Comments on Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017


December 05, 2017

I’m pleased to contribute to the debate on the Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017. We know that Australia has experienced some sustained pressure from many stakeholders across the globe to strengthen our anti-money-laundering and counterterrorism financing regime. This has been consistent over the past decade. In the course of this debate I think it’s safe to say that both sides of the parliament understand that this piece of legislation is well overdue for an update. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is the principal legislative instrument to combat money laundering and terrorism financing. It establishes reporting regimes for prescribed entities and provides procedures which reporting entities must go through to properly identify customers before engaging in transactions, including international and domestic fund transfers.

As the member for Hotham, the shadow justice minister, noted in her remarks, taking the profit motive out of crime is one of the key elements to maintaining law and order. Therefore our anti-money-laundering and counterterrorism financing legislation is immensely important within this objective. There’s an urgent need for reform and it’s well demonstrated in the scandal involving the Commonwealth Bank, in which AUSTRAC had initiated civil penalty proceedings in the Federal Court against the Commonwealth Bank of Australia for serious and systemic noncompliance with the existing Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

This bill implements a first phase of reforms arising from the recommendations of the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the associated rules and regulations. I won’t go through all of the details of the bill—we all know them. What I do want to say is, although it is acknowledged that this bill implements only the first phase of the necessary reforms, it’s important that all aspects of the bill are as strong and as robust as possible. While Labor are supportive of this bill on the basis of an initial review, we are concerned that the bill may not go far enough, particularly in light of the recent scandals that I have just referred to, including that involving the Commonwealth Bank and many others.

The 2015-16 report of the Financial Action Task Force, part of the global body responsible for setting and monitoring international standards on combating money laundering and the financing of terrorism, found that Australia’s regime for anti-money-laundering and counterterrorism financing was noncompliant with at least six international anti-money-laundering and counterterrorism financing standards. This report called on the regulator, AUSTRAC, to pursue a more aggressive enforcement agenda, recommending:

Australia should focus more on effective supervision and enforcement of individual reporting entities’ compliance with AML/CTF—

anti-money-laundering and counterterrorism financing—

obligations within the various sectors. Here’s the kicker: the double standard, the smoke and mirrors show on display by this government. It spruiks its record on national security with photo opportunities in front of tanks—everyone wearing helmets and maybe some fatigues, with a few guns in the background. It talks almost obsessively from one side of its mouth about cracking down on organised crime and terrorism, while from the other side it refuses to invest in law enforcement or commit to meaningful regulation and oversight of the banks.

Here are some facts: the very same year in which that criticism of our financial intelligence agency was made by the global organisation the Financial Action Task Force, AUSTRAC actually sustained a $7 million cut from the Abbott Liberal government’s 2014-15 budget. So, while Australia was being told to ramp up its anti-money-laundering and counterterrorism financing efforts and enforcement, the Liberal government cut eight per cent of AUSTRAC’s budget. The government is cutting funding to AUSTRAC—the body that is supposed to be monitoring these institutions and enforcing our laws. I note that the 2016-17 budget contains a $19 million cut to AUSTRAC’s work to protect the financial system from criminal abuse.

We’ve seen, of course, in recent days that the government have rolled over and decided to hold a royal commission into the banking and financial sector. Despite resisting Labor’s calls until the eleventh hour, they are now talking big on how they plan to clean up misconduct in the banks. Despite all of this—despite the smoke and mirrors by this government—Labor, in particular the member for Hotham, the shadow minister for justice, and the member for Isaacs, the shadow Attorney-General, are willing and eager to work with the government over the coming months on the more significant challenges Australia faces in responding to money laundering and terrorism financing. It’s very clear that Labor’s not going to stand in the way of legislation that strengthens our anti-money-laundering and counterterrorism financing regime. To be clear, this is an issue with direct bearing on our national security, and we don’t do smoke and mirrors; we do the real, substantive stuff, the real work that’s necessary.

It must be said that the ripping of millions upon millions of dollars out of AUSTRAC at the same time as professing to strengthen it through this particular legislation is just another example of the con job of this government. Despite that, I call on the government to work with Labor to ensure we deliver robust legislation which will underpin the safety and security of all Australians.