House of Representatives

Explanatory Memorandum

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

Schedule 1 - Amendments

Part 1-Amendments

Administrative Decisions (Judicial Review) Act 1977 (ADJR Act)

Item 1 - This item inserts new paragraph (qa) after paragraph (q) of Schedule 1 to the ADJR Act. Schedule 1 of the ADJR Act lists classes of decisions that are not decisions to which the ADJR Act applies. Paragraph (qa) adds 'decisions made under the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 ' to this class of decisions. In other words, the amendment ensures decisions made under the AML/CTF Bill are excluded from the operation of the ADJR Act. These decisions will not be subject to administrative review under the ADJR Act.

The exclusion of decisions made under the AML/CTF Bill from the operation of the ADJR Act is consistent with the current position of similar decisions under the Financial Transaction Reports Act 1988 (FTR Act) which are excluded from review under the ADJR Act.

Anti-Terrorism Act (No. 2) 2005 (AT Act)

The majority of items in Schedule 9 to the AT Act are to commence on 14 December 2006. Schedule 9 of the AT Act amends the FTR Act. The amendments in Schedule 9 are designed as a temporary measure addressing money laundering and terrorism financing pending passage of the AML/CTF Bill. As these provisions will be superseded by the provisions in the AML/CTF Bill, items 2 to 11 inclusive have been inserted to stop the relevant items in Schedule 9 of the AT Act coming into force if the AML/CTF Bill comes into effect before 14 December 2006. Items in Schedule 9 of AT Act which have already commenced are not affected by Items 2 to 11 in this Bill.

Item 2 - changes the commencement date for Schedule 9, items 1 and 2, which insert definitions of bearer negotiable instrument and bills of exchange into the FTR Act.

Item 3 - changes commencement date for Schedule 9, item 5, which inserts a definition of prescribed particulars into the FTR Act.

Item 4 - commencement date for Schedule 9, item 6, which inserts a definition of promissory note into the FTR Act.

Item 5 - commencement date for a new heading for Division 1A of Part II - Reports about transfers of currency and bearer negotiable instruments substituted by Schedule 9, item 8. Item 1D also changes the commencement date for Schedule 9, item 9, which adds a new section 15AA - Reports in relation to bearer negotiable instruments taken into or out of Australia at the end of Division 1A of Part II.

Item 6 - changes the commencement date for Schedule 9, item 10, which adds a new Division 3A after Division 3 in Part II of the FTR Act. Division 3A deals with customer information to be included in international funds transfer instructions (IFTIs) transmitted into and out of Australia. Item 1E ensures that, in the interim period before the AML/CTF Bill is passed, IFTIs must include customer information as outlined in Division 3A.

Item 7 - changes the commencement date for Schedule 9, item 11, which inserts a new Part IIIB - Register of Providers of Remittance Services into the FTR Act. Part IIIB only applies to cash dealers and is meant as a stopgap measure until the AML/CTF Bill is passed. The AML/CTF Bill includes provisions that deal more comprehensively with providers of designated remittance services.

Item 8 - changes the commencement date for Schedule 9, items 12 and 13, which remove ' to the Director ' from paragraph 28(1)(a) and subsection 29(1) of the FTR Act.

Item 9 - changes the commencement date for Schedule 9, items 14 and 15, which insert references to new section 15AA (inserted by item 9) and new section 33AA (inserted by item 18) into paragraph 29(3)(a) of the FTR Act.

Item 10 - changes the commencement date for Schedule 9, items 16 and 17. Item 16 inserts a new paragraph 29(4)(ba) into section 29 of the FTR Act. Paragraph 29(4)(ba) achieves consistency with other amendments relating to cash dealers by adding a paragraph describing a situation where a person makes a statement or presents a document that they know to be false or misleading in a material particular and is capable of causing a cash dealer to include customer information relating to an IFTI that is false or misleading in a material particular.

Item 11 - This item changes the commencement date for Schedule 9, items 18-24. These items insert various clauses into the FTR Act dealing with bearer negotiable instruments.

