CTH Introduces Bill Targeting Transnational Serious and Organised Crime

Thursday 10 September 2020 @ 11.54 a.m. | Crime | Legal Research

The Crimes Legislation Amendment (Economic Disruption) Bill 2020 (Cth) was introduced into the House of Representatives on 2 September 2020 by Mr Tehan, Minister for Education, on behalf of Mr Dutton, Minister for Home Affairs (the Minister). According to the second reading speech, the Bill is "a significant step forward in the Morrison government's fight against transnational, serious and organised crime [TSOC] groups".

Problem Bill Addresses 

Transnational, serious and organised crime is seen by the government as harming the community, the economy and national security. Examples of these types of crimes are importation of illicit substances, tax evasion, market distortion and money laundering. The government estimates the direct cost to Australia as being $47.4 billion a year and the cost when the indirect social and economic impacts are factored in, that is, the full cost, as not able to be measured.

Groups involved in TSOC can operate as sophisticated and compartmentalised businesses which generate huge profits from their criminal operations. To "clean" their criminal earnings and realise their profits, the TSOC business model uses money laundering. allowing profits to be concealed and reinvested in further criminal activity, or used to fund lavish lifestyles. As a result TSOC's are well financed and are intent on retaining their profits through any means necessary. Because of this, Australia needs, according to the Minister, "a tough regime aimed at destroying their business model".

What the Bill Does

The Bill amends the following legislation: 

  • the Crimes Act 1914 (Crimes Act), 
  • the Criminal Code Act 1995 (the Criminal Code), 
  • the COAG Reform Fund Act 2008, and 
  • the Proceeds of Crime Act 2002 (the POC Act).

In broad terms the Bill:

  • updates Commonwealth money laundering offences to address the behaviour of modern money laundering networks and remove unnecessary obstacles to securing  convictions and appropriate sentencing outcomes;
  • clarifies that the obligations imposed on investigating officials under Part IC of the Crimes Act do not apply to undercover operatives;
  • ensures that buy-back orders under the POC Act cannot be used by criminal suspects and their associates to buy back property forfeited to the Commonwealth or delay POC Act proceedings;
  • clarifies that the POC Act permits courts to make orders confiscating the value of a debt, loss or liability that has been avoided, deferred or reduced through   criminal offending;
  • clarifies the operation of the POC Act in relation to the restraint and confiscation of property located overseas;
  • strengthens information-gathering powers under the POC Act by increasing penalties for non-compliance and clarifying the circumstances in which information gathered under these powers can be disclosed and used, and
  • expands the Official Trustee in Bankruptcy’s (Official Trustee’s) powers to deal with property, gather information and recover costs under the POC Act to allow   the Official Trustee to discharge its functions in a more cost-effective manner.

With respect to money laundering the Bill amends Division 400 of the Criminal Code to ensure that Commonwealth money laundering offences can be more effectively used to target modern money laundering networks. Money laundering offences are expanded by the Bill to include persons who cause a dealing with money or other property to occur, or engage in conduct in relation to money or other property. This change ensures that offences capture the "controllers" of the money laundering networks who do not typically deal with money or other property directly and instead send instructions to another person to locate, move or otherwise engage in conduct that affects money or other property.

The Bill also targets members of money laundering networks who, " . . . remain willfully blind to the nature and origins of proceeds of crime that they deal with as a means of avoiding money laundering offences". This is done by creating new offences of "engaging in conduct in relation to ‘proceeds of general crime’". This removes the need to link money or other property to a kind of indictable offence (see Lin v The Queen [2015] NSWCCA 204) and instead takes an "all crimes" approach to predicate offending.

The Bill amends the Crimes Act with respect to the investigation of Commonwealth offences to clarify that the obligations imposed on investigating officials under Part IC of the Crimes Act, including the requirement under section 23F, to caution a person who is under arrest or who is a protected suspect before starting to question the person, do not apply to undercover operatives.

The Bill amends the POC Act with respect to buy-backs to ensure that criminal suspects and their associates are not afforded an opportunity to buy back forfeited property, and to ensure that a court hearing a buy back application is required to consider whether the applicant’s financial circumstances are such that the forfeited property will not be repurchased with illicit funds or unexplained wealth.  

The Bill clarifies the definition of "benefit" in the POC Act to explicitly provide that the definition includes the avoidance, deferral or reduction of a debt, loss or liability, including for example, the criminal evasion of import duties, excises or taxation.

The Bill clarifies that orders made by a court with proceeds jurisdiction under the POC Act can be made in respect of property located overseas.

The Bill strengthens the enforcement of information-gathering powers under the POC Act by increasing penalties for serious non-compliance offences, and allowing enhanced restraint and confiscation action to be taken where a person commits a non-compliance offence under existing section 195, 196 or 197A of the POC Act in relation to an examination notice.

The Bill enhances the powers of the Official Trustee, who has responsibility for managing the Confiscated Assets Account and property seized and confiscated under the POC Act.

The Bill was referred to the Senate Legal and Constitutional Affairs Legislation Committee on 3 September 2020 which is due to report by 10 November 2020.

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Crimes Legislation Amendment (Economic Disruption) Bill 2020 [CTH] , second reading speech and explanatory memorandum as reported in the TimeBase LawOne Service.

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