6) of the AML/CTF Act. These restrictions stipulate that, prior to disclosing any information, the AFP Commissioner and the CEO of the ACC must first satisfy themselves that the foreign law enforcement agency in question has given appropriate undertakings for the protection of the confidentiality of the information, for controlling the use that will be made of the information, and for ensuring that the information will be used only for the purpose for which it is communicated to that agency. Further, this measure is reasonable, necessary and proportionate to the achievement of the legitimate objective of assisting Australia to combat money laundering and terrorist financing, by enhancing collaboration with foreign enforcement agencies.

Onward disclosure of section 49 information

115. The proposed amendment to subsection 122(3) of the AML/CTF Act will engage, and limit, Article 17 of the ICCPR by facilitating the onward disclosure of information or documents obtained under section 49 of the AML/CTF Act. The ability to request section 49 information is limited to certain Commonwealth agencies, and this amendment is further limited to those agencies with an investigation role: the AFP, ACC, Department of Immigration and Border Protection (DIBP), and the Australian Commission for Law Enforcement Integrity (ACLEI).

116. The amendment seeks to address a legitimate objective by clarifying the operation and effect of subsection 122(3) of the AML/CTF Act. This is necessary to ensure that investigative and enforcement agencies are able to utilise section 49 information for investigative purposes, including in applications for warrants in relation to money laundering, predicate offences (including in relation to serious and organised criminal activity), and terrorism financing.

117. Designated entrusted investigating officials from the AFP, ACC, DIBP, and ACLEI are already entitled to access and disclose information or documents obtained under section 49 of the AML/CTF Act; this amendment seeks only to provide additional clarity regarding the scope and extent of this authority. To the extent that an individual's right to privacy is affected by these provisions, the release of information will occur under the law and will not be arbitrary.

118. Entrusted investigating officials can only disclose information where it is for the purposes of, or in connection with, the performance of the duties and functions of their office. Any other disclosures will continue to remain subject to the restrictions on the use of section 49 information set out in Part 11 of the AML/CTF Act. Further, it is reasonable, necessary and proportionate to the achievement of the legitimate objective of enabling officials to perform their duties effectively, to assist Australia to fulfil its international obligations to combat money laundering and terrorist financing.

Conclusion

119. Schedule 4 of the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act. To the extent that these measures may limit those rights and freedoms, such limitations are reasonable, necessary and proportionate.

Schedule 5 - Disclosure etc. of AusCheck scheme personal information

120. Schedule 5 engages the right to privacy under article 17 of the ICCPR.

Right to privacy

121. Article 17 of the ICCPR accords everyone the right to protection against arbitrary or unlawful interference with their privacy, family, home or correspondence. Accordingly, interferences with the right to privacy will be permitted provided they are not arbitrary and are authorised by law. In order for an interference with the right to privacy not to be 'arbitrary', the interference must be for a reason consistent with the ICCPR and be reasonable in the particular circumstances. Reasonableness in this context incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that:

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limitations serve a legitimate objective

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limitations adopt a means that is rationally connected to that objective, and

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the means adopted are not more restrictive than they need to be to achieve that objective.

122. The amendments in Schedule 5 will interact with the right to privacy in that it will facilitate AusCheck's sharing of individuals' personal information with Commonwealth, state and territory agencies where there is a law enforcement or national security need.

123. AusCheck is already authorised to disclose information to Commonwealth agencies for law enforcement and national security related purposes in circumstances currently provided in subparagraph 14(2)(b)(iii) of the AusCheck Act. The amendments enable AusCheck to disclose AusCheck scheme personal information with a broader range of Commonwealth agencies. However, disclosure must still be for the performance of functions relating to law enforcement or national security. The amendments also allow AusCheck to disclose information directly to state and territory agencies, including state and territory police, for the performance of functions relating to law enforcement or national security.

124. AusCheck performs an important national security role by coordinating background checking of individuals that require access to secure aviation and maritime security zones. AusCheck scheme personal information contains valuable security information such as criminal history and ASIO security assessment information on individuals who pose criminal and national security related risk. The amendments, which improve access to AusCheck Scheme personal information, provide a reasonable and proportionate means of supporting relevant Commonwealth agencies to effectively perform their law enforcement and national security functions. These agencies could benefit from better access to AusCheck information about individuals with access to secure areas. At present, a number of agencies that play a role in Australia's national security are outside the scope of those with which AusCheck can share information-particularly state and territory police operating at airports and maritime ports. The amendments in Schedule 5 are reasonable and proportionate in achieving the end of contributing to effective law enforcement and the national security of Australia.

125. Appropriate safeguards are in place to protect the disclosure of AusCheck scheme personal information under the AusCheck Act. Recipients of the information will still have to satisfy the criteria in new subparagraphs 14(2)(b)(iii) and (iiia) of the AusCheck Act. Specifically, AusCheck can only share information with Commonwealth, state or territory authorities which perform law enforcement and national security functions. This information will continue to be protected through existing privacy protections in the AusCheck scheme. Criminal offences are established in section 15 of the AusCheck Act which criminalise the unlawful disclosure of AusCheck scheme personal information. AusCheck also has robust administrative procedures and practices for ensuring its information is managed in an open and transparent way. The privacy notice outlines the uses and purposes to which personal information will be put. The notice is provided to each applicant prior to lodging an application and is also available on the AusCheck website. The policy includes information on contacting the AGD Privacy Contact Officer and the Office of the Australian Information Commissioner, should an individual feel aggrieved about the treatment of their personal information and wish to make a complaint.

126. AusCheck has also developed Guidelines for Accessing Information on the AusCheck Database ('AusCheck Guidelines') under regulation 15 of the AusCheck Regulations which establish a compulsory framework for providing access to AusCheck information. The AusCheck Guidelines are publicly available on the AusCheck website and require proactive steps for agencies to be approved for access to AusCheck information. The AusCheck Guidelines also publish the agencies approved for access to the database, and the AGD Annual Report includes information about these agencies and the purposes and frequency of access to AusCheck information. The AusCheck Guidelines will be updated to reflect the amendments in Schedule 5 to the Bill and continue to protect the disclosure of AusCheck scheme personal information.

127. Information sharing arrangements are also governed by memoranda of understanding with relevant authorities. AusCheck currently has MOUs to govern its information sharing with the Australian Federal Police (AFP) and the Australian Customs and Border Protection Service (ACBPS) - prior to its integration with the Department of Immigration and Border Protection.

128. The safeguards provide a robust framework that appropriately protects the disclosure of AusCheck scheme personal information.

Conclusion

129. The privacy statement and amendments in Schedule 5 to the Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act. To the extent that these measures may limit those rights and freedoms, such limitations are reasonable, necessary and proportionate in achieving the intended outcome of contributing to effective law enforcement and the national security of Australia. The amendments are limited to sharing for the purpose of law enforcement and national security, are subject to strict safeguards and do not arbitrarily or unlawfully interfere with individuals' privacy.