House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs and the Minister for Immigration and Border Protection, the Hon Peter Dutton MP)

General Outline

1. The Unexplained Wealth Legislation Amendment Bill 2018 (the Bill) amends the Proceeds of Crime Act 2002 (Cth) (the POC Act) to give effect to the National Cooperative Scheme on Unexplained Wealth (the national scheme) as recommended by the February 2014 Independent Report of the Panel on Unexplained Wealth (the Report) by former police commissioners, Mr Ken Moroney AO APM and Mr Mick Palmer AO APM, and negotiated by the Officials-Level Working Group on Unexplained Wealth (the Working Group) under the auspices of the former Law, Crime and Community Safety Council (LCCSC).

2. Depriving criminals of their wealth is a key element in combating serious and organised crime. Unexplained wealth laws provides a valuable tool to law enforcement to confiscate assets where a person linked to criminal activity cannot reasonably demonstrate that these assets have been lawfully obtained.

3. Currently, Commonwealth unexplained wealth orders can only be used in relation to a person or property that is linked to a Commonwealth offence, foreign offence or State offence with a federal aspect. With serious and organised crime groups constantly working across jurisdictions, national law enforcement efforts are being increasingly frustrated.

4. The national scheme will provide a national approach to target unexplained wealth, enabling all participating jurisdictions to work together to effectively deprive these criminals of their wealth, irrespective of the jurisdiction in which they operate.

5. The Bill, supplemented by an Intergovernmental Agreement on the National Cooperative Scheme on Unexplained Wealth (the 'NCSUW agreement') and State Bills, gives effect to the following aspects of the national scheme:

•

extending the scope of Commonwealth unexplained wealth restraining orders (section 20A) and unexplained wealth orders (section 179E) under the POC Act to Territory offences (specifically 'self-governing Territories' including the Australian Capital Territory and the Northern Territory) and 'relevant offences' defined in the legislation of 'participating States'

•

allowing 'participating State' and Territory agencies to access Commonwealth information gathering powers under the POC Act for the investigation or litigation of unexplained wealth matters under State or Territory unexplained wealth legislation, through inserting new provisions based on current production orders and notices to financial institutions powers

•

provisions to ensure the continued effective operation of State and Territory confiscation regimes

•

new equitable sharing arrangements to ensure that the contributions of Commonwealth, State, Territory and foreign law enforcement entities to investigating and litigating proceeds of crime matters and associated criminal proceedings are appropriately recognised through the sharing of recovered proceeds, and

•

amendments to the Telecommunications (Interception and Access) Act 1979 (Cth) (TIA Act) allowing Commonwealth, Territory and 'participating State' law enforcement agencies to use, communicate and record lawfully intercepted information in relation to unexplained wealth investigations and proceedings.

Schedule 1 - Constitutional basis for the measures

6. Schedule 1 to the Bill outlines the constitutional basis for the measures and defines the key terms underpinning the national scheme.

7. In general terms, the application of the measures in the Bill to the Australian Capital Territory and the Northern Territory will be based on the territories power under section 122 of the Commonwealth Constitution, among other powers (see subsection 14B(11) in Schedule 1 of the Bill).

8. To facilitate a national scheme allowing federal unexplained wealth orders, and the operation of other provisions of the POC Act as they relate to unexplained wealth, to extend to State matters (rather than only those matters already within Commonwealth constitutional power) States must agree to either refer power to the Commonwealth or adopt the text of Commonwealth laws under paragraph 51(xxxvii) of the Commonwealth Constitution, and refer the 'amendment reference' (at subsection 14C(4) of the Bill). Each State will retain the discretion under their legislation as to the particular State offences to be included within the scope of the referral or adoption.

9. If a State wishes to join the national scheme before the Bill is enacted , it must follow a two-step referral process. This involves enacting State legislation that refers the following matters to the Commonwealth Parliament:

•

the text references that give the Parliament power to enact Schedules 1, 2 and 4 of the Bill insofar as this power does not already lie with the Commonwealth - thereby granting the Commonwealth the power to validly enact that text as a Commonwealth law extending to that State, and

•

the 'amendment reference' at subsection 14C(4) - which ensures that the POC Act, as amended by the Bill, can be amended from time to time by Commonwealth Parliament and continue to apply in relation to State offences covered by the referral.

10. If, on the other hand, a State wishes to join the Scheme after the Bill is enacted , it must do so by enacting State legislation that adopts the most recently amended version of the POC Act so far as it is a law with respect to the matters that have been referred by another State (that is, the matters in Schedules 1, 2 and 4 of Bill as amended pursuant to another State's 'amendment reference'). The State must also refer the 'amendment reference' at subsection 14C(4) of Schedule 1 to the Bill.

Schedule 1 - Protections for participating States and Territories

11. To ensure that the confiscation regimes of the Territories and 'participating States' continue to operate effectively, Schedule 1 of the Bill includes provisions: preserving the concurrent operation of State and Territory laws (sections 14A and 14L); permitting States to remain 'participating States' even if they terminate their involvement in the national scheme in particular circumstances or they limit the scope of the Commonwealth's 'amendment reference' (subsection 14C(7) and (10)); and allowing States and Territories to rollback any future amendments to relevant provisions of the POC Act, ensuring that these amendments will not apply in their jurisdiction (sections 14G to 14K).

12. In addition, the Bill contains transitional, application and savings provisions at proposed Schedule 2 of the POC Act (as inserted by Schedule 1 of the Bill) which will allow the national scheme to continue to apply to proceedings that were initiated before a 'participating State' terminated its involvement in the scheme or provided that a particular State offence ceased to be a 'relevant offence' for the purposes of the national scheme.

13. These provisions complement mechanisms in the 'NCSUW agreement' to facilitate greater cross-jurisdictional coordination, which are intended to ensure that operational and legislative overlap between jurisdictions can be resolved quickly and efficiently. The mechanisms include de-confliction and consultation requirements should jurisdictions amend laws related to the national scheme.

14. These protections are intended to incentivise participation in the national scheme and ensure the continued operation of a suite of nationally cohesive, effective and cooperative laws to target unexplained wealth.

Schedules 2 and 3 - Extending Commonwealth unexplained wealth orders to State and Territory offences

15. Schedules 2 and 3 of the Bill expressly allow unexplained wealth restraining orders (section 20A) and unexplained wealth orders (section 179E) under the POC Act to be made in respect of all Territory offences, and 'relevant offences' of 'participating States' (to be specified in State legislation).

16. Current Commonwealth unexplained wealth restraining orders and unexplained wealth orders can only be made if the court is satisfied that a person, or the person's wealth, can be linked to a Commonwealth offence, a foreign indictable offence or a State offence that has a federal aspect.

17. Extending unexplained wealth restraining orders and unexplained wealth orders to Territory offences and specified 'participating State' offences will allow law enforcement to more effectively target unexplained wealth. In cases where a criminal syndicate has derived funds from a mix of 'participating State', Territory, foreign and Commonwealth offences, this Bill allows a single federal unexplained wealth regime to be used to restrain and confiscate the illicit funds of syndicate members (regardless of whether the funds were derived from Commonwealth, foreign, State or Territory based offending) rather than relying on a complex patchwork of orders brought by Commonwealth, State and Territory authorities.

Schedule 4 - Allowing State and Territory law enforcement to apply for production orders and issue notices to financial institutions

18. Schedule 4 of the Bill inserts new information gathering powers to allow access by agencies of 'participating States' and Territories to provisions equivalent to those relating to production orders (Part 3-2) and notices to financial institutions (Part 3-3) under the POC Act for unexplained wealth investigations and litigation under State and Territory 'unexplained wealth legislation'.

19. Production orders currently can only be sought by 'authorised officers' which, under section 338 of the POC Act, does not include State or Territory law enforcement and prosecutorial entities. Similarly, notices to financial institutions can only be issued by a limited class of senior Commonwealth officers (see subsection 213(3) of the POC Act). These notices compel the production of information or documents to 'authorised officers' which, as mentioned above, does not include State or Territory law enforcement or prosecutorial entities. Further, these provisions have been designed to facilitate the investigation and litigation of Commonwealth proceeds of crime matters, rather than State and Territory unexplained wealth matters.

20. Allowing 'participating State' and Territory agencies to apply for production orders and issue notices to financial institutions will greatly assist these agencies in obtaining information to support the investigation and litigation of unexplained wealth matters. 'Participating States' and Territories will be required to report annually on the use of these provisions.

Schedule 5 - Equitable sharing arrangements

21. Schedule 5 of the Bill contains provisions which give effect to new equitable sharing arrangements, which will operate through the Cooperating Jurisdiction Committee (CJC). The CJC is made up of representatives from the Commonwealth, 'cooperating States', 'participating States' and Territory parties to the 'NCSUW agreement', and ensures that jurisdictions are appropriately recognised for assisting in the investigation and litigation of proceeds of crime matters and associated criminal proceedings through the sharing of recovered proceeds.

22. The new equitable sharing arrangements are based on a presumption that proceeds from an action under the POC Act will be allocated in equal shares to each participating jurisdiction which contributed to that action. A general outline of these new arrangements is provided in the 'NCSUW agreement', which also includes definitions of key terms used in Schedule 5 including 'shareable', 'corresponding proceeds', 'decision-making period', 'contribution' and 'payment period'.

23. These arrangements will be supported by increased transparency in equitable sharing payments between jurisdictions participating in the national scheme. The 'NCSUW agreement' imposes record keeping requirements to enable the effectiveness of these new arrangements to be assessed.

Schedule 6 - Improvements to information sharing arrangements

24. Schedule 6 of the Bill improves information sharing between jurisdictions by amending the TIA Act to allow Commonwealth, 'participating States', Northern Territory and Australian Capital Territory law enforcement to use, communicate and record lawfully intercepted information in relation to unexplained wealth investigations and proceedings.

25. The TIA Act already allows lawfully intercepted information to be used for proceedings for the confiscation or forfeiture of property or for the imposition of a pecuniary penalty in connection with the commission of a prescribed offence, which includes some unexplained wealth proceedings. However, the new provisions will ensure that it is available for use in relation to all Commonwealth, and 'participating State' and Territory unexplained wealth matters, including those that do not require a connection with the commission of an offence.

26. Schedule 6 also contains amendments that will allow the New South Wales Crime Commission to use, communicate and record lawfully intercepted information in relation to proceedings for the confiscation or forfeiture of property or the imposition of a pecuniary penalty, in connection with a prescribed offence. These amendments will ensure that the Commission can disclose lawfully intercepted information to defendants in proceeds matters without first filing this information as evidence in court, which will greatly assist the Commission in settling proceeds matters out of court.

Schedule 7 - Review of national scheme

27. Under Schedule 7, a review of the 'national unexplained wealth provisions' (the key operative provisions in the scheme) must be undertaken as soon as practicable after the fourth anniversary of the commencement of the Unexplained Wealth Legislation Amendment Act 2018. This review is intended to inform the States of the efficacy of the national scheme before deciding whether to continue participating in this scheme.

Schedule 8 - Amendments to the Proceeds of Crime Regulations 2002

28. Schedule 8 of the Bill makes amendments to the Proceeds of Crime Regulations 2002 to clarify that the definition of 'unexplained wealth legislation' in section 338 of the Act extends to particular provisions of the Criminal Assets Recovery Act 1990 (NSW) and the Criminal Property Forfeiture Act (NT).

Financial Impact

29. The Bill will have no financial input.

ABBREVIATIONS

Statement of Compatibility with Human Rights

30. This 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.

Overview of the Bill

31. Commonwealth unexplained wealth laws were introduced in 2010 as part of a suite of reforms to more effectively prevent and investigate organised crime activity, and target the criminal profits of organised crime groups. The laws are located in the POC Act, which provides a comprehensive scheme to trace, investigate, restrain and confiscate proceeds generated from Commonwealth indictable offences, foreign indictable offences and certain offences against State and Territory law.

32. There are three types of orders which can be sought in relation to unexplained wealth under the POC Act:

•

unexplained wealth restraining orders (section 20A)

•

preliminary unexplained wealth orders (section 179B), and

•

unexplained wealth orders (section 179E).

33. Unexplained wealth restraining orders are interim orders that restrict a person's ability to dispose of, or otherwise deal with, property. These provisions ensure that property is preserved and cannot be dissipated prior to the making of an unexplained wealth order. A court must make an unexplained wealth restraining order if satisfied that there are reasonable grounds to suspect that:

•

a person's total wealth exceeds the value of the person's wealth that was lawfully acquired; and

•

the person has committed an offence, or the whole or any part of the person's wealth was derived from an offence, against the law of the Commonwealth, a foreign indictable offence or a State offence with a federal aspect.

34. Preliminary unexplained wealth orders require a person to attend court to demonstrate whether or not his or her wealth was derived from lawful sources. The court has discretion whether to make an unexplained wealth restraining order or a preliminary unexplained wealth order if there are not reasonable grounds to suspect that the person's total wealth exceeded their lawfully acquired wealth by $100,000 or more (paragraph 20A(4)(a) and subsection 179B(4)) and may refuse to make an unexplained wealth restraining order or revoke a preliminary unexplained wealth order, if this is in the public interest (paragraph 20A(4)(b) and subsection 179C(5)).

35. If the court is not satisfied that the person's wealth was not derived from an offence against a law of the Commonwealth, a foreign indictable offence or a State offence that has a federal aspect, then it must make an unexplained wealth order (subsection 179E(1)).

36. Unexplained wealth orders are final orders that make payable to the Commonwealth an amount which, in the court's opinion, constitutes the difference between a person's total wealth and the value of the person's property which the court is satisfied was not derived from the commission of an offence against a law of the Commonwealth, a foreign indictable offence or a State offence with a federal aspect, that is, the difference between their total wealth and their wealth that has been lawfully acquired. This amount can be increased or decreased in certain circumstances (see section 179J).

37. On 19 March 2012, the Parliamentary Joint Committee on Law Enforcement's report on the Inquiry into Commonwealth Unexplained Wealth Legislation and Arrangements recommended that the Commonwealth Government seek a referral of powers from the States for the purpose of legislating for a national unexplained wealth scheme.

38. In February 2014, the Independent Report of the Panel on Unexplained Wealth ('the Report') by former police commissioners, Mr Mick Palmer AO APM and Mr Ken Moroney AO APM, found that existing arrangements for dealing with unexplained wealth were not working effectively, particularly where criminal assets and activities were spread across multiple jurisdictions. The Report found that constitutional limits on Commonwealth laws significantly reduced the capacity for federal agencies to assist States and Territories to pursue assets located offshore or to coordinate action across multiple States.

39. To address this issue, the Report recommended that all Australian Governments agree to a referral of powers from the States to the Commonwealth to enable the unexplained wealth provisions in the POC Act to be broadened to also apply where a link to a suspected State or Territory offence could be established. LCCSC considered these recommendations and agreed to establish an officials-level Working Group on Unexplained Wealth ('the Working Group') to develop a national cooperative scheme on unexplained wealth premised on a referral of powers.

40. The amendments in the Bill give effect to the national scheme as negotiated by the Working Group.

41. Schedule 1 of the Bill outlines the key aspects of the national scheme, and includes amendments which:

•

allow for the concurrent operation of State and Territory unexplained wealth provisions

•

introduce 'roll-back' provisions that allow States and Territories to disapply amendments to Commonwealth laws as they apply to State or Territory offences

•

clarify the constitutional basis for provisions relating to referral or adoption, and

•

define key terms such as 'unexplained wealth', 'adoption Act', 'referral Act' and 'participating State'.

42. Schedule 1 of the Bill also allows the national scheme to continue to apply to proceedings that have already been initiated in the event of termination or cessation of the scheme. It also provides that the amendments made under Schedule 2 of the Bill (which extends the Commonwealth unexplained wealth regime to certain offences against the laws of 'participating States') apply regardless of when the offence was committed, when the wealth was acquired or when the property came into a person's effective control.

43. Schedule 2 of the Bill extends the 'main unexplained wealth provisions' (as defined by subsection 14B(3) of Schedule 1) to certain 'relevant offences' against the laws of referring or adopting States. 'Relevant offences' will be specified in legislation to be enacted by the referring or adopting States (see item 8 of Schedule 2).

44. Schedule 3 of the Bill extends the 'main unexplained wealth provisions' to offences against the laws of 'self-governing Territories'. The amendments made under Schedule 3 apply regardless of when the offence was committed, when the wealth was acquired or when the property came into the person's effective control.