Australian Securities and Investments Commission Act 2001 (ASIC Act)

Item 12 - inserts a new section 243E in the ASIC Act. Section 243E provides that section 95 of the AML/CTF Bill, which deals with the offence of tipping off, does not prohibit a person from disclosing a fact or information referred to in section 95 to a specified body, for example, ASIC, or in accordance with certain conditions set under the Corporations Act 2001 . Section 243E is in similar terms to the existing section 243D of the ASIC Act which allows disclosure of similar information under the FTR Act in the same circumstances.

Section 243E is consistent with FATF Recommendation 14, which maintains that financial institutions, their directors, officers and employees should be protected by legal provisions from criminal and civil liability for breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, if they report their suspicions in good faith to the Financial Intelligence Unit (FIU), even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred.

Commonwealth Electoral Act 1918 (Electoral Act)

Item 13 - inserts a new item 6 into the table in subsection 90B(4) of the Electoral Act, which deals with the provision of copies of or details from the Electoral Roll to specified classes of people. The table specifies who the Electoral Commission may give information in relation to the Electoral Roll, what information may be given and in what circumstances. Item 6 allows the Electoral Commission to give a copy of the Electoral Roll to a prescribed person who is a reporting entity (within the meaning of the AML/CTF Bill) or an agent of a reporting entity on request by the person or organisation or on payment of any fee payable under subsection (9) of the Electoral Act. Item 6 provides the equivalent access to the Roll for the purposes of a reporting entity that carries out applicable customer identification procedures under the AML/CTF Bill as is already provided under Item 5 of the table in relation to organisations verifying the identity of persons for the purposes of the FTR Act.

Item 14 - inserts a definition of applicable customer identification procedure into subsection 90B(10) of the Electoral Act for the purposes of section 90B of that Act, which relates to information on Rolls and certified lists of voters to be provided to particular people and organisations. The item aligns the definition in the Electoral Act with the definition in the AML/CTF Bill. The amendment is necessary because of the amendment made to the Electoral Act in item 2A.

Item 15 - inserts a definition of reporting entity into subsection 90B(10) of the Electoral Act for the purposes of section 90B of the Electoral Act. The item aligns the definition in the Electoral Act with the definition in the AML/CTF Bill. The amendment is necessary because of the amendment made to the Electoral Act in item 13.

Item 16 - inserts a new subsection 91A(2D) into section 91A of the Electoral Act (Use of information from Roll and habitation index). The new subsection provides that any information provided under item 6 of the table in subsection 90B(4) (this item was added by item 13 above), that is a copy of a Roll or an extract of a Roll given to a prescribed person or organisation, in this case a reporting entity or agent of a reporting entity, can only be given for the permitted purpose of the reporting entity or its agent carrying out an applicable customer identification procedure under the AML/CTF Bill. The provision is equivalent to subsection 91A(2C) in respect of the FTR Act.

Item 17 - inserts a definition for applicable customer identification procedure into subsection 91A(3) of the Electoral Act for the purposes of section 91A of the Electoral Act. The item aligns the definition in the Electoral Act with the definition in the AML/CTF Bill. The amendment is necessary because of the amendment made to the Electoral Act in item 16.

Corporations Act 2001 (Corporations Act)

Item 18 - amends paragraph 766B(3)(a) of the Corporations Act. The amendment ensures that where the provider of personal advice (as defined by subsection (3)), in providing the advice, considers one or more of the objectives, financial situation and needs of the person who receives the advice otherwise than for the purposes of compliance with the AML/CTF Bill, regulations under the AML/CTF Bill or AML/CTF Rules made under the AML/CTF Bill, the advice is not personal advice for the purposes of Chapter 7 of the Corporations Act.

Crimes Act 1914 (Crimes Act)

Items 19 and 20 - These items amend Part VIIC of the Crimes Act. They enable disclosure of pardons, quashed and spent convictions to AUSTRAC for the purpose of AUSTRAC assessing prospective members of staff or consultants or other persons assisting AUSTRAC.

