Senate

Revised Explanatory Memorandum

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

General outline

This Bill amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Commonwealth Places (Application of Laws) Act 1970, Criminal Code Act 1995, Customs Act 1901, Financial Transaction Reports Act 1988, International Transfer of Prisoners Act 1997 and the Surveillance Devices Act 2004.

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

•

ban the importation of all substances that have a psychoactive effect that are not otherwise regulated or banned

•

ensure that Australian Customs and Border Protection (ACBPS) officers have appropriate powers to stop these substances at the border

•

correct an error in the definition of a minimum marketable quantity in respect of a drug analogue of one or more listed border controlled drugs

•

introduce new international firearms trafficking offences, amend existing cross-border firearms offences and introduce mandatory minimum sentences of five years' imprisonment for these offences

•

streamline the international transfer of prisoners regime within Australia and clarify the processes involved

•

clarify the ability of the Australian Taxation Office (ATO) to disclose certain information held by the Australian Transaction Reports and Analysis Centre (AUSTRAC), change the name of the Crime and Misconduct Commission of Queensland to the Crime and Corruption Commission of Queensland and add the Independent Broad-based Anti-Corruption Commission of Victoria as a designated agency

•

amend certain slavery offences to clarify they have universal jurisdiction, and

•

validate access by the Australian Federal Police (AFP) to certain investigatory powers in designated State airports.

The Bill comprises six schedules.

Schedule 1 will amend the Criminal Code Act 1995 (the Code) and Customs Act 1901 (the Customs Act) to strengthen the Commonwealth's ability to respond to new and emerging illicit drugs, also known as 'new psychoactive substances'. New psychoactive substances are designed to mimic the psychoactive effects of illicit drugs, but their chemical compositions are not captured by existing controls on those drugs. There is evidence that manufacturers design the chemical structures of psychoactive substances to avoid these controls and prohibitions.

The amendments in Schedule 1 will fill the regulatory gap between when psychoactive substances first appear and when they are controlled under other parts of the Code or under the Customs (Prohibited Imports) Regulations 1956. They will ensure that new psychoactive substances cannot be imported while the Government assesses their harms and considers the appropriate controls to place on them. The measure takes a precautionary approach to dealing with psychoactive substances. It is intended to work in parallel with, and not replace, any of the existing schemes which regulate the importation of both illicit drugs and substances with a legitimate use into Australia.

Schedule 1 will:

•

introduce an offence into the Code for importing a psychoactive substance that does not have a legitimate use or which is not already prohibited

•

introduce an offence into the Code of importing a substance where its presentation contains a representation that it has the same effects as, or substantially similar effects to, a serious drug, or that it is a lawful alternative to a serious drug, and

•

amend the Customs Act to allow Australian Customs and Border Protection Service (ACBPS) and Australian Federal Police (AFP) officers to exercise appropriate administrative powers to search for, detain, seize and destroy substances prohibited under the new offences in the Criminal Code.

Schedule 2 will amend the Code and the Customs Act to implement election commitments made in the Government's Policy to Tackle Crime (the Policy), released in August 2013. In the Policy, the Coalition undertook to implement tougher penalties for gun-related crime, including through the introduction of mandatory minimum sentences of five years' imprisonment for illegal firearm trafficking.

Schedule 2 will:

•

create new international firearms offences of trafficking prohibited firearms and firearm parts into and out of Australia (new Division 361 of the Code)

•

extend the existing offences of cross-border disposal or acquisition of a firearm and taking or sending a firearm across borders within Australia in Division 360 of the Code to include firearm parts as well as firearms, and

•

introduce a mandatory minimum five year term of imprisonment for the new offences in Division 361 and existing offences in Division 360 of the Code.

Schedule 3 will amend the International Transfer of Prisoners Act 1997 (ITP Act), which governs Australia's international transfer of prisoners (ITP) scheme. The ITP scheme aims to promote the successful rehabilitation and reintegration into society of a prisoner, while preserving the sentence imposed by the sentencing country as far as possible. This is a voluntary scheme which requires the consent of the prisoner, Australia's Attorney-General, the relevant transfer country, and, where applicable, the relevant Australian state or territory to or from which the prisoner wishes to transfer.

Since the ITP scheme has been in place, it has become clear that improvements to the ITP Act are required to clarify and streamline the process, to make the scheme more straightforward, operate more efficiently, and reduce unnecessary burdens on the resources required to process ITP applications. The amendments in this Schedule seek to address these issues, with the effect being timelier processing of applications, reduced resource burden and improved usability of the legislation by prisoners, while still maintaining prisoners' rights and due process.

