Explanatory Statement

Issued by the Minister for Home Affairs

Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2020

Proceeds of Crime Act 2002

These Regulations ensure that the new Australian Capital Territory (ACT) unexplained wealth regime is appropriately supported by Commonwealth law, and give effect to a Commonwealth commitment under the National Cooperative Scheme on Unexplained Wealth.

The Regulations are made under the Proceeds of Crime Act 2002 (the POC Act). The POC Act provides a scheme to trace, restrain and confiscate the proceeds and benefits gained from, and the instruments used in the commission of, Commonwealth indictable offences, foreign indictable offences and certain offences against state and territory law.

Section 338 of the POC Act provides that:

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'interstate restraining order' - means an order that is made under a 'corresponding law' and is of a kind declared by the regulations to be within this definition

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'interstate pecuniary penalty order' - means an order that is made under a 'corresponding law' and is of a kind declared by the regulations to be within this definition

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'unexplained wealth legislation' - of a State or self-governing Territory means a law of the State or Territory that is prescribed by the regulations, and

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'corresponding law' - means a law of a State or of a self-governing Territory that is declared by the regulations to be a law that corresponds to the POC Act.

Section 328 of the POC Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Item 9 of section 7 of the Proceeds of Crime Regulations 2019 (the principal Regulations) provides that the Confiscation of Criminal Assets Act 2003 (ACT) (the ACT Confiscation Act) is a 'corresponding law' under section 338 of the POC Act.

The purpose of the Proceeds of Crime Amendment Unexplained Wealth Regulations 2020 (the Regulations) is to amend the principal Regulations to ensure that the POC Act appropriately recognises the ACT's unexplained wealth regime under the ACT Confiscation Act. This regime came into force on 29 August 2020 with the commencement of the Confiscation of Criminal Assets (Unexplained Wealth) Amendment Act 2020 (ACT).

The Regulations achieve this objective by making three amendments.

First, the Regulations amend section 20 of the principal Regulations to define Part 7A of the ACT Confiscation Act, and the other provisions of that Act that relate to that Part, as 'unexplained wealth legislation' for the purposes of section 338 of the POC Act.

This grants the ACT information-gathering and information-sharing powers under the Scheme. The Scheme was established under the Unexplained Wealth Legislation Amendment Act 2018 and was intended to enhance the ability of Commonwealth, State and Territory law enforcement agencies to trace, identify and seize assets that cannot be connected to a lawful source.

These amendments allow specified members of specified Australian Capital Territory agencies to:

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apply for production orders and issue notices to financial institutions to obtain documents and information of relevance to investigations and proceedings under the ACT's 'unexplained wealth legislation' (see Schedule 1 to the POC Act), and

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use, communicate and record lawfully intercepted information in relation to investigations and proceedings under the ACT's 'unexplained wealth legislation' (see subsection 5(1), paragraphs 5B(1)(be)(bf), 6L(1)(ba)(bb), subsection 6L(3) and subparagraphs 68(c)(ia) and (d)(iaa) of the Telecommunications (Interception and Access) Act 1979).

Clause 1 of Schedule 1 to the POC Act provides that an authorised Territory officer may apply for a production order. For the purposes of the ACT, an authorised territory officer would be a person who may apply for, or make an affidavit in support of, a restraining order under the ACT Confiscation Act. Subclause 12(3) of Schedule 1 to the POC Act has the effect that the Commissioner or head (however described) of ACT Policing and the Director of Public Prosecutions in the ACT would be empowered to give notice to a financial institution.

Second, the Regulations insert new item 3 in table 7 of Schedule 2 to the principal Regulations defining an unexplained wealth order under subsection 98D(1) of the ACT Confiscation Act as an 'interstate pecuniary penalty order' for the purposes of the POC Act. This ensures that the order can be registered and enforced under section 307 of the POC Act.

Third, the Regulations insert new item 3 in table 7 of Schedule 3 to the principal Regulations defining an unexplained wealth restraining order under subsection 32A(2) of the ACT Confiscation Act as an 'interstate restraining order' for the purposes of the POC Act. This ensures that these orders can be registered and enforced under sections 303 and 308 of the POC Act.

The Regulations are informed by consultation with the ACT Government's Justice and Community Safety Directorate and the Australian Federal Police, which are supportive of the changes.

The POC Act specified no conditions that need to be satisfied before the power to make the Regulations was exercised.

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

The Regulations commenced on the day after registration on the Federal Register of Legislation.