Item 19 adds the following definition of AUSTRAC to section 85ZL of the Crimes Act, AUSTRAC means the Australian Transaction Reports and Analysis Centre continued in existence by the AML/CTF Bill. AUSTRAC was established by the FTR Act and is continued in existence by section 72 of the AML/CTF Bill.

Item 20 substitutes a new paragraph 85ZZH(h) into Part VIIC Division 6 of the Crimes Act. The new paragraph (h) changes the exemption for AUSTRAC so that it applies for the purpose of assessing prospective members of the staff of AUSTRAC, persons proposed to be engaged as consultants under subsection 187(1) of the Crimes Act or persons whose services are proposed to be made available to AUSTRAC under subsection 187(3) of the Crimes Act once the AML/CTF Bill comes into force. The amendment ensures that prospective staff or consultants of AUSTRAC will have to disclose pardons, quashed and spent convictions they have before being assessed by AUSTRAC.

Criminal Code Act 1995 (Criminal Code)

A number of amendments to the Criminal Code are being made that extend predicate offences of money laundering offences in Chapter 10 of the Criminal Code to State and Territory indictable offences.

Item 30 - repeals paragraph 400.2(1)(b) in Division 400 of Part 10.2 of the Criminal Code which deals with money laundering offences. This paragraph currently defines the critical element of the money laundering offences of dealing with money or other property as covering money or property that is proceeds of a crime in relation to an offence that is a Commonwealth indictable offence or a foreign indictable offence. Item 30 inserts a new paragraph so that dealing with money or other property will also cover money or property that is proceeds of a crime in relation to an offence against a State indictable offence, an Australian Capital Territory indictable offence and a Northern Territory indictable offence.

Item 31 - repeals sub-sections 400.2(3) and (4) and replaces them with a sub-section clarifying the constitutional basis for extension of the definition of dealing with money or other property to State and Territory indictable offences as being a law with respect to external affairs. The application to State indictable offences has been limited to ensure that their inclusion does not violate the Commonwealth's constitutional power to make legislation under the external affairs power.

Section 400.1 sets out definitions to extending the categories of predicate offences from which proceeds of crime can be laundered to State, Territory or foreign indictable offences requires the addition of new definitions to achieve consistency with Item 30. The new definitions are:

Item 21 - definition of Australian Capital Territory indictable offence

Item 22 - definition of Commonwealth indictable offence

Item 23 - definition of banking transaction has been removed from sub-section 400.2(3) and inserted into the definition section. The definition is necessary to clarify subparagraph 400.2(2)(a)(iii), which states that a person deals with money or property if the person engages in a banking relationship relating to money or other property (among other things).

Item 24 - definition of export money or other property has been removed from sub-section 400.2(3) and inserted into the definition section.

Item 25 - definition of foreign indictable offence has been removed from sub-section 400.2(3) and inserted into the definition section.

Item 26 - definition of import money or other property has been removed from sub-section 400.2(3) and inserted into the definition section.

Item 27 - definition of Northern Territory indictable offence .

Item 28 - definition of State indictable offence .

Item 29 - definition of connected with the offence in the definition of foreign indictable offence has been removed from sub-section 400.2(4) and inserted into the definition section.

Items 32 and 33 - make amendments to subparagraph 400.9(1)(b)(i). Item 32 is necessary because Item 33 adds two new paragraphs after paragraph 400.9(1)(b)(i). The new paragraphs are necessary to achieve consistency with the amendments above relating to the expansion of predicate offences to proceeds of crime from State indictable offences, Australian Capital Territory indictable offences or Northern Territory indictable offences. A suspicion that money or property is proceeds of crime relating to these new offences is added to the list of reasonable suspicions which is an element of the offence of receiving, possessing, concealing, importing into or exporting from Australia money or other property established by section 400.9.

