House of Representatives

Revised Explanatory Memorandum

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

Schedule 1 - Unexplained wealth

GENERAL OUTLINE

Schedule 1 will strengthen the Commonwealth's unexplained wealth regime.

Unexplained wealth provisions were introduced into the POC Act in February 2010, as part of a suite of reforms to more effectively prevent, investigate and litigate organised crime activity, and target the proceeds of organised crime groups.

On 19 March 2012, the PJC-LE handed down the final report on its Inquiry into Commonwealth unexplained wealth legislation and arrangements. In this report, the PJC-LE concluded that the unexplained wealth provisions were not operating as effectively as Parliament had intended.

Schedule 1 will implement recommendations made in the PJC-LE's final report. These amendments will:

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insert a statement in the objects clause to make it clear that POC Act orders aim to undermine 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 a preliminary unexplained wealth order to be extended by a court in appropriate circumstances (recommendation 9)

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harmonise provisions relating to the payment of legal expenses for unexplained wealth cases with those for other POC Act proceedings so as to prevent restrained and forfeited 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 13, in part), and

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require the Australian Federal Police (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 reports (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:

•

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.

These amendments will ensure that the Commonwealth has strong laws to target the criminal economy; by confiscating the proceeds of crime, and preventing the reinvestment of proceeds of crime into further criminal activity.

Schedule 1 - Unexplained wealth amendments

Proceeds of Crime Act 2002

Item 1 - After paragraph 5(d)

Item 1 amends section 5 of the POC Act to insert an additional object of the Act. The inserted object clause provides that a principal object of the Act is to 'undermine the profitability of criminal enterprises'.

The objects clause in section 5 of the POC Act currently identifies the principal objects of the Act as being:

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to deprive persons of the proceeds of offences, the instruments of offences, and benefits derived from offences, against the laws of the Commonwealth or the non-governing Territories

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to deprive persons of literary proceeds derived from the commercial exploitation of their notoriety from having committed offences

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to deprive persons of unexplained wealth amounts that the person cannot satisfy a court were not derived from certain offences

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to punish and deter persons from breaching laws of the Commonwealth or the non-governing Territories

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to prevent the reinvestment of proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts in further criminal activities

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to enable law enforcement authorities effectively to trace proceeds, instruments, benefits, literary proceeds and unexplained wealth amounts

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to give effect to Australia's obligations under the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, and other international agreements relating to proceeds of crime, and

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to provide for confiscation orders and restraining orders made in respect of offences against the laws of the States or the self-governing Territories to be enforced in the other Territories.

Item 1 implements recommendation 1 of the PJC-LE inquiry by updating the objects clause to better reflect the objects of the unexplained wealth provisions in the POC Act.

The Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 amended the POC Act to include unexplained wealth provisions. The unexplained wealth provisions in the POC Act allow the court to make orders with respect to the restraint and forfeiture of assets where the court is satisfied that there are reasonable grounds to suspect that a person's total wealth exceeds the value of the person's wealth that was lawfully acquired. These provisions aim to target the people at the head of criminal networks, receiving the proceeds of crime, whilst keeping themselves insulated from liability for offences. This amendment ensures that the objects clause of the POC Act refers expressly to the intent of these provisions.

Item 2 - Subsection 20A(1)

Item 2 amends subsection 20A(1) of the POC Act by omitting the words 'may order' and substituting 'must order'.

Currently, a court has discretion in deciding whether to make an unexplained wealth restraining order, even when it is satisfied that the relevant criteria have been met. This is in contrast to most other types of proceeds of crime orders, which a court must make if it is satisfied that the criteria have been met.

In the PJC-LE's final report on its Inquiry into unexplained wealth legislation and arrangements, the PJC-LE concluded:

The committee is of the view that there does not seem to be a strong case for a specific unexplained wealth judicial discretion relating to restraining orders and preliminary orders to appear, given there is limited impact on an individual subject to those types of orders and that there are already significant safeguards in place, such as:

•

the requirement for a court to be satisfied that the tests for the orders have been met;

•

the judicial discretions of general public interest and the interests of justice tests that need to be satisfied;

•

the standard powers courts have to order costs; and

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oversight by this committee.

The additional discretion available to courts in unexplained wealth cases provides a disincentive for proceeds of crime authorities to bring unexplained wealth proceedings, as there is greater uncertainty of the outcome (which also leaves the authority more open to an award of costs being made against it).

This amendment (in conjunction with the amendment made by item 4) will remove a court's general discretion to make an unexplained wealth restraining order where the amount of unexplained wealth is suspected to be $100,000 or more.

This amendment will provide greater certainty to parties involved in unexplained wealth matters. The court will continue to have a discretion in deciding whether to make an order in cases where the amount of unexplained wealth is not suspected to be $100,000 or more, which will act as a safeguard in smaller cases.

While this item removes the general discretion given to a court under subsection 20A(1), a court will still have the ability to refuse to make a restraining order under subsection 20A(4) if it is satisfied that it is not in the public interest to make the order. A court may also refuse to make a restraining order if the Commonwealth refuses to give an undertaking with respect to the payment of damages or costs, or both, for the making and operation of the order under section 21 of the POC Act.

This amendment implements Recommendation 12 of the PJC-LE's final report.

Item 3 - Subsections 20A(3A) to (3C)

Item 3 repeals subsections 20A(3A) to (3C).

Subsections 20A(3A) to (3C) allow a court to order that restrained property be disposed of for the purposes of meeting a person's reasonable legal expenses. People who are subject to proceeds of crime proceedings (other than unexplained wealth proceedings) are not entitled to meet their legal costs from restrained property.

The ability of a person to dispose of restrained property to meet their legal costs weakens the effectiveness of the unexplained wealth provisions by allowing the wealth suspected to have been unlawfully acquired to be used to contest proceedings. This may lead to fewer assets being available for confiscation if an unexplained wealth order is successful and is likely to cause more protracted litigation.

This amendment will harmonise provisions relating to the payment of legal expenses for unexplained wealth cases with those for other proceedings under the POC Act.

Legal aid commissions will continue to be entitled to be reimbursed for legal costs incurred in representing people whose property is covered by a restraining order under the POC Act. Matters under the POC Act have also been established as a priority civil law area for the allocation of Commonwealth funded legal services by State and Territory legal aid commissions under the National Partnership Agreement on Legal Assistance Services. As a matter of practice, many jurisdictions' legal assistance guidelines provide that, when determining whether legal assistance should be provided in relation to Commonwealth POC Act matters, any of a person's property that is covered by a restraining order, or is likely to be covered by a restraining order, should be disregarded for the purposes of means tests.

This amendment implements Recommendation 10 of the PJC-LE's final report.

Item 4 - Subsection 20A(4)

Item 4 amends subsection 20A(4) to provide an additional ground on which a court may refuse to make an unexplained wealth restraining order. Currently, subsection 20A(4) provides that a court may refuse to make a restraining order if it is satisfied that it is not in the public interest to make the order. Item 4 adds an additional ground for refusal, where it is satisfied that there are not reasonable grounds to suspect that a person's total wealth exceeds the value of the wealth that the person has lawfully acquired by $100,000 or more.

This amendment is related to item 2, which removes a court's discretion in deciding whether to make an unexplained wealth restraining order. This amendment will act as an additional safeguard by ensuring that the court's discretion to make an unexplained wealth restraining order is retained in matters where the person is suspected of having less than $100,000 of unexplained wealth or where an order would not be in the public interest.

A threshold of $100,000 was suggested by the PJC-LE after consultation with international and domestic criminal justice stakeholders. The introduction of this threshold also reinforces that the primary purpose of unexplained wealth provisions is to target larger cases involving serious and organised crime, and not individuals with small amounts of wealth. Providing the court with an additional discretion in these smaller cases will ensure that the courts have greater powers to prevent the potential hardship arising from the use of the provisions in cases where there are only small amounts of unexplained wealth.

This amendment implements Recommendation 12 of the PJC-LE's final report.

