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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-02-06 Daily Xml
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FINANCIAL TRANSACTION REPORTS (STATE PROVISIONS) (MISCELLANEOUS) AMENDMENT BILL

Introduction and First Reading

Received from the House of Assembly and read a first time.

Second Reading

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (17:40): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The South Australian Financial Transaction Reports (State Provisions) Act 1992 (the SA Act) is part of a national regulatory regime set up by the Financial Transaction Reports Act 1988 of the Commonwealth (the Financial Transaction Reports Act) to monitor suspicious financial transactions. The SA Act complements the Financial Transaction Reports Act.

In 2006, the Commonwealth Government upgraded this regime. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the Anti-Money Laundering Act) was enacted to combat changes in how financial transactions are conducted as a result of an increase of cashless, non face-to-face electronic transactions, and global development in value transfer technology. The new regime is designed to combat organised and serious crime, including major drug dealing and terrorism financing.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) was established by the Financial Transaction Reports Act. AUSTRAC's function is to retain, compile, analyse and disseminate information concerning financial transactions.

Under the Financial Transaction Reports Act, 'cash dealers' are required to report certain significant cash transactions to AUSTRAC and to maintain exemption registers of those transactions not reported. The term 'cash dealer' is defined to include financial institutions and organisations such as authorised deposit-taking institutions (banks), insurers, casino operators, trustees and managers of unit trusts and financial service licensees. Cash dealers are also required to report suspect transactions. Certain significant cash transfers must be reported by solicitors and certain transfers of currency must also be reported to AUSTRAC.

However, the Financial Transaction Reports Act has now mostly been superseded by the Anti-Money Laundering Act.

AUSTRAC is now governed by the Anti-Money Laundering Act, which has extended the regulatory regime imposed by the Financial Transaction Reports Act. Under the Anti-Money Laundering Act a far broader range of entities are required to make reports to AUSTRAC, referred to in that Act as 'reporting entities'.

While most of the provisions of the Financial Transaction Reports Act have been superseded by the Anti-Money Laundering Act, there remain some cash dealers who are not covered by the Anti-Money Laundering Act and continue to be obliged to report to AUSTRAC under the Financial Transaction Reports Act.

The Bill amends the SA Act in light of changes made to this national regime by the Anti-Money Laundering Act.

Updating terminology

The Bill amends the SA Act to reflect the new Commonwealth regime that now includes both the Financial Transaction Reports Act and the more recent Anti-Money Laundering Act.

Terminology in the SA Act is changed to reflect the new Commonwealth terminology. For example, both the Financial Transaction Reports Act and the Anti-Money Laundering Act now refer to reports being made to the 'AUSTRAC CEO'. The SA Act, however, uses outdated terminology and refers to reports being made to the 'Director'. The SA Act is being updated to reflect such changes in terminology.

Further information regarding suspect transactions

If a cash dealer communicates information to AUSTRAC in accordance with the requirements of section 16(1) of the Financial Transaction Reports Act, the Commissioner of Police (or a member of the police carrying out an investigation arising from, or relating to matters referred to in, the information) may, under section 5 of the SA Act, request certain further information from the cash dealer.

As currently enacted, section 5(2) of the SA Act requires this 'further information' to be information that may be relevant to the investigation of, or prosecution of a person for, an offence against the law of the State, or information that may be of assistance in the enforcement of the Criminal Assets Confiscation Act 2005 (SA) (the Criminal Assets Confiscation Act).

It is an offence under the SA Act for a cash dealer not to comply with the request.

The requirement in section 5 for the 'further information' to be information that may be relevant to the investigation of, or prosecution of a person for, an offence against the law of the State, or information that may be of assistance in the enforcement of the Criminal Assets Confiscation Act, appears to limit unnecessarily what further information South Australia Police (SAPol) may seek.

Under the Anti-Money Laundering Act, reporting entities are required to report suspicious matters if they suspect that the information they have may be relevant to the investigation of, or prosecution of a person for, an offence against a law of a State of Territory, or may be of assistance in enforcing State and Territory laws that are the equivalent of the Proceeds of Crime Act 2002 (Cth). In SA, both the Criminal Assets Confiscation Act and the Serious and Organised Crime (Unexplained Wealth Act) 2009 (SA) (the Unexplained Wealth Act) are equivalent to the Proceeds of Crime Act 2002 (Cth).

It is, therefore, appropriate under section 5 that a cash dealer should be reporting further information that would be of assistance in the enforcement of both the Criminal Assets Confiscation Act and the Unexplained Wealth Act.

Furthermore, suspicious matters should be reported under section 5 regardless of whether an investigation or prosecution has commenced.

The Bill, therefore, makes amendments to section 5 of the SA Act so that the Commissioner of Police, or an investigating officer, may request such further information from that cash dealer that is directly or indirectly related to the original report that:

may be relevant to the investigation of, or prosecution of a person for, an offence against a South Australian law; or

relates to any purpose, power or function of SAPol under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act or the Unexplained Wealth Act.

Under sections 41, 43 and 45 of the Anti-Money Laundering Act, reporting entities are required to communicate certain information to AUSTRAC. There is no provision in the SA Act that allows for investigating officers in SAPol or the Commissioner of Police to then seek further information from the reporting entities.

A new section 5A is, therefore, to be inserted into the SA Act to ensure that, when a reporting entity reports information to AUSTRAC under section 41, 43 or 45 of the Anti-Money Laundering Act, the Commissioner of Police or an investigating officer may request such further information from that reporting entity that is directly or indirectly related to the original report that:

may be relevant to the investigation of, or prosecution of a person for, an offence against a South Australian law; or

relates to any purpose, power or function of SAPol under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act or the Unexplained Wealth Act.