45. Schedule 4 of the Bill contains amendments to the POC Act that do not relate to specific recommendations of the Report but have been identified by the Working Group as necessary to improve information gathering by 'participating States' and 'self-governing Territories'.

46. These amendments:

•

allow a magistrate to make a production order requiring a person to produce documents to an 'authorised officer' of a 'participating State' or Territory that are relevant to determining whether to take action against a person under the unexplained wealth legislation of the 'participating State' or 'self-governing Territory' or in relation to proceedings against a person under that legislation

•

allow a specified official of a 'participating State' or 'self-governing Territory' to give notice to financial institutions to provide an 'authorised officer' with certain information or documents relevant to determining whether to take action against a person under the unexplained wealth legislation of the 'participating State' or Territory or in relation to proceedings against the person under that legislation

•

permit the disclosure of information obtained under a production order or notice to a financial institution to particular authorities for particular purposes, and

•

require authorities to report to the Parliamentary Joint Committee on Law Enforcement on information obtained under production orders or notices to financial institutions if requested and to provide a written report to the Minister on the use of the powers each financial year.

47. Schedule 5 of the Bill contains amendments that give effect to the new sharing arrangements for proceeds of crime realised under the national scheme. These amendments:

•

allow amounts that have been paid (or are to be paid) under the 'national cooperative scheme' or an 'equitable sharing program' to be credited to or debited from the Confiscated Assets Account (CAA), and

•

outline the arrangements for sharing 'proceeds of confiscated assets' with States, Territories or foreign countries under the 'national cooperative scheme'.

48. Schedule 6 of the Bill amends the Telecommunications (Interception and Access) Act 1979 (Cth) (TIA Act) to facilitate information-sharing on unexplained wealth between Commonwealth, 'participating State' and Territory agencies.

49. Schedule 7 of the Bill provides that an independent review of unexplained wealth provisions and any other matter under the 'NCSUW agreement' must be undertaken as soon as practicable after the fourth anniversary of the Unexplained Wealth Legislation Amendment Act 2018.

50. Schedule 8 of the Bill makes amendments to the Proceeds of Crime Regulations 2002 to clarify that the definition of 'unexplained wealth legislation' in section 338 of the POC Act extends to particular provisions of the Criminal Assets Recovery Act 1990 (NSW) and the Criminal Property Forfeiture Act (NT).

51. The purpose of the Bill is to provide a stronger basis for the Commonwealth to work with States and Territories through coordinated operations to comprehensively target criminal assets-utilising unexplained wealth laws to undermine criminal gangs and prevent them reinvesting their profits to support further criminal activity.

Human rights implications

52. The human rights that may be of relevance to the Bill are those set out in Articles 2(3), 14(1) and 17 of the International Covenant on Civil and Political Rights (ICCPR),

Article 2(3) - Right to an effective remedy

53. Article 2(3) of the ICCPR protects the right to an effective remedy for any violation of rights or freedoms recognised by the ICCPR, including the right to have such a remedy determined by a competent judicial, administrative or legislative authority or by any other competent authority provided for by the legal system of the state. The right to an effective remedy applies notwithstanding that a violation has been committed by persons acting in an official capacity.

54. The Bill does not contain measures that prevent a person from bringing a private action for compensation. Therefore the right to an effective remedy is not engaged.

Article 14(1) - Right to a fair hearing in civil proceedings

55. Article 14(1) of the ICCPR guarantees equality before courts and tribunals, and the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

56. Proceedings under the POC Act are civil proceedings heard by Commonwealth, State and Territory courts in accordance with relevant procedures of those courts. This affords an affected person adequate opportunity to present his or her case, such that the right to a fair hearing is not limited. The Bill will not affect the civil court procedures applicable to POC Act proceedings.

57. In some situations, applications for interim POC Act orders such as unexplained wealth restraining orders or preliminary unexplained wealth orders may be heard without notice being given to the person who is the subject of the application at the time the application is made (subsections 26(4) and 179B(3)). These are important features of the laws that serve the justifiable and reasonable purpose of preventing a person from dispersing his or her assets during the time between an order being sought and an order being made.

58. The POC Act also specifies that a court is not prevented from making an unexplained wealth order simply because the person who has been ordered to appear by the court making the preliminary unexplained wealth order has failed to appear (paragraph 179E(4)(b)). This provision fulfils the justifiable and reasonable purpose of preventing persons from frustrating unexplained wealth proceedings by simply failing to appear when ordered to do so.

59. Should an unexplained wealth restraining order or preliminary unexplained wealth order be made without notice, the POC Act provides mechanisms which allow a person to quickly contest these orders (sections 29, 31 and 179C). The amendments in the Bill will not affect the ability of a person to challenge the making of an order.

60. Accordingly, the Bill engages, but does not limit, the fair trial rights provided for in Article 14(1) of the ICCPR.

Articles 14(2)-(7) and 15 - Minimum guarantees in criminal proceedings

61. Articles 14(2) to (7) and Article 15 of the ICCPR provide minimum guarantees which apply to criminal proceedings only. The United Nations Human Rights Committee has stated that criminal charges primarily encompass acts that are declared to be punishable under domestic criminal law, but may also extend to acts that are criminal in nature with sanctions that, regardless of their qualification in domestic law, must be regarded as penal. Relevant factors in considering whether charges are criminal include whether proceedings are brought by a public authority, whether there is a punitive element to the process and whether there are potentially serious consequences such as imprisonment (see Human Rights Committee General Comment 32).

62. Unexplained wealth proceedings and other proceedings under the POC Act are brought by a public authority for the purpose of determining and punishing breaches of Commonwealth law. However, these proceedings are civil proceedings only and are not criminal in nature - unexplained wealth orders imposed via unexplained wealth proceedings cannot create any criminal liability, do not result in any finding of criminal guilt and do not expose people to any criminal sanctions. Proceedings on an application for a restraining order or an unexplained wealth order are also explicitly characterised as civil in section 315 of the POC Act and the rules of statutory construction and evidence applicable only in relation to criminal law do not apply in proceedings under the Act.

63. As a result, the amendments in the Bill do not engage aspects of Article 14(2)-(7) and (15) relating to the determination of criminal charges.

Article 17 - Right to privacy

64. Article 17 of the ICCPR accords everyone the right to protection against arbitrary or unlawful interference with their privacy, family, home or correspondence. This includes the right to protection from interferences with a person's personal information and property, particularly where it is a family home. Interferences are permissible so long as they are authorised by law and are not arbitrary.

65. The term 'unlawful' in Article 17 means no interference can take place except in cases authorised by law. What is 'arbitrary' will be determined by circumstances of each case. In order for an interference with the right to privacy not to be arbitrary, the interference must be for a reason consistent with the provisions, aims and objectives of the ICCPR and be reasonable in particular circumstances. The United Nations Human Rights Committee has interpreted reasonableness in this context to imply that any interference with privacy must be proportional to the end sought and be necessary in the circumstances of any given case.

66. The measures in this Bill are designed to achieve the legitimate objectives of combating criminal activity and ensuring that property acquired unlawfully is not retained by criminals.

(a)(i) Interference with privacy - production orders and notices to financial institutions

67. Schedule 4 of the Bill allows relevant authorities in Territories and 'participating States' to compel others to provide documents or information using production orders or notices to financial institutions.

68. To the extent that the amendments in Schedule 4 may limit the right to privacy, any limitation of those rights is aimed at disrupting and combating serious and organised crime by facilitating information-sharing programs between Commonwealth, State and Territory agencies whose functions relate to unexplained wealth. Any limitations of rights are reasonable, necessary and proportionate to achieving this purpose.

69. Information obtained from these orders and notices can only be disclosed to specific authorities where a person believes on reasonable grounds that the disclosure will serve a purpose provided in Part 3 of Schedule 4 of the Bill. Disclosure can be made, for example, to the Australian Tax Office only for the purpose of protecting public revenue.

70. While information can be disclosed to an investigative or prosecutorial body for the purpose of investigating or prosecuting a crime punishable by at least three years imprisonment, evidence obtained from a production order against a person will not be admissible in criminal proceedings against this person under proposed subsection 18(3), except where these criminal proceedings relate to the provision of false or misleading information under sections 137.1 or 137.2 of the Criminal Code in relation to producing a document or making it available.

71. The use of these powers will also be supervised by the Parliamentary Joint Committee on Law Enforcement, which may require an authority to provide further particulars on any information disclosed under a production order or notice to financial institutions, and the use of these powers will be outlined in a yearly report to the Minister.

(a)(ii) Interference with privacy - TIA Act amendments

72. Schedule 6 of the Bill engages the right to privacy by allowing officers in Commonwealth, Territory and 'participating State' agencies to use, record, or communicate lawfully intercepted information or interception warrant information for a purpose connected with an unexplained wealth proceeding in relation to the agency. These amendments also allow the chief officer of an agency to communicate lawfully intercepted information to the relevant Commissioner of Police if that information relates to the unexplained wealth provisions of that jurisdiction.

73. To the extent that the amendments in Schedule 6 may limit the right to privacy, these limitations are reasonable, necessary and proportionate to achieving the legitimate objective of ensuring that law enforcement authorities are in a position to effectively combat serious and organised crime by improving the information-sharing arrangements between law enforcement agencies that deal with unexplained wealth.

74. The TIA Act prohibits law enforcement from intercepting communications or accessing stored communications except for proper purposes under a warrant or authorisation. Under the Act, law enforcement agencies may only share lawfully intercepted or stored information with other agencies in particular circumstances and for particular purposes.

75. The tools available under the interception regime in the TIA Act are often useful in obtaining information about organised criminal activities when 'traditional' investigative techniques prove inadequate. The Bill allows information obtained under the TIA Act to be shared between law enforcement agencies, thereby facilitating the effective investigation of unexplained wealth matters, which often involve the covert movement of funds across State and Territory borders.

76. Under the TIA Act, the purposes for which disclosure can occur, and the authorities with which information is shared, are strictly limited. Information obtained under the TIA Act is also subject to a range of protections under the Act, including:

•

restrictions that prevent Australian law enforcement, anti-corruption, and national security agencies from accessing communications and telecommunications data except for proper purposes under a warrant or authorisation

•

prohibitions on a range of people associated with the telecommunications industry, such as employees of carriers and emergency call service people, from disclosing any information or document relating to a communication, which includes telecommunications data, and

•

requirements that an authorised officer must consider the privacy of a person before authorising the disclosure of particular information, or that persons who issue warrants must consider the privacy of the persons affected by those warrants.

77. It is also important to note that the TIA Act already allows for the communication of lawfully intercepted information or interception warrant information relevant to certain forfeiture matters, including the confiscation or forfeiture of property and pecuniary penalty orders which relate to the commission of a prescribed offence. The amendments in the Bill merely extend the existing disclosure laws to ensure that they also cover information relevant to unexplained wealth provisions.

78. The amendments at Schedule 6 therefore impact upon the right to privacy, but impose limitations on this right that are authorised by law and are not arbitrary.

(b) Interference with personal property

79. Schedule 5 of the Bill provides equitable sharing arrangements for property that has already been confiscated under the POC Act. A person who has property confiscated under the POC Act no longer has any interest in this property and the proprietary rights of this person therefore remain unaffected by these sharing arrangements. These sharing arrangements therefore do not engage the right to privacy.

80. Schedules 2 and 3 of the Bill, however, extend the scope of unexplained wealth orders under the POC Act which, like other confiscation orders under the POC Act, interact broadly with the right to protection from interference with a person's property. However, the Bill supports the important objective of ensuring that criminals are not able to profit from their crimes and are deterred from further criminal activity, and provides for a range of safeguards and procedures to ensure that it is not more onerous than necessary in achieving this end.

81. These safeguards and procedures include, but are not limited to, the following:

•

courts may refuse to make an unexplained wealth restraining order, a preliminary unexplained wealth order or an unexplained wealth order if there are not reasonable grounds to suspect that the person's total wealth exceeds by $100,000 or more the value of their wealth that was 'lawfully acquired' (subsections 20A(4), 179B(4) and 179E(6))

•

a court may refuse to make an unexplained wealth restraining order or unexplained wealth order if the court is satisfied that it is not in the public interest to make the order (subsections 20A(4) and 179E(6))

•

courts may also exclude property from the scope of some of these orders or revoke these orders in a range of situations, including (for some orders) where it is in the public interest or the interests of justice to do so (sections 24A, 29A, 42 and 179C), and

•

courts may also make orders relieving dependents from hardship caused by unexplained wealth orders (section 179L) and allow for reasonable expenses to be paid out of funds restrained under unexplained wealth restraining orders (section 24).

82. Proceeds of crime authorities are also Commonwealth agencies that are bound by an obligation to act as model litigants (see paragraph 4.2 and Appendix B of the Legal Services Directions 2017). This obligation requires these authorities to act honestly and fairly in handling litigation brought under the Act, and includes (but is not limited to) obligations not to take advantage of a claimant who lacks resources to litigate a legitimate claim and not to rely on technical defences except in limited circumstances.

83. The amendments are reasonable, necessary and proportionate measures to achieve the legitimate objectives of combating criminal activity and ensuring that property or wealth acquired unlawfully is not retained by criminals.

(c) Conclusion

84. To the extent that any amendments made by the Bill may affect a person's right to protection against arbitrary and unlawful interference with their privacy, family, home or correspondence, these effects are reasonable, necessary and proportionate to achieving the purpose of combating criminal activity and ensuring that property or wealth acquired unlawfully is not retained by criminals.

Conclusion

85. 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 2011. To the extent that these measures may limit those rights and freedoms, such limitations are reasonable, necessary and proportionate in achieving the intended outcomes of the Bill.

Notes on Clauses

Clause 1 - Short title

1. Clause 1 provides for the short title of this Act to be the Unexplained Wealth Legislation Amendment Act 2018 (the Act).

Clause 2 - Commencement

2. Subclause 2(1) provides for the commencement of each provision in the Act, as set out in the table contained in the subclause.

3. Item 1 of the table provides that sections 1 to 3 and anything in the Act not covered elsewhere in the table commences the day the Act receives Royal Assent.

4. Item 2 of the table provides that Schedules 1 to 8 of the Act commence on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day this Act receives Royal Assent, they commence on the day after the end of that period.

5. Subclause 2(2) states that any information in column 3 of the table in subclause 2(1) is not part of the Act, and information may be inserted in this column, or information in it may be edited, in any published version of this Act.

Clause 3 - Schedules

6. Clause 3 states that legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1-State reference or adoption for the purposes of the national cooperative scheme on unexplained wealth

Proceeds of Crime Act 2002

Constitutional basis for the scheme and key terms

7. Schedule 1 provides for the referral of matters from States to the Commonwealth, or the adoption of Commonwealth laws by States, to permit:

•

'proceeds of crime authorities' (including the AFP and Commonwealth Director of Public Prosecutions under section 338 of the POC Act) to take action against wealth suspected of being derived from certain State offences (Schedule 2 of the Bill as passed by Parliament)

•

State and Territory law enforcement entities to apply for production orders or issue notices to financial institutions under the POC Act (Schedule 4 of the Bill as passed by Parliament), and

•

the national scheme to continue to apply to proceedings that have already been initiated in the event of termination or cessation of the scheme (if State legislation refers or adopts Schedule 1 of the Bill as passed by Parliament).

8. Schedule 1 amends Part 1-4 of the POC Act to include provisions: outlining the constitutional basis for the measures in the Bill; defining key terms underpinning the national scheme; providing that 'participating States' and Territories may rollback 'express amendments' to the POC Act that may affect the operation of their laws; and minimising the risk of inconsistency arising between State and Territory 'special confiscation laws' (namely those laws specified under regulation 4 of the Proceeds of Crime Regulations 2002) and the POC Act.

9. Division 1 provides that the POC Act is intended to operate alongside, rather than to the exclusion of, State and Territory laws to the extent that the State or Territory laws are capable of concurrent operation.

10. Subdivision A of Division 2 sets out the constitutional basis for the relevant provisions of the Act, as well as defining terms critical to the operation of a State's referral or adoption - enacted through this Bill and the legislation of referring or adopting States. Critically, proposed Division 2 defines the text to be referred by States and the post-amended versions of the Act to be adopted by States. It sets out the scope of the 'amendment reference', the effect of termination of a reference or adoption, and the criteria a State will need to meet to become a 'participating State' or a 'cooperating State' capable of benefiting from the national scheme.