Item 5 - Subsection 20A(4A)

Item 5 amends subsection 20A(4A) by omitting 'subsection (1)' and substituting 'this section'. This amendment is consequential to item 2 and reflects that a court will no longer have a general discretion to make an order under subsection 20A(1). Subsection 20A(4A), as amended, will still allow a court to make an order as to costs if the court refuses to make a section 20A restraining order on other grounds (eg under subsection 20A(4), as amended, or section 21).

Item 6 - Subsection 20A(5)

Item 6 amends subsection 20A(5) by omitting 'may' and substituting 'must'. This amendment is consequential to item 2 and reflects that a court will no longer have a general discretion to refuse to make an order under subsection 20A(1).

Item 7 - After subsection 45(6)

Item 7 inserts a new subsection (6A) into section 45.

Section 45 currently causes restraining orders (with the exception of unexplained wealth restraining orders under section 20A, which are covered by section 45A) to cease in a wide range of situations. For example, property may cease to be covered by a restraining order if it vests absolutely in the Commonwealth, if it is sold to satisfy the payment of a pecuniary penalty order or if an application for forfeiture is unsuccessful.

Item 7 is related to item 24, which will insert new section 179SA into the POC Act. This will allow charges to be created and registered over restrained property to secure the payment of unexplained wealth amounts. In line with other provisions in the POC Act relating to charges, unexplained wealth charges would be automatically created where a person is subject to both an unexplained wealth order and a restraining order under the POC Act.

Item 7 will support the amendments to section 179SA by amending section 45 to provide that, if a charge is created over restrained property under section 179SA, the restraining order over that property will not cease to be in force until the charge over the property ceases to have effect under proposed subsection 179SA(2). This provision means that the restraining order will continue to cover that property even if it would usually cease under subsections 45(1), (2), (3), or (6).

This amendment will ensure that property continues to be restrained and cannot be disposed of or dealt with in a way that might frustrate a charge under section 179SA. It is an offence punishable by five years imprisonment and/or 300 penalty units if a person knowingly or recklessly contravenes a restraining order (eg by selling property, using it as collateral for a loan or moving it out of the jurisdiction). This will ensure that property continues to be available to secure the payment of unexplained wealth amounts.

Item 8 - Subsection 45A(1)

Item 8 repeals subsection 45A(1) and substitutes it with a new subsection covering when a section 20A restraining order made before an application for an unexplained wealth order ceases to be in force. This item operates in conjunction with the amendments in item 10, which relate to restraining orders that are made at the same time as or after the application for an unexplained wealth order.

Currently, section 45A establishes three ways in which an unexplained wealth restraining order under section 20A will cease to operate:

1.

An unexplained wealth restraining order has been made, but no subsequent application for an unexplained wealth order is made within 28 days after the restraining order was made.

2.

An application for an unexplained wealth order has been made within 28 days after the making of the restraining order, but a court has refused to make the unexplained wealth order and an appeal against that refusal has not subsequently been brought, or has lapsed or been denied.

3.

An application for an unexplained wealth order has been made within 28 days after the restraining order, the court has made the unexplained wealth order, and the order has subsequently been complied with (ie the person subject to the order has paid the amount they are required to pay under the order), or has been successfully appealed and disposed of.

In all of the above situations, the current provisions of section 45A assume that an application for an unexplained wealth restraining order will be made before an unexplained wealth order. However, in practice, restraining orders can also be sought after an unexplained wealth order has been made. For example, this may occur where further property of a person is identified after the order is made and a restraining order is then applied for to ensure that that further property is available to satisfy the unexplained wealth order. It may also occur where an order under subsection 179S(3) is made. As section 45A does not make any provision for such situations, it is not clear how this section would operate.

Item 8 will insert a new subsection 45A(1) covering situations where a restraining order is made before an application for an unexplained wealth order. Under this subsection, a restraining order under section 20A will lapse if no application for an unexplained wealth order was made before the restraining order was made, and no application for an unexplained wealth order is made within 28 days after the restraining order was made.

In conjunction with the amendments made by item 10, this amendment will help make it clear to people who are bound by a section 20A restraining order when that order ceases to have effect.

Item 9 - Paragraph 45A(2)(c)

Item 9 repeals paragraph 45A(2)(c) and replaces it with a new paragraph that provides that a restraining order made under section 20A will cease to be in force where an application for an unexplained wealth order is made within 28 days after the making of the restraining order, but the court refuses to make either a preliminary unexplained wealth order in connection with the application or the unexplained wealth order, and all appeal avenues are closed.

Current paragraph 45A(2)(c) only provides for a restraining order to cease where the court has refused to make an unexplained wealth order. However, under section 179E, a court can only make an unexplained wealth order if the court has previously made a preliminary unexplained wealth order. If a court refuses to make a preliminary unexplained wealth order, then the unexplained wealth order will automatically fail. Consequently, paragraph 45A(2)(c) has been amended to capture situations where a court refuses to make either a preliminary unexplained wealth order or an unexplained wealth order.

Item 10 - After subsection 45A(3)

Item 10 inserts new subsections (3A) and (3B) after subsection 45A(3). These new subsections govern when a section 20A restraining order made at the same time as or after an application for an unexplained wealth order will lapse. This item operates in conjunction with the amendment in item 8, which relates to restraining orders obtained before an application for an unexplained wealth order.

As noted in item 8 above, the current provisions of section 45A assume that an application for an unexplained wealth restraining order will be made before an unexplained wealth order. However, in practice, restraining orders can also be sought after an unexplained wealth order has been made. For example, this may occur where further property of a person is identified after the order is made and a restraining order is then applied for to ensure that that further property is available to satisfy the unexplained wealth order, or where an order under subsection 179S(3) is made. As section 45A does not make any provision for this situation, it is not clear how this section would operate. Item 10 will clarify when a section 20A restraining order ceases to be in force, where that restraining order was made at the same time as or after an application for an unexplained wealth order.

Under item 10, a section 20A restraining order that was made at the same time as or after an application for an unexplained wealth order would lapse in two circumstances:

1.

The order would lapse under new subsection 45A(3A) if a court refuses to make a preliminary unexplained wealth order or an unexplained wealth order, and all appeal avenues are closed. This could be because the time for an appeal against the refusal has expired without an appeal being lodged, an appeal against the refusal has lapsed, or an appeal against the refusal has been dismissed and finally disposed of.

2.

The order would lapse under new subsection 45A(3B) if an unexplained wealth order is made and either the order is complied with or an appeal against the order has been upheld and finally disposed of.

These amendments, in conjunction with the amendments made by item 8, will help to make it clear to people who are bound by a section 20A restraining order when that order ceases to have effect.

Item 11 - Before subsection 45A(4)

Item 11 inserts a new sub-heading, 'Court may make costs order if restraining order ceases'. This amendment is consequential to items 8 and 10, which also insert headings into section 45A to clarify what the different subsections relate to.

Item 12 - Subsection 45A(4)

Item 12 amends subsection 45A(4) by omitting 'or (2)' and substituting '(2) or (3A)'. This amendment expands a court's ability to make costs orders under subsection 45A(4) to also include situations where a restraining order under section 20A ceases to be in force because a court refuses to make a preliminary unexplained wealth order or an unexplained wealth order. As new subsection 45A(3A) substantially mirrors 45A(2) (which is already listed in subsection 45A(4)), it is appropriate that the court's powers under subsection 45A(4) apply equally to both of these subsections.

Item 13 - Section 179B (heading)

Item 13 repeals the existing section 179B heading and substitutes '179B Making a preliminary unexplained wealth order requiring a person to appear'.

This item will ensure that the heading reflects that section 179B governs the making of preliminary unexplained wealth orders.

Item 14 - Subsection 179B(1)

Item 14 amends subsection 179B(1) of the POC Act by omitting 'may make an order' and substituting 'must make an order'.

Currently, a court has discretion in deciding whether to make a preliminary unexplained wealth order, even when it is satisfied that the relevant criteria have been met. This is in contrast to most other types of proceeds of crime orders, which a court must make if it is satisfied that the criteria have been met.