Item 34 - adds another situation where paragraph 400.9(1)(b) (relating to reasonable suspicion element of offence in section 400.9) is satisfied. The situation is if the conduct referred to in paragraph (1)(a) involves a number of transactions that are structured or arranged to avoid the reporting requirements of the AML/CTF Bill that would otherwise apply to the transactions.

Item 35 - adds another situation where paragraph 400.9(1)(b) is satisfied. The situation is if the conduct referred to in paragraph (1)(a) amounts to an offence against section 139 (providing a designated service using a false customer name or customer anonymity), 140 (receiving designated service using a false customer name or customer anonymity) or 141 (non-disclosure of other name by which customer is commonly known) of the AML/CTF Bill.

Item 36 - adds another situation where paragraph 400.9(1)(b) is satisfied. The situation is if the conduct referred to in paragraph (1)(a) involves a threshold transaction within the AML/CTF Bill and the defendant has contravened their obligations under the AML/CTF Bill or given false or misleading information in purported compliance with those obligations.

Item 37 - limits the application of subparagraph (1)(b)(ia) (inserted by item 33 above) to the extent that the law governing the State indictable offence is a law with respect to external affairs (within the meaning of paragraph 51 of the Constitution).

This limitation is necessary to ensure that the AML/CTF Bill is not constitutionally invalid by exceeding the constitutional head of power that the AML/CTF Bill is made under-the external affairs power.

Item 38 - is necessary to align with the other changes to the Criminal Code regarding predicate offences of proceeds of crime offences. The amendment adds State indictable offences, ACT indictable offences and Northern Territory offences to the list of offences where it is not necessary to prove the existence of any fault element.

Financial Management and Accountability Regulations 1997 (FMA Regulations)

The Bill amends the FMA Regulations. The amendment is a minor administrative amendment, achieving consistency in Part 1 Schedule 1, item 104 by changing references to the Director of AUSTRAC to the Chief Executive Officer of AUSTRAC.

The unusual step of an Act amending regulations is being taken because of the impracticality of attempting to make the required amendments to these regulations in one day after Royal Assent of the AML/CTF Bill but before the relevant Part of the AML/CTF Bill commences (Part 16 of the AML/CTF Bill commences the day after Royal Assent).

Financial Transaction Reports Act 1988 (FTR Act)

The Bill makes a number of amendments to the FTR Act. A lot of the amendments are minor amendments and are aimed at avoiding duplication of obligations under the AML/CTF Bill and the FTR Act. These include, for example Item 40, which removes 'to establish an Australian Transaction Reports and Analysis Centre' from the title of the FTR Act. The AML/CTF Bill contains provisions continuing AUSTRAC in existence, so it is not necessary to have this reference in the FTR Act. These amendments are required as the FTR Act will continue for cash dealers who are not reporting entities under the AML/CTF Bill.

Item 44 - makes it clear that AUSTRAC is continued in existence by the AML/CTF Bill by adding words to that effect to a new definition of AUSTRAC inserted into subsection 3(1).

Other changes include changing the title of Director of AUSTRAC to AUSTRAC CEO (which is the title used in the AML/CTF Bill) (items 41, 42, 53, 64, 65, 66, 67, 69, 73, 74, 76, 77, 79, 81, 84, 86, 87, 89, 92, 95, 96, 97, 99, 103, 105, 106, 107, 111,115,116,117,118,119,120,121,122,123,123,125,126, 132, 135, 136, 137, 138, 139, 140, 145, 146).

Other changes are more fundamental.

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Item 113 - repeals Part IIIB of the FTR Act which deals with the registration of remittance dealers. This Part is replaced by Part 6 of the AML/CTF Bill.

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Item 114 - repeals Part IV of the FTR Act which deals with secrecy obligations and access to FTR information. Part IV is replaced by Part 11 of the AML/CTF Bill. The critical provision of Part IV of the FTR Act is section 27 which deals with access to FTR information to nominated officers of government agencies. Section 27 will be replaced by section 126 of the AML/CTF Bill which permits access to specified officials or a specified class of officials of a specified designated agency . The term designated agency is defined in section 5 of the AML/CTF Bill.