11. Subdivision B of Division 2 provides a rollback mechanism for participating jurisdictions to determine the scope of the national scheme by expressly rolling back amendments made to certain provisions of the POC Act. This mechanism allows States and Territories to limit their involvement in the scheme rather than removing themselves from the scheme entirely through termination.

12. Subdivision C of Division 2 provides that the 'special confiscation laws' (and orders made under them) of States and Territories are intended to operate concurrently with the 'national unexplained wealth provisions' under the POC Act. This Subdivision is intended to clarify the scope of operation of the unexplained wealth provisions (and orders made under them) to minimise the possibility of an inconsistency arising between the Commonwealth unexplained wealth provisions and the 'special confiscation laws' of a State or Territory.

Transitional, application and saving provisions

13. Schedule 1 also inserts new Schedule 2 into the POC Act, which contains transitional, application and saving provisions. These provisions ensure that key elements of the scheme continue to operate in relation to ongoing matters if a 'participating State' terminates their reference or adoption or if an offence of a 'participating State' ceases to be a 'relevant offence' of the State for the purposes of the scheme.

14. Division 1 of Part 1 of new Schedule 2 outlines that if a 'participating State' ceases to be a 'participating State' because it has terminated its reference or adoption of Schedules 2 (extending federal unexplained wealth orders to State offences) and 4 (allowing State and Territory officials to use production orders and notices to financial institutions) or the 'amendment reference' at subsection 14C(4), then:

•

this termination does not materially affect particular matters that were ongoing at the time the termination took effect, including, but not limited to, the equitable sharing arrangements under Division 2 of Part 4-3, any order made or thing done before termination or any proceedings instituted under the 'national unexplained wealth provisions' before termination, but

•

this termination will impact upon the future operation of the 'national unexplained wealth provisions' for matters brought after termination.

15. Division 2 of Part 1 outlines that if a law of a 'participating State' ceases to be a 'relevant offence' of that State (which may occur if State legislation explicitly provides that this is the case pursuant to item 8 of Schedule 2 of the Bill), then:

•

the cessation does not materially affect particular matters that were ongoing at the time the termination took effect, including, but not limited to, the equitable sharing arrangements under Division 2 of Part 4-3 of the POC Act, any order made or thing done before termination or any proceedings instituted under the 'national unexplained wealth provisions' before termination, but

•

this cessation will impact upon the future operation of the 'national unexplained wealth provisions' for matters brought after termination.

16. Part 2 defines key terms and explains how the amendments made by Schedule 2 of the Bill (extending the unexplained wealth orders provisions to certain offences against the laws of 'participating States') and Schedule 4 of the Bill apply in certain circumstances. This Part contains measures which ensure that ongoing unexplained wealth actions are not frustrated by a particular State or Territory reducing their involvement in the scheme or by onerous requirements that law enforcement prove that particular matters occurred after commencement.

Item 1 - Before section 12

17. This item inserts new 'Division 1-General'.

Item 2 - After section 14

18. Item 2 inserts new sections 14A to 14L in Part 1-4 of the POC Act.

Section 14A - Concurrent operation of State and Territory laws

19. New section 14A replaces the existing general concurrent operation provision for the POC Act at section 15, which is repealed by the Bill, and re-enacts it with some modifications. New section 14A covers the operation of the POC Act but does not apply to the 'national unexplained wealth provisions', which will be covered by section 14L.

20. The concept 'national unexplained wealth provisions' is defined at subsection 14B(2) and includes:

•

the 'main unexplained wealth provisions'; and

•

the 'participating jurisdiction information gathering provisions'; and

•

the 'unexplained wealth machinery and transitional provisions'.

21. These provisions indicate that the POC Act is not intended to operate to the exclusion of State and Territory laws, but is instead to operate concurrently with these laws unless there is a direct inconsistency.

Division 2-The 'national unexplained wealth provisions'

22. Item 2 inserts new 'Division 2-The national unexplained wealth provisions' after section 14A. This new Division splits Part 1-4 of the POC Act into 'Division 1-General', which includes sections 12 to 14A (inclusive), and 'Division 2-The national unexplained wealth provisions', which includes sections 14B to 15 (inclusive).

Subdivision A-General

23. Item 2 inserts new 'Subdivision A-General' after 'Division 2-The national unexplained wealth provisions'. This Subdivision includes new sections 14B to 14F (inclusive).

Section 14B Constitutional basis of the 'national unexplained wealth provisions'

24. Section 14B outlines the constitutional basis for the 'national unexplained wealth provisions'.

Key provisions

25. Subsections 14B(2) to 14B(5) (inclusive) define key terms that are referred to throughout the Bill.

26. The 'national unexplained wealth provisions', as defined by subsection 14B(2), are essentially the operative provisions of the national scheme that are relevant to the States' referral or adoption of power, specifically unexplained wealth restraining orders (section 20A) and other unexplained wealth orders (Part 2-6), State and Territory access to production orders and notices to financial institutions (Schedule 4 of the Bill); and the machinery and transitional provisions underpinning the scheme at Schedule 1 of the Bill.

27. The Bill clarifies that these operative provisions: do not exclude or limit the operation of State or Territory law that is capable of operating concurrently (section 14L); continue to operate in relation to ongoing matters after State termination or roll-back (proposed Schedule 2 of the POC Act), and will be subject to review on the fourth anniversary of the commencement of the Unexplained Wealth Legislation Amendment Act 2018.

28. The 'main unexplained wealth provisions', as defined at subsection 14B(3), are essentially the unexplained wealth regime under the POC Act (section 20A and Part 2-6 of the POC Act) and related provisions (including other parts of the POC Act insofar as they relate to those provisions, such as the information gathering provisions in Chapter 3) or instruments.

29. This term is used in the definition of the 'national unexplained wealth provisions' and in relation to amendments to the Telecommunications (Interceptions and Access) Act 1979 under Schedule 6 of the Bill. The latter amendments expand the ability of authorities to use, communicate and record lawfully intercepted information in relation to proceedings under the 'main unexplained wealth provisions'. This term is also used in the titles of Schedules 2 and 3 of the Bill, which extend the 'main unexplained wealth provisions' to 'Territory offences' and specified offences of 'participating States'.

30. The 'participating jurisdiction information gathering provisions', as defined in subsection 14B(4), are essentially the measures under new Schedule 1 of the POC Act (as inserted by Schedule 4 of the Bill) and section 14A, which gives new Schedule 1 effect, along with related provisions or instruments. New Schedule 1 allows authorities of 'participating States' and 'self-governing Territories' to apply for production orders and issue notices to financial institutions in relation to matters arising under their 'unexplained wealth legislation'

31. The 'unexplained wealth machinery and transitional provisions' under subsection 14B(5) are essentially the key provisions outlining the mechanisms underpinning State and Territory involvement in the scheme and how the scheme will apply to ongoing matters should a State or Territory's involvement in the Scheme be rolled back or terminated. This term is used also to clarify the constitutional basis of various aspects of the scheme under Schedule 1 of the Bill.

Constitutional basis for application in 'participating States'

32. Subsections 14B(6)-(12) set out the constitutional basis for the 'national unexplained wealth provisions' as applied in 'participating States', 'non-participating States', 'self-governing Territories' and outside Australia.

33. The 'national unexplained wealth provisions' generally rely on a mix of the Commonwealth Parliament's existing legislative powers under the Constitution (including the territories power under section 122, the external affairs power at paragraph 51(xxix) and other heads of power under section 51) and the legislative powers that the Commonwealth will have following the enactment of the 'referral Acts' or 'adoption Acts' of 'participating States' under paragraph 51(xxxvii) of the Constitution.

34. The proposed text-based referral of powers from the States, or the adoption of Commonwealth law by the States, will allow the Commonwealth to greatly expand the coverage of the 'national unexplained wealth provisions' to matters typically falling within the legislative powers of State Parliaments.

Section 14C What is a 'participating State'?

35. Section 14C details the steps a State will need to take to become a 'participating State' for the purposes of the national scheme. Territories will be automatically bound by the national scheme upon the enactment of this Bill.

36. In essence, if a State wishes to become a 'participating State' before this Bill is enacted it must, through a 'referral Act', refer power to make Schedules 1 ('text reference 2'), 2 and 4 ('text reference 1') of the Bill and the 'amendment reference' (at section 14D, which supports subsequent amendments to referred or adopted laws) of the Bill to Commonwealth Parliament. The term 'referral Act' is defined in subsection 14C(11) as an Act that meets these conditions.

37. If a State wishes to become a 'participating State' after this Bill is enacted it must, through an 'adoption Act', adopt the bulk of Schedule 1 ('post-amended version 2 of this Act'), as well as Schedules 2 and 4 ('post-amended version 1 of this Act') and refer the 'amendment reference' (at section 14D) to the Commonwealth Parliament. The term 'adoption Act' is defined in subsection 14C(11) as an Act that meets these conditions.

38. 'Participating States' are able to access the key benefits of the scheme, including: the ability to use production orders and notices to financial institutions to gather information for unexplained wealth proceedings (Schedule 4); preferable treatment under enhanced equitable sharing arrangements (Schedule 5); access to telecommunications intercept information (Schedule 6); and protective mechanisms to allow States to leave the national scheme should there be a breakdown in collaboration (Schedule 1).

39. A 'participating State' will become a 'non-participating State' where they terminate their referred or adopted text or their 'amendment reference'. Subsection 14C(7), however, allows States to remain 'participating States' even if their 'referral Act' or 'adoption Act' is structured to terminate their text referral or adoption, or restrict their 'amendment reference', in particular circumstances. A State will also remain a 'participating State' under subsection 14C(10) where all State 'amendment references' terminate on the same day. This allows States to have significant control over their involvement in the national scheme.

40. 'Non-participating States' will not have access to the above benefits. 'Non-participating States', however, will be 'cooperating States' if they terminate particular aspects of their involvement in the scheme due to Commonwealth amendments to equitable sharing or rollback provisions (section 14F). 'Cooperating States' are capable of receiving preferential treatment under the equitable sharing arrangements in Schedule 5, but the Minister retains the ability to declare that a State is not a 'cooperating State' by legislative instrument.

Text to be referred by States

41. Subsections 14C(2) and (3) outline the text of the Bill to be referred by the States (through their 'referral Act') to Commonwealth Parliament. Once this text is referred, the enactment of this Bill will ensure that the Commonwealth has power to validly enact that text so that it applies in referring states.

42. In essence, the matters to be referred by referring States are those that are required to enable the Commonwealth to enact Schedules 1 (including the mechanical and transitional provisions underpinning the referral), 2 (extending Commonwealth unexplained wealth orders to particular State offences) and 4 (information-gathering measures) of the Bill. Those matters are defined by reference to a comparison between the POC Act before the relevant amendments are enacted and the POC Act after the relevant amendments have been enacted.

The 'amendment reference'

43. Subsection 14C(4) defines the 'amendment reference' that a State must refer to Commonwealth Parliament to become a 'participating State'.

44. This 'amendment reference' ensures that the text referred to Commonwealth Parliament or adopted by States can be amended from time to time by the Commonwealth Parliament and will still apply as a law of national application. This 'amendment reference' is a vital component of the scheme, as it ensures that the Commonwealth Parliament can amend the POC Act as it applies to 'participating State' offences, ensuring that Commonwealth legislation remains responsive in an evolving environment.

45. The 'amendment reference' has been structured to ensure that the POC Act will continue to operate in referring or adopting States even if that Act is amended after a referral or adoption is completed, provided that these amendments relate to 'information gathering' or 'unexplained wealth', and are 'express amendments' to the text of the POC Act itself (rather than another Commonwealth Act). These terms are defined at subsection 14C(11).

46. This 'amendment reference' is intended to apply broadly to the POC Act insofar as it relates to 'unexplained wealth' or 'information gathering', extending to (but not limited to) laws concerning the detection, investigation, litigation and administration of unexplained wealth matters including: Schedules 1-8 of the Bill (once enacted), unexplained wealth provisions (sections 20A and Part 2-6 of the POC Act), information gathering provisions (Chapter 3 of the POC Act), administration provisions (Chapter 4 of the POC Act), miscellaneous provisions (Chapter 5 of the POC Act) and relevant interpretation provisions (Chapter 6 of the POC Act).

Text to be adopted by States

47. The purpose of subsections 14C(5) and (6) is to specify the text of the Bill, as enacted by Commonwealth Parliament, to be adopted by States through their 'adoption Act'.

48. Once this text is adopted, it will apply as Commonwealth law in adopting (and referring) States. In essence, the text to be adopted is the amendments to the POC Act made by Schedules 1 (including the mechanical and transitional provisions underpinning the referral), 2 (extending Commonwealth unexplained wealth orders to particular State offences) and 4 of the Bill (information-gathering measures).

49. The law to be adopted is essentially defined by reference to a comparison between the POC Act before the relevant provisions are enacted and the POC Act after the relevant amendments (including any amendments enacted in reliance on the 'amendment reference') have been enacted.

Ceasing to be a 'participating State'

50. Subsection 14C(7) provides that, even where certain conditions are imposed on the text or 'amendment references' by a State, the State will nevertheless be a 'participating State' for the purposes of the Bill.

51. Subsection 14C(8) provides that, where the text reference (or the adoption of a post amended version of the POC Act) terminates in relation to a particular State, that State ceases to be a 'participating State' for the purposes of the Bill.

52. Subsection 14C(9) provides that, where the 'amendment reference' terminates in relation to a particular State, that State ceases to be a 'participating State' for the purposes of the Bill.

53. Subsection 14C(10) provides that States will remain 'participating States' if all terminate their 'amendment references' on the same day. This mechanism provides a means for orderly withdrawal of references where the scheme has, by mutual agreement between all participating jurisdictions, failed to meet expectations. In such circumstances, the Commonwealth will no longer be able to amend the POC Act to the extent that it would otherwise be in reliance on referred power.

54. Subsection 14C(11) sets out other definitions necessary for the interpretation of this Act, including 'adoption Act', 'express amendment', 'pre-amended version of this Act', 'referral Act', 'relevant law 1' and 'relevant law 2'.

Section 14D Meaning of 'unexplained wealth'

55. Subsection 14D(1) sets out that for the purposes of the 'amendment reference' of a State, 'unexplained wealth' means property or wealth that might not have been lawfully acquired. Subsection 14D(2) sets out that the meaning of 'lawfully acquired', ' property' and 'wealth' in subsection (1) includes, but is not limited to, the meaning of those terms in this Act as in force immediately before the enactment of the first 'referral Act' of a State. The definitions of 'lawfully acquired', 'property' and 'wealth' under the POC Act can be found at sections 337A, 338 and subsection 179G(1) respectively.

Section 14E Meaning of 'information gathering'

56. Section 14E establishes that for the purposes of the 'amendment reference' of a State, 'information gathering' means the production or provision of information for the purposes of, or relevant to, the taking of action, or the institution of proceedings, under a law of the State.

Section 14F When a 'non-participating State' is a 'cooperating State'

57. Section 14F outlines the circumstances in which a State will be considered to be a 'cooperating State'. Under the national scheme, 'cooperating States' remain members of the CJC which decides on the distribution of 'sharable proceeds' amongst contributing jurisdictions. 'Non-participating states' (including 'cooperating States'), however, will not have access to the information gathering or information sharing measures at Schedules 4 and 6 of the Bill or to the benefits granted under the Intergovernmental Agreement on the National Cooperative Scheme on Unexplained Wealth (the 'NCSUW agreement'). 'Cooperating States' will, however, retain the benefits relating to equitable sharing.

58. Subsection 14F(1)-(2) provide that a 'participating State' will become a 'cooperating State' where the following occurs:

•

the Commonwealth enacts an 'express amendment' of section 14G or 14J (about rollback) or Division 2 of Part 4-3 of the POC Act (relating to equitable sharing)

•

the State terminated its adoption or referral by proclamation under its 'adoption Act' or 'referral Act', and

•

the State does not terminate its adoption of 'post-amended version 2 of this Act' or 'text reference 2' (the machinery and transitional provisions under Schedule 1 of the Bill as referred or adopted by States).

59. This mechanism is intended to provide security for referring States that the rollback powers in section 14G or 14J, and the equitable sharing arrangements under Division 2 of Part 4-3 of the POC Act, will remain in place as a protection agreed between the Commonwealth, States and Territories. 'Express amendment' to the POC Act by the Commonwealth Parliament without prior consultation with States and Territories of either of these arrangements would constitute a breach of the 'NCSUW agreement', and therefore give rise to circumstances which may result in termination of a State's 'amendment reference', or its referral or adoption process more generally.

