House of Representatives

Explanatory Memorandum

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

Schedule 9 - Freedom of Information Act 1982

Part 1-Exemption of certain AUSTRAC documents

Proposed Item 1

Proposed Item 1 ensures that the Australian Transaction Reports and Analysis Centre (AUSTRAC) is exempt from the operation of the Freedom of Information Act 1982 (FOI Act) in relation to documents concerning information communicated to it under section 16 of the Financial Transaction Reports Act 1988 (FTR Act).

Under section 16 of the FTR Act, information is communicated to the Director of AUSTRAC by a "cash dealer". The term "cash dealer" is a defined term in the FTR Act and includes financial institutions, insurance companies, securities dealers, casinos, bookmakers and other authorised deposit-taking institutions. Cash dealers are required to report a range of financial transactions including suspicious transactions, transactions relevant to the investigation or prosecution of Commonwealth offences and transactions which they suspect are related to terrorist activity.

The information provided in suspicious transaction reports is crucial to the effectiveness of Australia's anti-money laundering program. AUSTRAC, and its law enforcement, revenue, national security and social justice partner agencies are reliant on reports of suspicious transactions as a strong source of intelligence. It is essential that the reports be fully protected and that cash dealers feel confident to report a transaction without fear of retribution from a customer (which may result from disclosure of a report).

The amendment made by Proposed item 1 is consistent with the policy intention of two previous amendments to the FTR Act concerning reports of suspicious transactions. Those amendments prohibited the disclosure of the existence of a report to a third party (other than a court) and made the reports inadmissible in evidence in legal proceedings (other than a prosecution for an offence against subsections 29(1) or 30(1) of the FTR Act).

Proposed Item 2

Proposed Item 2 ensures that the Australian Transaction Reports and Analysis Centre is exempt from the operation of the FOI Act in relation to documents concerning information communicated to it under section 16 of the FTR Act, regardless of whether such a document became a "document of an agency" before, on or after the commencement of Proposed item 1. In particular, it ensures that a relevant document that became a "document of an agency" before the commencement of Proposed item 1 is exempt.

Part 2-Technical corrections

Proposed Item 3

Proposed Item 3 removes unnecessary quotation marks in the proposed item dealing with the Australian Trade Commission (ATC) in Division 1 of Part II of Schedule 2 to the FOI Act. Proposed item 3 is solely a technical amendment and makes no other amendment to the existing proposed item dealing with the ATC.

Proposed Item 4

Proposed Item 4 removes unnecessary quotation marks in the proposed item dealing with the National Health and Medical Research Council (NHMRC) in Division 1 of Part II of Schedule 2 to the FOI Act. Proposed item 4 is solely a technical amendment and makes no other amendment to the existing proposed item dealing with the NHMRC.