• Inter-Agency Phoenix Forum minutes - 21 March 2014

    Meeting details

    Venue:

    ASIC
    Level 5
    100 Market Street
    SYDNEY

     

     

    Date:

    21 March 2014

     

     

    Start:

    10.00am

    Finish:

    12.50pm

    Chair:

    Bruce Collins

     

     

    Contact and Secretariat:

    Kay Johnston

    Contact phone:

    (02) 4923 1751

    Attendees

    Australian Business Register

    • Trisha Clarke

    Australian Crime Commission

    • David Ross

    Australian Federal Police

    • Nicholas McTaggart

    Australian Securities & Investments Commission

    • Brett Bassett

    Clean Energy Regulator

    • Dean Smeulders

    Department of Employment

    • Justin Bell

    Department of the Environment

    • Matthew Dutkiewicz

    Fair Work Building & Construction

    • Peter Darlaston

    Fair Work Ombudsman

    • Anthony Fogarty

    Office of the Migration Agents Registration Authority

    • Steve Ingram

    Office of State Revenue - NSW

    • Michael Sofiak
    • Jim Ormiston

    Australian Taxation Office

    • Michael Cranston
    • Bruce Collins
    • Michael Seddon

    Guests

    Australian Taxation Office

    • Jessica Billimoria
    • Darryl Stephens
    • Tim Fraser
    • Karen Ley

    Australian Securities & Investments Commission

    • Chris Howard

    Australian Business Register

    • John Madelly

    Australian Federal Police

    • Matthew Heather

    Immigration

    • Don Bellino
    • Angelo Fitsioris

    Fair Work Ombudsman

    • Aaron Rilstone

    Apologies

    Australian Securities & Investments Commission

    • Joe Zubcic

    State Revenue - Vic

    • Christian Birke

    Department of Environment

    • Matthew Dadswell
    • David Swanton

    Department of Human Services

    • Gary McEwan

    Australian Crime Commission

    • Richard Grant

    Australian Federal Police

    • Linda Champion

    Australian Taxation Office

    • Debbie Rawlings
    • Brett Martin

    Agenda items

    1. Welcome and introduction

    Bruce Collins welcomed everyone to the forum and introductions were made. Mike Sofiak (OSR NSW) informed the meeting that Jim Ormiston would be taking on his role. Bruce thanked Mike for his input to date.

    2. Acceptance of previous & review of action items

    Previous minutes were accepted.

    Review of Action items

    Meeting 24/7/2013

    1.1 ABR currently considering whether to take up ongoing membership with forum. Trisha Clarke advised that ABR would like to join forum on an ongoing basis (closed)

    3.1 The ATO will discuss matching MARA data with the Phoenix Risk Model and provide aggregate findings back to MARA (ongoing – carried over)

    Meeting 12/11/2013

    6.1 The ATO will investigate the possibility of holding a cross agency law design workshop and will report back to the Forum at next meeting – Michael Seddon (ATO) advised that this will need to be pushed out to next financial year (carried over).

    6.2 ATO to confirm and ensure that all Secretaries have been written to regarding a possible Phoenix Taskforce. Michael Seddon advised that the ATO has written to members who have briefed their Secretaries. The foundation document requires updating and re-distribution to members for acceptance/feedback (carried over)

    6.3 ATO to write to the Secretary of DEEWR regarding the taskforce proposal (carried over to be included with action item 6.2)

    7.1 Property developer information to be sourced from the Department of Employment that can be disseminated to members – Karen Ley (ATO) advised that there had been 19 matches with the data and that a report would be prepared and tabled at the next forum meeting (carried over)

    9.1 The draft media strategy to be circulated to members for review. Agencies to identify any potential events or opportunities that can be leveraged for media coverage and share this with the ATO for inclusion in the media strategy. Darryl Stephens (ATO) advised that he has been having one to one discussion with agencies to progress this matter (carried over)

    9.2 Member agencies to share their key messages about phoenix with the ATO, with a view to developing a whole-of-government key message guide for phoenix (feeds into agenda item 9.1 closed)

    9.3 The existing ATO Phoenix communications strategy to be updated to include a cross-agency focus and presented at the next forum meeting (feeds into agenda item 9.1 closed)

    3. Australian Business Register - Phoenix Watch List (PWL)

    One page document circulated to meeting ‘Phoenix Watch List (PWL) Project Status’ – update provided by Trisha Clarke:

