Speeches

Speeches Chris has made in the Australian Federal Parliament.

ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING BILL 2006 ANTI-MONEY LAUNDERING AND COUNTER-TERRORISM FINANCING (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) BILL 2006 Second Reading Mr

November 28, 2006

Mr HAYES (Werriwa) (7.07 p.m.)—I rise with a sense of relief to contribute to this debate
on the Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 and Anti-Money
Laundering and Counter-Terrorism Financing (Transitional Provisions and Consequential
Amendments) Bill 2006, because I and many others in this place were wondering whether
these bills would ever be presented to this parliament. In his second reading speech, the
Attorney-General made efforts to categorise this bill as ‘the product of extensive consultation
between government, business and the community’. If you examine the real situation more
closely, you will find that the legislative package that we have before us today is more a
product of actions stemming from considerable international embarrassment. I will address
that matter a little later on.


I would like to indicate at the outset that I am generally supportive of the provisions in these
bills. I am certainly supportive of taking action to combat the threat of terrorism, and I agree
that one of the most powerful actions that we have at our disposal is shutting down the means
by which terrorist organisations finance their operations. Terrorist organisations—like any
other business, quite frankly—rely on the smooth transfer of money to fund their operations.
Shutting down that flow of funds severely curtails their ability to organise and get operations
off the ground. Stopping the flow of funds therefore severely hinders the ability of terrorist or
criminal organisations to take or disrupt the lives of ordinary citizens.


I indicated that I was pleased to be able to contribute to this debate, as I did not think it was
ever going to occur. I say that because in February 2004 the Attorney-General rose in this
place and gave a ministerial statement extolling the virtues of the government’s actions when
it comes to tackling head-on the issue of terrorism. As part of the statement, he indicated:
... I have made it my business to ensure that the government is doing everything it possibly can to discharge its most
important duty—that of protecting our country and our people—to ensure that our way of life, our values and our
freedom to be safe in our own homes are protected and, in doing so, to defend the right of all peoples to live in peace.


That is quite noble. From that statement, you would think that this government has been
setting a cracking pace when it comes to putting in place all appropriate measures to deal with
the threat of terrorist activity, whether it takes place in Australia or whether it is organised or funded by Australian based organisations. On genuine reflection upon what has occurred, I
have to say that that is not the case at all.


Despite the illusion that this government has tried to create of the pace of its response to
terrorism, it would be described best as being disappointingly slow. It talks about action but
certainly takes considerable time to deliver on its commitments. I raise this in the context of
this bill because, given the importance of addressing terrorist financing, I feel it has taken far
too long for this bill to come before the parliament. In December 2003 the government made a
commitment to implementing the 40 revised recommendations of the OECD financial action
task force. This commitment was confirmed in response to a question on notice asked by the
member for Barton in May 2005. Interestingly, the Minister for Justice and Customs said in
that response:
Australia is already compliant with many of the FATF 40 Recommendations, while the rest will be implemented following the passage of new anti-money laundering legislation.

It is interesting that the minister may have created the impression that we as a nation are
subscribing to and implementing the majority of the 40 recommendations of the task force.
But, in 2005, the financial action task force visited Australia to review Australia’s operations
and legislative framework to evaluate the level of our compliance. As the member for Brisbane
has said in this place, the task force report was an embarrassing read, to say the least. The
task force reported that the government had yet to deliver a comprehensive response to the
threat of terrorism financing. That is after the commitments made in 2003 and after the
response to the question on notice. The position from the audit undertaken by the task force
was that we had yet to deliver a comprehensive response to the threat of terrorist financing.
In fact, it was found that Australia was only compliant with nine of the 40 recommendations on
anti money laundering—nine, which is even less than a quarter. Of course that was not the
only finding the task force made in auditing the level of our compliance. The task force also
reported that Australia was not compliant in any of the nine special recommendations dealing
with antiterrorism financing. That is a pretty sad indictment of the Minister for Justice and
Customs, as was his response to the member for Barton when the minister indicated that we
were compliant with many of the 40 recommendations. Not to put too fine a point on it, the
word ‘many’ implies that it is the majority or close to the majority. The finding of the task
force was that only nine recommendations had been adhered to—less than a quarter—and
none of the special recommendations had been adhered to. It is a pretty poor reflection of this
government’s efforts to address the terrorism threat.


I would have thought that in the international community it would reflect pretty poorly on
Australia’s ability to uphold its end of the bargain when it comes to shutting down the finances
or having the capability to shut down the finances of terrorist organisations. Once again, it
seems that, for all of those pieces of government rhetoric on national security, their actions
just do not extend past the distribution of fridge magnets and Australia’s involvement in the
conflict in Iraq. Regrettably, it is big talk and little action—and what action we have is slow in
coming.


We had a commitment given in December 2003. We are now on the cusp of December 2006.
It is some three years later and we are finally debating the legislative framework that will be
the guide for that commitment. Three years is a long time. Three years is a heck of a long time
when we are talking about terrorism. I am sure that the members opposite will not like being
reminded of the fact that it has taken so long for this legislation to come before the
parliament. I am equally sure that members opposite will not like the fact that the myth of
strong activity and taking a tough stand against terrorists that this mob have shrouded
themselves in has been exposed as an illusion with this legislation taking three years to come
before the parliament.