In the PJC-LE's final report on its inquiry into unexplained wealth legislation and arrangements, the PJC-LE concluded:

The committee is of the view that there does not seem to be a strong case for a specific unexplained wealth judicial discretion relating to restraining orders and preliminary orders to appear, given there is limited impact on an individual subject to those types of orders and that there are already significant safeguards in place, such as:

•

the requirement for a court to be satisfied that the tests for the orders have been met;

•

the judicial discretions of general public interest and the interests of justice tests that need to be satisfied;

•

the standard powers courts have to order costs; and

•

oversight by this committee.

Providing the court with additional discretion in unexplained wealth cases creates a disincentive for proceeds of crime authorities to bring unexplained wealth proceedings, as there is greater uncertainty of the outcome (which also leaves the authority more open to an award of costs being made against it).

This amendment (in conjunction with the amendment made by item 17) will remove a court's discretion to make a preliminary unexplained wealth order where the amount of unexplained wealth is suspected to be $100,000 or more.

This amendment will provide greater certainty to parties involved in unexplained wealth matters. The court will continue to have a discretion in deciding whether to make an order in cases where the amount of unexplained wealth is not suspected to be $100,000 or more, which will act as an additional safeguard in smaller cases. The court also has the power to revoke an order under subsection 179C(5) if there are no grounds on which to make the order at the time of considering the application to revoke the order; or it is satisfied that it is in the public interest or otherwise in the interests of justice to do so.

This amendment implements Recommendation 12 of the PJC-LE's final report.

Item 15 - Subsection 179B(2)(including the heading)

Item 15 makes amendments to section 179B of the POC Act to implement recommendation 8 of the PJC-LE Report. The amendments aim to eliminate the requirement for the proceeds of crime authority to meet an evidence threshold test for a preliminary unexplained wealth order where the evidence threshold test for an unexplained wealth restraining order has already been met, and the restraining order remains in force or has been revoked under section 44 of the POC Act (Giving security etc. to revoke a restraining order). To this end, the amendments address duplication in affidavit requirements and requirements for the court to be satisfied that an authorised officer has reasonable grounds to suspect that the person's total wealth exceeds the value of the person's wealth that was lawfully acquired.

Item 15 also addresses some concerns with the affidavit requirements in subsection 179B(2) that will apply to applications for preliminary unexplained wealth orders where an unexplained wealth restraining order is not already in force.

Item 15 repeals subsection 179B(2), including the heading, and replaces it with three new subsections (1A), (1B) and (2).

Effect of restraining orders

Part 2-6 of the POC Act provides for the making of preliminary unexplained wealth orders and unexplained wealth orders. A preliminary unexplained wealth order requires a person to attend court for the purposes of enabling the court to decide whether to make an unexplained wealth order against the person. Under current section 179B of the POC Act, a court may make a preliminary unexplained wealth order if it is satisfied that an authorised officer has reasonable grounds to suspect that a person's total wealth exceeds the value of the person's wealth that was lawfully acquired.

If a preliminary unexplained wealth order has been made and the court is not satisfied that the person's wealth was not derived from an offence against a law of the Commonwealth, a foreign indictable offence or a State offence with a federal aspect, it may make an unexplained wealth order under section 179E of the POC Act. An unexplained wealth order makes payable to the Commonwealth an amount which, in the court's opinion, constitutes the difference between the person's total wealth and the value of the person's property which the court is satisfied did not derive from the commission of a relevant offence. That is, the difference between their total wealth and the wealth that has been legitimately acquired.

Part 2-1 of the POC Act provides for the making of restraining orders, including unexplained wealth restraining orders. An unexplained wealth restraining order is an interim order that restricts a person's ability to dispose of or otherwise deal with property. Under subsection 20A(1) of the POC Act, the court may make an unexplained wealth restraining order restraining how property is dealt with where the court is satisfied that there are reasonable grounds to suspect that a person's total wealth exceeds the value of the person's wealth that was lawfully acquired, and there are reasonable grounds to suspect that a person has committed certain offences, or that the whole or part of the suspect's wealth was derived from certain offences.

When applying for unexplained wealth restraining orders and preliminary unexplained wealth orders, a proceeds of crime authority is required to provide an affidavit of an authorised officer stating the grounds of which the authorised officer suspects that a person's total wealth exceeds the value of their lawfully acquired wealth. These requirements are set out in subsection 20A(3) with respect to unexplained wealth restraining order applications and subsection 179B(2) with respect to preliminary unexplained wealth matters.

Subsection 179B(2) of the POC Act requires that an application for a preliminary unexplained wealth order be supported by an affidavit of the authorised officer stating:

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the identity of the person

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that the authorised officer suspects that the person's total wealth exceeds the valued of the person's wealth that was lawfully acquired (including the grounds on which this suspicion is held)

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the property the authorised officer knows or reasonably suspects was lawfully acquired by the person (including the grounds on which this suspicion is held), and

•

the property the authorised officer knows or reasonably suspects is owned by the person or is under the effective control of the person(including the grounds on which this suspicion is held).

Section 20A(3) of the POC Act requires that an application for an unexplained wealth restraining order be supported by an affidavit of the authorised officer stating:

•

that the authorised officer suspects that the total wealth of the suspect exceeds the valued of the suspect's wealth that was lawfully acquired

•

that the property with respect to which the order is sought is in the suspect's effective control, and

•

that the authorised officer suspects that the suspect has committed certain offences, or that the whole or part of the suspect's wealth was derived from certain offences.

Under subsection 20A(3) the authorised officer is also required to set out the grounds on which his or her suspicions are held.

Unexplained wealth order proceedings can commence either with an application for a restraining order followed by an application for a preliminary unexplained wealth order, or with an application for a preliminary unexplained wealth order. Where an unexplained wealth restraining order is obtained prior to, or at the same time as a preliminary unexplained wealth order, and remains in force or has been revoked under section 44 of the POC Act at the time of applying for the preliminary unexplained wealth order, authorised officers are required at two stages to provide affidavits stating their reasonable grounds for the suspicions on which the applications are made (subsections 20A(3) and 179B(2) respectively). Similarly, the court is required at both stages to be satisfied that an authorised officer has reasonable grounds to suspect that the person's total wealth exceeds the value of the person's wealth that was lawfully acquired (paragraphs 20A(1)(f) and 179B(1)(b) respectively).

Evidence from law enforcement agencies to the PJC-LE inquiry indicated that removing this duplication would have a beneficial impact on efficiency and resourcing for these agencies and the courts. The PJC-LE inquiry noted that meeting the evidence threshold requirements with respect to both preliminary unexplained wealth orders and unexplained wealth restraining orders involved unnecessary duplication.

The PJC-LE recommended that the POC Act be amended so as to eliminate the requirement for authorised officers to meet an evidence threshold test for a preliminary unexplained wealth order where the evidence threshold for a restraining order has already been met (recommendation 8).

New subsection (1A) provides that paragraphs 179B(1)(b) and (c) (which requires the court to be satisfied that an authorised officer has reasonable grounds to suspect that the person's total wealth exceeds the value of the person's wealth that was lawfully acquired and for affidavit requirements set out in subsection 179B(2) to be met) do not apply where a restraining order made under section 20A is in force or has been revoked under section 44.

New subsection (1B) provides that if new subsection (1A) applies, the court may take into account the affidavit that an authorised officer provided in support of the application for the restraining order, which met the requirements set out in subsection 20A(3). This new subsection also provides that the court may take into account any material that an authorised officer or proceeds of crime authority provided in the proceedings under section 20A, relating to the requirements of subsection 20A(3) and any other material provided by that officer or authority in the proceedings for the preliminary unexplained wealth order (paragraphs (b) and (c) respectively). This is to ensure that authorised officers are not prevented from providing an affidavit at the preliminary unexplained order stage on a discretionary basis, to cover situations in which further information of relevance to an unexplained wealth matter has come to light and it is appropriate that this information be brought to the court's attention. New subsection (1B) also clarifies that the court's power to take any other material into account is not limited by these new provisions.