    • Currently 11 agencies and 8 State and Territory bodies looking to be a party to the watch list, with ASIC/FWO and ATO being key federal agencies (this may change)
    • Currently dealing with law issues and functionality – main issues being:- what can Registrar do with information and can information be passed to the Registrar
    • Meeting held with relevant parties 18/3/14
    • ABN Act law change may be required
    • Prototype being developed – focussing on who is controlling the mischief – to be used as indicative data only
    • On track for December 2014 implementation
    • Several members voiced concern about tagging as phoenix – privacy concerns – FOI concerns and reverse workflow issues
    • ABR provide facility and agencies provide the data and are end users
    • Immigration (Angelo Fitsioris) expressed interest in their involvement – they have data to share – need to deal with issue of basis for information sharing (to be discussed out of session between Immigration and ABR)
    • Bruce Collins raised concern around potential change of machinery of government if ABR were to move from ATO.

    4. Prescribed/regulated Phoenix Taskforce

    Update provided by Bruce Collins.

    • There are restrictions on Commissioner of Taxation to disseminate information and a taskforce assists eg. ACC Data Fusion Centre, Operation Wickenby, Criminal Asset Confiscation Taskforce
    • There is provision in the Tax Administration Act that enables the prescription of a taskforce – naming agencies, essentially freeing up some restrictions that currently exist.
    • Has been discussed with Treasury – currently an issue re ministerial change
    • ABR likely to be a member
    • ATO currently combining some business lines eg. PGH, SNC and ATP – this should provide more alignment and ability to have purposes other than tax ie. employee entitlements, building and construction etc.
    • Foundation document still able to be modified as it is not yet approved.
    • Next step is for Treasury to contact Ministers – sign off minute, cabinet approves amendment to regulations – to date government approval has not yet been obtained.
    • Information will come into the ATO who will act as clearing house to then disclose to other agencies. Every agency needs to make their own call on this and whether their provisions will allow disclosure.

    Action item

    Description

    Responsibility

    2014.1

    Due date 30/4/14

    Redistribute Phoenix Taskforce foundation document for comment - add Immigration and MARA.

    Michael Seddon

    5. ASIC/ATO/Fair Work Building & Construction Head Contractor Round Table

    The following update was provided by Bruce Collins, Brett Bassett & Peter Darlaston:-

    • ASIC/ATO & FWO (B&C) attended round table discussion with head contractors from the building and construction industry in December 2013
    • There was a shared interest by head contractors managing phoenix operators in their space – they have varying degrees of systems in place to manage their risk/exposure
    • The issue is around next level ie. subcontractors and their subcontractors
    • ASIC have been conducting proactive desktop surveillance on the construction industry and highest risk people – educative component
    • Discussion around statutory declarations provided to head contractors and the federal agencies ability to utilise this information
    • Next meeting aimed at Aug/Sep 2014 with head contractors
    • Possible change in environment within B&C industry with re-introduction of ABCC and new building code – possible denial of government contracts for 6-12 mths if non-compliant with code
    • Sham contracting still a significant problem in this industry
    • Angelo Fitsioris (IMMI) asked if there was a role for IMMI re visa status of lower level employees of subcontractors (Bruce Collins & Angelo to have offline discussion regarding this)
    • Michael Seddon (ATO) and Joe Zubcic (ASIC) are going back and contacting head contractors individually
    • Michael Seddon mentioned the Taxable Payments Reporting System (TPRS) which was introduced with 2013 being the first year – all contractor payments should be reported which may assist with identifying sham contracting.

    6. ATO Phoenix Commonwealth Games Project

    Michael Seddon provided a brief overview of the Commonwealth Games Project being conducted within the ATO.

    • Commencing with building and construction of venues (focussing on obtaining information from head contractors regarding subcontractors used) then moving to the labour hire, security, marshalls etc.
    • Road testing methodology with the Pan Pacs and 40 subcontractors
    • Plan to refer information to appropriate agencies as we go forward
    • ASIC advised that they are looking at statutory declarations where government funding is targeted toward construction in an effort to protect government investment
    • Need to inform FW B&C as well.