60. Where a 'cooperating State' terminates aspects of its involvement in the scheme, but continues to refer the provisions under Schedule 1 of the Bill (the machinery and transitional provisions), the State will be afforded access to the equitable sharing arrangements to preserve good will and facilitate the resumption of negotiations between the 'cooperating State' and the Commonwealth.

61. Under subsections 14F(3)-(5), however, the State will cease to be a 'cooperating State' if the Minister declares that that this State is not a 'cooperating State' by way of legislative instrument. This legislative instrument is not disallowable under subsection 14F(5). This gives the Minister the means to remove the benefits offered to 'cooperating States' should negotiations break down.

Subdivision B - Rollback of particular 'express amendments'

62. New subdivision B allows 'participating States' and 'self-governing Territories' to nullify 'express amendments' to the POC Act as they apply to unexplained wealth proceedings, production orders or notices to financial institutions within their jurisdiction.

63. These rollback mechanisms give 'participating States' and 'self-governing Territories' control over future amendments to: unexplained wealth restraining orders, preliminary unexplained wealth orders and unexplained wealth orders as they apply to proceedings which rely upon their State and Territory offences (Schedules 2-3 of the Bill), and; production orders and notices to financial institutions where these are sought by their State or Territory authorities (under Schedule 4 of the Bill).

64. Subdivision B provides that if a proclamation under a 'participating State's' 'referral Act' or 'adoption Act', or a disapplying law of a 'self-governing Territory', declares that an 'express amendment' to the POC Act is not to apply to particular proceedings, applications, orders or notices, and this proclamation comes into effect within 6 months of the enactment of the 'express amendment', the POC Act will apply to the proceedings involving their State or Territory offences, or production orders and notices to financial institutions applied for by State or Territory entities, as if the amendment was never made.

65. This grants additional assurances to the States and Territories that, if the Commonwealth enacts amendments that are incompatible with State or Territory law or policy, these jurisdictions will be able to rollback those amendments in so far as they apply within that jurisdiction.

Section 14G Effect of rollback by participating States on unexplained wealth proceedings

66. Under section 14G a 'participating State' may, by proclamation that comes into force within six months of the enactment of an 'express amendment' to the POC Act, declare that this amendment does not apply to proceedings for unexplained wealth restraining orders, preliminary unexplained wealth orders and unexplained wealth orders which relied on State offences and were initiated while the proclamation was in force.

67. Where a State chooses to use this mechanism, this will ensure that the Commonwealth cannot progress unexplained wealth proceedings based on the 'express amendment' that was the subject of this proclamation. This limitation will apply even where the proceedings relate to both a 'relevant offence' of a 'participating State' and a Commonwealth offence. However, this will not impact on proceedings where the 'express amendments' are only relevant to Commonwealth offences.

Section 14H Effect of rollback by 'self-governing Territories' on unexplained wealth proceedings

68. Under section 14H a 'self-governing Territory' may, through a disapplying law that comes into force within six months of the enactment of an 'express amendment' to the POC Act, provide that this 'express amendment' does not apply to proceedings for unexplained wealth restraining orders, preliminary unexplained wealth orders and unexplained wealth orders which relied on Territory offences and were initiated while the disapplying law was in force.

69. Where a Territory chooses to use this mechanism, this will ensure that the Commonwealth cannot progress unexplained wealth proceedings based on the 'express amendment' that was the subject of this disapplying law. This will apply even where the proceedings instituted relate to both Territory offences and Commonwealth offences. However, this will not impact on proceedings where the 'express amendments' are only relevant to Commonwealth offences.

Section 14J Effect of rollback by 'participating States' on action taken under State reference information gathering provisions

70. Under section 14J a 'participating State' may, by proclamation that comes into force within six months of the enactment of an 'express amendment' to the POC Act, declare that an 'express amendment' to the POC Act does not apply to the notices to financial institutions and production orders under new Schedule 1 of the POC Act (Schedule 4 of the Bill), as sought by authorised entities of this State, while the proclamation is on foot.

71. Where a State chooses to use this mechanism, this will ensure that their authorised officers will not be bound by the 'express amendment' when seeking notices to financial institutions or production orders under new Schedule 1 of the POC Act.

Section 14K Effect of rollback by 'self-governing Territories' on action taken under State reference information gathering provisions

72. Under section 14K a 'self-governing Territory' may, by disapplying law that comes into force within six months of the enactment of an 'express amendment' to the POC Act, declare that an 'express amendment' to the POC Act does not apply to certain information gathering mechanisms (notices to financial institutions and production orders) as sought by authorised entities of this Territory while the proclamation is on foot.

73. Where a Territory chooses to use this mechanism, this will ensure that their authorised officers will not be bound by the 'express amendment' when applying for notices to financial institutions or production orders under new Schedule 1 of the POC Act.

Subdivision C - Interaction of the 'national unexplained wealth provisions' and orders with State and Territory laws and orders

74. Subdivision C sets out the interaction between the 'national unexplained wealth provisions' and orders with State and Territory law and orders. It contains further clarification provisions to ensure that the laws and orders of 'participating States' and 'self-governing Territories' continue to operate concurrently, so far as is possible, with the POC Act while these jurisdictions remain involved in the scheme.

75. The 'national unexplained wealth provisions' are supplementary to State and Territory laws and do not attempt to provide an exclusive or exhaustive regime for the recovery of unexplained wealth or proceeds of crime. As such, differences between aspects of the 'national unexplained wealth provisions' and State and Territory laws or orders do not indicate that the Commonwealth provisions exclude the operation of State or Territory laws or orders.

Section 14L Concurrent operation of State and Territory laws with 'national unexplained wealth provisions'

76. Subsection 14L(1) allows for the concurrent operation of State and Territory laws with the 'national unexplained wealth provisions'. Under subsection 14L the 'national unexplained wealth provisions' do not exclude or limit the operation of a law of a State or Territory (including a 'special confiscation law') to the extent that the law is capable of operating concurrently with those provisions.

77. Subsection 14L(2) states that a 'corresponding law' of a State or Territory is a 'special confiscation law' while the State is a 'participating State' or the Territory is a 'self-governing Territory'. This ensures that the definition of 'special confiscation law' remains aligned to the list of State and Territory laws at regulation 4 of the Proceeds of Crime Regulations 2002.

78. Subsection 14L(3) outlines that without limiting subsection (1), the 'national unexplained wealth provisions' do not exclude or limit the concurrent operation of a 'special confiscation law' of a State or Territory merely because the 'national unexplained wealth provisions' and the 'special confiscation law' were constructed to deal with the same property or matter.

79. Subsection 14L(4) states that the principle in subsection 14L(3) applies even where a 'special confiscation law' of a State or Territory could apply in a broader, or narrower, fashion to property or a matter that otherwise could be subject to the national unexplained wealth provisions'.

80. Subsection 14L(5) operates to ensure that this section does not, by implication, affect section 14A (which deals with the concurrent operation of this Act, except 'national unexplained wealth provisions', and laws of States and Territories).

81. Subsection 14L(6) details the application of this section. Under subsection 14L(6) this section applies in relation to the operation of the 'national unexplained wealth provisions' and a law of a 'participating State' or 'self-governing Territory' in the period referred to in subsection (7), including in relation to:

•

orders that are made under a 'special confiscation law' in that period in relation to proceedings that are instituted under the 'special confiscation law' before or in that period; and

•

orders that are made under a 'special confiscation law' before that period and that are in force at any time in that period; and

•

orders that are made under the 'national unexplained wealth provisions' in that period in relation to proceedings that are instituted under the 'national unexplained wealth provisions' before or in that period.

82. Subsection 14L(7) outlines that for the purposes of subsection (6), the period is as follows:

•

for a 'participating State' that has a 'referral Act' - the period starts at the commencement of this section and only ends if the State ceases to be a 'participating State', in which case, the period ends at the time the State so ceases; and

•

for a 'participating State' that has an 'adoption Act' - the period starts at the commencement of the State's 'adoption Act' and only ends if the State ceases to be a 'participating State', in which case, the period ends at the time the State so ceases; and

•

for a 'self-governing Territory' - the period starts at the commencement of section 14L and does not end.

Item 3 - At the end of Subdivision D of Division 2 of Part 1-4

83. Item 3 adds Section 14N - Transitional, application and saving provisions relating to the national cooperative scheme on unexplained wealth, which operates such that Schedule 2 of the POC Act (as inserted by Schedule 1 of the Bill) has effect.

Item 4 - Section 15

84. This item repeals section 15 of the POC Act. This section has been replaced by subsection 14A(1) under Division 1 of Part 1-4 of the Act, which operates to the same effect.

Item 5 - Section 338

85. This item inserts the following key definitions under section 338 of the POC Act:

•

adoption Act has the meaning given by subsection 14C(11).

•

amendment reference has the meaning given by subsection 14C(4).

•

express amendment has the meaning given by subsection 14C(11).

•

cooperating State has the meaning given by subsections 14F(1), (2) and (3).

•

information gathering:

(a)

in relation to the 'amendment reference' of a State-has the meaning given by section 14E; and

(b)

otherwise-has its ordinary meaning.

•

Main machinery and transitional provisions has the meaning given by paragraph 14B(5)(a).

•

main unexplained wealth provisions has the meaning given by subsection 14B(3).

•

national unexplained wealth provisions has the meaning given by subsection 14B(2).

•

non-participating State means a State that is not a 'participating State'.

•

participating jurisdiction information gathering provisions has the meaning given by subsection 14B(4).

•

participating State has the meaning given by subsections 14C(1), (7), (8), (9) and (10).

•

post-amended version 1 of this Act has the meaning given by subsection 14C(5).

•

post-amended version 2 of this Act has the meaning given by subsection 14C(6).

•

pre-amended version of this Act has the meaning given by subsection 14C(11).

•

referral Act has the meaning given by subsection 14C(11).

•

relevant law 1 has the meaning given by subsection 14C(11).

•

relevant law 2 has the meaning given by subsection 14C(11).

•

special confiscation law has the meaning given by subsection 14L(2).

•

text reference 1 has the meaning given by subsection 14C(2).

•

text reference 2 has the meaning given by subsection 14C(3).

•

unexplained wealth:

(a)

in relation to the 'amendment reference' of a State-has the meaning given by section 14D; and

(b)

otherwise-has its ordinary meaning.

•

unexplained wealth machinery and transitional provisions has the meaning given by subsection 14B(5).

Item 6 - In the appropriate positions

86. Item 6 inserts new "Schedule 2 - Transitional, application and saving provisions relating to the national cooperative scheme on unexplained wealth".

Schedule 2 - Transitional, application and saving provisions relating to the national cooperative scheme on unexplained wealth

87. Schedule 2 sets out the transitional, application and saving provisions underpinning the national scheme.

Part 1 - General

88. Schedule 2 is split into two parts. Part 1 deals with general matters relating to transitional, application and saving provisions underpinning the national scheme, while Part 2 defines other key terms and contains application provisions that apply to the measures in Schedule 2 of the Bill.

89. Schedule 2 ensures that the national scheme will continue to apply to existing matters where a 'participating State' terminates their referral, adoption or 'amendment reference', or provides that a certain offence is not a 'relevant offence' to which Commonwealth unexplained wealth orders will extend under Schedule 2 of the Bill. This ensures that ongoing matters are not negatively impacted by the termination or cessation of involvement in the scheme and can be continued to finality.

Division 1 - Termination of State reference or adoption

90. Division 1 deals with the termination of a State reference or adoption.

Clause 1- Effect of termination of things that happened beforehand etc.

91. Clause 1 outlines the effect of a 'participating State's' termination of its reference or adoption (as described in subsection 14C(8) and (9) on things that occurred before termination.

92. Clause 1 ensures any proceedings that have been commenced based upon the referral or adoption prior to it being terminated can be seen through to their conclusion and that all actions necessary to support those proceedings can be undertaken. For example, if a restraining order was made under section 20A based on a 'relevant offence' prior to termination and the relevant State's referral or adoption was then terminated, clause 1 of Schedule 2 would operate to ensure that the matter could be seen through to conclusion, including (but not limited to):

•

allowing for an application for a preliminary unexplained wealth order and unexplained wealth order to be made, heard and determined

•

allowing applications ancillary to the unexplained wealth restraining order to be made, heard and determined

•

allowing for a respondent or interested party to make counter applications,

•

allowing investigators to undertake enquiries and use investigative powers to support unexplained wealth proceedings and investigate material and information raised in counter applications

•

allowing for the enforcement of unexplained wealth orders and recovery of unexplained wealth amounts, including through the use of debt recovery mechanisms

•

allowing any action in relation to any proceeding, order, remedy or investigation referred to above to be undertaken.

93. This provides certainty to investigators, proceeds of crime authorities, respondents, courts and other interested parties that the law as it stood prior to the termination continues to apply. It is intended that these provisions be interpreted broadly so that the full range of activities and actions necessary to bring a matter to finality can still occur.

Clause 2 - Effect of termination on the sharing of certain 'proceeds of confiscated assets'

94. Clause 2 outlines the effect of a 'participating State's' termination of its reference or adoption (as described in subsection 14C(8) and (9)) on the equitable sharing arrangements under Division 2 Part 4-3 of the POC Act.

95. Subclause 2(1) provides that this 'participating State' can continue to access these equitable sharing arrangements where an unexplained wealth order relates to a 'relevant offence' of that State. This ensures that States will still have access to the favourable equitable sharing arrangements under Division 2 Part 4-3 of the POC Act for Commonwealth unexplained wealth matters that previously relied on the State's referral or adoption of power and have reached forfeiture stage after termination.

96. Subclause 2(2) clarifies that clause 2(1) does not apply to 'cooperating States', which will continue to have access to the favourable equitable sharing arrangements under Division 2 of Part 4-3 of the POC Act.

Clause 3 - Effect of termination - regulations

97. Subclause 3(1) states that regulations may make provision in relation to circumstances that arise because a State ceases to be a 'participating State'.

98. Subclause 3(2) confirms that subclause 3(1) and clauses 1 and 2 do not limit each other.

Division 2 - Ceasing to be a 'relevant offence' of a State

99. This Division deals with the transitional provisions that apply with an offence against the law of a 'participating State' ceases to be a 'relevant offence' of that State.

Clause 4 - Effect of cessation on things that happen beforehand etc.

100. Clause 4 ensures that if proceedings that have been commenced based upon an offence against a law of a 'participating State' that later ceases to be a 'relevant offence', those proceedings can be seen through to their conclusion and all actions necessary to support those proceedings can be undertaken. For example, if a restraining order was made under section 20A based on a 'relevant offence' that offence later ceases to be a 'relevant offence', clause 4 of Schedule 2 would operate to ensure that the matter could be seen through to conclusion, including (but not limited to):

•

allowing for an application for a preliminary unexplained wealth order and unexplained wealth order to be made, heard and determined

•

allowing applications ancillary to the unexplained wealth restraining order to be made, heard and determined

•

allowing for a respondent or interested party to make counter applications,

•

allowing investigators to undertake enquiries and use investigative powers to support unexplained wealth proceedings and investigate material and information raised in counter applications

•

allowing for the enforcement of unexplained wealth orders and recovery of unexplained wealth amounts, including through the use of debt recovery mechanisms, and

•

allowing any action in relation to any proceeding, order, remedy or investigation referred to above to be undertaken.

101. This provides certainty to investigators, proceeds of crime authorities, respondents, courts and other interested parties that the law as it stood prior to the offence ceasing to be a 'relevant offence' continues to apply. It is intended that these provisions be interpreted broadly so that the full range of activities and actions necessary to bring a matter to finality can still occur.

Clause 5 - Effect of cessation - regulations

102. Subclause 5(1) states that regulations may make provision in relation to circumstances that arise because an offence against a law 'participating State' ceases to be a 'relevant offence' of that State.

103. Subclause 5(2) provides that subclause 5(1) and clause 4 do not limit each other.

Part 2 - Unexplained Wealth Legislation Amendment Act 2018

104. Part 2 deals with the Unexplained Wealth Legislation Amendment Act 2018.

Clause 6 - Definitions

105. Clause 6 establishes that in, in Part 2: 'amending Act' means the Unexplained Wealth Legislation Amendment Act 2018 and 'commencement' means the commencement of Schedule 2 to the amending Act.