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The repeal of Part IV and its replacement by an access provision designed around the concept of designated agency means that the FTR Act needs to be amended to repeal a number of definitions of government agencies. These will be covered in the AML/CTF Bill under the definition of designated agency . These amendments include:

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Item 43 - repeals the definition of APRA officer in subsection 3(1) FTR Act.

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Items 46 and 47 - repeal the definitions of Centrelink officer and Child Support Agency respectively.

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Item 49 - repeals the definition of CSA officer under the FTR Act

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Item 52 - repeals the definition of Director under the FTR Act

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Item 54 - repeals the definition of Inter-Governmental Committee under the FTR Act

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Item 55 - repeals the definition of member of the staff of the Police Integrity Commission under the FTR Act

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Item 57 - repeals the definition of Police Integrity Commission under the FTR Act

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Item 60 - repeals the definition of Royal Commission under the FTR Act

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Item 61 - repeals the definition of Royal Commission into the New South Wales Police Service under the FTR Act

The FTR Act will continue for cash dealers who are not reporting entities under the AML/CTF Bill. It is therefore necessary to align terminology from the AML/CTF Bill with those continuing provisions under the FTR Act to ensure there is no confusion about the parallel operation of each piece of legislation. It is also necessary to truncate the operation of some provisions of the FTR Act so that they do not continue after the commencement of the parallel provisions under the AML/CTF Bill. This gives rise to the following amendments:

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Section 7 of the FTR Act requires cash dealers to report significant cash transactions . Item 63 inserts a new paragraph into sub-section 7(1) of the FTR Act so that such reports are not required if the cash dealer is required to report the transaction as a reporting entity under the AML/CTF Bill (ie the transaction is a designated service transaction and the transaction occurred after the commencement of the AML/CTF Bill).

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Section 11 of the FTR Act permits financial institutions to seek exemptions from the requirement to report significant transactions where the other party is not a financial institution by entering that transaction into an exemption register. Item 68 inserts a new sub-section into section 11 to confirm that a financial institution must not enter a designated service transaction or a class of designated service transactions in its exemption register after commencement of the AML/CTF Bill.

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Section 15 of the FTR Act places obligations on persons to report transfers of currency into or out of Australia. Items 71 and 72 insert two new sub-sections into section 15 to ensure that obligations under this section will not apply to transfers that occur after the commencement of Division 1 of Part 4 of the AML/CTF Bill. Division 1 of Part 4 of the AML/CTF Bill will impose similar obligations. Item 78 clarifies that requirements to report cross border transfers under section 15 won't apply to solicitors, solicitor corporations or partnerships of solicitors if they are reporting entities under the AML/CTF Bill and the transaction is a designated service transaction which occurred after commencement of the AML/CTF Bill.

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Section 16 of the FTR Act places obligations on cash dealers to report suspicious transactions. Item 85 inserts a new paragraph into section 16 of the FTR Act so that such reports are not required if the cash dealer is a reporting entity under the AML/CTF Bill (ie the transaction is a designated service transaction and the transaction occurred after the commencement of the AML/CTF Bill).

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Section 17B of the FTR Act requires cash dealers to report international funds transfer instructions. Item 88 clarifies that this provision won't apply after the commencement of the AML/CTF Bill as a similar obligation is imposed in the AML/CTF Bill.

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Sections 17FA and 17FB of the FTR Act requires Authorised Deposit-Taking Institutions to include certain customer information in international funds transfer instructions transmitted into, or out of, Australia. Items 90 and 91 make amendments to paragraphs 17FA(1)(a) and 17FB(1)(a) so that these obligations will not apply if the transmission is after the commencement of the AML/CTF Bill in circumstances which amount to the provision of a designated service.

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Section 18 of the FTR Act requires cash dealers to acquire account information from a person opening an account. Items 93 and 94 make amendments so that these obligations will not apply if the person becomes a signatory to the account after the commencement of the AML/CTF Bill in circumstances which amount to the provision of a designated service.

