House of Representatives

Revised Explanatory Memorandum

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

General outline

This Bill amends the Proceeds of Crime Act 2002 (the POC Act).

The Bill contains measures to implement recommendations made by the Parliamentary Joint Committee on Law Enforcement (the PJC-LE) in its final report on its inquiry into Commonwealth unexplained wealth legislation and arrangements.

In 2011-12, PJC-LE conducted an inquiry into Commonwealth unexplained wealth legislation and arrangements. The final report of the inquiry was handed down on 19 March 2012. The inquiry examined the effectiveness of Commonwealth laws and took evidence from the Attorney-General's Department, the Australian Crime Commission (ACC), the Australian Federal Police (AFP), the Australian Taxation Office and a number of other government and non-government organisations. It made 18 recommendations aimed at improving the investigation and litigation of Commonwealth unexplained wealth matters. The Bill will implement eight of these recommendations to strengthen the Commonwealth's unexplained wealth legislation and arrangements.

PURPOSE

The purpose of this Bill is to amend the POC Act to strengthen the Commonwealth's unexplained wealth regime and improve the investigation and litigation of unexplained wealth matters.

Schedule 1 of the Bill contains amendments that will amend the POC Act to implement the PJC-LE's recommendations to:

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include a statement in the objects clause about undermining the profitability of criminal enterprise (recommendation 1)

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ensure evidence relevant to unexplained wealth proceedings can be seized under a search warrant (recommendation 5)

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streamline affidavit requirements for preliminary unexplained wealth orders (recommendation 8)

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allow the time limit for serving notice of applications for certain unexplained wealth orders to be extended by a court in appropriate circumstances (recommendation 9)

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harmonise legal expense and legal aid provisions for unexplained wealth cases with those for other POC Act proceedings so as to prevent restrained assets being used to meet legal expenses (recommendation 10)

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allow charges to be created over restrained property to secure payment of an unexplained wealth order as can occur with other types of proceeds of crime order (recommendation 11)

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remove a court's discretion to make unexplained wealth restraining orders, preliminary unexplained wealth orders and unexplained wealth orders once relevant criteria are satisfied (recommendation 12), and

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require the AFP Commissioner to provide a report to the PJC-LE annually on unexplained wealth matters and litigation, and to empower the Committee to seek further information from federal agencies in relation to such a report (recommendation 13, in part).

Schedule 1 of the Bill also contains amendments to the POC Act that do not relate to specific recommendations of the PJC-LE but have been identified as necessary to support the amendments outlined above and to address inefficiencies in the Act, namely to:

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clarify that unexplained wealth orders may be made where a person who is subject to the order fails to appear at an unexplained wealth proceeding. The purpose of this amendment is to ensure that persons cannot frustrate unexplained wealth proceedings by simply failing to appear when required to do so. The amendment will give effect to the original intent of the unexplained wealth scheme in the POC Act

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ensure that provisions in the POC Act that determine when restraining orders cease to have effect take account of: the new provisions allowing charges to be created and registered over restrained property to secure the payment of unexplained wealth amounts; and the fact that unexplained wealth restraining orders may sometimes be made after an unexplained wealth order (not only before). Consequential amendments are proposed to ensure that provisions allowing a court to order costs in certain situations where a restraining order has ceased take account of these amendments

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further streamline the making of preliminary unexplained wealth orders where an unexplained wealth restraining order is in place (or has been revoked under section 44 of the POC Act)

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remove redundant and unnecessary affidavit requirements in support of applications for preliminary unexplained wealth orders, and

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ensure that a copy of the affidavit relied upon when a preliminary unexplained wealth order was made must be provided to the person who is subject to the order in light of changes to the affidavit requirements for preliminary unexplained wealth orders outlined above.

In addition, Schedule 1 of the Bill will amend the POC Act to extend the purposes under section 266A for which information obtained under the coercive powers of the POC Act can be shared with a State, Territory or foreign authority to include a proceeds of crime purpose.

The purpose of these amendments is to enhance information sharing with appropriate State, Territory and foreign authorities. Proceeds of crime investigations and litigation increasingly involve transnational elements due to the international nature of serious and organised crime. To effectively pursue the proceeds of crime offshore and assist our foreign counterparts in doing so it is essential that the AFP has the ability to share information for such purposes.

Schedule 2 of the Bill corrects minor drafting errors in the POC Act that were identified during the drafting of the Bill.

The amendments made by the Bill will ensure that the Government has strong laws to target the substantial profits made by serious and organised crime.

FINANCIAL IMPACT STATEMENT

Schedule 1 of the Bill will improve the Commonwealth's ability to confiscate unexplained wealth.

ACRONYMS AND ABBREVIATIONS