House of Representatives

Proceeds of Crime (Consequential Amendments and Transitional Provisions) Bill 2002

Second Reading Speech

Mr Williams (Attorney-General)

I move

That this bill be now read a second time.

This is a companion bill to the Proceeds of Crime Bill 2002 and contains transitional and consequential provisions.

The bill will amend the Criminal Code to insert new money laundering offences replacing those in the Proceeds of Crime Act 1987 with updated provisions based on the recommendations of the Australian Law Reform Commission. The bill proposes a series of new offences graded according both to the level of knowledge required of the offender and the value of the property involved in the dealing constituting the laundering. These new offences will permit prosecutors to more accurately reflect the level of culpability of the offender in the charges they prefer and courts will be provided with a greater degree of guidance in their sentencing. The regime includes alternative verdict provisions so that where a court is satisfied that the person is not guilty of the offence charged but is guilty of another money laundering offence which carries a lesser penalty the person can be convicted of that lesser offence consistent with the rules of procedural fairness. The upper limit of the penalties will be increased from 20 to 25 years imprisonment. The scope of the offence has been expanded to include exports as well as imports of money and other property, money laundering in relation to some state and territory offences which have relevance to the Commonwealth, and where the money or property is an instrument of crime used to facilitate criminal activity, such as occurred in the lead-up to the recent terrorist attacks.

The bill also amends the Mutual Assistance in Criminal Matters Act 1987 which provides the mechanism for international cooperation in criminal cases, including in the tracing, freezing and confiscation of proceeds of crime. Currently, many of the provisions dealing with enforcement of foreign orders are scattered throughout the Proceeds of Crime Act 1987. This bill will place most of these provisions in the Mutual Assistance in Criminal Matters Act 1987 and in the course of doing so has brought them into line with the provisions of the Proceeds of Crime Bill applicable to Australian offences. The bill will also enable prescribed countries to enforce civil forfeiture orders in Australia. Only countries which have a sound justice system and whose civil forfeiture regime incorporates adequate safeguards for innocent third parties as well as persons suspected of engaging in criminal activities will be prescribed. This is also of importance in efforts to combat those who finance terrorism.

The Financial Transaction Reports Act 1988 is amended to incorporate the record retention requirements placed on financial institutions by the Proceeds of Crime Act 1987. The provisions relating to the transfer of records between authorised deposit-taking institutions are also relocated.

The bill amends the Bankruptcy Act, as recommended by the Australian Law Reform Commission, to ensure that bankruptcy is not used as a means of thwarting confiscation of the proceeds of crime by using them to satisfy creditors in a bankruptcy. Although this may be seen by some as restricting the funds available to satisfy creditors, the property in question is not derived from lawful activity and the bankrupt has no legal or moral entitlement to that property. It is therefore not appropriate that an offender be able to use proceeds of crime to settle debts. Legitimate creditors can continue to apply to a court to have property excluded from restraining orders to satisfy the liability. These amendments will take effect for bankruptcies occurring after the commencement of the relevant part of this bill.

Similarly the bill amends the Family Law Act to ensure that property settlements and spousal maintenance cannot be used to defeat confiscation proceedings. The bill will require family law proceedings dealing with property affected by a restraining order to be stayed pending the outcome of confiscation proceedings. This is consistent with the current practice of the Family Court. Dependents can continue to seek release of property from restraint to prevent hardship. The provisions will have no impact on child maintenance.

Decisions of the DPP and an approved examiner in relation to compulsory examinations about the financial affairs of people under the Proceeds of Crime Act have been included in schedule 1 of the Administrative Decisions (Judicial Review) Act as decisions to which that act does not apply. Decisions would still be reviewable under the prerogative writs and section 39B of the Judiciary Act 1903.

To ensure that there is no doubt that the AFP has the function of enforcing the Proceeds of Crime Act, the Australian Federal Police Act 1979 is amended to specifically confer that function.

Under the Telecommunications (Interception) Act 1979, intercepting agencies may only communicate intercepted information for defined permitted purposes. In the case of the National Crime Authority, relevant permitted purposes are limited to purposes connected with a relevant proceeding in relation to the authority, which is in turn limited to proceedings by way of prosecution for a prescribed offence.

The amendment in this bill will include forfeiture proceedings within the meaning of relevant proceedings as the term relates to the NCA. This will permit the NCA to communicate relevant intercepted information in connection with a proceeding for the confiscation or forfeiture of property. This will bring the NCA's powers into line with those of the AFP and state police services. The amendments to other legislation affected by this bill are consequential on the Proceeds of Crime Bill.

I commend the bill to the House and present the explanatory memorandum.

Debate (on motion by Ms Ellis) adjourned.