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Section 20 of the FTR Act requires cash dealers to maintain account information and signatory information in a way that can be audited. Item 98 inserts new words into sub-paragraphs 20(1)(a) and 20(1)(b) to ensure that cash dealers are only required to hold such information for the purposes of compliance with that Part of the FTR Act.

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Section 21 of the FTR Act sets up a mechanism whereby a person who wishes to become a signatory to an account can be identified by an identification referee. Items 100 and 101 make amendments so that these obligations will not apply to an individual who wishes to become a signatory to the account after the commencement of the AML/CTF Bill. Item 102 inserts an amendment to sub-section 22(1) to clarify that identification references can only be given to cash dealer for the purposes of this Part.

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Section 24 of the FTR Act creates an offence of opening an account in a false name. Item 108 amends section 24 so that the offence provision won't apply in relation to the operation of an account after the commencement of the AML/CTF Bill in circumstances that amount to the provision of a designated service.

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Section 24D of the FTR Act imposes record keeping obligations on bullion sellers. Item 112 amends subsection 24D(1) so that these obligations won't apply after the commencement of Division 1 of Part 2 of the commencement of the AML/CTF Bill as this Division imposes similar obligations on reporting entities.

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Section 33 of the FTR Act requires a person who is about to leave Australia or arrives in Australia to submit to questioning and search powers in relation to currency. Items 127 and 128 insert amendments to sub-sections 33(1) and 33(2) so that these obligations won't apply if the person leaves or arrives into Australia after the commencement of Division 1 of Part 4 of the AML/CTF Bill as this Division imposes similar obligations on reporting entities.

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Section 33AA of the FTR Act requires a person who is about to leave Australia, or arrives in Australia, to submit to questioning and search powers in relation to bearer negotiable instruments. Items 129 and 130 insert amendments to sub-sections 33AA(1) and 33AA(2) so that these obligations won't apply if the person leaves or arrives in Australia after the commencement of Division 1 of Part 4 of the AML/CTF Bill as this Division imposes similar obligations on reporting entities.

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Sections 40C and 40D of the FTR Act deal with definitions relating to obligations to retain financial transaction documents . Items 143 and 144 make amendments to definitions of financial transaction document and customer-generated financial document in sections 40C and 40D so that these obligations will be limited to transactions carried out before the commencement of Division 1 of Part 2 of the AML/CTF Bill.

These amendments are all supported by other amendments which insert definitions of the terms designated service (item 50), designated service transaction (item 51) and reporting entity (item 59) as well as a clarification that the term non-reportable transaction under the FTR Act includes a transaction that is not a designated service transaction (item 56).

Section 38 of the FTR Act sets out the functions of the Director of AUSTRAC . Other items make amendments to change the term Director to AUSTRAC CEO. Item 141 inserts a new sub-section to clarify that failure on the part of the AUSTRAC CEO to comply with requirements to consult with cash dealers under subsection 38(2) will not affect the validity of the performance of the function by the AUSTRAC CEO. This amendment brings the FTR Act into line with the similar provision in the AML/CTF Bill (sub-clause 212(5)).

Item 142 - repeals those sections of the FTR Act which implement the administrative framework for the operation of AUSTRAC under the FTR Act including delegation (section 39 FTR Act), staff (section 40 FTR Act), consultants (section 40A FTR Act) and Annual Report (section 40B FTR Act)

Financial Transaction Reports Amendment Bill 2006 (FTRA Bill)

Subsection 2(1) of the FTRA Bill deals with the commencement of sections 1 to 3 of the FTRA Bill. Sections 1 to 3 of the FTRA Bill makes further amendments to the FTR Act. These amendments in turn amend changes to the FTR Act made by Schedule 9 to the AT Act. Schedule 9 to the AT Act will commence on 14 December 2006. The amendments in Schedule 9 are designed as a temporary measure addressing money laundering and terrorism financing pending passage of the AML/CTF Bill. When the AML/CTF Bill commences there will be no further need for these temporary measures. If the AML/CTF Bill commences before commencement of these temporary measures (ie 14 December 2006) these temporary measures won't need to commence at all. Therefore item 147 is required to ensure that these temporary amendments will not commence if the AML/CTF Bill commences before 14 December 2006.