    7. Phoenix Media Strategy

    Jessica Billimoria (ATO) and Darryl Stephens (ATO) provided the following update:

    • Media action was going to hang on the prescription of a taskforce – due to delay – will now focus on work occurring now eg. Commonwealth Games and Head Contractor meetings with anticipated delivery mid-April.
    • ATO is having one on one meetings with each agency in relation to media strategy in order to ascertain consistent key messages for each agency – each agency will release their own component
    • Michael Cranston (ATO) stated that we need to ensure that the message will spark interest from journalists – high level won’t get us there – need to talk about successes particularly from a combined front – continuing story rather than single event – include education aspects – reassure community government is dealing with the behaviour.

    8. Disengaged Property Developer (Phoenix) risk

    Karen Ley provided the following update:-

    • Risk presents most around new residential premises (small to medium enterprises) – high rise developments (strata) – don’t tend to have employees – utilise SPV (special purpose vehicles) – paying everyone except ATO/OSR/Workcover
    • Risk model detects new entry into system – from current Director identifiers
    • Need to stop repeat behaviour – contact immediately upon registration
    • Currently 150 controlling minds within data set – cross matched to telephone numbers and bank account details
    • Karen asked ASIC what they required from a referral point of view – Brett Bassett advised that there would need to be a breach of Directors duties, false documents lodged or principals involved in aiding and abetting (S79 Corporations Act).

    9. Operation Enola update

    Document circulated to meeting – Tim Fraser (ATO) provided the following update:

    • Tim Fraser (ATO) has been appointed as project manager
    • Needs tactical approach to co-ordinate all efforts of ATO around this group
    • Need to consider who we are going to target ie. one of each profession being Tax Agent, Liquidator, Real Estate Agent & Lawyer
    • Information collection strategy – identify assets
    • Who has effective control? – understand the environment
    • ASIC focus is definitely on the Liquidators.

    10. Discussion - Current media in the Building & Construction industry

    David Ross (ACC) and Nick McTaggart (AFP) led discussion:

    • Royal Commission – information will come out into the public arena as a result of this process – secondary information sources may open up – about triggering community interest
    • There will be pressure to action from government
    • Need to consider POCA (Proceeds of Crime) action – focus on following money and assets.

    11. Working Holiday Maker (WHM) Visa Scheme overview

    One page document circulated to meeting – Angelo Fitsioris (IMMI) provided overview:

    • 417 visa program – cannot extend beyond 12 months – must meet conditions
    • 7.30 Report – visa holders obtained their own ABN – labour hire firm kept the difference – they then sell their ABN to money launderers or pass onto others – multiple players in the industry
    • Department of Employment interested as funding goes to abbatoirs/meat processing.
    • Immigration are very active in this area and may have information that may/may not be able to share.

    Action item

    Description

    Responsibility

    2014.2

    Due date 30/4/14

    Angelo Fitsioris (IMMI) to explore possible information exchange with ATO (Michael Seddon), OSR NSW (Mike Sofiak/Jim Ormiston) & MARA (Steve Ingram) and report back to this forum.

    Angelo Fitsioris (Immigration)

    12. Intelligence sharing

    The following intelligence was shared between the forum members:

    • Bruce Collins (ATO) – clusters of property developers have been identified in trust project where possible $100m at risk – sophisticated phoenix operators with use of special purpose vehicles – probable engagement with law enforcement necessary
    • David Ross (ACC) – strategic intelligence products have been developed in relation to serious financial crime – looking to possibly share intel.
    • Nick McTaggart (AFP) – Fraud and Corruption Centre – fraud referrals – looking to connect to other strategies eg. Large scale input tax credit scam fed into targeting Liquidators etc. – use of telephone intercepts and covert powers – evidence important
    • Trisha Clarke (ABR) – system release Dec 2013 provided geocoding of register including branches of ABN and ANZSIC on branch.

    13. Wrap up and close

    Michael Cranston raised the following in the wrap up:

    1. How is the Forum going?
      Everyone agreed that the Forum was valuable to their agency
    2. Are we meeting often enough/too often?
      Everyone agreed that the timeframe was just right and to meet more often would not be necessary.
    3. Current travel restrictions were discussed and it was proposed to investigate whether video conferencing would be an option for at least one of the two meetings per year.
      It was also agreed that the networking achieved during the face-to-face meetings was invaluable and therefore at least one meeting per year should be face-to-face.

    Action item

    Description

    Responsibility

    2014.3

    For next meeting

    Investigate possibility of video conference facilities for one of the two meetings per year. Criteria – location (Sydney/Canberra/Brisbane & Melbourne) in either ATO or ASIC premises.

    Kay Johnston (Secretariat)

      Last modified: 14 Oct 2015QC 47092