I acknowledge that the government has taken some action in relation to combating terrorist
activity, but these have been largely stopgap measures, hastily drafted and introduced without
the proper examination that such legislation would ordinarily deserve. Do not forget: some of
the legislation has been on the basis of ‘let us put it in now and revise it later’. There was even
a situation where an amendment was introduced to change one word in a piece of legislation
so that it could be operative. Despite the embarrassment that that has incurred, the task
force’s report on Australia’s compliance stands as an indictment of this country and its level of
meeting its commitments to and compliance with its earlier undertakings.


It has sent a clear message to the heart of the government that it can no longer make small
attempts to bring Australia in line with the rest of the world when it comes to putting in place
all of the necessary conditions to limit the activity of terrorist organisations. It has prompted
actions that the proper process for consultation has resulted in the legislation before us today.
The task force has shown that temporary fixes are not enough. The process that has led to the
introduction of this legislation has shown that it cannot get away with sloppy drafting when it
comes to addressing these serious situations.


As I have said, this bill is long overdue. It is long overdue and it is overly complex, but I must
admit it will deliver significant improvements to Australia’s historically poor record when it
comes to dealing with anti money laundering and counterterrorism financing. To that extent, I
support the objectives of this bill. There has been extensive consultation on this bill to make
sure that it is workable, given the serious concerns previously expressed, particularly by the
business community. Therefore, we on this side of politics are largely supportive of this
approach.

However, this support is not without some concerns. There is a particular concern about clause
6(7) of the bill and I am of the view—as are many on this side of the chamber—that this clause
should be struck out. All too often with this government we are seeing legislation being drafted
and passed that uses extensive reliance on regulation to bring the provisions of the legislation
into effect. While it is acknowledged that this is sometimes the best way to achieve the desired
outcome, it is also the best way, quite frankly, to avoid proper scrutiny. In some instances this
method is appropriate, but it concerns me that this government has a tendency to defer to the
use of regulation rather than legislation. It defers to the use of regulation because it is the
easiest to change and the changes can effectively be introduced by a ministerial media release
where the biggest risk for the government is a bad story for a couple of days in the tabloids
rather than having the changes being subject to proper questioning and debate of the
parliament.

Clause 6(7) of the bill affords the government the power to amend the tables of designated
services in the act. Currently, the designated services include activities such as: provision of
accounts or transactions to and from accounts; taking of deposits; loans and acting as
guarantor of loans; factoring a receivable; forfeiting a bill of exchange or promissory notes;
leasing, and the supply goods by way of lease; supplying goods by hire purchase; cheque
accounts; bills of exchange, promissory notes or letters of credit; debit cards; stored credit
cards; travellers cheques—and the list goes on.


As I have indicated, while regulations like clause 6 are used to amend sections of legislation,
they should only be used in limited circumstances and should only be used for compelling
reasons. I do not believe that the case has been adequately made to provide us with enough
comfort to allow the government to change designated tables by administrative fiat, as
outlined in clause 6. The explanatory memorandum to this bill indicates that the reason for the
inclusion of clause 6(7) has been to:
... allow the Bill to keep pace with business changes and changes in the techniques used by money launderers and
terrorist financiers.

It is a claim of flexibility. This is a claim that I tend to question. This legislative package
contains a number of exemptions and discretions that prompt a number of serious questions
about the necessity of allowing changes by regulation. I welcome the amendment by the
opposition that would strike out clause 6(7). Flexibility is important, but flexibility can also
come to mean different things to different people as time marches on. To allow this degree of
flexibility by administrative fiat is too significant, given the nature of the legislation that is
being debated before us this evening. It would be short-sighted of us as legislators to simply
include provisions in legislation that suit our purposes in the here and now and not be mindful
of an alternative interpretation that could be applied in the future.


While recognising the general acceptance by the business community of the regime to be
introduced—and certainly I acknowledge that it was introduced after lengthy consultation and
follow-up—this bill will impose a significant compliance burden on small business. I think that
is a matter of fact. I guess that can be put down as a consequence of the subject matter of
these bills. However, it should be realised that a compliance burden is inevitable for small
businesses in this country.


As was pointed out to the government in the original drafting of the bill, the poorly drafted
provisions that it contained would have hurt businesses. Quite frankly, it would have hit them
hard. There was a real and legitimate concern from the business community that it was being
asked to pay too high a price through increased business closures. I concede that this is a
matter of balance. It is certainly a matter of placing binding commitments on the business
community, but quite frankly it has got to be recognised that there are going to be
organisations which will struggle to comply and there will be compliance costs. This needs to
be noted by government as it passes legislation of this type. For instance, I note that initial
funding has been provided for a period of four years to the Office of the Privacy Commissioner
and that a number of small businesses will receive additional guidance and assistance with the
implementation of measures related to this bill. The fact that the government did get such a
stern warning about the impact of the legislation in its original form should stand as a constant
reminder that shoddy drafting produces wide-ranging impacts that need to be avoided in
producing legislation of this type.

The heightened sense of insecurity pervading the population following a range of terrorist
attacks has resulted in a heightened sense of the need for increased protection from terrorist
attack. The provisions of this bill will help to make a range of criminal activities less profitable
and accordingly less likely to be undertaken. They will also make sure that Australia’s
regulatory framework to shut down the financing of terrorist organisations is based on fact
rather than on the myth and illusion that the government has previously tried to create around
its actions to shut down terrorist operations. This will provide a disincentive for criminal
activity and terrorist activity by making it more difficult and by making it less profitable for
those organisations to go about their evil intent. (Time expired)

WE'LL PUT PEOPLE FIRST