Freedom of Information Act 1982 (FOI Act)

Item 148 - amends Part II of Schedule 2 of the FOI Act by adding a reference to sections 41 and 49 of the AML/CTF Bill. Section 41 of the AML/CTF Bill obliges reporting entities under the AML/CTF Bill to lodge reports of suspicious matters with AUSTRAC while section 49 obliges reporting entities to give such further information relevant to reports of suspicious matters under section 41, threshold transaction reports under section 43 or reports of international funds transfer instructions under section 45 if required to do so.

These amendments effectively exempt reports of suspicious matters under the FOI Act. Suspicious transaction reports made under the FTR Act are currently exempt from the FOI Act. The amendments extend the exemption to suspicious transaction reports made under the AML/CTF Bill and to any further information provided about such reports under section 49.

Inspector-General of Intelligence and Security Act 1986 (IGIS Act)

The AML/CTF Bill allows a number of agencies including the Inspector-General of Intelligence and Security access to information collected by AUSTRAC under the AML/CTF Bill. The amendments to the IGIS Act ensure that access granted to the Inspector-General is appropriately managed.

Section 22 of the IGIS Act requires the Inspector- General to prepare a report upon completion of an inquiry under the IGIS Act which sets out the conclusions and recommendations as a result of the inquiry.

Item 149 - ensures that AUSTRAC information (within the meaning of the AML/CTF Bill) is not disclosed in such reports.

IItem 150 - amends the note to section 25A of the IGIS Act. Section 25A obliges the Inspector-General to report to the responsible Minister or head of the relevant agency upon completion of an inspection of any agency. Item 150 ensures that the Inspector-General may only disclose AUSTRAC information as permitted under section 128 of the AML/CTF Bill. Section 128 sets out the various circumstances when and conditions under which AUSTRAC information can be passed on by an official of a designated agency under the AML/CTF Bill.

Law Enforcement Integrity Commissioner Act 2006 (LEIC Act)

The amendment to the LEIC Act inserts the AML/CTF Bill secrecy provisions (Part 11 of the AML/CTF Bill) into the definition of law enforcement secrecy provision in subsection 5(1) of the LEIC Act. The secrecy provisions in the FTR Act are currently law enforcement secrecy provisions in the LEIC Act. The secrecy provisions in the FTR Act will be repealed by the Bill and replaced by the secrecy provisions in the AML/CTF Bill and therefore need to be carried over to the LEIC Act.

Privacy Act 1988 (Privacy Act)

New subsection 6E(1A) will be added to the Privacy Act. This will have the effect of classifying a small business operator that is a reporting entity (ie a person who provides a designated service under the AML/CTF Bill) to be an organisation for the purposes of the Privacy Act, ensuring that all reporting entities are subject to the Privacy Act in relation to their obligations to collect personal information under the AML/CTF Bill.

Proceeds of Crimes Act 2002 (PoC Act)

IItem 153 - of the PoC Act amends sub-section 29(3) of the PoC Act to include offences against the AML/CTF Bill. Section 29 of the PoC Act sets out the circumstances in which the Court may exclude property from a restraining order made under the PoC Act. These include circumstances defined in sub-section 29(3) where the offences to which the restraining order relates are offences under the FTR Act. Item 153 adds to this list the following offences under the AML/CTF Bill:

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section 53 - failure to report the movement of $10,000 or more in physical currency into or out of Australia

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section 59 - failure to provide a report about the movement of bearer negotiable instruments into or out of Australia

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section 136 - giving false or misleading information

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section 137 - producing false or misleading documents

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section 139 - providing a designated service using a false customer name or customer anonymity

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section 140 - receiving a designated service using a false customer name or customer anonymity

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section 141 - non-disclosure of other name by which customer is commonly known

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section 142 - conducting transactions so as to avoid reporting requirements relating to threshold transactions, and

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section 143 - conducting transfers so as to avoid reporting requirements relating to cross-border movements of physical currency.

