House of Representatives

Explanatory Memorandum

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

Anti-money Laundering and Counter-terrorism Financing (Transitional Provisions and Consequential Amendments) Bill 2006

General Outline

The Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Bill 2006 (the Bill) contains consequential amendments related to the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 (the AML/CTF Bill).

As a result of the AML/CTF Bill, a number of consequential amendments must be made to existing Commonwealth legislation to allow operation of provisions in the AML/CTF Bill.

This includes amendments to the Financial Transaction Reports Act 1988 (FTR Act). The FTR Act, as amended by the Financial Transaction Reports Act Amendment Bill 2006, will continue in force after the AML/CTF Bill has been enacted. The amended FTR Act is designed to operate parallel to the AML/CTF Bill. The amended FTR Act will apply to cash dealers who are not reporting entities under the AML/CTF Bill.

Financial Impact Statement

The Bill has no direct financial impact. However, the AML/CTF Bill, as discussed in that Bill's explanatory memorandum, will have a financial impact.

Abbreviations

The following abbreviations are used in this explanatory memorandum:

NOTES ON CLAUSES

Clause 1 Short Title

This clause provides that the short title of the Bill is the Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Bill 2006.

Clause 2 Commencement

Clause 2 details the commencement of each provision of Anti-Money Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential Amendments) Bill 2006 (the Bill) in a table contained in the clause. This part of the explanatory memorandum only refers to the commencement aspects of the items in the table. The explanatory memorandum on the substance of each of these items is contained later in this document.

Clause 2(1) contains a table stating when various clauses and items in the Schedule of the Bill will come into effect. Column 1 specifies provisions in the Bill and column 2 states when those provisions commence or are taken to have commenced. Column 3 contains additional information that isn't part of the Bill - this information may be added to or edited in any published version of the Bill.

Item 1 of the table provides that clauses 1 to 3 of the Bill and any other provision of the Bill that is not covered by the table will commence on the day the Bill receives Royal Assent.

Item 3 of the table provides that items 2 to 11 of Schedule 1 commence immediately after the commencement of section 2 of the Anti-Terrorism Bill (No. 2) 2005 . As indicated in column 3 of item 3, section 2 commenced on 14 December 2005.

A number of items in the table provide that various items in Schedule 1 of the Bill commence at the same time as clause 3 of the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 (AML/CTF Bill) commences. Clause 3 of the AML/CTF Bill commences the day after the AML/CTF Bill receives Royal Assent. These items are 2, 4, 6, 8, 10, 12, 14, 16, 18, 20, 22 and 24. In other words these items will also commence the day after the AML/CTF Bill receives Royal Assent.

Item 21 of the table provides that item 147 in the Schedule 1 commences immediately after the commencement of section 2 of the Financial Transaction Reports Amendment Bill 2006 . Section 2 commences on the day on which the Financial Transaction Reports Amendment Bill 2006 receives Royal Assent.

Item 23 in the table provides that item 151 in Schedule 1 commences the later of at the same time as section 3 of the AML/CTF Bill and immediately after the commencement of section 5 of the Law Enforcement Integrity Commissioner Act 2006 .

The remaining items in the commencement table, namely items 5, 7, 9, 11, 13, 15, 17 and 19, commence at the same time as section 3 of the AML/CTF Bill unless that section commences before 14 December 2006, in which case the provisions do not commence at all.

Clause 3 Schedules

This clause explains the operation of the Schedule to the Bill and provides that each Act or set of regulations specified in Schedule 1 to the Bill are amended as set out in the Schedule. Any other item in a Schedule in the Bill has effect according to its terms.