Senate

Revised Explanatory Memorandum

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

Schedule 6 - Minor Amendments

GENERAL OUTLINE

Schedule 6 makes minor and technical amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act and the Financial Transaction Reports Act 1988 (FTR Act). These amendments will clarify the ability of the Australian Taxation Office to share certain information held by the Australian Transaction Reports and Analysis Centre (AUSTRAC), enabling the ATO to catch tax cheats and raise taxation revenue. These amendments will also simplify the FTR Act to give permanent effect to an exemption granted by the AUSTRAC CEO, simplifying the obligations of cash dealers, in line with the Government's deregulatory agenda.

Schedule 6 also amends the AML/CTF Act to enable the Victorian Independent Broad Based Anti-Corruption Commission (IBAC) to access AUSTRAC information, enhancing its ability to investigate corruption, and simplify the FTR Act to give permanent effect to an exemption granted by the AUSTRAC CEO, simplifying the obligations of cash dealers, in line with the Government's deregulatory agenda.

In addition, Schedule 6 amends section 301.11 of the Criminal Code Act 1995 (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. It also amends Division 312 of the Code to update references to the border controlled drugs list and the controlled drugs list for the purposes of working out commercial, marketable or trafficable quantities of drugs and precursors in mixtures, or where different kinds of drugs, plants or precursors are involved.

Finally, Schedule 6 corrects minor grammatical errors in subsection 205E(2) and paragraphs 205E(2)(a) and (b) of the Customs Act.

Anti-Money Laundering and Counter-Terrorism Financing Act 2006

Item 1 - Section 5 (after paragraph (s) of the definition of designated agency)

The definition of 'designated agency' in section 5 of the AML/CTF Act lists certain Federal, State and Territory agencies which have access to AUSTRAC information under Part 11 of the Act.

This item adds the Independent Broad-based Anti-corruption Commission of Victoria (IBAC) to the definition of designated agency. Enabling IBAC to access AUSTRAC information will enhance IBAC's ability to investigate corruption, in line with the abilities of similar agencies in other jurisdictions.

Item 2 - Section 5 (paragraph (t) of the definition of designated agency )

This item reflects the name change the Crime and Misconduct Commission of Queensland underwent on 1 July 2014 to become the Crime and Corruption Commission of Queensland.

Item 3 - After paragraph 122(3)(g)

This item explicitly gives the Commissioner of Taxation and taxation officers power to disclose information relating to reports of threshold transactions and international funds transfer instructions for the purposes of, or in connection with, the performance of the official's duties.

While taxation officers have a range of powers under the AML/CTF Act to disclose AUSTRAC information (see in particular section 125) there was previously some uncertainty about whether information obtained under section 49 was capable of disclosure, due to the interaction between section 122 and other parts of the AML/CTF Act (in particular section 125). This amendment makes clear that disclosures of information obtained under section 49 relating to reports of threshold transactions and international funds transfer instructions are capable of disclosure for the purposes of the official's duties.

This item provides clarity and certainty to the Australian Taxation Office (ATO) when disclosing such information, enabling the ATO to disclose such information to individuals, in particular the taxpayers about whom such information relates, with legislative certainty about the permissibility of that disclosure.

Item 4 - After subsection 122(3)

This item makes clear that disclosures mentioned in subsection 355-50(2) of Schedule 1 to the Taxation Administration Act 1953 would be considered disclosures that meet the criteria of new subparagraph 122(3)(ga)(ii) (see item 2).

Item 5 - Application of amendments

This item ensures that the amendments made by items 3 and 4 apply to disclosures of section 49 information, regardless of whether that information was given under section 49 before, or after, those items commenced.

Criminal Code Act 1995

Item 6 - Section 301.11 (table item 3, column headed "Marketable quantity (minimum)")

Section 301.11 assists in determining the marketable threshold quantities for the controlled drugs list contained in Schedule 3 of the Criminal Code Regulations 2002. Section 301.11 defines marketable quantity as it relates to a serious drug, controlled precursor or border controlled precursor as well as to drug analogues of listed controlled or border controlled drugs.

This provision includes a table which indicates to the reader all possible meanings of 'marketable quantity' that apply to the offences in Part 9.1 of the Code. At item 3, the minimum marketable quantity of a drug analogue of 1 or more listed border controlled drugs is prescribed as being the 'commercial quantity' of the listed drug.

The amendment will ensure that in relation to a drug analogue of one or more listed border controlled drugs, the minimum marketable quantity is the marketable quantity listed in the regulations for that border controlled drug. If a substance is a drug analogue of two or more listed border controlled drugs then the minimum marketable quantity of the drug analogue is calculated by taking the smallest marketable quantity of the two or more listed drugs.

