House of Representatives

Law and Justice Legislation Amendment (Serious Drug Offences and Other Measures) Bill 2005

Explanatory Memorandum

(Circulated by authority of the Minister for Justice and Customs, Senator the Honourable Chris Ellison)

General outline and financial impact

General Outline

This Bill proposes to insert new serious drug offences into Chapter 9 of the Criminal Code entitled 'Dangers to the Community'. Consistent with the general approach of the Criminal Code project, the amendments will assemble these very serious offences in the central statute rather than the Customs Act 1901 (Customs Act) which is primarily a regulatory statute. The inclusion of these offences will substantially complete Australian Government implementation of the Model Criminal Code, which was developed by State, Territory and Australian Governments during the last decade to achieve greater national consistency in the criminal law.

The import and export offences in proposed Division 307 are based on the existing offences in the Customs Act. The other offences are based on Chapter 6 of the Model Criminal Code. Chapter 6 was developed in 1998 by the Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General (MCCOC) after nationwide consultation. It takes into account the 1980 report of the Hon Mr Justice E S Williams who called for greater consistency in Australia's drug laws. The proposed new offences are principally targeted at organised illicit drug traders and commercially motivated drug crime. They remove legal loopholes being exploited by drug traders who structure the illegal trafficking of serious drugs in a way which avoids the full consequence of their conduct under the existing law. In particular, these new offences provide an avenue for accumulating the amount of drugs traded on multiple occasions within a specified period into a single offence to avoid traffickers escaping liability by manipulating the amount of drugs traded on each particular occasion.

Chapter 6 of the Model Criminal Code has been modified in some respects to take into account developments since 1998. The most significant of these is the increased trade in manufactured drugs and chemical substances used to make those drugs - precursors. Whilst the model offences focussed primarily on sale of precursors, the Bill also contains serious offences targeting those who manufacture or possess precursors for the purpose of manufacturing illicit drugs. To increase enforceability of the precursor offences, the Bill also includes a presumption of intent to manufacture an illicit drug where a person is illegally selling, manufacturing or possessing prescribed precursors.

The Bill includes additional offences that target those who endanger children during the drug manufacturing process. The new offences include a federal drug endangerment offence (based on the general endangerment offence in Chapter 5 of the Model Criminal Code) and new aggravated offences which increase penalties for those who engage in manufacturing where there is a danger to children.

The 1998 MCCOC report took an unconventional approach by not incorporating a presumption of commercial purpose (trafficking) where a threshold quantity of illicit drug is involved. To address concerns raised by law enforcement agencies during consultation on the model offences, the Standing Committee of Attorneys-General decided that it was preferable to incorporate a presumption of this kind. Accordingly, presumptions of commercial purpose are incorporated into the offences in the Bill.

The Bill will preserve the existing regulatory offences involving controlled substances, such as the scheme in place for the issuing licenses for the manufacture of controlled substances under the Narcotic Drugs Act 1967 . Existing State and Territory regulatory schemes will continue to operate, and it will be a defence to the offences in the Bill if the relevant conduct is justified or excused under a law of the Commonwealth or a State or Territory.

Overlapping State and Territory drug offences will also continue to operate alongside the offences in Part 9.1 of the Criminal Code. This approach is consistent with the approach taken in other areas of criminal law, such as terrorism, fraud, computer crime, money laundering and sexual servitude. It is intended that drug offences will continue to be investigated in accordance with the established division of responsibility between federal and State and Territory law enforcement agencies. The Bill preserves the existing powers of law enforcement officers, including Customs officials and the Australian Federal Police, in relation to serious drugs offences.

Current federal drug offences employ a variety of terms to refer to illicit drugs. The Bill proposes to streamline these terms and employ consistent terminology for referring the illicit substances caught by its provisions. For offences relating to import and export the terms 'border controlled drugs', 'border controlled plants' and 'border controlled precursors' are used. For the other offences with broader domestic application the terms 'controlled drugs', 'controlled plants' and 'controlled precursors' are used. The specific substances that will be covered by each of these categories, together with the appropriate quantities, are set out in proposed Division 314.