The amendments in Schedule 3 will:

•

remove the requirement for the Attorney-General to make a final decision where a transfer cannot proceed due to an application not meeting all requirements under the ITP Act (i.e. an unviable application)

•

impose a one-year time limit on reapplications from prisoners whose applications are refused, or who withdraw their applications

•

clarify that prisoners with suspended sentences may be transferred under the ITP scheme

•

clarify that a prisoner who wishes to transfer to Australia may apply for transfer either to the country in which they are serving their sentence or directly to Australia

•

clarify that the date on which the assessment of dual criminality is based is the date the application for transfer is received

•

clarify that the definition of 'joint prisoner' includes a prisoner who was convicted in one or more Australian states and/or territories

•

clarify that the option of writing to a transfer country to advise that the Attorney-General's consent would be given if a variation were made to the terms of transfer is a discretionary, rather than a mandatory, requirement

•

broaden the definition of 'prisoner's representative' to include a prisoner's close family member, and

•

remove references to prescribed application forms.

Schedule 4 amends the Code to clarify that the slavery offences in section 270.3 have universal jurisdiction. This approach accords with the prohibition of slavery as a jus cogens (peremptory) norm of customary international law - meaning that it is non-derogable and applies at all times and in all circumstances - and one that is expressly prohibited by a number of treaties to which Australia is a party. It is also in keeping with Australia's recognition of universal jurisdiction as a well-established principle of international law, and one which extends to a range of crimes including piracy, genocide, war crimes, torture and other crimes against humanity.

The purpose of Schedule 5 is to validate action undertaken by a member of the AFP, or a special member under the Commonwealth Places (Application of Laws) Act 1970, for an investigation of an applied State offence in relation to a Commonwealth place that would otherwise have been invalid because the Commonwealth place was not, for a time, a designated State airport. This retrospective application is limited to the period starting 19 March 2014 and ending on 16 May 2014 and refers only to those investigatory powers specified in subsection 5(3A) of the Commonwealth Places (Application of Laws) Act 1970. The measure is necessary to address the anomaly that arises between 19 March 2014 and 16 May 2014, when these powers were inadvertently not available due to repeal of regulations which has now been rectified.

Schedule 6 will make minor and technical amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), the Code, the Financial Transaction Reports Act 1988 (FTR Act) and the Surveillance Devices Act 2004.

The purpose of the anti-money laundering amendments to the AML/CTF Act in Schedule 6 is to clarify the ability of the ATO to disclose certain information held by AUSTRAC, amend the name of the Crime and Misconduct Commission of Queensland in the list of designated agencies to the Crime and Corruption Commission of Queensland and to add the Independent Broad-based Anti-Corruption Commission of Victoria (IBAC) as a designated agency.

The purpose of the amendment to the FTR Act is to give permanent effect to an exemption granted by the AUSTRAC CEO in relation to account blocking obligations of cash dealers in certain circumstances. A consequential amendment has also been made to the Surveillance Devices Act 2004 to remove reference to an offence against a repealed section of the FTR Act.

In summary, these amendments:

•

clarify that information obtained under section 49 of the AML/CTF Act is able to be shared by the ATO, in particular with the taxpayer about whom the information relates

•

add IBAC to the list of designated agencies that are authorised to access AUSTRAC data

•

ensure the renamed Crime and Corruption Commission of Queensland is able to continue to access AUSTRAC data, and

•

give permanent effect to an exemption granted by the AUSTRAC CEO from an obligation for cash dealers to block accounts in certain circumstances. This exemption was granted by the AUSTRAC CEO due to the fact that the obligation was largely duplicative of safeguards in the AML/CTF Act.

Schedule 6 will enable AUSTRAC to share financial intelligence information with IBAC, improving information sharing and enhancing IBAC's ability to perform its functions. Enabling IBAC to access AUSTRAC information will enhance IBAC's investigative abilities, in line with those of similar agencies in other jurisdictions.

In addition, Schedule 6 will make minor amendments to Division 301.11 of the Code to correct an error in the definition of a minimum marketable quantity in respect of a drug analogue of 1 or more listed border controlled drugs. This error occurred when Division 301.11 was inserted into the Code in November 2012 by the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012.

FINANCIAL IMPACT STATEMENT

AUSTRAC will meet the ongoing costs of administering the AML/CTF measures within existing resources. The amendment to clarify the ATO's ability to share information obtained under section 49 of the AML/CTF Act will facilitate the ATO's ability to undertake compliance action, raising Government revenue. The remaining measures within this Bill will have little or no impact on Government revenue.

REGULATION IMPACT STATEMENT

The Regulation Impact Statement for the measure to ban the importation of new psychoactive substances is at Attachment A.

The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required for the remaining measures within this Bill as the proposed changes have a minor impact on business, community organisations or individuals.

ACRONYMS