Authority: Section 338 of the Proceeds of Crime Act 2002

ATTACHMENT B

Statement of Compatibility with Human Rights

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

Proceeds of Crime Amendment (Unexplained Wealth) Regulations 2020

1. This legislative instrument 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 legislative instrument

2. The Proceeds of Crime Amendment (Unexplained Wealth) Regulations 2020 (the Regulations) amends the Proceeds of Crime Regulations 2019 (the POC Regulations 2019) to ensure that the Proceeds of Crime Act 2002 (Cth) (the POC Act) appropriately recognises the Australian Capital Territory (ACT) unexplained wealth regime under the Confiscation of Criminal Assets Act 2003 (ACT) (the ACT Confiscation Act). This regime came into force on 29 August 2020 with the commencement of the Confiscation of Criminal Assets (Unexplained Wealth) Amendment Act 2020 (ACT).

3. The Regulations are made under the POC Act. The POC Act provides a scheme to trace, restrain and confiscate the proceeds and benefits gained from, and the instruments used in the commission of, Commonwealth indictable offences, foreign indictable offences and certain offences against state and territory law.

4. Section 338 of the POC Act provides that:

•

'interstate restraining order' - means an order that is made under a 'corresponding law' and is of a kind declared by the regulations to be within this definition

•

'interstate pecuniary penalty order' - means an order that is made under a 'corresponding law' and is of a kind declared by the regulations to be within this definition

•

'unexplained wealth legislation' - of a State or self-governing Territory means a law of the State or Territory that is prescribed by the regulations, and

•

'corresponding law' - means a law of a State or of a self-governing Territory that is declared by the regulations to be a law that corresponds to the POC Act.

5. Item 9 of section 7 of the POC Regulations 2019 provides that the ACT Confiscation Act is a 'corresponding law' under section 338 of the POC Act.

6. Schedule 1 of the Regulations sets out the amendments that would be made to the POC Regulations 2019.

7. Item 1 would amend section 20 of the POC Regulations 2019 to set out the 'unexplained wealth legislation' of the ACT for the purposes of the section 338 of the POC Act. The ACT's unexplained wealth legislation is defined to be Part 7A of the ACT Confiscation Act, and the other provisions of that Act that relate to that Part. This would grant the ACT information-gathering and information-sharing powers under the National Cooperative Scheme on Unexplained Wealth (the Scheme).

8. These amendments allow specified members of specified ACT agencies to:

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apply for production orders and issue notices to financial institutions to obtain documents and information of relevance to investigations and proceedings under the ACT's 'unexplained wealth legislation' (see Schedule 1 of the POC Act), and

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use, communicate and record lawfully intercepted information in relation to investigations and proceedings under the ACT's 'unexplained wealth legislation' (see subsection 5(1), paragraphs 5B(1)(be)(bf), 6L(1)(ba)(bb), subsection 6L(3) and subparagraphs 68(c)(ia) and (d)(iaa) of the Telecommunications (Interception and Access) Act 1979).

9. Item 2 provides that an unexplained wealth order made under subsection 98D(1) of the ACT Confiscation Act is an 'interstate pecuniary penalty order' for the purposes of the POC Act. Item 3 further provides that an unexplained wealth restraining order made under subsection 32A(2) of the ACT Confiscation Act is an 'interstate restraining order' for the purposes of the POC Act. These amendments ensure that these orders can be registered and enforced under the POC Act where appropriate.

Human rights implications

10. The Regulations engage Australia's international obligations under the International Covenant on Civil and Political Rights (ICCPR). In particular, the Regulations engage the right to freedom from arbitrary and unlawful interference with privacy, family, home and correspondence in Article 17 of the ICCPR.

Right to privacy - Article 17 of the ICCPR

11. Article 17 of the ICCPR accords everyone the right to protection against arbitrary or unlawful interference with their privacy, family, home or correspondence. In General Comment 16, the United Nations Human Rights Committee stated that the term 'home' is to be understood to indicate the place where a person resides or carries out his usual occupation. 'Correspondence' also includes electronic means of communication. Interferences are permissible so long as they are authorised by law and are not arbitrary.

12. The United Nations Human Rights Committee has not defined 'privacy', however it should be understood to comprise freedom from unwarranted and unreasonable intrusions into activities that society recognises as falling within the sphere of individual autonomy.

13. 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 the 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 the 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.

14. The Regulations are clearly lawful, in that they are prescribed by law. The below analysis also provides that, if these provisions limit the rights in Article 17, these limitations are not arbitrary, as they are reasonable, necessary and proportionate to achieve the legitimate purpose of protecting public order and the rights and freedoms of others.

Freedom from arbitrary or unlawful interference with privacy - production orders and notices to financial institutions

15. To the extent that the Regulations support the operation of the POC Act in relation to production orders and notices to financial institutions, they may engage the right to privacy.