In April 2002 at the Leaders' Summit on Terrorism and Multi-jurisdictional Crime all jurisdictions reaffirmed their commitment to implement Chapter 6 of the Model Criminal Code. Victoria, Tasmania and the ACT have implemented many of the provisions. It is hoped that the enactment of the proposed federal offences will encourage the remaining jurisdictions to implement the model offences.

The Bill also makes a number of minor amendments to some existing offences in the Criminal Code relating to children in armed conflict, and makes some amendments to other legislation.

Schedule 2 gives effect to an obligation under the Optional Protocol to the Convention on the Rights of the Child on the Involvement of Children in Armed Conflict. The Optional Protocol requires state parties to it to take all measures necessary to criminalise the recruitment or use in hostilities by armed groups not part of the State of persons under the age of 18 years. The Bill will comply with this obligation by amending the Criminal Code to provide that these activities constitute federal offences, punishable by imprisonment for up to 17 years.

Schedule 3 amends the Proceeds of Crime Act 2002 to enable a court to make a restraining order or forfeiture order over a bankrupt's property where the property has vested in the Official Trustee or a registered trustee under the Bankruptcy Act 1996 .

Schedule 4 amends the Australian Federal Police Act 1979 to insert two specific functions and create an exception to the secrecy provision in that Act. The specific functions will clarify that the functions of the Australian Federal Police (AFP) extend to providing assistance to, and cooperating with, Australian and foreign law enforcement agencies, intelligence or security agencies and government regulatory agencies, and establishing, developing and monitoring peace, stability and security in other countries. The exception to the secrecy provision will clarify that the AFP can disclose personal information about a person with that person's consent.

Schedule 5 amends the Mutual Assistance in Business Regulation Act 1992 to facilitate transfer of responsibility from the Attorney-General to the Treasurer for consideration of requests received from foreign regulators for information, documents or evidence.

Schedule 6 amends the Financial Transaction Reports Act 1988 to clarify that cash dealers are not required to obtain multiple identification references from a person who is a signatory to different accounts with the cash dealer.

Schedule 7 repeals the Defence (Transitional Provisions) Act 1950 which no longer has any legal effect.

Schedule 8 makes a technical amendment to a new detention power recently added to the Customs Act to allow Customs officers to detain people who are on bail and are caught trying to leave Australia in breach of their bail conditions. This amendment will put beyond doubt that the detention power applies where the relevant bail condition is worded to prohibit the person 'from approaching an international departure point'.

Schedule 9 exempts AUSTRAC from the operation of the Freedom of Information Act 1982 (FOI Act) in relation to documents concerning information communicated to it under section 16 of the Financial Transaction Reports Act 1988 . It also makes minor technical corrections to two items in Part II of Schedule 2 to the FOI Act.

Financial impact

There is no financial impact flowing directly from the offence provisions in this Bill.

Abbreviations used in the Explanatory Memorandum

AFP Act Australian Federal Police Act 1979
AUSTRAC Australian Transaction Reports Analysis Centre
Bankruptcy Act Bankruptcy Act 1966
Bankruptcy Amendment Act Bankruptcy Legislation Amendment Act 2004
Border controlled substances This term collectively refers to border controlled drugs, border controlled plants and border controlled precursors
Controlled substances This term collectively refers to controlled drugs, controlled plants and controlled precursors
Criminal Code The Schedule to the Criminal Code Act 1995
Customs Act Customs Act 1901
FOI Act Freedom of Information Act 1982
FTR Act Financial Transaction Reports Act 1988
LI Act Legislative Instruments Act 2003
MA Act Mutual Assistance in Criminal Matters Act 1987
MABR Act Mutual Assistance in Business Regulation Act 1992
MCCOC Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General
MCCOC Report Model Criminal Code, Chapter 6, Serious Drug Offences Report, October 1998 (as amended in 2003)
Narcotic Drugs Act Narcotic Drugs Act 1967
POC Act Proceeds of Crime Act 2002
TINDAPS Act Crimes (Traffic in Narcotic Drugs and Psychotropic Substances) Act 1990


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