The PoC Act also uses the current FTR Act terminology of Director of AUSTRAC . Item 154 has the effect of replacing this with the terminology CEO of AUSTRAC as used under the AML/CTF Bill.

Part 6-1 of the PoC Act deals with interpretation of the PoC Act and sets out the meaning of some important concepts. Item 155 includes a new item to clarify that valuations used in the definition of serious offence (which is also amended as discussed below) are to be determined in accordance with definitions in the AML/CTF Bill as follows:

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the definition of value in section 5 which is that value in relation to transferred property means the market value of the property as at the time of the transfer. In working out the market value of the property, disregard anything that would prevent or restrict conversion of the property to money

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section 18 provides that in determining whether an amount of foreign currency (including an amount in which a document is denominated) is not less than an Australian dollar amount, the amount of foreign currency is to be translated to Australian currency at the exchange rate applicable at the relevant time, and

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section 19 provides that in determining whether an amount of e-currency is not less than an Australian dollar amount, the amount of e-currency is to be translated to Australian currency in accordance with the method specified in the AML/CTF Rules.

Item 156 - amends the definition of AUSTRAC in section 338 of the PoC Act to reflect the introduction of the AML/CTF Bill.

Item 157 - amends the definition of serious offence in the PoC Act to include the following offences under the AML/CTF Bill:

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section 53 - failure to report the movement of $10,000 or more in physical currency into or out of Australia

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section 59 - failure to provide a report about the movement of bearer negotiable instruments into or out of Australia

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section 136 - giving false or misleading information

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section 137 - producing false or misleading documents

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section 139 - providing a designated service using a false customer name or customer anonymity if the customer concerned had an account with transaction totalling at least $50,000 in value during any 6 month period

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section 140 - receiving a designated service using a false customer name or customer anonymity if the customer concerned had an account with transactions totalling at least $50,000 in value during any 6 month period

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section 141 - non-disclosure of other name by which customer is commonly known if the customer concerned had an account with transactions totalling at least $50,000 in value during any 6 month period

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section 142 - conducting transactions so as to avoid reporting requirements relating to threshold transaction if transactions in breach of that section total at least $50,000 in value during any 6 month period, and

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section 143 - conducting transfers so as to avoid reporting requirements relating to cross-border movements of physical currency if transactions in breach of that section total at least $50,000 in value during any 6 month period.

Surveillance Devices Act 2004 (SD Act)

The SD Act enables law enforcement officers to apply for warrants, emergency authorisations and tracking device authorisations in relation to a relevant offence , which is defined as an offence with a penalty of three years or more imprisonment, or an offence otherwise specified in the definition of relevant offence in the SD Act.

The amendments to the SD Act make offences against the following sections of the AML/CTF Bill a relevant offence for the purposes of the SD Act:

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section 34 - failure to carry out the applicable customer identification procedure after commencing to provide a designated service

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section 53 - failure to report the movement of $10,000 or more in physical currency into or out of Australia

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section 59 - failure to provide a report about the movement of bearer negotiable instruments into or out of Australia

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section 139 - providing a designated service using a false customer name or customer anonymity, and

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section 140 - receiving a designated service using a false customer name or customer anonymity.

Part 2 -Transitional Provisions

These provisions are necessary to ensure that the administrative framework implemented for the operation of the FTR Act is carried over for the operation of the AML/CTF Bill.

The provisions ensure that the instruments appointing the AUSTRAC CEO (item 159), setting the terms and conditions of his or her appointment (item 160), making acting appointments (161), dealing with the AUSTRAC CEO's leave (item 162), making delegations (163) and appointing consultants (164) that were made under the relevant sub-sections of the FTR Act will carry over as if the instrument was in force immediately before the commencement of the item in Part 2.

Item 165 - permits the making of regulations to facilitate transition to the AML/CTF Bill.