In cases where an unexplained wealth restraining order was not sought prior to a preliminary unexplained wealth order, or is not in force, subsection 179B(1) still requires that an authorised officer provide an affidavit that meets the requirements of subsection 179B(2) when applying for a preliminary unexplained wealth order.

Affidavit requirements

Proposed new subsection 179B(2) provides new affidavit requirements in support of applications for preliminary unexplained wealth orders. These amendments are considered necessary to address law enforcement concerns with the current affidavit requirements and anomalies that arise as a consequence of amendments made above.

New subsection 179B(2) does away with the current requirement in existing paragraph 179B(2)(a) for an affidavit in support of an application for a preliminary unexplained wealth order to state the identity of the person. This paragraph is considered unnecessary as the identity of the person against whom the preliminary unexplained wealth order is being sought will be included in the application for the order as a matter of practice.

New subsection 179B(2) also eliminates the requirement in existing paragraph 179B(2)(c) for the affidavit to state the property that the authorised officer knows or reasonably suspects was lawfully acquired by the person and/or the property known or suspected to be owned or under the effective control of the person. The original policy intention underlying paragraph (c) was to impose appropriate limits on the information about a person's unexplained wealth that an authorised officer would have to include in his or her affidavit to meet the requirements set out at paragraph 179B(2)(b). However, subsequent consideration of subparagraphs 179B(2)(c)(i) and (ii) has raised concerns that, rather than limiting the amount of information that an authorised officer must include in their affidavit, they could be interpreted to create separate (and additional) stand-alone criteria that an authorised officer must meet when making an application to a court for a preliminary unexplained wealth order. The repeal of subparagraphs 179B(2)(c)(i) and (ii) aims to remove this risk.

New subsection 179B(2) requires affidavits in support of preliminary unexplained wealth order applications to state that the authorised officer suspects that the person's total wealth exceeds the value of the person's wealth that was lawfully acquired and include the grounds on which the authorised officer holds that suspicion.

These provisions will apply in preliminary unexplained wealth order proceedings in circumstances where an unexplained wealth restraining order is not in force at the time the application for the preliminary order is made.

Item 16 - Before subsection 179B(3)

Item 16 inserts a new sub-heading, 'Considering application without notice'. This amendment is consequential to item 15, which (amongst other things) inserts a new heading into section 179B. This heading articulates the purpose of 179B(3).

Item 17 - At the end of section 179B

Item 17 inserts a new subsection 179B(4), which provides that a court may refuse to make a preliminary unexplained wealth order if it is satisfied that there are not reasonable grounds to suspect that the person's total wealth exceeds the value of the wealth that the person has lawfully acquired by $100,000 or more.

This amendment is related to item 14, which removes a court's discretion in deciding whether to make a preliminary unexplained wealth order. This amendment will act as an additional safeguard by ensuring that the court's discretion to make a preliminary unexplained wealth order is retained in matters where the person is suspected of having less than $100,000 of unexplained wealth.

A threshold of $100,000 was suggested by the PJC-LE after consultation with international and domestic criminal justice stakeholders. The introduction of this threshold also reinforces that the primary purpose of unexplained wealth provisions is to target larger cases involving serious and organised crime, and not individuals with small amounts of wealth. Providing the court with an additional discretion in cases involving a smaller amount of wealth will ensure that the courts have greater powers to prevent the potential misuse of these provisions.

This amendment implements Recommendation 12 of the PJC-LE's final report.

Item 18 - Subsection 179E(1)

Item 18 amends subsection 179E(1) of the POC Act by omitting 'may make an order' and substituting 'must make an order'.

Currently, a court has a discretion in deciding whether to make an unexplained wealth order, even when it is satisfied that the relevant criteria have been met. This is in contrast to most other types of proceeds of crime orders, which a court must make if it is satisfied that the criteria have been met.

In the PJC-LE's final report on its Inquiry into unexplained wealth legislation and arrangements, the PJC-LE observed that, while an unexplained wealth order may have a significant impact upon the individual concerned, the test to be satisfied is substantial. The PJC-LE also found that the current judicial discretion may limit the effective use of unexplained wealth laws.

Providing the court with the current discretion in unexplained wealth cases provides a disincentive for proceeds of crime authorities to bring unexplained wealth proceedings, as there is greater uncertainty of the outcome (which also leaves the authority more open to an award of costs being made against it).

Similar to the amendment made by item 17, this amendment will remove a court's discretion to make an unexplained wealth order where the amount of unexplained wealth is $100,000 or more.

This amendment will provide greater certainty to parties involved in unexplained wealth matters. The court will continue to have a discretion in deciding whether to make an order in cases where the amount of unexplained wealth is not $100,000 or more, which will act as an additional safeguard in smaller cases.

While the general discretion under subsection 179E(1) is being removed, the court will still have the ability under subsection 179E(6) to refuse to make an unexplained wealth order if the court is satisfied that it is not in the public interest to make the order.

This amendment implements Recommendation 13 of the PJC-LE's final report.

Item 19 - Subsection 179E(4)

Item 19 amends subsection 179E(4) of the POC Act by adding an additional subparagraph 179E(4)(b) that provides that the court is not prevented from making an unexplained wealth order under section 179E in relation to a person in circumstances where the person fails to appear as required by a preliminary unexplained wealth order.

Subparagraph 179E(1)(a) provides that an unexplained wealth order may only be made where a preliminary unexplained wealth order has been made in relation to the person. A preliminary unexplained wealth order requires a person to appear before the court 'for the purpose of enabling the court to decide whether or not to make an unexplained wealth order in relation to the person'. While the intention was always to enable a court to make an unexplained wealth order even when the person did not appear, it is considered appropriate to put the issue beyond doubt and provide for it expressly.

Item 19 will give effect to the original policy intent of unexplained wealth proceedings under section 179E and clarify that a court is not prevented from making an unexplained wealth order simply because the person subject to a preliminary unexplained wealth order has failed to appear. It is not intended that a person might frustrate unexplained wealth proceedings by simply refusing to appear.

Item 20 - Subsection 179E(6)

Item 20 amends subsection 179E(6) to provide that a court may refuse to make an unexplained wealth order if it is satisfied that the person's unexplained wealth amount is less than $100,000. The person's unexplained wealth amount is calculated based on the formula in subsection 179E(2).

This amendment is related to item 18, which removes a court's discretion in deciding whether to make an unexplained wealth order. This amendment will act as an additional safeguard by ensuring that court's discretion to make an unexplained wealth order is retained in matters that where the amount of unexplained wealth that the person has is less than $100,000.

A threshold of $100,000 was suggested by the PJC-LE after consultation with international and domestic criminal justice stakeholders. The introduction of this threshold also reinforces that the primary purpose of unexplained wealth provisions is to target larger cases involving serious and organised crime, and not individuals with small amounts of wealth. Providing the court with an additional discretion in cases involving a smaller amount of wealth will ensure that the courts have greater powers to prevent any potential hardship arising from the use of these provisions. Under the amended subsection 179E(6) the court will retain its discretion to refuse to make an unexplained wealth order if it is satisfied that it is not in the public interest to make the order.

This amendment implements Recommendation 13 of the PJC-LE's final report.

Item 21 - paragraph 179N(2)(b)

Item 21 inserts new paragraph 179N(2)(b) into section 179N, which sets out the notice requirements if a proceeds of crime authority has made an application for an unexplained wealth order.

Existing subparagraph 179N(2)(b) provides that if a court makes a preliminary unexplained wealth order in relation to the person, the proceeds of crime authority must, within 7 days of the making of the order, provide to the person a copy of the application for the unexplained wealth order and the affidavit relied upon by the court, referred to in subsection 179B(2).

New paragraph 179N(2)(b) is required to take account of the fact that under section 179B, as amended by item 15, the affidavit relied upon when making a preliminary unexplained wealth order may have been an affidavit relied upon at the unexplained wealth restraining order stage. New paragraph 179N(2)(b), therefore, stipulates that the person the subject of the preliminary unexplained wealth order must be provided with either a copy of the affidavit referred to in subsection 179B(2) or if, because of new subsection 179B(1A), there is no such affidavit, the affidavit referred to in paragraph 179B(1B)(a).