Reporting of suspect transactions relevant to SA

Under section 6 of the SA Act, a cash dealer who is a party to a transaction and has reasonable grounds to suspect that information it has concerning the transaction may be relevant to the investigation or prosecution of an offence against a law of South Australia or may be of assistance in the enforcement of the Criminal Assets Confiscation Act, must prepare a report of the transaction and communicate the information to the Director (which is outdated terminology and will be updated as a report to AUSTRAC).

Currently, this obligation does not apply if the cash dealer is obliged to report the transaction under section 16 of the Financial Transaction Reports Act.

The Bill amends the SA Act to take into account any obligation that a cash dealer who is also a reporting entity has to report under the Anti-Money Laundering Act.

Under section 6 of the SA Act, once such a report is made to AUSTRAC, SAPol and the Commissioner for Police may request further information and the cash dealer must provide it.

As currently enacted, the SA Act requires that this further information must be information that may be relevant to the investigation of, or prosecution of a person for, an offence against the law of the State, or information that may be of assistance in the enforcement of the Criminal Assets Confiscation Act.

The Bill amends this provision such that SAPol can request further information that is directly or indirectly related to the original report that:

may be relevant to the investigation of, or prosecution of a person for, an offence against a South Australian law; or

relates to any purpose, power or function of SAPol under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act and the Unexplained Wealth Act.

This amendment provides consistency across the SA Act and ensures SAPol have appropriate access to information.

Section 9 of the SA Act provides that a person who obtains information under the SA Act must not make a record of the information and must not divulge or communicate that information except in the performance of their duties relating to the enforcement of a law of the State, the Commonwealth or another State or Territory.

However, currently, section 9 applies only to persons who are or have been a Commissioner of Police or a member of SAPol. Given that other persons, such as lawyers acting for SAPol who are public servants, may also access the information, the Bill amends this section to ensure it also applies to such persons.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Financial Transaction Reports (State Provisions) Act 1992

4—Amendment of long title

This proposed amendment inserts a reference to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the AMLCTF Act) of the Commonwealth so that the principal Act will now make provision for reporting under both the Financial Transaction Reports Act 1988 (the FTR Act) of the Commonwealth and the AMLCTF Act.

5—Amendment of section 3—Interpretation

These proposed amendments insert definitions of the 2 Commonwealth Acts referred to in the long title of the principal Act and make other amendments consequential on the inclusion of provisions in the principal Act relating to reporting under both of those Acts.

6—Amendment of section 5—Further reports of suspect transactions under FTR Act

This amendment proposes to repeal current subsections (1) and (2) and to substitute subsections that provide that if a cash dealer communicates information to the AUSTRAC CEO under section 16 of the FTR Act, the cash dealer must, if requested to do so by the Commissioner of Police or a police officer, give the Commissioner or police officer such further information, within the period specified in the request, as is specified in the request. Further information that may be specified in such a request is information directly or indirectly related to the original communication that—

may be relevant to the investigation of, or prosecution of a person for, an offence against a law of the State; or

relates to any other purpose, function or power of South Australia Police under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act 2005 or the Serious and Organised Crime (Unexplained Wealth) Act 2009.

The other amendment to this section updates the penalty provision for an offence against subsection (3).

7—Insertion of new section

New section 5A (Further reports of suspect transactions under AMLCTF Act) provides that if a reporting entity communicates information to the AUSTRAC CEO under section 41, 43 or 45 of the AMLCTF Act, the reporting entity must, if requested to do so by the Commissioner of Police or a police officer, give the Commissioner or police officer such further information, within the period specified in the request, as is specified in the request. Further information that may be specified in such a request is information directly or indirectly related to the original communication that—

may be relevant to the investigation of, or prosecution of a person for, an offence against a law of the State; or

relates to any other purpose, function or power of South Australia Police under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act 2005 or the Serious and Organised Crime (Unexplained Wealth) Act 2009.

It is an offence if the reporting entity does not comply with the request for further information to the extent that the reporting entity has the further information.

8—Amendment of section 6—Reports of suspect transactions not reported under a Commonwealth Act

One of the amendments proposed to this section will repeal current subsections (1) and (2) and substitute those subsections. New subsection (1) provides that a cash dealer who is party to a transaction and has reasonable grounds to suspect that information the cash dealer has concerning the transaction—

may be relevant to the investigation of, or prosecution of a person for, an offence against a law of the State; or

relates to any other purpose, function or power of South Australia Police under any Act or law; or

may be of assistance in the enforcement of the Criminal Assets Confiscation Act 2005 or the Serious and Organised Crime (Unexplained Wealth) Act 2009,

must, as soon as reasonably practicable after forming the suspicion, prepare a report of the transaction and communicate the information to the AUSTRAC CEO.

That subsection does not, however, apply if the cash dealer is required to report the transaction under—

Division 2 of Part II of the FTR Act; or

if the cash dealer is a reporting entity—Division 2 of Part III of the AMLCTF Act.

Further amendments proposed to this section reflect the proposed amendments to current section 5 and new section 5A, or are consequential.

9—Amendment of section 7—Protection of cash dealers and reporting entities etc

These proposed amendments are consequential.

10—Amendment of section 8—False or misleading statements

This proposed amendment is to update the penalty for the offence relating to false or misleading statements.

11—Amendment of section 9—Secrecy

The amendments proposed to this section update the penalty and the references in the section to include any other person who has access to protected information in the course of official duties.

Debate adjourned on motion of Hon. D.W. Ridgway.

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