Clause 7 - Amendments made by Schedule 2 to the 'amending Act'

106. Clause 7 sets out that the amendments made by Schedule 2 to the 'amending Act' (which extends the 'main unexplained wealth provisions' to certain offences against the laws of 'participating States') apply to an application made after commencement for an order in relation to an offence against a law of a 'participating State', whether or not:

•

the offence is committed, or is suspected of having been committed, before or after the commencement; or

•

the application relates to wealth that is acquired before or after the commencement; or

•

the application relates to property that is acquired before or after the commencement; or

•

the application relates to property that becomes subject to the effective control of a person before or after commencement.

107. Retrospective operation is required to ensure that unexplained wealth action is not frustrated by requiring law enforcement agencies to obtain evidence of, and prove, the precise point in time at which certain property or wealth was derived, acquired, realised or became subject to the effective control of a person.

108. Such a requirement would be unnecessarily onerous and would be contrary to the objects of the Act. Further, it would be almost impossible to show the point at which wealth or property was acquired or derived in cases where a person has accumulated significant amounts of wealth and property over decades and has no apparent source of legitimate income, especially in relation to property that is portable and not subject to registration requirements or where relevant financial records have been destroyed or lost over time.

109. Previous amendments to unexplained wealth orders and restraining orders have been applied retrospectively to property or wealth acquired before the amendments commenced (see item 34 of the Crimes Legislation Amendment (Unexplained Wealth and other Measures) Act 2015 and Schedule 3 item 2 of the Law Enforcement Legislation Amendment (State Bodies and Other Measures) Act 2016).

110. It is also necessary to apply these amendments retrospectively to offences against a law of a 'participating State' to ensure that the aims of the POC Act are not frustrated. It is necessary for these provisions to apply retrospectively as the criminal conduct of the person may continue over several years or may not be discovered immediately.

111. These amendments do not have the effect of criminalising conduct which was otherwise lawful prior to the amendments.

Clause 8 - Amendments by Schedule 4 to the 'amending Act'

112. Subclause 8(1) states that Part 1 of Schedule 1 of the POC Act (as inserted by Schedule 4 of the Bill) applies in relation to production orders applied for after commencement in relation to a document, whether or not:

•

the document was created; or property relating to the document was acquired, derived or realised (directly or indirectly), transferred or subject to the effective control of a person before or after commencement; or

•

the document was relevant for the purposes of determining whether to take action under the 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory' in relation to a matter occurring before or after commencement; or

•

the document was relevant for the purposes of proceedings under the 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory' instituted before or after commencement.

113. Subclause 8(2) states that Part 2 of Schedule 1 of the POC Act (as inserted by Schedule 4 of the Bill) applies in relation to notices to financial institutions given after commencement in relation to information or a document, whether or not:

•

the following occurred before or after commencement: the information was obtained or the document created; related property was acquired, derived or realised (directly or indirectly), transferred or subject to the effective control of a person; a related account was held by a person; a related stored value card was issued; or a related transaction was conducted by a financial institution on behalf of a person; or

•

the information or document was relevant for the purposes of determining whether to take action under the 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory' in relation to a matter occurring before or after commencement; or

•

the information or document was relevant for the purposes of proceedings under the 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory' instituted before or after commencement.

114. Retrospective operation of Parts 1 and 2 of proposed Schedule 1 of the POC Act is required to ensure that unexplained wealth action is not frustrated by requiring law enforcement agencies to obtain evidence of, and prove, the precise point in time at which the above matters arose.

115. Such a requirement would be unnecessarily onerous and would be contrary to the objects of the POC Act. Further, it would be almost impossible to show the point at which certain documents were created, information was obtained, matters occurred or property was acquired where a person has accumulated significant amounts of wealth and property over decades and has no apparent source of legitimate income.

116. In these cases, documents or information could relate to thousands of matters (including transactions, property acquisitions etc.). If the amendments applied prospectively to these matters, these matters would all need to be examined to determine if they occurred after commencement before a document or information could be obtained. This would be virtually impossible in many cases, undermining the utility of production orders and notices to financial institutions for 'participating State' and Territory law enforcement.

117. Obtaining details on these matters would also be particularly difficult in circumstances where: a person's property is portable and not subject to registration requirements; matters have occurred over a broad or undetermined time period, and; where an individual does not keep thorough records detailing the date that particular matters occurred, documents were created or information was obtained.

118. It is also necessary to apply these measures retrospectively to matters (including criminal conduct) as the criminal conduct of the person may continue over several years or may not be discovered immediately.

119. These amendments do not have the effect of criminalising conduct which was otherwise lawful prior to the amendments.

Schedule 2-Extending the ' main unexplained wealth provisions ' to certain offences against the laws of ' participating States '

Proceeds of Crime Act 2002

120. Schedule 2 extends unexplained wealth restraining orders (section 20A), unexplained wealth orders (section 179E) and relevant provisions relating to appeals (subsection 322(4A)) to 'relevant offences' against the laws of 'participating States'. These 'relevant offences' are specified by the 'referral Act' or 'adoption Act' of the State under section 338 of the POC Act.

121. For New South Wales, 'relevant offences' are defined under section 8 of the Unexplained Wealth (Commonwealth Powers) Bill 2018 (NSW), which includes the offences in subsection 6(2) of the Criminal Assets Recovery Act 1990 (NSW) with limited exemptions. When both this Bill and the Unexplained Wealth (Commonwealth Powers) Bill 2018 are enacted, unexplained wealth restraining orders (section 20A) and unexplained wealth orders (section 179E) will extend to a range of serious criminal offences under New South Wales law, including (but not limited to) specified firearms offences and offences punishable by 5 years or more involving theft, fraud, extortion, violence or a range of other conduct (see paragraphs 6(2)(d) and (e) of the Criminal Assets Recovery Act 1990).

Item 1 - Subparagraph 20A(1)(g)(i)

122. Item 1 inserts ", a 'relevant offence' of a 'participating State'" after "'foreign indictable offence'" in subparagraph 20A(1)(g)(i) of the POC Act.

123. This item allows unexplained wealth restraining orders to be obtained where there are reasonable grounds to suspect that a person has committed a 'relevant offence' of a 'participating State' (which includes offences specified in the 'referral Act' or 'adoption Act' of this State).

124. For example, subject to the passage of the Unexplained Wealth (Commonwealth Powers) Bill 2018 (NSW) and this Bill, a Commonwealth unexplained wealth restraining order could now extend to a person who was suspected of committing specific firearms offences under New South Wales law, even where no connection to a Commonwealth, foreign or State offence with a federal aspect could be established.

Item 2 - Subparagraph 20A(1)(g)(ii)

125. Item 2 inserts ", a 'relevant offence' of a 'participating State'" after "'foreign indictable offence'" in subparagraph 20A(1)(g)(ii).

126. This item allows unexplained wealth restraining orders to be obtained where there are reasonable grounds to suspect that the whole or any part of a person's wealth was derived from a 'relevant offence' of a 'participating State' (which includes offences specified in the 'referral Act' or 'adoption Act' of this State).

127. For example, subject to the passage of the Unexplained Wealth (Commonwealth Powers) Bill 2018 (NSW) and this Bill, an unexplained wealth restraining order could extend to wealth derived from New South Wales' bribery offences punishable by imprisonment for 5 years or more, even if this wealth could not be connected to a Commonwealth, foreign or State offence with a federal aspect.

Item 3 - Subparagraph 20A(3)(c)(i)

128. Item 3 inserts ", a 'relevant offence' of a 'participating State'" after "'foreign indictable offence'" in subparagraph 20A(3)(c)(i).

129. This item expands the affidavit requirements that must be met to support an application an unexplained wealth restraining order. These requirements reflect the changes made at subparagraph 20A(1)(g)(i).

Item 4 - Subparagraph 20A(3)(c)(ii)

130. Item 4 inserts ", a 'relevant offence' of a 'participating State'" after "'foreign indictable offence'" in subparagraph 20A(3)(c)(ii).

131. This item expands the affidavit requirements that must be met to support an application an unexplained wealth restraining order. These requirements reflect the changes made at subparagraph 20A(1)(g)(ii).

Item 5 - After subparagraph 179E(1)(b)(ii)

132. Item 5 inserts subparagraph (iia) "a 'relevant offence' of a 'participating State';" after subparagraph 179E(1)(b)(ii).

133. This item allows unexplained wealth orders to be obtained in situations where a court is not satisfied that the whole or any part of the person's wealth was not derived from a 'relevant offence' of a 'participating State' (which includes offences specified in the 'referral Act' or 'adoption Act' of this State).

134. Currently, if law enforcement discover that a portion of a person's wealth arose from a State offence, this would be irrelevant to determining whether a Commonwealth unexplained wealth order should be issued unless it could be proved that this State offence had a federal aspect under section 3AA of the Crimes Act 1914. This item will remove this impediment for 'relevant offences' of a 'participating State'.

Item 6 - After subparagraph 179E(2)(b)(ii)

135. Item 6 inserts subparagraph (iia) "a 'relevant offence' of a 'participating State';" after subparagraph 179E(2)(b)(ii).

136. Subsection 179E(2) currently determines the 'unexplained wealth amount' to be forfeited to the Commonwealth under an 'unexplained wealth order' by determining the difference between a person's total wealth and the sum of the values of property that the court is satisfied was not derived from a Commonwealth offence, foreign indictable offence and/or a State offence with a federal aspect. This amount is then further reduced under section 179J.

137. Under the current status quo, if a person's total wealth is calculated as being $2 million, and the court is not satisfied that $1 million was not derived from Commonwealth offences and $500,000 was not derived from a State offence without a federal aspect, proceeds authorities could only confiscate $1 million under the unexplained wealth order (minus deductions under section 179J), as they would be unable to include the $500,000 linked to the State offence.

138. Item 6 ensures that a court must now turn its mind to whether the value of a person's property was derived from a 'relevant offence' of a 'participating State' in making this determination. If a court is not satisfied that the value of property was not derived from a 'relevant offence' this value will be effectively added to the 'unexplained wealth amount' determined under subsection 179E(2), increasing the amount forfeited.

139. Using the example above, if the State offence was a 'relevant offence' of a 'participating State', the court will now be able to find that $1.5 million (minus section 179J deductions) should be forfeited to the Commonwealth under the unexplained wealth order, as the $500,00 relating to State offending can now be included in the 'unexplained wealth amount' forfeited.

Item 7 - After subparagraph 322(4A)(a)(ii)

140. Item 7 inserts subparagraph (iia) "a 'relevant offence' of a 'participating State';" after subparagraph 322(4A)(a)(ii).

141. Item 7 extends a person's appeal rights under subsection 322(4A) to state that a person may appeal against an unexplained wealth order (section 179E) or an order regarding property subject to the person's effective control (section 179S) as if the person had been convicted of a 'relevant offence' of a 'participating State' or the targeted order were, or were part of, the sentence imposed on the person in respect of the offence.

Item 8 - Section 338

142. Item 8 inserts a new definition of relevant offence into section 388 which provides that a "'relevant offence' of a 'participating State' means an offence of a kind that is specified by the 'referral Act' or 'adoption Act' of the State."

Schedule 3-Extending the ' main unexplained wealth provisions ' to certain offences against the laws of ' self-governing Territories '

Proceeds of Crime Act 2002

143. Schedule 3 provides that unexplained wealth restraining orders (section 20A), unexplained wealth orders (section 179E) and relevant provisions relating to appeals (subsection 322(4A)) apply to all offences against the laws of 'self-governing Territories' (defined under section 338 of the POC Act to include the Australian Capital Territory and the Northern Territory).

144. Schedule 3 extends to all Territory offences. There is no need for the Territories to refer power or adopt Commonwealth laws to enable the Commonwealth to enact Schedule 3.

Item 1 - Subparagraph 20A(1)(g)(i)

145. Item 1 omits "or a 'State offence' that has a federal aspect" from subparagraph 20A(1)(g)(i) and substitutes ", a 'State offence' that has a federal aspect or a 'Territory offence'".

146. This item allows unexplained wealth restraining orders to be obtained where there are reasonable grounds to suspect that a person has committed a 'Territory offence' (which includes any offence against the law of a 'self-governing Territory' under section 338).

Item 2 - Subparagraph 20A(1)(g)(ii)

147. Item 2 omits "or a 'State offence' that has a federal aspect" from subparagraph 20A(1)(g)(ii) and substitutes ", a State offence that has a federal aspect or a 'Territory offence'".

148. This item allows unexplained wealth restraining orders to be obtained where there are reasonable grounds to suspect that the whole or any part of a person's wealth was derived from a 'Territory offence' (which includes any offence against the law of a 'self-governing Territory' under section 338).

Item 3 - Subparagraph 20A(3)(c)(i)

149. Item 3 omits "or a 'State offence' that has a federal aspect" from subparagraph 20A(3)(c)(i) and substitutes ", a State offence that has a federal aspect or a 'Territory offence'".

150. This item expands on the affidavit requirements that must be met to support an application an unexplained wealth restraining order. These amendments reflect the changes made at subparagraph 20A(1)(g)(i).

Item 4 - Subparagraph 20A(3)(c)(ii)

151. Item 4 omits "or a 'State offence' that has a federal aspect" and substitutes ", a 'State offence' that has a federal aspect or a 'Territory offence'".

152. This item expands on the affidavit requirements that must be met to support an application an unexplained wealth restraining order. These amendments reflect the changes made at subparagraph 20A(1)(g)(ii).

Item 5 - At the end of paragraph 179E(1)(b)

153. Item 5 adds at the end of paragraph 179E(2)(b) ";(iv) a 'Territory offence'".

154. This item allows unexplained wealth order to be obtained where a court is not satisfied that the whole or any part of the person's wealth was not derived from a 'Territory offence' (which includes any offence against the law of a 'self-governing Territory' under section 338 of the POC Act).

Item 6 - At the end of paragraph 179E(2)(b)

155. Item 6 adds at the end of paragraph 179E(2)(b) subparagraph ";(iv) a 'Territory offence'".

156. Subsection 179E(2) currently determines the 'unexplained wealth amount' to be forfeited to the Commonwealth by determining the difference between a person's total wealth and the sum of the values of property that the court is satisfied was not derived from a Commonwealth offence, foreign indictable offence and/or a State offence with a federal aspect. This amount is then further reduced under section 179J.

157. Item 6 ensures that a court must now have regard to whether the value of a person's property was not derived from a 'Territory offence' in making this determination. If a court is not satisfied that the value of property was not to derived from a 'Territory offence' this value will be effectively added to the 'unexplained wealth amount' determined under subsection 179E(2), increasing the amount seized.

Item 7 - Subparagraph 322(4A)(a)(iii)

158. Item 7 omits "and" from subparagraph 322(4A)(a)(iii).

Item 8 - At the end of paragraph 322(4A)(a)

159. Item 8 adds at the end of paragraph 322(4A)(a) subparagraph "(iv) a 'Territory offence'; and".

160. Items 7 and 8 extend a person's appeal rights under subsection 322(4A) to state that a person may appeal against an unexplained wealth order (section 179E) or an order regarding property subject to the person's effective control (section 179S) as if the person had been convicted of a 'Territory offence' or the targeted order were, or were part of, the sentence imposed on the person in respect of the offence.

Item 9 - Section 338

161. Item 9 inserts a new definition of 'Territory offence' into section 338 which provides that "'Territory offence' means an offence against a law of a 'self-governing Territory'."

Item 10 - Application of amendments

162. Item 10 outlines how the amendments made by this Schedule of the Bill apply. The amendments made by this Schedule apply to an application made after the commencement of this Schedule for an order in relation to a State offence that has a federal aspect or an offence against a law of a 'self-governing Territory': whether or not: the offence is committed, or is suspected of having been committed, before or after that commencement; or the application relates to wealth that is acquired before or after that commencement; or the application relates to property that is acquired before or after that commencement; or the application relates to property that becomes subject to the effective control of a person before or after that commencement.

163. Retrospective operation is required to ensure that unexplained wealth action is not frustrated by requiring law enforcement agencies to obtain evidence of, and prove, the precise point in time at which certain property or wealth was derived, acquired, realised or became subject to the effective control of a person.

164. Such a requirement would be unnecessarily onerous and would be contrary to the objects of the POC Act. Further, it would be almost impossible to show the point at which wealth or property was acquired or derived in cases where a person has accumulated significant amounts of wealth and property over decades and has no apparent source of legitimate income, especially in relation to property that is portable and not subject to registration requirements or where relevant financial records have been destroyed or lost over time.