Item 22 - After subsection 179N(2)

Item 22 inserts new subsections 179N(2A) and (2B) into section 179N. Subsection 179N(2A) allows a court to make an order extending the time limit for serving notice of a preliminary unexplained wealth order under subsection 179N(2) by up to 28 days where the court is satisfied that it is appropriate to do so. However, a court will only be able to make such an order if the responsible authority applies for the order before the end of the period for serving the notice.

New subsection 179N(2B) provides that the court may extend the period for serving notice more than once.

Extending the time limit for giving notice of a preliminary unexplained wealth order will make the provisions more flexible in circumstances where it is not possible for notice to be given within seven days of the order being made. For example, this may cover situations where a suspect is attempting to avoid service of the notice or is temporarily absent from the jurisdiction. A court will have the discretion to extend the time limit for serving notice, which will ensure that independent consideration is given as to whether it is appropriate to give an extension.

This amendment implements Recommendation 9 of the PJC-LE's final report.

Item 23 - Subsection 179S(3)

Item 23 repeals subsection 179S(3) and substitutes a new subsection enabling a court to make a restraining order under section 20A in certain circumstances.

Under subsection 179S(1), where the court has made an unexplained wealth order in relation to a person the responsible authority may apply to the court for an order, declaring that all or part of property within the effective control of that person be made available to satisfy the unexplained wealth order. Subsection 179S(3) then allows a court to also make a restraining order in respect of that property to prevent it being dissipated prior to the enforcement of the unexplained wealth order. To enable this to occur, subsection 179S(3) deems that certain requirements, which are relevant to the making of a section 20A unexplained wealth restraining order, have been met. However, it is not clear what type of restraining order is created in existing subsection 179S(3). This may cause confusion for people subject to such an order about their legal rights.

The amendments in item 23 will clarify that an order made under subsection 179S(3) is a restraining order under section 20A. If a restraining order is made under subsection 179S(3), a person with an interest in that property has the same rights as if a restraining order under section 20A were made against them. For example, the person can apply to have his or her interest excluded under section 29A or to have the order revoked under section 42.

Under this item, the court may, on application by the responsible authority, make a restraining order under section 20A over property covered by a declaration under 179S(1), as if the requirements to obtain a section 20A restraining order had been met. These amendments are necessary to support changes in item 24, which allow for the creation and registration of charges over property subject to a restraining order.

Item 24 - Section 179SA

Item 24 repeals section 179SA, which relates to the payment of legal expenses, and substitutes new sections 179SA and 179SB relating to the creation and registration of charges over property subject to a restraining order.

Repeal of existing section 179SA

Currently, section 179SA allows a court to order that property covered by an order under subsection 179S(1) be used to meet a person's reasonable legal expenses arising from an application under the POC Act, instead of being available to satisfy an unexplained wealth order. People who are subject to proceeds of crime proceedings (other than unexplained wealth proceedings) are not entitled to meet their legal costs from property covered by an order under the POC Act.

The ability of a person to use property covered by an order under subsection 179S(1) to meet their legal costs weakens the effectiveness of the unexplained wealth provisions by allowing assets that would otherwise be confiscated to be used to contest proceedings. This may lead to fewer assets being available for confiscation and is likely to cause more protracted litigation.

This amendment will harmonise provisions relating to the payment of legal expenses for unexplained wealth cases with those for other proceeds of crime proceedings.

Legal aid commissions will continue to be entitled to be reimbursed for legal costs incurred in representing people whose property is covered by a restraining order under the POC Act. Matters under the POC Act have also been established as a priority civil law area for the allocation of Commonwealth funded legal services by State and Territory legal aid commissions under the National Partnership Agreement on Legal Assistance Services. As a matter of practice, many jurisdictions' legal assistance guidelines provide that, when determining whether legal assistance should be provided in relation to Commonwealth POC Act matters, any of a person's property that is covered by a restraining order, or is likely to be covered by a restraining order, should be disregarded for the purposes of means tests.

This amendment implements Recommendation 10 of the PJC-LE's final report.

Inclusion of new sections 179SA and 179SB

Unexplained wealth orders create a civil debt payable to the Commonwealth. As such, an unexplained wealth order does not attach to particular property of a person or require that particular property be forfeited.

Other provisions in the POC Act that create a civil debt payable to the Commonwealth, such as pecuniary penalty orders and literary proceeds orders, allow for the creation and registration of charges over restrained property to secure payment of amounts owing to the Commonwealth. This ensures that property is available to satisfy a pecuniary penalty order or a literary proceeds order if a person does not pay the amount specified in the order. However, the same power does not exist for unexplained wealth orders.

Proposed sections 179SA and 179SB will allow charges to be created and registered over restrained property to secure payment of unexplained wealth amounts.

Under proposed subsection 179SA(1), where an unexplained wealth order has been made against a person and the person is also the suspect in relation to a restraining order, upon the making of the later of the orders a charge is created over restrained property to secure the payment to the Commonwealth of the person's unexplained wealth amount.

The charge is created over the person's property and any other property over which the court has found the person has effective control (pursuant to subsection 179S(1).

There are a number of circumstances, set out in subsection 179SA(2), in which the charge may cease to have effect. Some of those circumstances relate directly to the unexplained wealth order; others relate to the property the subject of the charge.

Under subsection 179SA(2), the charge will cease if a person successfully appeals against either the unexplained wealth order or restraining order, and the relevant order is discharged by the court. If the person pays out the unexplained wealth amount in full, the charge ceases to have effect.

Certain sales or disposal of property also cause the cessation of the charge. The property may be disposed of by order of the court under Division 4 of Part 4-1, or by the owner of the property with the consent of the court or (in certain circumstances) the Official Trustee. Sale of the property to a purchaser for sufficient consideration, where the person has no notice of the charge and purchases in good faith will also cause the charge to cease.

The responsible authority for the unexplained wealth order or restraining order can also determine that a charge ceases to have effect in respect of the property. Any determination must be in writing. This paragraph has been included to enable a responsible authority to properly manage charges over property to secure unexplained wealth amounts. For example, if the restrained property over which the charge was created was separately being pursued for forfeiture under the POC Act, the responsible authority could choose to waive the charge over the property and seek to recover the unexplained wealth amount using other means available to it.

Subsection 179SA(3) provides that the charge is subject to all earlier encumbrances on the property that would otherwise have priority (other than an encumbrance in which the person who has had the unexplained wealth order made against them has an interest). For example, if the restrained property is a house, there may be an earlier mortgage which upon disposal of the property would be paid out prior to payment of the unexplained wealth amount.

By operation of paragraph 179SA(3)(b), the charge has priority over all other encumbrances.

Paragraph 179SA(3)(c) enables a charge to continue to have effect, despite any change in ownership of the property. However, this is subject to the matters set out in subsection 179SA(2). For example, if the property was sold to a third person who paid sufficient consideration, had no knowledge that the property was subject to the charge, and otherwise acted in good faith, the charge would be affected by the change in ownership by virtue of paragraph 179SA(2)(d). However, if the person did know of the charge or if the sale was not for sufficient consideration, then the conditions of paragraph 179SA(2)(d) would not be met, and subsection 179SA(3) would apply. The property would remain subject to the charge, and may be disposed of to satisfy the unexplained wealth amount. The purpose of these conditions is to ensure that a person cannot frustrate a charge by selling goods to a friend or family member below market value.

Paragraph 179SA(4) provides that subsection 73(2) of the Personal Property Securities Act 2009 applies to the charge (to the extent, if any, to which that Act applies in relation to the property charged). This is to ensure that the priority between the charge and a security interest in the property to which the Personal Property Securities Act 2009 applies is to be determined in accordance with the POC Act rather than the Personal Property Securities Act 2009.