Item 7 - Paragraph 312.1(1)(b)

Paragraph 312.1(1)(b) sets out how to determine quantities of listed controlled drugs in mixtures. The paragraph refers to the quantities specified in the listings of such drugs.

The paragraph currently refers to Division 314, which had previously contained the drugs listings but which was repealed in 2013. These listings are now contained in Regulations.

This item will correct this error by substituting the reference to 'in Division 314' with 'in Regulations made for the purposes of item 1 of the table in section 301.10, 301.11 or 301.12'..

Item 8 - Paragraph 312.1(3)(b)

Paragraph 312.1(3)(b) sets out how to determine quantities of listed border controlled drugs in mixtures. The paragraph refers to the quantities specified in the listings of such drugs.

The paragraph currently refers to Division 314, which had previously contained the listed border controlled drugs but which was repealed in 2013. These listings are now contained in Regulations.

This item will correct this error by substituting 'in Division 314' with 'in Regulations made for the purposes of item 1 of the table in section 301.10 or 301.11'.

Item 9 - Paragraph 312.2(4)(b)

Paragraph 312.2(4)(b) sets out how to determine quantities of listed controlled drugs in mixtures where different kinds of drugs, plants or precursors are involved. The paragraph refers to the quantities specified in the listings of such drugs.

The paragraph currently refers to Division 314, which had previously contained the listed drugs but which was repealed in 2013. These listings are now contained in Regulations.

This item will correct this error by substituting 'in Division 314' with 'in Regulations made for the purposes of item 1 of the table in section 301.10, 301.11 or 301.12'..

Item 10 - Paragraph 312.2(5)(b)

Paragraph 312.2(5)(b) offsets out how to determine quantities of listed border controlled drugs in mixtures where different kinds of drugs, plants or precursors are involved. The paragraph refers to the quantities specified in the listings of such drugs.

The paragraph currently refers to Division 314, which had previously contained the listed border controlled drugs but which was repealed in 2013. These listings are now contained in Regulations.

This item will correct this error by substituting 'in Division 314' with 'in Regulations made for the purposes of item 1 of the table in section 301.10 or 301.11" in place of "in Division 314'.

Customs Act 1901

Items 11 to 13 - Subsection 205E(2)

These items correct minor grammatical errors in subsection 205E(2) and paragraphs 205E(2)(a) and (b). They do not make substantive changes to the Act.

Financial Transaction Reports Act 1988

Item 14 - Subsection 3(1) (definition of FTR information )

This item removes reference to repealed subsection 18(8A) (see item 6) in the definition of FTR information at subsection 3(1) of the FTR Act.

Item 15 - Sections 18 and 19

This item repeals sections 18 and 19 of the FTR Act, giving permanent effect to exemption 3 of 2013 granted by the AUSTRAC CEO pursuant to section 41A of the FTR Act.

Exemption 3 of 2013 removed obligations of cash dealers under section 18 to block accounts in certain circumstances and associated obligations of the AUSTRAC CEO under section 19 to give notice to the account signatories, unblock accounts if satisfied of certain circumstances and forfeit all rights and interests in relation to the account in certain circumstances.

The AUSTRAC CEO granted exemption 3 of 2013 due to the fact that the obligations imposed on cash dealers under section 18 of the FTR Act were largely duplicative of safeguards contained in the subsequent AML/CTF Act.

Item 16 - Paragraph 20(1)(b)

This item reflects the modified punctuation that will be required at the end of paragraph 20(1)(b) when the reference to subsection 18(1) is removed (see item 8).

Item 17 - Subsection 20(1)

This item removes reference to repealed subsection 18(1) (see item 6) in section 20 on the information required to be held by cash dealers.

Item 18 - Paragraph 29(3)(a)

This item removes reference to repealed section 18 (see item 6) in relation to the requirement that a person must not make a report, statement or declaration that the person knows is false or misleading under subsection 29(3).

Item 19 - Paragraph 29(3)(b)

This item removes reference to a 'statement [made under section 18]' as this is a reference to repealed section 18 (see item 6).

Item 20 - Section 42

This item removes reference to repealed subsections 19(2) and (3) (see item 6) in section 42 on decisions of the AUSTRAC CEO to which the Administrative Decisions (Judicial Review) Act 1977 applies.

Surveillance Devices Act 2004

Item 21 - Subsection 6(1) (paragraph (c) of the definition of relevant offence)

This item removes from the definition of 'relevant offence' reference to offences against repealed section 18 (see item 6).