165. Previous amendments to unexplained wealth orders and restraining orders have been applied retrospectively to property or wealth acquired before the amendments commenced (see item 34 of the Crimes Legislation Amendment (Unexplained Wealth and other Measures) Act 2015 and Schedule 3 item 2 of the Law Enforcement Legislation Amendment (State Bodies and Other Measures) Act 2016).

166. It is also necessary to apply these amendments retrospectively to offences against a law of a 'participating State' to ensure that the aims of the POC Act are not frustrated. It is necessary for these provisions to apply retrospectively as the criminal conduct of the person may continue over several years or may not be discovered immediately.

167. These amendments do not have the effect of criminalising conduct which was otherwise lawful prior to the amendments.

Schedule 4-Information gathering under the ' national cooperative scheme on unexplained wealth '

168. Production orders under Part 3-2 of the POC Act are issued by a magistrate and require a person to produce a 'property tracking document' that is relevant to identifying, locating or quantifying property that may be of relevance to an order that may be sought under the POC Act. Only 'authorised officers' may apply for these orders and, under section 338 of the POC Act and regulation 3A of the Proceeds of Crime Regulations 2002, 'authorised officers' do not include officers from States or Territories.

169. Notices to financial institutions under Part 3-3 of the POC Act are issued by officers (specified in subsection 213(3)) to financial institutions (defined at section 338) and compel these institution to provide an 'authorised officer' with specific information or documents. As outlined above, the term 'authorised officer' does not include officers from States or Territories, while the officers specified in subsection 213(3) also do not include these officers.

170. Schedule 4 inserts new Schedule 1 into the POC Act, which allows specified officers in Territories and 'participating States' to apply for production orders and issue notices to financial institutions to gather information for the purposes of unexplained wealth proceedings commenced under their legislation or deciding whether to institute such proceedings.

171. Part 1 provides that an 'authorised State/Territory officer' of a 'participating State' or 'self-governing Territory' may apply to a magistrate for a production order. In all material respects, this Part mirrors the existing production order power in Part 3-2 of the POC Act, but is adapted for use by officers of 'participating States' and 'self-governing Territories'.

172. Part 2 provides that an official (specified in subsection 12(3)) of a 'participating State' or 'self-governing Territory' may issue a notice to a financial institution compelling this institution to provide certain information to an 'authorised State/Territory officer' of a Territory or 'participating State' to determine whether to take any action under the unexplained wealth legislation of the State or Territory. In all material respects, this Part mirrors the existing notice to financial institutions power in Part 3-3 of the POC Act, but is adapted for use by officials of 'referring States' and 'self-governing Territories'.

173. Part 3 provides a list of the purposes for which information obtained under Part 1 or Part 2 of this Schedule may be disclosed, and to whom the information may be disclosed. Proposed sections 19 and 20 expressly provide for Commonwealth parliamentary supervision of actions taken under this Schedule, and the reporting requirements upon the head of the police force or service of any State or Territory which utilises these powers.

174. These proposed information gathering measures will complement current State and Territory investigative powers to ensure that law enforcement officers have a comprehensive suite of investigation powers to trace and investigate unexplained wealth amounts.

Item 1 - At the end of Division 2 of Part 1-4

Subdivision D - Other matters

175. Item 1 inserts 'Subdivision D - Other matters' at the end of Division 2 of Part 1-4 of the POC Act. This subdivision includes section 14M.

Section 14M Information gathering by 'participating States' and 'self-governing Territories'

176. Section 14M gives effect to new Schedule 1.

Item 2 - At the end of paragraph 266A(1)(b)

177. Item 2 adds "or clause 18 of Schedule 1" at the end of paragraph 266A(1)(b). This ensures that agencies which receive a lawful disclosure of information pursuant to new clause 18 of Schedule 1 can then disclose this information to the recipients, and for the purposes, outlined in section 266A of the POC Act.

Item 3 - Section 338

178. Item 3 inserts a new definition of 'authorised State/Territory officer' into section 338. This definition states that the definition of 'authorised State/Territory officer' is provided in proposed subclause 1(2) of new Schedule 1, which outlines that that these officers include (but are not limited to) persons who can apply for, or make an affidavit in support of, a restraining order under a 'special confiscation law' of a State or Territory.

179. An 'authorised State/Territory officer' of a 'participating State' or 'self-governing Territory' may apply for a production order, receive documents provided as a result of this order and receive information or documents obtained from notices to financial institutions under new Schedule 1 of the POC Act.

Item 4 - Section 338 (definition of production order)

180. Item 4 amends the definition of 'production order' in section 338 to include the new production orders under subclause 1(1) of new Schedule 1 of the POC Act.

Item 5 - Section 338

181. Item 5 inserts a new definition of 'unexplained wealth legislation' into section 338, which provides that 'unexplained wealth legislation' of a State or 'self-governing Territory' means a law of the State or Territory that is prescribed by the regulations.

182. The 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory' must be prescribed under the regulations to allow this State or Territory to benefit from the information gathering provisions at Schedule 4 of the Bill and the information sharing provisions at Schedule 6.

183. Schedule 8 of this Bill provides that the 'unexplained wealth legislation' of New South Wales is Division 2 of Part 3 of the Criminal Assets Recovery Act 1990 (NSW), and other provisions of that Act that relate to that Division, while the 'unexplained wealth legislation' of the Northern Territory is Division 1 of Part 6 of the Criminal Property Forfeiture Act (NT) and other provisions that relate to that Division.

Item 6 - In the appropriate position

184. Item 6 inserts in the appropriate position "Schedule 1 - Information gathering by participating States and self-governing Territories".

Schedule 1-Information gathering by 'participating States' and 'self-governing Territories'

185. Under the heading "Schedule 1-Information gathering by 'participating States' and 'self-governing Territories'" there is a note that states to see section 14M.

Part 1-Production orders

186. Part 1 contains new clauses 1 to 11 (inclusive) of proposed Schedule 1 of the POC Act.

Clause 1 - Making production orders

187. Clause 1 outlines the procedure for making and granting applications for production orders.

188. Subclause 1(1) provides that a magistrate may make a production order requiring a person to produce, or make available for inspection, one or more of the documents referred to in subclause 1(6) to an 'authorised State/Territory officer' of a 'participating State' or 'self-governing Territory'.

189. Under subclauses 1(3) and 1(4), that order may only be made on the application of an 'authorised State/Territory officer' of a 'participating State' or 'self-governing Territory' (as defined at subclause 1(2)), and the magistrate must be satisfied that the person is reasonably suspected of having possession or control of the relevant documents.

190. A production order can only require the production of documents which are in the possession, or under the control, of a corporation or are used, or intended to be used, in the carrying on of a business (see paragraphs 1(3)(b)-(c)).

191. This restriction on the type of documents which can be required has been made because the privilege against self-incrimination does not apply to production orders and only a use immunity is conferred preventing their admissibility in certain criminal proceedings. No derivative use immunity has been conferred and therefore no documents in the custody of an individual which relate to the affairs of an individual can be compelled to be produced.

192. Subclause 1(5) states that the 'authorised State/Territory officer' need not give notice of the application to any person.

193. Subclause 1(6) outlines the type of document that may be subject to a production order, and includes:

•

a document relevant to identifying, locating or quantifying property of a person for the purposes of determining: whether to take any action in relation to the person under the 'unexplained wealth legislation' of the 'participating State' or 'self-governing Territory'; or proceedings in relation to the person under the 'unexplained wealth legislation' of the 'participating State' or 'self-governing Territory' concerned;

•

a document relevant to identifying or locating any document necessary for the transfer of property of such a person;

•

a document that would assist in the reading or interpretation of a document referred to in paragraph (a) or (b).

194. A similar provision to clause 1 applying in relation to Commonwealth production orders can be found at section 202 of the POC Act.

Clause 2 - Contents of production orders

195. Clause 2 sets out what a production order must specify.

196. Under subclause 2(1) a production order must specify: the nature of the documents required; the place at which the person must produce the documents or make the documents available; the time at which, or the times between which this must be done, and; the name of the 'authorised State/Territory officer' who (unless he or she inserts the name of another officer in the order) is to be responsible for giving the order to the person. The production order must also set out the effect of the offences in clauses 9 (disclosing existence or nature of production orders) and 10 (failing to comply with an order) if applicable.

197. While ordinarily the time specified under subclause 2(2) must be at least 14 days from the day on which the order is given, the magistrate may specify an earlier time when having regard to the urgency of the request and the hardship to the person required to produce or make available the documents under subclause 2(3).

198. A similar provision applying in relation to Commonwealth production orders can be found at section 203 of the POC Act.

Clause 3 - Powers under production order

199. Clause 3 outlines that the 'authorised State/Territory officer' may inspect, take extracts from, or make copies of, a document produced or made available under a production order.

200. A similar provision applying in relation to Commonwealth production orders can be found at section 204 of the POC Act.

Clause 4 - Retaining produced documents

201. Clause 4 outlines how long an 'authorised State/Territory officer' may retain documents produced under a production order, and the rights that the person to whom a production order is given has in relation to those documents.

202. Under subclause 4(1), the documents may be retained by an 'authorised State/Territory officer' for as long as is necessary for the purposes of the unexplained wealth legislation of the 'participating State' or 'self-governing Territory' concerned. Under subclause 4(2) the person to whom a production order is given may require the 'authorised State/Territory officer' to give the person a certified copy of the document retained, or require the 'authorised State/Territory officer' to allow the person to inspect, take extracts from or make copies of, the document.

203. A similar provision applying in relation to Commonwealth production orders can be found at section 205 of the POC Act.

Clause 5 - Privilege against self-incrimination etc. does not apply

204. Subclause 5(1) provides that it is not an excuse for failing to produce, or to make available, a document as required by a production order, that the production or making available of the document would tend to incriminate the person or make him or her liable to a penalty, or constitute a breach of an obligation not to disclose the existence or contents of the document, or breach legal professional privilege.

205. Subclause 5(2) provides a use immunity, that is, any document produced or made available is not admissible in evidence in criminal proceedings against a natural person except for the offences of giving false or misleading information or documents under the Criminal Code.

206. It is appropriate to override the privilege against self-incrimination and legal professional privilege under subclause 5(1) as criminals regularly seek to hide their ill-gotten gains behind a web of complex legal, contractual and business arrangements. As such, requiring the production and availability of relevant documents is necessary to enable law enforcement to effectively trace, restrain and confiscate unexplained wealth amounts. This provision therefore accords with the principles at Part 9.5.3 of the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide).

207. It should also be noted that subclause 5(2) includes a 'use immunity' protection as recommended in Part 9.5.4 of the Guide. The fact that this 'use immunity' protection does not extend to sections 137.1 or 137.2 can be justified as the privilege against self-incrimination does not apply where it is alleged that a person has given false or misleading information (see Part 9.5.2 of the Guide).

208. Further, it should be noted that similar provisions overriding the privilege against self-incrimination exist at section 206 of the POC Act.

Clause 6 - Varying production orders

209. Clause 6 provides that a person required to produce a document under a production order may apply to the magistrate who made the order, or if that person is not available, to another magistrate to vary the production order so that it merely requires the person to make the document available for inspection. If the magistrate is satisfied that the document is essential to the person's business activities, it may be varied.

210. A similar provision applying in relation to Commonwealth production orders can be found at section 207 of the POC Act.

Clause 7 - Jurisdiction of magistrates

211. Clause 7 enables a magistrate in a State or 'self-governing Territory' to issue a production order relating to one or more documents that are located in that State or Territory, a non-governing Territory or another State or Territory if he or she is satisfied that there are special circumstances which make this appropriate. Special circumstances could, for example, be found where most of the documents are located in the jurisdiction where the order is sought, the investigation is centred there and it is important that no warning of the production order be given to person in other jurisdictions.

212. As with search warrants, there may be a major conspiracy investigation where production orders need to be simultaneously executed in a number of jurisdictions. In such circumstances, it would be undesirable for applications to be made in each jurisdiction, particularly if officers with the necessary knowledge of the matter are all located in one jurisdiction. This would also protect the security of the investigation.

213. A similar provision applying in relation to Commonwealth production orders can be found at section 208 of the POC Act.

Clause 8 - Making false statements in applications

214. Clause 8 makes it an offence to make a false or misleading statement in, or in connection with, an application for a production order. The offence is punishable by 12 months imprisonment, a fine of 60 penalty units, or both.

215. A similar offence provision applying in relation to Commonwealth production orders can be found at section 209 of the POC Act.

Clause 9 - Disclosing existence or nature of production orders

216. Subclause 9(1) makes it an offence for a person given a production order to disclose the existence or nature of the production order where the order specifies that information about the order must not be disclosed. It is also an offence under subclause 9(2) to disclose information to another person if the other person could infer the existence or nature of the order from that information. Each of those offences is punishable by a maximum of 2 years imprisonment or a fine of 120 penalty units, or both.

217. Subclause 9(3) sets out the exceptions to these offences which include where: the disclosure is made to obtain legal advice or legal representation; the disclosure is made for the purposes of, or in the course of, legal proceedings; or the disclosure is made to an employee, agent or other person in particular circumstances.

218. The offence-specific defences at subclause 9(3) reverse the onus of proof, placing an evidential burden of proof on the defendant to prove these matters. This is appropriate as the matters outlined in subclause 9(3) go to the particular motivations of the defendant making the disclosure. These motivations would be peculiarly within the knowledge of the defendant and therefore would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter (see Part 4.3.1 of the Guide).

219. Similar offence provisions applying in relation to Commonwealth production orders can be found at section 210 of the POC Act.

Clause 10 - Failing to comply with production orders

220. Subclause 10(1) provides that it is an offence to fail to comply with a production order where the order is given to the person and that person has not been notified of sufficient compliance in relation to the order. Subclause 10(2) outlines that a person is notified of sufficient compliance where that person gives an 'authorised State/Territory officer' of the 'participating State' or 'self-governing Territory' a statutory declaration stating that the person does not have possession or control of the document specified in the production order, and the officer notifies the person that the statutory declaration is sufficient compliance with the production order. The maximum penalty is 6 months imprisonment or a fine of 30 penalty units, or both.

221. Subclause 10(3) sets out the exceptions to this offence, which apply if the person: fails to comply with the production order only because the person does not produce the document specified in the order within the time specified in the order; and took all reasonable steps to produce the document within that time; and produces the document as soon as practicable after that time.

222. The offence-specific defences at subclause 10(3) reverse the onus of proof, placing an evidential burden of proof on the defendant to prove these matters. This is appropriate as the reasons that a person failed to comply with an order, and the steps taken by the person to comply with an order, are both peculiarly within the knowledge of the defendant and would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter (see Part 4.3.1 of the Guide).

223. Similar offence provisions applying in relation to Commonwealth production orders can be found at section 211 of the POC Act.

Clause 11 - Destroying etc. documents subject to production orders

224. Clause 11 states that a person commits an offence if: the person destroys, defaces or otherwise interferes with a document; and a production order is in force requiring the document to be produced or made available. The maximum penalty for this offence is 6 months imprisonment or 30 penalty units, or both.

225. A similar offence provision applying in relation to Commonwealth production orders can be found at section 212 of the POC Act.

Part 2 - Notices to financial institutions

226. Part 2 of new Schedule 1 deals with notices to financial institutions and contains new clauses 12 to 17.

Clause 12 - Giving notices to financial institutions

227. Clause 12 sets out the procedure that must be followed where a specified officer (under subclause 12(3)) gives a notice to a financial institution requiring the production of information or documents to an 'authorised State/Territory officer' of a 'participating State' or Territory.

228. Under subclause 12(1), a specified official (under subclause 12(3)) may give a written notice to a financial institution requiring the production of any information or documents relevant to certain 'account', 'stored value card' and transaction information. Subclause 12(2) provides that the notice must not be issued unless the officer reasonably believes that giving the notice is required to determine whether to take action under the 'unexplained wealth legislation' of the State or Territory; or in relation to proceedings under this legislation.

229. Officials of a 'participating State' or 'self-governing Territory' who may give a notice are outlined at subclause 12(3), and include: the Commissioner or head (however described) of the police force or police service of the State or Territory; or the Director of Public Prosecutions, or a person performing a similar function, appointed under a law of the State or Territory; or if New South Wales is a 'participating State' - the Commissioner and Assistant Commissioners of the New South Wales Crime Commission; or for a 'self-governing Territory' - a person of a kind prescribed by the regulations in relation to the Territory.

230. Similar provisions applying in relation to Commonwealth notices to financial institutions can be found at section 213 of the POC Act.

