House of Representatives

Explanatory Memorandum

(Circulated by authority of the Attorney-General, the Honourable Robert McClelland MP)

Schedule 7 - Listings under the Charter of the United Nations Act 1945

Overview

Part 4 of the Charter of the United Nations Act 1945 (the Charter Act) gives effect to Australia's obligations under paragraphs 1(c) and (d) of the United Nations Security Council Resolution 1373 of 28 September 2001. These paragraphs oblige Australia to:

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freeze, without delay, funds and other financial assets or economic resources of: persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts; entities owned or controlled directly or indirectly by such persons; and of persons acting on behalf of, or at the direction of, such persons and entities, including funds derived or generated from property owned or controlled directly or indirectly by such persons and associated persons and entities, and

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prohibit its nationals or any persons and entities within its territory from making any funds, financial assets or economic resources or financial or other related services available, directly or indirectly, for the benefit of such persons or entities.

Schedule 7 will amend the Charter Act to implement the Australian Government's response to recommendation 22(b) of the Parliamentary Joint Committee on Intelligence and Security Report Review of Security and Counter-Terrorism Legislation , tabled in Parliament in December 2006 (2006 PJCIS Report) to improve the standard for listing a person, entity, asset or class of assets. The Schedule will also amend the Charter Act to provide for the regular review of listings under the Charter Act.

Charter of the United Nations Act 1945

Item 1: Subsections 15(1) and (3) - Improving the standard for listing under the Charter Act

Under Part 4 of the Charter Act the Minister for Foreign Affairs must list, by notice in the Gazette , a person or an entity (subsection 15(1)), or may list an asset or class of assets (subsection 15(3)), if he or she is satisfied of the 'prescribed matters'. It is an offence for an individual (subsection 20(1)) or a body corporate (subsection 20(3C)) to use or deal with a listed asset or with an asset that is owned or controlled by a listed person or entity, or to allow or facilitate such using or dealing, without the written authorisation of the Minister for Foreign Affairs. It is also an offence for an individual (subsection 21(1)) or a body corporate (subsection 21(2C)) to make an asset available to a listed person or entity, without the written authorisation of the Minister for Foreign Affairs.

Item 1 will amend subsections 15(1) and (3) to require that the Minister for Foreign Affairs list a person, entity, asset or class of assets if he or she is satisfied 'on reasonable grounds' of the prescribed matters. This will implement recommendation 22(b) of the 2006 PJCIS Report. It will also bring Australia into line with the international standard for terrorist asset freezing established by the Financial Action Task Force (FATF) in its Special Recommendation III and detailed in the FATF Guidance Document "International Best Practices - Freezing of Terrorist Assets" released on 23 June 2009.

Item 2: Proposed new subsection 15A - Duration of listing

This item will insert proposed new section 15A to provide that a listing under section 15 ceases to have effect on the third anniversary of the day on which the listing took effect, unless the Minister for Foreign Affairs has, prior to this date, declared, in writing, that the listing continues to have effect under proposed subsection 15A(2). A listing that continues to have effect because the Minister for Foreign Affairs has made a declaration under proposed subsection 15A(2), will in turn cease to have effect on the third anniversary of the day of the making of the declaration, unless the Minister for Foreign Affairs makes a further declaration, in writing, that the listing continues to have effect.

The Minister for Foreign Affairs will not be able to make a declaration unless satisfied on reasonable grounds of the prescribed matters for the original listing. Proposed subsection 15A(5) will provide that a declaration will not constitute a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 . This provision is merely declaratory and is included for the avoidance of doubt.

Item 3: Before paragraph 19(3)(a)

This item is a consequential amendment to clarify that nothing in existing section 19 prevents a listing ceasing to have effect under proposed section 15A.

Item 4: Transitional - listings under section 15 of the Charter Act

This item will provide that, for the purposes only of section 15A, listings made under subsection 15(1) or (3) and in effect before the commencement of the amendments will be treated as if they had been made immediately after that commencement.