16. Item 1 of the Regulations would amend section 20 of the POC Regulations 2019 to define the term 'unexplained wealth legislation' to include specific legislation under the ACT's jurisdiction. Under the POC Act relevant authorities in Territories and 'participating States' can compel persons to provide documents and/or information using production orders or notices to financial institutions for purposes connected with their 'unexplained wealth legislation'.

17. To the extent that the application of these provisions are activated by section 20 of the POC Regulations 2019, the right to privacy may be engaged. However, the extended application is reasonable, necessary and proportionate to achieve the legitimate objectives of preserving public order and protecting the rights and freedoms of others. This is because these powers assist in combating serious and organised crime by enhancing information-gathering and information-sharing arrangements within Commonwealth, State and Territory agencies whose functions relate to unexplained wealth.

18. Extending these Commonwealth investigative powers to the ACT is necessary to ensure uniformity in powers between jurisdictions (assisting individuals and financial institutions in responding to these orders) and to give law enforcement greater options in pursuing vital information in unexplained wealth cases. The permissible uses of information gathered under these powers will also be aligned, allowing jurisdictions to work closer together to investigate and prosecute serious offences.

19. This extension is also reasonable and proportionate as there are significant protections in the POC Act that protects information obtained under these orders/notices. After obtaining this information, persons are only permitted to disclose it to specific authorities where there are reasonable grounds to believe that the disclosure will service a specific purpose (see Part 3 of Schedule 1 to the POC Act). This includes disclosing to investigative or prosecutorial bodies to investigate a crime punishable by at least three years imprisonment.

20. There are also 'use protections' which attach to information obtained by production orders, which prevent this information from being admissible in criminal proceedings against the person who disclosed it (unless the proceedings relate to making or producing a false or misleading document under section 137.1 or 137.2 of the Criminal Code).

21. Further, the use of production orders and notices to financial institutions is supervised by the Parliamentary Joint Committee on Law Enforcement, ensuring oversight for the exercise of these powers in relation to sharing information with the ACT.

22. To the extent that the Regulations support the operation of the POC Act in relation to production orders and notices to financial institutions, they may engage the right to privacy, but any limitation is reasonable, necessary and proportionate to achieve the legitimate objectives of preserving public order and protecting the rights and freedoms of others.

Freedom from arbitrary or unlawful interference with privacy - Telecommunications (Interception and Access) Act 1979

23. To the extent that item 1 the Regulations expands the operation of provisions under the Telecommunications (Interception and Access) Act 1979 (the TIA Act) to the ACT jurisdictions, it may limit the right to privacy.

24. Section 20 of the POC Regulations 2019 defines 'unexplained wealth legislation' for the purposes of the TIA Act. This activates relevant provisions of the TIA Act which provide that officers in Commonwealth, Territory and 'participating State' agencies may 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 legislation' of that jurisdiction.

25. If item 1 of the Regulations limits the right to privacy, however, these limitations are necessary, reasonable and proportionate to achieve the legitimate objective of preserving public order. This is because these powers ensure 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 and proceeds of crime.

26. Item 1 of the Regulations is necessary as, without this amendment, there would be doubt as to whether lawfully intercepted information could be shared with relevant ACT officers for the purposes of particular unexplained wealth orders. 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. Section 20 of the POC Regulations 2019 ensures that it is available for use in particular unexplained wealth matters, even if those matters do not require a connection with the commission of an offence.

27. Section 20 of the POC Regulations 2019 is necessary as 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. By prescribing the ACT as a jurisdiction with whom lawfully intercepted information can be shared, Item 1 of the Regulations allows information obtained under the TIA Act to be used, stored and shared by these jurisdictions, thereby facilitating the effective investigation of unexplained wealth matters, which often involve the covert movement of funds across state and territory borders.

28. Item 1 of the Regulations is also reasonable and proportionate in achieving the legitimate objectives mentioned above, as the use of the powers activated under the TIA Act is subject to a number of safeguards. Agencies, for example, are prohibited from intercepting communications or accessing stored communications except for proper purposes under a warrant or authorisation, and may only share lawfully intercepted or stored information with other agencies in particular circumstances and for particular purposes.

29. There are also limitations on the purposes for which disclosure can occur, and with which authorities information can be shared. Further, there are:

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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

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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.

30. To the extent that item 1 of the Regulations may limit the right to privacy, by prescribing the ACT as a jurisdiction with whom lawfully intercepted personal information can be shared, these limitations are reasonable, necessary and proportionate to achieving the legitimate objective of protecting public order, by 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 and proceeds of crime.

Conclusion

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