Clause 13 - Contents of notices to financial institutions

231. Clause 13 sets out what a notice must contain.

232. First, it must state that the official giving the notice believes that giving the notice is required to determine whether to take action under the 'unexplained wealth legislation' of the State or Territory, or in relation to proceedings under the 'unexplained wealth legislation' of the State or Territory. It must also specify the name of the financial institution, the kind of information or documents required to be provided, and the form and manner in which that information or those documents are to be provided. The notice must also set out the effect of the offences in clauses 16 (disclosing existence or nature of a notice) and 17 (failing to comply with a notice) if applicable.

233. While ordinarily the time specified for production in the notice must be at least 14 days from the day on which the notice is given, the official may specify an earlier time when having regard to the urgency of the request and the hardship that may be caused to the financial institution required to provide the information or documents under subclause 13(2).

234. Similar provisions applying in relation to Commonwealth notices to financial institutions can be found at section 214 of the POC Act.

235. Clause 13 adheres closely to the principles in Chapter 9 of the Guide. Notices can only be issued where an issuer reasonably believes that the notice would assist in any action under the 'unexplained wealth legislation' of a 'participating State' or 'self-governing Territory', or in relation to proceedings under this legislation. It is extremely unlikely that an issuer will satisfy this test if they do not reasonably believe that the financial institution actually holds the relevant information or documents (Part 9.1.1 of the Guide).

236. Notices to financial institutions also: are issued by heads of agencies or appropriately senior officials (Part 9.2 of the Guide); must be made in writing (Part 9.3 of the Guide); are issued to persons (9.4 of the Guide). The definition of financial institution includes various bodies corporate and natural persons at section 338); and must contain relevant details (Part 9.3.3 of the Guide).

237. Generally, financial institutions are given 14 days to comply with notices (Part 9.3.4 of the Guide) but this period for compliance may be shortened to a minimum of 3 days after the giving of the notice, provided that the official giving the notice have regard to the urgency of the situation and any hardship that may be caused to the financial institution required by the notice (see paragraph 13(1)(e)(ii)).

238. These shortened timeframes will, in appropriate situations, ensure that property obtained with the proceeds of crime that is capable of restraint is quickly identified before it can be dissipated. Subclause 13(2) sets the parameters for the use of shortened timeframes and ensures that adequate consideration is given by authorised officers in determining that a shorter time frame is necessary. The shorter timeframe is intended for use in genuinely urgent situations only. It does not exist to be used merely for matters of convenience for the authorised officer. For example, if the investigating agency has been negligent in drafting and giving a notice to a financial institution, it would not be sufficient justification to reduce the time in which a financial institution has to comply with the notice.

239. It should also be noted that, while failing to comply with a notice is an offence under subclause 17(1), there is a defence for persons who take all reasonable steps to comply with the notice under subclause 17(2), ensuring that a failure to comply with a shortened timeframe will not lead to criminal liability where carrying out the request was unreasonable or impossible within the relevant timeframes.

Clause 14 - Protection from suits etc. for those complying with notices

240. Subclause 14(1) provides that a financial institution or one of its officers, employees or agents acting in the course of their employment or agency are protected from any action, suit or proceeding (such as a claim for damages for releasing private information) in relation to any action taken by the institution or person in relation to its or their response to a notice under clause 12, or in the mistaken belief that action was required under the notice.

241. Subclause 14(1) ensures that financial institutions and related persons are not exposed to situations where they may be criminally liable for failing to comply with a notice under clause 17, but would nevertheless expose themselves to liability (for releasing private information etc.) by complying with this notice.

242. Subclause 14(2) establishes that a financial institution, or person who is an 'officer, employee or agent' of a financial institution, who provides information under a notice under clause 12 is taken, for the purposes of Part 10.2 of the Criminal Code (offences relating to money-laundering), not to have been in possession of that information at any time.

243. Subclause 14(2) ensures that financial institutions, or the officers, employees or agents of financial institutions, will not be directly liable for the offences under Part 10.2 of the Criminal Code for providing information under a notice.

244. Similar provisions applying in relation to Commonwealth notices to financial institutions can be found at section 215 of the POC Act.

Clause 15 - Making false statements in notices

245. Clause 15 creates the offence of providing a false or misleading statement in relation to a notice to a financial institution. The offence applies whether the statement is given orally or in a document or other form. The maximum penalty which can be imposed in relation to this offence is 12 months imprisonment, a fine of 60 penalty units, or both.

246. A similar provision applying in relation to Commonwealth notices to financial institutions can be found at section 216 of the POC Act.

Clause 16 - Disclosing existence or nature of notices

247. Clause 16 creates the offence of disclosing the existence or nature of notices given under clause 12 where the notice specifies that information about the notice must not be disclosed. The maximum penalty which can be imposed in relation to this offence is 2 years imprisonment, a fine of 120 penalty units, or both.

248. A similar provision applying in relation to Commonwealth notices to financial institutions can be found at section 217 of the POC Act.

Clause 17 - Failing to comply with notices

249. Subclause 17(1) sets out an offence for failing to comply with a notice given under clause 12. The maximum penalty which can be imposed in relation to this offence is 6 months imprisonment, a fine of 30 penalty units, or both.

250. Subclause 17(2) outlines the exceptions to this offence, which apply if the person: fails to comply with the notice only because the person does not provide the information or document within the period specified in the notice; took all reasonable steps to provide the information or document within that period; and provides the information or document as soon as practicable after the end of that period.

251. The offence-specific defence at subclause 17(2) reverses the onus of proof, placing an evidential burden of proof on the defendant to prove these matters. This is appropriate as the reasons that a person failed to comply with a notice, and the steps taken by the person to comply with the notice, are both peculiarly within the knowledge of the defendant and would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter (see Part 4.3.1 of the Guide to Framing Commonwealth Offences).

252. Similar offence provisions applying in relation to Commonwealth notices to financial institutions can be found at section 218 of the POC Act.

Part 3 - Disclosure of information

253. Part 3 of Schedule 1 deals with the disclosure of information and includes new clauses 18 to 20.

Clause 18 - Disclosure

254. Clause 18 allows authorities to disclose certain information obtained from production orders and notices to financial institutions to other authorities in circumstances and for the purposes described in subclause 18(2).

255. Subclause 18(1) sets out the types of information that can be disclosed under clause 18, including: information obtained as a direct result of the exercise of power (by the person or someone else), or performance (by the person) of a function, under Part 1 or 2 of Schedule 1 of the POC Act (the production order and notice to financial institution provisions as inserted by Schedule 4 of the Bill), or; as a result of a disclosure, a series of disclosures.

256. Subclause 18(2) provides that the information outlined above may only be disclosed to a specified authority for a specified purpose as outlined in the table to this subclause. Information may only be disclosed to such an authority when the person disclosing the information believes, on reasonable grounds, that the disclosure will serve that purpose and a court has not made an order prohibiting the disclosure of information for that purpose.

257. Item 1 of the table at subclause 18(2) sets out that a disclosure may be made to the authority of a State or 'self-governing Territory' that has a function under a 'corresponding law' of the State or Territory for the purposes of: (a) engaging in proceedings under that corresponding law; (b) engaging in proceedings for the forfeiture of things under a law of that State or Territory; or (c) deciding whether to institute proceedings of a kind referred to in paragraph (a) or (b).

258. Item 2 of the table sets out that a disclosure may be made to the authority of the Commonwealth with one or more functions under the POC Act for the purpose of facilitating the authority's performance of its functions under the POC Act.

259. Item 3 of the table sets out that a disclosure may be made to the authority of the Commonwealth, or of a State or 'self-governing Territory', that has a function of investigating or prosecuting offences against a law of the Commonwealth, State or Territory for the purpose of assisting in the prevention, investigation or prosecution of an offence against that law that is punishable on conviction by imprisonment for at least 3 years or for life.

260. Item 4 of the table sets out that a disclosure may be made to the Australian Taxation Office for the purpose of protecting public revenue.

261. Subclause 18(3) establishes that in a 'criminal proceeding' against a person who produced or made available a document under a production order, none of the following that is disclosed under clause 18 is admissible in evidence against the person: (a) the document; (b) information contained in the document.

262. This subclause will ensure that the immunities that apply to a particular document or information in this document will continue to apply when the document or information is disclosed under clause 18. This immunity will continue even if the document or information is produced in some other form. However, the subclause will not prevent information or documents disclosed under clause 18 from being used to pursue further criminal investigations, or other investigations under the POC Act, nor will it prevent the admission in criminal proceedings of evidence that is obtained as a result of those investigations.

263. Subclause 18(4) states that subclause (3) does not apply in a proceeding under, or arising out of, section 137.1 or 137.2 of the Criminal Code (false or misleading information or documents) in relation to producing the document or making it available. This subclause contains a note that subclauses (5) and (6) reflect subclause 5(2).

264. The limitation on the 'use immunity' at subclause 18(4) can be justified as the privilege against self-incrimination does not apply where it is alleged that a person has given false or misleading information (see Part 9.5.2 of the Guide to Framing Commonwealth Offences).

265. Subclause 18(5) confirms that to avoid doubt: (a) this clause does not prohibit the disclosure under section 266A of any information disclosed under this clause; and (b) this clause does not affect the admissibility in evidence of any information, document or thing obtained as an indirect consequence of a disclosure under this clause.

266. The purpose of paragraph 18(5)(b) is to make it clear that subclause 18(3) only creates a direct use immunity in respect of the types of information referred to in that subclause. This is consistent with the direct use immunity that would have applied when the information was originally obtained under production orders (see proposed subclause 5(2) of this Schedule).

267. The effect of clause 18 is that no derivative use immunity will attach to the information to which it applies. Notwithstanding this, subclauses 18(3)-(5) ensure that a direct use immunity for criminal proceedings applies to person who is required to produce or make available a document under a production order.

268. Similar provisions to clause 18 are contained in section 266A of the POC Act.

Clause 19 - Parliamentary supervision of the operation of this Schedule

269. Subclause 19(1) states that the operation of this Schedule is subject to the oversight of the Parliamentary Joint Committee on Law Enforcement.

270. Subclause 19(2) sets out that the Committee may require an authority of a 'participating State' or 'self-governing Territory' that is the recipient of any information disclosed as the result of the operation of this Schedule to appear before it from time to time to give evidence.

Clause 20 - reports about the operation of this Schedule

271. Subclause 20(1) states that the Commissioner or head (however described) of a police force or police service of a 'participating State' or 'self-governing Territory' must give the Minister a written report in respect of each financial year that contains the following information: (a) the number and results of applications for production orders under clause 1 in the year by an 'authorised State/Territory officer' of the State or Territory; (b) the number of notice to financial institutions issued under clause 12 in the year by an official specified in subclause 12(3) of the State or Territory; (c) any other information of a kind prescribed by the regulations.

272. Subclause 20(2) sets out that the Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after its receipt by the Minister.

Schedule 5-Sharing proceeds under the ' national cooperative scheme '

Proceeds of Crime Act 2002

273. Part 4-3 of the POC Act establishes the Confiscated Assets Account (CAA) as a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.

274. Schedule 5 divides Part 4-3 of the POC Act into three separate divisions which, along with accompanying State and Territory legislation and the 'NCSUW agreement', outline the equitable sharing arrangements under the national scheme for distributing 'shareable' proceeds amongst jurisdictions.

275. Under the arrangements, 'shareable' proceeds (as defined by the 'NCSUW agreement') are distributed among domestic and foreign entities pursuant to a specific process, which can be broken down into the initial notification period, the 'decision-making period' and the 'payment period'.

276. The arrangements can be distinguished from the existing sharing of amounts credited to the CAA under other Commonwealth legislation, such as the Crimes Act 1914, the Customs Act 1901 and the Mutual Assistance in Criminal Matters Act 1987 which is retained in new Division 2 of Part 4-3 of the POC Act.

Initial notification period

277. The process begins with the forfeiting jurisdiction notifying members of the CJC of a final order, negotiated settlement or other forfeiture relating to 'shareable' proceeds pursuant to the process outlined in the 'NCSUW agreement'.

The 'decision-making period'

278. Once notification is given, the following steps must be completed during the 'decision-making period' (as defined in the 'NCSUW agreement' or under regulations):

•

The CJC must establish a CJC sub-committee pursuant consisting of the forfeiting jurisdiction and any other CJC member unanimously agreed by the CJC to be a contributing jurisdiction to the action and recovery of proceeds.

•

The CJC must then decide unanimously whether a non-cooperating jurisdiction contributed to the action and what proportion, if any, will be paid to the jurisdiction.

•

The CJC subcommittee members will then be entitled to equal shares of the remaining proceeds, unless they unanimously decide to vary this presumption within the 'decision-making period'.

•

The relevant Minister of the forfeiting jurisdiction will then decide if a foreign jurisdiction has contributed to the action, and what amount of the proceeds will be allocated in recognition of that contribution.

The 'payment period'

279. Once the distribution of funds are determined, these funds must be paid to 'participating States', 'cooperating States' and 'self-governing Territories' within the 'payment period' (as defined in the 'NCSUW agreement' or under regulations) and pursuant to the process set out in the 'NCSUW agreement'.

Item 1 - Before section 295

280. This item inserts a new Division 1, titled "Division 1-Establishment, crediting and payments out of the Account" into Part 4 - 3 of the POC Act.

Item 2 - Paragraph 296(1)(e)

281. This item repeals existing paragraph 296(1)(e) and inserts new paragraphs 296(1)(e) and (ea) to the existing list of payments that can be credited to the CAA.

282. Paragraph 296(1)(e) permits money paid to the Commonwealth by a State or 'self-governing Territory' under the 'equitable sharing program' to be credited to the CAA. 'Equitable sharing program' is defined at subsection 296(4) of the POC Act.

283. Paragraph 296(1)(ea) permits money paid to the Commonwealth by a State or 'self-governing Territory' under the 'national cooperative scheme' to be credited to the CAA. The 'national cooperative scheme' is defined at new subsection 297A(1).

Item 3 - Paragraph 296(1)(h)

284. This item repeals paragraph 296(1)(h) and inserts new paragraphs 296(1)(h) to (o).

285. Paragraphs 296(1)(h) to (o) permit money that is paid to the Commonwealth under other statutory regimes to be credited to the CAA, including money paid under the Mutual Assistance in Criminal Matters Act 1987, the Crimes Act 1914 and the Customs Act 1901. These paragraphs were previously located in the definition of 'proceeds of confiscated assets' at paragraphs 296(3)(i) to (p), which have been repealed by item 5.

286. These amendments have been made to ensure that the definition of 'proceeds of confiscated assets' at subsection 296(3) is confined to amounts directly confiscated under the POC Act. This is necessary as the new equitable sharing arrangements are confined to 'proceeds of confiscated assets' which are 'shareable' (within the meaning of the 'NCSUW agreement'), and confining the concept of 'proceeds of confiscated assets' to amounts confiscated under the POC Act ensures that these amounts do not directly extend to amounts forfeited under other confiscation regimes.

Item 4 - Paragraphs 296(3)(e) to (fa)

287. This item repeals paragraph 296(3)(e) to (fa) and inserts new paragraphs 296(3)(e) to (fa). These new paragraphs are identical to the old paragraphs except that they specify that these payments can only be credited to the CAA 'to the extent it has been paid to the Commonwealth'.

Item 5 - paragraphs 296(3)(i) to (p)

288. Item 5 repeals paragraphs 296(3)(i) to (p) and substitutes 296(3)(i), which provides that amounts paid to the Commonwealth in settlement of proceedings connected with the POC Act must be credited to the CAA.

289. Item 3 replicates paragraphs 296(3)(i) to (p) in new paragraphs 296(1)(h) to (o), and repeals the previous settlement provision at 296(1)(h), ensuring that the definition of 'proceeds of confiscated assets' only extends to amounts confiscated under the POC Act.

Item 6 - Paragraph 296(4)(a)

290. Item 6 amends paragraph 296(4)(a) to qualify that the existing equitable sharing arrangements under subsection 296(4)(a) do not extend to 'proceeds of confiscated assets' that are 'sharable' (within the meaning of the 'NCSUW agreement').

291. This is intended to preserve the operation of existing equitable sharing arrangements under subsection 296(4) while providing different equitable sharing arrangements for the national scheme in new Division 2 of Part 4-3.