Proposed subsection 179SA(5) provides that a determination by the responsible authority for the unexplained wealth order or restraining order that a charge ceases to have effect in respect of the property made under paragraph 179SA(2)(e) is not a legislative instrument. This provision has been included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Proposed subsection 179SB(1) provides that where a law of the Commonwealth, or of a State or Territory provides for a system of registration for certain types of property, the Official Trustee or the responsible authority for the unexplained wealth order or restraining order may cause the charge created under proposed subsection 179SA(1) to be registered in accordance with the provisions of that law. For example, if a charge was created over real property, the Official Trustee or responsible authority would be able to register that charge in the property register within the state where the property is located.

Once registration has taken place, new subsection 179SB(2) has the effect that any person who purchases or otherwise acquires an interest in the property is taken to have notice of the charge. This means that once a charge is registered, any person who subsequently purchases the property will be deemed to have notice of the charge for the purposes of determining whether the charge should cease under paragraph 179SA(2)(d).

Subsection 179SB(3) provides that registration of a charge on certain types of personal property under the Personal Property Securities Act 2009, includes the registration of data in relation to those types of property for the purposes of paragraph 148(c) of that Act.

These amendments will improve the enforcement of unexplained wealth orders by ensuring that restrained property can be used to satisfy an unexplained wealth order if a person does not pay an unexplained wealth amount.

This amendment implements Recommendation 11 of the PJC-LE's final report.

Item 25 - Before subsection 179U(2)

Item 25 inserts a sub-heading 'Appearing before the Committee' before subsection 179U(2). This amendment is consequential to item 22, which inserts a new subsection increasing the PJC-LE's oversight of investigations and litigation in relation to unexplained wealth.

Item 26 - At the end of section 179U

Item 26 inserts new subsections 179U(3) to (5), which will enhance reporting to the PJC-LE on investigations related to unexplained wealth and unexplained wealth litigation.

Under this item, the Commissioner of the AFP will be required to report on the number of matters investigated in the previous financial year by each enforcement agency where the likely outcome may be the initiation of unexplained wealth proceedings, and provide details on how that number has been calculated. This will provide the PJC-LE with an overview of the number of unexplained wealth matters at investigation stage, though not all of these matters may ultimately be litigated. The report will also be required to state the number of applications for unexplained wealth restraining orders and unexplained wealth orders, and the results of those applications.

The role of providing a report to the PJC-LE has been conferred upon the Commissioner of the AFP, as the AFP is responsible for proceeds of crime investigations and is the lead agency in the Criminal Assets Confiscation Taskforce. It is envisaged that the Commissioner of the AFP is also the most likely authority to undertake litigation in relation to unexplained wealth. Providing a consolidated response from all agencies will ensure that the report presents a complete picture of relevant investigations and litigation undertaken within the previous financial year.

Under proposed subsection 179U(4), the Commissioner of the AFP must provide the PJC-LE with the report as soon as practicable after the AFP's annual report is laid before parliament under section 67 of the Australian Federal Police Act 1979. This will ensure that reporting under proposed subsection 179U(3) can be done in conjunction with other reporting requirements.

Proposed 179U(5) provides that the Commonwealth Director of Public Prosecutions or Chief Executive Officer (however described) of an enforcement agency must comply with any requests from the Commissioner of the AFP for information that the Commissioner considers is necessary to prepare the report to the PJC-LE under proposed subsection 179U(3). This subsection will ensure that the Commissioner of the AFP has access to relevant information on investigations and litigation conducted by other agencies for the purpose of providing a consolidated report to the PJC-LE. It is envisaged that the agency providing this information will remain responsible for the quality of that information and for answering any further questions that arise as a result of that information.

This item implements part of Recommendation 13 of the PJC-LE's final report.

Items 27 and 28 - After paragraph 227(1)(h) and after paragraph 228(1)(d)

Items 27 and 28 insert new paragraphs into subsections 227(1) and 228(1) respectively. These items will enable the seizure of things that are relevant to unexplained wealth proceedings during the execution of a warrant granted under section 225.

Under section 225 of the POC Act, a magistrate may issue a warrant to search a premises if satisfied by information on oath that there are reasonable grounds for suspecting that there is 'tainted property' or 'evidential material' at the premises (or will be within 72 hours).

Tainted property is defined as proceeds of certain indictable offences or an instrument of an indictable offence.

Evidential material means evidence relating to:

•

property in respect of which action under the POC Act has or could be taken

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benefits derived from the commission of certain offences, or

•

literary proceeds.

While the current search warrant provisions allow for the collection of some evidence in relation to property relevant to unexplained wealth proceedings, it is currently not possible to seize all evidence that would be relevant to an unexplained wealth investigation or proceeding. For example, the current search warrant provisions would not necessarily allow the seizure of material relevant to ascertaining the total wealth of a person (such as evidence of a person's income or legitimately acquired property) or evidence of unlawful activities from which a person has derived wealth. Furthermore, officers are not able to collect evidence relating to summary offences and foreign offences, even though restraint action in unexplained wealth matters can be based on the commission of summary or indictable Commonwealth offences, or foreign indictable offences.

Item 27 will insert paragraph 227(1)(ha), which will require a search warrant that authorises the seizure of other things found at the premises in the course of the search that the executing officer or a person assisting believes on reasonable grounds to be things relevant to unexplained wealth proceedings. Item 28 will insert paragraph 228(1)(da), which authorises the authorised officer or a person assisting to seize things found at the premise in the course of the search that he or she believes on reasonable grounds to be things relevant to unexplained wealth proceedings. A definition of 'things relevant to unexplained wealth proceedings' will be inserted into section 338 by item 33.

These amendments will ensure that material relevant to unexplained wealth proceedings can be seized when searching premises under a warrant and will enhance the investigation of unexplained wealth matters.

This item implements Recommendation 5 of the PJC-LE's final report.

Item 29 - Subparagraph 256(1)(b)(ii)

Item 29 amends subparagraph 256(1)(b)(ii) by omitting 'and' and substituting 'or'. This amendment is consequential to item 24, which inserts a new subparagraph after 256(1)(b)(ii).

Item 30 - At the end of paragraph 256(1)(b)

Item 30 inserts a new subparagraph into paragraph 256(1)(b) relating to the return of things relevant to unexplained wealth proceedings that have been seized under warrant. This amendment provides that the authorised officer responsible for executing the warrant must take reasonable steps to return these things where the reason that the thing was seized no longer exists or if it is decided that the thing is not to be used in evidence.

Item 31 - Subsection 266A(2) (after table item 2A)

Under the POC Act, a person may be compelled by a court, or an approved proceeds of crime examiner to provide a sworn statement, or disclose certain information. Part 3-6 of the POC Act sets out the circumstances in which information obtained as a result of these processes may be disclosed and the authorities to whom such disclosures may be made.

Section 266A of the POC Act itemises in a table the authorities to which disclosure may be made and the purposes for which disclosure may be made where information has been obtained either:

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as a result of a person giving a sworn statement in relation to interests or liabilities in property, or the identification or location of property interests pursuant to paragraph 39(1)(ca), (d) or (da) of the POC Act, or

•

through the exercise of powers or a function under Part 3-1 (examinations), 3-2 (production orders), 3-3 (notices to financial institutions), 3-4 (monitoring orders) or 3-5 (search and seizure powers) of the Act.

Subsection 266A(2) provides that disclosure of information to an authority described in an item of the table may occur if a person believes on reasonable grounds that disclosure will serve the purposes described in the associated item within the table. Item 31 amends the table to insert two additional table items to enhance the ability of proceeds of crime authorities to disclose information to State and Territory counterparts and to foreign authorities.

Table item 2 deals with the disclosure of information to Commonwealth, State and Territory authorities. This item provides that information can only be disclosed to Commonwealth, State or Territory authorities for the purpose of assisting in the prevention, investigation or prosecution of offences punishable by at least three years imprisonment.

Item 2 of the table does not allow for information to be disclosed to an authority for the purposes of deciding whether to institute proceeds of crime proceedings under State and Territory proceeds of crime laws. For example, during the course of gathering information under the POC Act, an AFP officer may obtain information relevant to confiscation action occurring under a State or Territory proceeds of crime scheme. Under item 2 of the table set out at section 266A, this information would currently not be able to be disclosed to relevant state and territory counterparts. Item 31 inserts a new item 2B into the table at section 266A to overcome this limitation.

Item 31 inserts a new item 2B into the table, which provides that a disclosure of information under section 266A may occur to an authority of a State, or a self-governing Territory, that has a function under a corresponding law of the State or Territory, for any one or more of the following purposes:

•

engaging in proceedings under that corresponding law

•

engaging in proceedings for the forfeiture of things under a law of that State or Territory, and/or

•

deciding whether to institute proceedings under a corresponding law or for the forfeiture of things.

Under section 338 of the POC Act, a corresponding law of a State or Territory is a law that is designated by the Proceeds of Crime Regulations 2002 (the POC Regulations) as one which corresponds to the POC Act. Regulation 4 of the POC Regulations declares the proceeds of crime laws of all States and Territories as corresponding laws.

Item 31 also amends the table to enhance the ability of proceeds of crime authorities to disclose information to foreign authorities.

Item 2A of the table at section 266A deals with the disclosure of information to an authority of a foreign country that has a function of investigating or prosecuting offences against a law of the country. Item 2A currently provides for sharing of information obtained as a direct result of paragraph 39(1)(d), Parts 3-1, 3-2, 3-3, 3-4 or 3-5, or as a result of a disclosure, or a series of disclosures, under section 266A. Such information can only be shared with a foreign authority that has a function of investigating or prosecuting offences against a law of the country. The information must be shared only for the purpose of assisting in the prevention, investigation or prosecution of an offence against that law, and only where the offence is constituted by conduct that would also constitute an offence against Australian law had the conduct occurred in Australia. Furthermore, the corresponding Australian offence must be punishable by imprisonment for at least 3 years or for life. The current section 266A therefore limits the sharing of information with foreign counterparts to authorities which investigate or prosecute criminal offences for the purpose of assisting those investigations and prosecutions, and only where dual criminality is met with an Australian offence with the requisite punishment threshold. This limitation currently prevents authorities from sharing information with foreign authorities for the purpose of identifying, locating, tracing, investigating or confiscating proceeds or instruments of crime under a law of the country. 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 proceeds of crime matters, it is essential that a proceeds of crime authority has the ability to share information for such purposes.

Item 31 inserts new item 2C in the table to address these matters. This item would provide that a disclosure of information under section 266A may occur to an authority of a foreign country that has either or both the function of investigating or prosecuting offences against a law of that country, and identifying, locating, tracing, investigating or confiscating proceeds of crime under a law of the country. Including those foreign authorities with a function of identifying, locating, tracing, investigating or confiscating proceeds of crime in the foreign country would ensure cooperation can occur with a foreign country where that foreign country has set up a separate authority for proceeds of crime work, which does not investigate offences. An example of an authority that falls within this definition is the Criminal Assets Bureau in Ireland which does not investigate offences but which deals with proceeds of crime.

New table item 2C provides that information can only be disclosed to foreign authorities for the purposes of assisting in identification, location, tracing, investigation or confiscation of proceeds of crime, if the identification, location, tracing, investigation or confiscation could take place under the POC Act, or under a corresponding law of a State or a self-governing Territory, if the proceeds related to an offence against a law of the Commonwealth, State or a Territory. This in effect limits the sharing of information to those countries where the proceeds or instruments of crime concerned would be capable of being confiscated under Australian laws if the proceeds or instruments had related to an offence against a law of the Commonwealth, a State or Territory. For example, law enforcement authorities in the United States and Australia may have been co-operating in relation to the investigation of an international crime syndicate that is believed to be involved in drug trafficking and money laundering. During this investigation, the United States may have requested information regarding specific assets through informal and formal channels. During the execution of a search warrant, the AFP may obtain information identifying additional real estate previously unknown to United States Authorities. The AFP has reasonable grounds to suspect that this property is the proceeds of drug trafficking and is aware that the United States shortly intends to commence proceeds of crime action against the registered owner of this real estate. Under these amendments, the AFP would be able to share the information about this additional property with the relevant United States authorities as the conduct under investigation in the United States (drug trafficking) would also constitute an offence against a law of the Commonwealth which is capable of leading to action under the POC Act. This will ensure that Australian law enforcement authorities are able to proactively share relevant information with their foreign counterparts.

Given the increasingly international nature of many crimes, including money laundering, drug trafficking, people smuggling and fraud, this amendment will significantly improve cooperation between Australia and its foreign counterparts in targeting the criminal economy.

Item 32 - Subsection 304(2)

Item 32 amends subsection 304(2) by omitting '42 to 45, 142 and 169' and substituting '42 to 45A, 142, 169 and 179SA'. This item will expand the sections that do not apply in relation to an 'interstate restraining order,' registered in the Supreme Court of a Territory under Division 1 of Part 4-5 of the POC Act to also include sections 45A and 179SA.

Subsection 304(1) of the POC Act provides that once an interstate restraining order is registered in the Supreme Court of a Territory it may be enforced as if it were a restraining order made under sections 17, 18, 19, 20 or 20A. Division 1 of Part 4-5 also contains a number of provisions that govern the duration of registration of an interstate restraining order, cancellation of registration and creating charges over property that is subject to a registered interstate restraining order. These provisions have been specifically drafted to take into account differences between how interstate restraining orders are registered and enforced and how restraining orders under sections 17, 18, 19, 20 or 20A of the POC Act are obtained and enforced.

Amending subsection 304(2) to provide that sections 45A and 179SA do not apply to a registered interstate restraining order will make it clear that the provisions in Division 1 of Part 4-5 governing interstate restraining orders are intended to operate to the exclusion of section 45A and 179SA (which provide for the cessation of unexplained wealth restraining orders and the creation of charges over restrained property to secure the payment of unexplained wealth amounts). This will assist in avoiding confusion as to when the registration of an interstate restraining order ceases and when a charge is created over property covered by an interstate restraining order.

Item 33 - Section 338

Item 33 inserts a new definition of 'thing relevant to unexplained wealth proceedings' into section 338. This definition complements the amendments made by items 29 and 30, which allow for the seizure of things relevant to unexplained wealth proceedings under a warrant granted under section 225.

A thing relevant to unexplained wealth proceedings means a thing that is reasonably suspected may be relevant for the purposes of initiating or conducting proceedings for an unexplained wealth restraining order under section 20A or under part 2-6 (which relates to the granting of preliminary unexplained wealth orders and unexplained wealth orders amongst other things). This includes things in electronic form.

Things that might be relevant to an unexplained wealth proceeding may include things that show:

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whether a person's total wealth exceeds the value of the person's wealth that was lawfully acquired

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the amount by which a person's total wealth exceeds the value of the person's wealth that was lawfully acquired

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whether a person has committed an offence against a law of the Commonwealth, a foreign indictable offence or a State offence that has a federal aspect

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whether the whole or any part of a person's wealth was derived from an offence against a law of the Commonwealth, a foreign indictable offence or a State offence that has a federal aspect, or

•

whether particular property was lawfully acquired by a person, owned by a person or under the effective control of a person.

For example, this may include things that show that a person has legitimately derived part of his or her wealth (such as payslips, business documents, details of inheritances, details of debts or evidence of gifts), as well as things that show that the person's wealth has not been lawfully derived (such as things that indicate that a person may have engaged in certain offences or things that indicate that a person is living an extravagant lifestyle that is not supported by their income). It may also include things that go to quantifying the person's wealth, (such as property documents, information about investments or bank records).

Item 34 - Application of amendments

Item 34 sets out how the amendments made in Part 1 of Schedule 1 apply.

Section 20A, 45 and 45A

Sub-item 34(1) provides that the amendments to section 20A of the POC Act apply to restraining orders applied for on or after the commencement of item 34, regardless of whether the application for the restraining order relates to property or wealth acquired before, on, or after commencement or to an offence suspected of being committed before, on, or after commencement.