Item 7 - Paragraph 296(4)(c)

292. Item 7 amends paragraph 296(4)(c) to qualify that the existing equitable sharing arrangements under subsection 296(4)(c) do not extend to 'proceeds of confiscated assets' that are 'sharable' (within the meaning of the 'NCSUW agreement').

293. This is intended to preserve the operation of existing equitable sharing arrangements under subsection 296(4) while providing different equitable sharing arrangements for the national scheme in new Division 2 of Part 4-3.

Item 8 - Paragraph 297(a)

294. Item 8 repeals paragraph 297(a) and inserts paragraphs 297(a), (aa), (ab) and (ac) into subsection 297(1), which defines the purposes for which funds are paid out of the CAA.

295. Paragraphs 297(a) and (aa) enable payments to be made out of the CAA to States or 'self-governing Territories' and foreign countries under the existing 'equitable sharing program' as specified at subsection 296(4).

296. Paragraphs 297(ab) and (ac) enables payments to be made out of the CAA to States or 'self-governing Territories' and foreign countries under the 'national cooperative scheme' as defined at subsection 297A(1).

297. Paragraphs 297(a) and (ab) clarify that payments to States and 'self-governing Territories' are by way of financial assistance.

Item 9 - After section 297

298. Items 9 inserts "Division 2 - The 'national cooperative scheme on unexplained wealth'" into Part 4-3 of the POC Act.

297A The scheme

299. Item 9 inserts a new section 297A after the heading "Division 2-The 'national cooperative scheme on unexplained wealth'" which outlines the 'national cooperative scheme on unexplained wealth' for the purposes of the equitable sharing arrangements.

300. Under new subsection 297A(1) the 'national cooperative scheme on unexplained wealth' is a scheme under which any or all of the following occur:

•

the Commonwealth shares 'proceeds of confiscated assets that are shareable' (within the meaning of the 'NCSUW agreement') with a foreign country in accordance with new section 297B or a State or a 'self-governing Territory' in accordance with new section 297C; or

•

a 'participating State', 'cooperating State' or 'self-governing Territory' shares with the Commonwealth, in accordance with the law of the State or Territory, any 'corresponding proceeds' of the State or Territory (within the meaning of the 'NCSUW agreement') that are 'shareable' (within the meaning of that agreement); or

•

a 'non-participating State' (other than a 'cooperating State') shares with the Commonwealth any corresponding proceeds of the State (within the meaning of the 'NCSUW agreement') that are 'shareable' (within the meaning of that agreement)

301. Under new subsection 297A(2) the 'NCSUW agreement' is the Intergovernmental Agreement on the National Cooperative Scheme on Unexplained Wealth, as in force from time to time.

297B Sharing with foreign countries

302. New section 297B sets out the process for the Commonwealth sharing 'proceeds of confiscated assets' that are shareable' with a foreign country (within the meaning of the 'NCSUW agreement').

303. Subsection 297B(2) establishes that if the Minister decides that a foreign country has made a contribution in relation to the recovery of the proceeds; and it is appropriate that a specified amount of the proceeds be payable to the country; then the specified amount is payable to the foreign country under national scheme.

304. Under subsection 297B(3) however, the specified amount must not exceed the amount of proceeds, reduced by any amounts for the making of payments referred to in paragraphs 297(fa), (ga) and (h) in relation to the proceeds. This ensures that the Commonwealth services the mandatory payments it must make under legislation before distributing proceeds to foreign countries (including court-ordered payments at paragraph 55(2)(a) of the Act).

297C Sharing with States and Territories

305. New section 297C sets out the process for the Commonwealth sharing 'proceeds of confiscated assets' that are shareable' with States and 'self-governing Territories'.

306. Subsection 297C(2) sets out the amount of proceeds to be shared. According to subsection 297C(2) the proceeds are to be reduced by: any amount of the proceeds that is payable to a foreign country under subsection 297B(2); and any amounts for the making of payments referred to in paragraphs 297(fa), (ga) and (h) in relation to the proceeds. The resulting amount is the 'net amount'.

307. The CJC, which is made up of 'cooperating States', 'participating States', the Commonwealth and Territory parties, then distributes this 'net amount' pursuant to the process set out at subsections 297C(3) to (11).

308. Subsection 297C(3) provides that the CJC must first establish a subcommittee for the purposes of deciding how to distribute this 'net amount'. Subsection 297C(4) provides that this subcommittee must consist of the Commonwealth, as well as other 'participating States', 'cooperating States' or 'self-governing Territories' that the CJC committee unanimously decides has made a 'contribution' (within the meaning of the 'NCSUW agreement') in relation to the recovery of the proceeds.

309. Under subsection 297C(5) a 'non-participating State' (other than a 'cooperating State') can only obtain a share of the 'net amount' if the CJC subcommittee makes a unanimous decision that this State made a 'contribution' (within the meaning of the 'NCSUW agreement') in relation to the recovery of the proceeds and it is appropriate that a specified proportion of the 'net amount' be payable to that State.

310. Under subsection 297C(6) the method by which the 'net amount' is distributed to 'participating States', 'cooperating States' or 'self-governing Territories' on the CJC subcommittee is more favourable than for 'non-participating States'. This subsection provides a presumption that the 'net amount' that remains after the application of subsection 297C(5) is to be divided into equal portions between the Commonwealth and each of those States or Territories that make up the CJC subcommittee of 'contributing' jurisdictions.

311. This presumption, however, can be overridden under subsection 297C(7) within the 'decision-making period' (as defined in the 'NCSUW agreement') if the CJC subcommittee makes a unanimous decision that these arrangements are inappropriate and it is instead appropriate that a specified proportion be payable to particular States and Territories.

312. Subsection 297C(8) clarifies that decisions may be made under section 297C in relation to an amount before the amount becomes 'proceeds of confiscated assets' or the 'net amount'. This allows the distribution of shareable proceeds to be determined in anticipation of these proceeds being forfeited to the Commonwealth, allowing for the quick distribution of funds under the new equitable sharing arrangements once forfeiture occurs.

313. Subsection 297C(9) outlines that the 'decision-making period' is defined in the 'NCSUW agreement' or, if it is not defined in this agreement, is defined in the regulations.

314. Subsection 297C(10) states that the 'NCSUW agreement' and the regulations may specify that the decision-making period starts or ends at a time before an amount becomes 'proceeds of confiscated assets'. This complements the power at subsection 297C(8), allowing the distribution of shareable proceeds to be determined in anticipation of these proceeds being forfeited to the Commonwealth.

315. Subsection 297C(11) outlines that amounts that are payable to a 'participating State', 'cooperating State' or a 'self-governing Territory' under this section must be paid by the Minister within the payment period as defined in the 'NCSUW agreement' or, if it is not defined in this agreement, as defined in the regulations.

Item 10 - Before section 298

316. Item 10 inserts "Division 3-Programs for expenditure on crime prevention etc." into Part 4-3 of the POC Act.

Item 11 - Section 338

317. Item 11 inserts the following definitions into section 338: 'national cooperative scheme on unexplained wealth' has the meaning given by subsection 297A(1); and 'NCSUW agreement' has the meaning given by subsection 297A(2).

Schedule 6-Sharing information under the national cooperative scheme on unexplained wealth

Telecommunications (Interception and Access) Act 1979

318. Schedule 6 improves information sharing between jurisdictions by amending the Telecommunications (Interception and Access) Act 1979 (TIA Act) to allow Commonwealth, 'participating States', Northern Territory and Australian Capital Territory agencies to use, communicate and record lawfully intercepted information for unexplained wealth investigations and proceedings, without having to show a link to a prescribed offence.

319. Schedule 6 also contains amendments which will allow the New South Wales Crime Commission to use, communicate and record lawfully intercepted information in relation to proceedings for the confiscation or forfeiture of property or the imposition of a pecuniary penalty, in connection with a prescribed offence. These amendments will ensure that the Commission can disclose lawfully intercepted information to defendants in proceeds matters without first filing this information as evidence in court, which will greatly assist the Commission in settling proceeds matters out of court.

Item 1 - Subsection 5(1)

320. Item 1 amends subsection 5(1) to clarify that the terms 'main unexplained wealth provisions', 'participating State' and 'unexplained wealth legislation' have the same meaning as the POC Act (as amended by this Bill).

Item 2 - After paragraph 5B(1)(bd)

321. Item 2 expands the types of proceedings which are defined as 'exempt proceedings' in the TIA Act. The effect of this expansion is that a person may give lawfully intercepted information and interception warrant information in evidence in an unexplained wealth proceeding, overriding the general prohibition in the TIA Act on using, disclosing, recording and giving in evidence lawfully intercepted information.

322. Currently, paragraph 5B(1)(b) specifies that proceedings for the confiscation or forfeiture of property, or for the imposition of a pecuniary penalty, in connection with the commission of a prescribed offence, are 'exempt proceedings' for the purpose of the TIA Act. This allows for lawfully intercepted information and interception warrant information to be used in unexplained wealth proceedings where these proceedings are linked to a prescribed offence but not where this link cannot be established (for example where the wealth vastly exceeds the person's known lawful income but the underlying predicate offending is not known).

323. This amendment will expand the definition of exempt proceedings to explicitly cover these circumstances, and subsequently all proceedings arising under or in relation to the unexplained wealth legislation of the Commonwealth, a 'participating State', the Australian Capital Territory or the Northern Territory. This will allow lawfully intercepted information and interception warrant information to be used in orders that target the highest echelons of organised crime, which tend to distance themselves from predicate offending but hold large amounts of unexplained wealth.

Item 3 - After paragraph 6L(1)(b)

324. Item 3 adds proceedings under, or relating to, a matter arising under Commonwealth, Territory and 'participating State' unexplained wealth legislation to the definition of 'relevant proceeding' in the TIA Act. This addition expands the definition 'permitted purpose' in section 5 of the TIA Act, so that the AFP, the police forces of the Territories, and the police force of any 'participating State' will be able to deal in interception information under section 67 of the TIA Act for purposes connected with unexplained wealth proceedings. This overrides the general prohibition on using, communicating and recording lawfully intercepted information.

325. This also addresses a possible gap in the TIA Act. Currently, paragraph 6L(1)(b) specifies that a proceedings under a law of the Commonwealth, or of a State, for the confiscation or forfeiture of property, or for the imposition of a pecuniary penalty, in connection with the commission of a prescribed offence, are 'relevant proceedings'. This item will expand 'relevant proceedings' to cover all proceedings arising under or in relation to the unexplained wealth legislation of the Commonwealth, a 'participating State', the Australian Capital Territory or the Northern Territory (not just those linked to a prescribed offence).

Item 4 - After paragraph 6L(2)(a)

326. Item 4 ensures that the New South Wales Crime Commission can use, communicate and record lawfully intercepted information for the purposes of civil confiscation and forfeiture proceedings. This grants the New South Wales Crime Commission the same powers to use such information as that already held by the Australian Criminal Intelligence Commission, the Australian Commission for Law Enforcement Integrity and the Queensland Crime and Corruption Commission, for the purposes of consistency.

Item 5 - After paragraph 6L(2)(a)

327. Item 5 omits "the Crime Commission" from paragraph 6L(2)(b) of the TIA Act. This change has been made as the provisions in this paragraph are now included in paragraph 6L(2)(aa).

Item 6 - At the end of section 6L

328. Item 6 inserts new subsection 6L(3), which expands the term 'relevant proceeding' in relation to interception agencies to include a proceeding under, or a proceeding relating to a matter arising under 'the main unexplained wealth provisions' or the 'unexplained wealth legislation' of a 'participating State', the Australian Capital Territory or the Northern Territory.

329. This addition expands the definition 'permitted purpose' in section 5 of the TIA Act, so that interception agencies (as defined at section 5 of the TIA Act) will be able to deal in interception information under section 67 of the TIA Act for a purpose relating to unexplained wealth proceedings. This overrides the general prohibition on using, communicating and recording lawfully intercepted information.

Item 7 - After subparagraph 68(c)(i)

330. Item 7 amends section 68 of the TIA Act to provide that the chief officer of an agency may communicate lawfully intercepted information that was originally obtained by the originating agency or interception warrant information to the AFP Commissioner of Police if the information relates to the subject matter of a proceeding under the Commonwealth's 'main unexplained wealth provisions'.

331. This will allow the chief officers of Commonwealth, State and Territory agencies to communicate lawfully intercepted information or interception warrant information obtained by these agencies to the AFP where this information is of relevance to subject matter of a proceeding under the Commonwealth's 'main unexplained wealth provisions'.

Item 8 - After subparagraph 68(d)(i)

332. Item 8 amends section 68 of the TIA Act to allow chiefs of agencies to communicate lawfully intercepted information or interception warrant information to the Commissioner of Territory and 'participating State' police forces where this information relates to the subject matter of a proceeding under the 'unexplained wealth legislation' of that jurisdiction.

333. This ensures that, where lawfully intercepted information and interception warrant information is lawfully obtained by an agency, but is of relevance to the 'unexplained wealth legislation' of another jurisdiction, this information can be disclosed by the agency to the Commission of the State or Territory police force with an interest in the matter.

Item 9 - Application

334. Item 9 states that the amendments to the TIA Act made by Schedule 6 (except the amendment of subsection 5(1) of that Act) apply to proceedings begun on or after the commencement of this Schedule.

Schedule 7-Review of the national cooperative scheme on unexplained wealth

Proceeds of Crime Act 2002

335. Schedule 7 provides for the independent review of the national scheme as soon as practicable after four years from the commencement of the Bill (as enacted). This review will inform States and Territories of the efficacy of the national scheme before State referrals sunset and the NSCUW agreement subsequently ceases to have effect (under subsection 9(1) of Unexplained Wealth (Commonwealth Powers) Bill 2018 (NSW), New South Wales' referral will sunset after six years).

336. The results of this review will be used by States and Territories to determine whether to extend their participation in the national scheme past the relevant sunsetting date.

Item 1 - After section 327

337. Item 1 inserts new section 327A, which requires an independent review of the 'national unexplained wealth provisions' and any other matter specified in the accompanying 'NCSUW agreement' to be reviewed under this section.

338. New subsection 327A(2) states that this review must be undertaken as soon as practicable after the fourth anniversary of the commencement the Unexplained Wealth Legislation Amendment Act 2018.

339. New subsection 327A(3) sets out that, before the review is undertaken, the Minister must consult the appropriate Ministers of the 'participating States', 'cooperating States' and 'self-governing Territories' about the terms of the review and the appointment of the persons who are to undertake the review.

340. New subsection 327A(4) establishes that persons who undertake the review must: consult the appropriate Ministers of the 'participating States', 'cooperating States' and 'self-governing Territories' for the purposes of undertaking the review; and give a written report of the review to the Commonwealth Minister and the State and Territory Ministers who were consulted.

341. New subsection 327A(5) outlines that the Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after its receipt by the Minister.

Schedule 8 - 'Unexplained wealth legislation' of a State or Territory

Proceeds of Crime Regulations 2002

Item 7 - At the end of Part 3

342. Item 7 inserts regulation 13A into the Proceeds of Crime Regulations 2002, which defines New South Wales' 'unexplained wealth legislation' as provided at proposed section 338 of the POC Act (see item 5 of Schedule 4 of this Bill).

343. New regulation 13A(1) defines the 'unexplained wealth legislation' of New South Wales as 'Division 2 of Part 3 of the Criminal Assets Recovery Act 1990 of New South Wales, and the other provisions of that Act that relate to that Division'. The accompanying note states that section 6 of the Criminal Assets Recovery Act 1990 is an example of a provision that relates to Division 2 of Part 3 of that Act because Division 2 refers to that term.

344. New regulation 13A(2) defines the 'unexplained wealth legislation' of the Northern Territory as Division 1 of Part 6 of the Criminal Property Forfeiture Act (NT), and the other provisions of that Act that relate to that Division. The accompanying note states that section 100 of the Criminal Property Forfeiture Act (NT) is an example of a provision that relates to Division 1 of Part 6 of that Act because it relates to unexplained wealth declarations.

345. The term 'other provisions of that Act that relate to that Division' are intended to be interpreted broadly to include (but not be limited to) investigative powers and orders that are exercised or made under each jurisdiction's unexplained wealth regime.

346. New regulation 13A ensures that New South Wales and the Northern Territory can access the information gathering measures at Schedule 4 of the Bill (relating to production orders and notices to financial institutions) and the information sharing measures at Schedule 6 of the Bill (involving the sharing of TIA Act information), which apply in relation to the 'unexplained wealth legislation' of 'participating States' and 'self-governing Territories'.