Similarly, under sub-item 34(2) of this item the amendments to sections 45 and 45A of the POC Act apply in relation to a restraining order made on or after commencement, regardless of whether the restraining order relates to property or wealth acquired before, on, or after commencement or to an offence suspected of being committed before, on, or after commencement.

While these amendments to section 20A will only apply to restraining orders applied for on or after commencement and the amendments to section 45 and 45A will only apply to restraining orders made on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendments commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these provisions retrospectively is necessary to ensure their effective operation. Under paragraph 20A(2)(a), unexplained wealth restraining orders may apply to all of the property of the suspect. This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's property or wealth regardless of when it was acquired to ensure that orders are not frustrated by requiring the precise point in time at which certain property or wealth was acquired to be established.

It is also necessary for this amendment to apply to offences regardless of when they are suspected to have been committed. The criminal conduct from which a person may have profited or gained property may continue over several years (including over the time of commencement), may not be discovered immediately, or may not be able to be attributed to a specific date. This is especially relevant for unexplained wealth proceedings which aim to target the heads of organised crime organisations who may have committed and/or profited from multiple offences over many years.

Sections 179B and 179E

Sub-item 34(3) provides that the amendments to sections 179B and 179E apply in relation to an unexplained wealth order applied for on or after the commencement of this item, regardless of whether that application relates to wealth that was acquired before on or after commencement.

While the amendments to sections 179B and 179E only apply to unexplained wealth orders that are applied for on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendments commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these provisions retrospectively is necessary to ensure their effective operation. Under section 179G of the POC Act, the amount of wealth a person has is calculated having regard to property owned, effectively controlled, disposed of or consumed at any time, including before the time the Commonwealth's unexplained wealth laws commenced. This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's wealth regardless of when it was acquired to ensure that orders are not frustrated by requiring the precise point in time at which certain wealth or property was acquired to be established.

Section 179N

Sub-item 34(4) provides that the amendments to 179N apply in relation to a preliminary unexplained wealth order obtained on or after commencement, regardless of when the application for the unexplained wealth order on which the preliminary unexplained wealth order is based was made or whether that application relates to wealth acquired before, on or after commencement.

While the amendments to section 179N only apply to preliminary unexplained wealth orders that are made on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendment commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these amendments will ensure the effective operation of section 179N. Under section 179G of the POC Act, the amount of wealth a person has is calculated having regard to property owned effectively controlled, disposed of or consumed at any time, including before the time the Commonwealth's unexplained wealth laws commenced. This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's property or wealth regardless of when it was acquired to ensure that a court has the discretion to make an order extending the period for serving notice under subsection 179N(2) without requiring the precise point in time at which certain wealth or property was acquired to be established.

These amendments will apply regardless of whether the application for the unexplained wealth order on which the preliminary unexplained wealth order is based was made before, on or after commencement. This will ensure that a court still has the power to extend the period for serving notice, where it considers it appropriate to do so (for example, where a suspect is attempting to avoid service or it temporarily absent from the jurisdiction).

Section 179S

Sub-item 34(5) provides that amendments to section 179S apply in relation to an unexplained wealth order made on or after the commencement of this item, regardless of whether that unexplained wealth order relates to wealth that was acquired before on or after commencement, and whether the property subject to the order under subsection 179S(1) came under the effective control of the person against whom the unexplained wealth order has been made before, on or after commencement.

While the amendments to section 179S only apply to unexplained wealth orders that are made on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendments commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these provisions retrospectively is necessary to ensure their effective operation. Under section 179G of the POC Act, the amount of wealth a person has is calculated having regard to property owned, effectively controlled, disposed of or consumed at any time, including before the time the Commonwealth's unexplained wealth laws commenced. This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's wealth regardless of when it was acquired to ensure that orders are not frustrated by requiring the precise point in time at which certain wealth or property was acquired to be established.

Similarly, it will often not be possible to ascertain when certain property became under the effective control of the person who is subject to an unexplained wealth restraining order. For example, the person who has effective control over property may not be the legal owner of that property or may maintain effective control using a complex system of companies and/or trusts. As such, applying these provisions retrospectively will ensure that a person is not able to escape the operation of section 179S by arguing about the date that the property came under the effective control of the person subject to the unexplained wealth restraining order.

Repeal of section 179SA

Sub-item 34(6) preserves the operation of 179SA of the POC Act, which is being repealed under item 24, in relation to unexplained wealth orders made before the commencement of this item. This will ensure that where an unexplained wealth order has been made prior to commencement, a court can still make an order for a person's reasonable legal expenses to be met out of property covered by an order under subsection 179S(1).

Section 179SA and 179SB

Sub-item 34(7) provides that sections 179SA and 179SB (as inserted by Schedule 1) apply in relation to an unexplained wealth order made on or after the commencement of this item, regardless of whether that unexplained wealth order relates to wealth that was acquired before on or after commencement or whether the restraining order under subsection 179SA(1) is made before, on or after commencement.

While sections 179SA and 179SB will only apply to unexplained wealth orders that are made on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendments commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these provisions retrospectively is necessary to ensure their effective operation. Under section 179G of the POC Act, the amount of wealth a person has is calculated having regard to property owned, effectively controlled, disposed of or consumed by a person at any time, including before the time the Commonwealth's unexplained wealth laws commenced. This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's wealth regardless of when it was acquired to ensure that these provisions are not frustrated by requiring the precise point in time at which certain wealth or property was acquired to be established. Charges created under section 179SA will also occur automatically once the requirements of legislation have been met. As such, if these provisions are not applied retrospectively, it could cause considerable confusion about whether a charge had or had not been created.

Applying these new provisions to restraining orders regardless of when they were made will also ensure that unexplained wealth amounts can be more effectively recovered. As the unexplained wealth provisions were developed to target the heads of organised crime organisations who may have committed or profited from multiple offences over many years, it is possible that multiple actions may be taken under the POC Act against a person. Applying this provision retrospectively will ensure that if an unexplained wealth order is obtained against a person, a charge can be created against other property that might be subject to a restraining order under the POC Act (regardless of when that order was obtained).

Subsections 179U(3) to (5)

Sub-item 34(8) provides that subsections 179U(3) to (5) apply only to financial years starting from 1 June 2014. This provision has been included to give the Commissioner of the AFP and the CEOs of other enforcement agencies sufficient time to put in place structures to enable them to comply with their reporting obligations.

Sections 227, 228 and 256

Sub-item 34(9) provides that amendments to sections 227, 228 and 256 apply in relation to a search warrant that is applied for under this Act on or after commencement, regardless of whether the thing relates to property or wealth acquired, or an offence suspected of having been committed before, on or after commencement.

While the amendments to sections 227, 228 and 258 will only apply to unexplained wealth orders that are made on or after commencement, the operation of these amendments is partially retrospective because they may apply to property or wealth acquired before the amendments commenced. While the amendments may apply retrospectively with respect to a person's wealth, they do not create retrospective criminal liability.

Applying these provisions retrospectively is necessary to ensure their effective operation. In deciding whether to initiate proceedings for an unexplained wealth restraining order and unexplained wealth order, it is often necessary to have regard to the total property owned by a suspect (including property that is under the person's effective control, or that has been consumed or disposed of). This property may have been accumulated over decades and it will often be difficult, if not impossible, to ascertain specifically when property or wealth was acquired. As such, it is necessary for these amendments to apply to a person's wealth regardless of when it was acquired to ensure that search warrants are not frustrated by requiring the precise point in time at which certain wealth or property was acquired to be established.

It is also necessary for this amendment to apply to offences regardless of when they are suspected to have been committed. The criminal conduct from which a person may have profited or gained property may continue over several years (including over the time of commencement), may not be discovered immediately, or may not be able to be attributed to a specific date. This is especially relevant for unexplained wealth proceedings which aim to target the heads of organised crime organisations who may have committed and/or profited from multiple offences over many years.

Section 266A

Sub-item 10 provides that amendments to section 266A apply in relation in relation to the disclosure of information that has been obtained under the POC Act on or after commencement, regardless of whether the information was obtained before, on or after commencement.