Federal Parliament - Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019

November 11, 2020

Dr ALYI've waited a long time to speak on this legislation, the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019—a very long time. It seems that it isn't one of the priorities for this government and it keeps getting put off. But it does come at a timely moment, because just today I finished writing a book chapter on counterterrorism financing in which I argued that our counterterrorism financing and anti-money-laundering legislation needs to be stronger in order to capture cyber-enabled serious and organised crime transnationally as well as cyber-enabled terrorism.

In 2016, I believe it was, a terrorist organisation based in Indonesia managed to raise US$600,000 utilising cybercrime and money-laundering provisions in order to carry out a terrorist attack before they were stopped. So the importance of this legislation cannot be understated. And its because of the importance of this legislation that Labor supports this bill in the House. But I think it's also equally important that I, like the Member for Bruce, point out some of the deficiencies of this legislation; it certainly does not go far enough.

The bill implements a second phase of reforms that arise from the recommendations of the report on the statutory review of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated rules and regulations that were tabled in parliament on 29 April 2016. That's more than four years ago now. As I said, I've been waiting a long time to speak on this bill. It has taken four years to implement legislation—importantly, legislation that does not capture all of the recommendations of that report that was tabled in April 2016. That's a really sad indictment on this government. We know that, during COVID, criminal syndicates, criminal organisations and transnational terrorist organisations have ramped up their efforts in other ways, in novel ways. So we need to be sure that our system is not exploitable, that they don't exploit any vulnerabilities in our system. This legislation was needed in its current form but also in a more comprehensive form four years ago. We've been waiting four years for this.

The bill also addresses some of the deficiencies identified by the Financial Action Task Force in its mutual evaluation report on Australia's anti-money-laundering and counterterrorism financing regime. Those deficiencies were identified in 2015. It has taken five years since those deficiencies were identified for the government to act on it. As the Member for Bruce said, this bill does not address all of the necessary deficiencies. While it goes some way towards hardening our anti-money-laundering and counterterrorism financing regime, it does not do everything that it should do to ensure that Australia is not seen as an easy target for criminal syndicates and transnational terrorist organisations who would use our systems to raise funds for criminal activities, to launder money that has been garnered through criminal activities or to raise funds to carry out a terrorist attack.

Labor successfully referred this legislation to the Senate Legal and Constitutional Affairs Legislation Committee. It's important to note that Labor senators from that Committee recommended that the Government note and consider several concerns that were raised by industry. Let me go through some of those concerns. The Australian Financial Markets Association, in their submission, stated that opportunities for consultation and clarification were cut short by the government entering into caretaker mode and with the introduction of the bill into Parliament. They waited five years to introduce the bill, they have known about deficiencies in the system for five years—and I've been waiting to speak on this bill for at least six months—and then they cut the consultation period short. Both the Australian Financial Markets Association and the Financial Services Council expressed concern about the term 'opening an account', which is included in the bill. They said it should be specifically defined in the Anti-Money Laundering and Counter-Terrorism Financing Act to ensure consistency of approach across reporting entities, as they believe there is some ambiguity as to when an account is actually opened. Labor senators also noted that a vast amount of detail for the bill lies in the explanatory memorandum, and noted concerns raised by the AMFA that some elements of the explanatory memorandum need to be placed in legislation—in other words, it's a sloppily written bill. These points were raised by people who took the time to write a submission to the Senate inquiry, but none of those points have been taken up in this current iteration of the bill we have before us.

The importance of this bill and of a comprehensive framework for strengthening our anti-money-laundering and CT financing laws cannot be underestimated. We need to ensure, as I said earlier, that Australia is not seen as an easy target and an easy place to do business for those who would seek to launder money garnered through criminal activities or raise funds in order to carry out a terrorist attack. In February 2020, February of this year, the Financial Secrecy Index declared that Australia is a nation—get this—that continues to host 'significant quantities of illicit funds from outside the country'. Australia has been named and shamed as a country that's an easy target for money launderers and criminal activity.

The Financial Secrecy Index also states that Australia needs to do more to counter money laundering. We need to do more, more than what's in this bill. We need to fully implement the recommendations that were made more than four years ago. That's what we need to do. We need to listen to the experts. The government needs to listen to its own agency when it's told that this bill has serious deficiencies that are still going to leave Australia vulnerable to money-laundering and terrorism financing.

The world's anti-money-laundering and counterterrorism financing watchdog, the Financial Action Task Force, has expressed serious concerns about Australia's anti-money-laundering and counterterrorism financing regulatory framework and has expressed concerns about this government's failure to implement the reforms according to its own timetable. I have spoken about this in the four years or five years it has taken. The FATF, the Financial Action Task Force, placed Australia on an enhanced follow-up remediation program in 2015. Five years ago we were warned. Five years ago Australia was told it needs to do better by an international watchdog in this space. The FATF undertook a major evaluation of Australia's anti-money-laundering and counterterrorism financing framework, and it found major noncompliance with international best practice in a number of areas. This is not just a matter that leaves Australia and Australians vulnerable; we have an obligation to the rest of the world to do as much as we can to ensure that criminal syndicates and terrorist organisations who operate transnationally do not use and exploit Australian systems for their means. The FATF's 2015 mutual evaluation report made clear that Australia is an 'attractive destination'—an attractive destination—not for tourism but for 'foreign proceeds of crime, particularly corruption related proceeds, flowing into real estate'.

Australia has been listed as a major money-laundering country by none other than the United States. Now we've all seen Ozark—well, some of us have. Money laundering isn't some fun family adventure. It is actually serious business. This legislation and particularly the shortcomings in this legislation have serious consequences. The shortcomings in this legislation far outweigh the minor gaps that the legislation closes. In the past few months, we've seen some very-high-profile money-laundering cases: the Commonwealth Bank, Westpac, Crown casino and other casino operators. But the government has been slow to act. I don't think anyone can argue that four years and five years waiting on legislation based on reports that very clearly stated and very clearly outlined where the deficiencies were is acceptable. That is not acceptable.

Since 2013, the Government have repeatedly missed deadlines in their own anti-money-laundering and counterterrorism financing reform timetable, and I find it quite extraordinary for the Government to walk around crowing about how tough they are on security, like they're the protectors of the universe. I half expect half of them to walk in here with their undies on the outside, sometimes, the way they go on about national security. Of course national security should be one of our priorities—

An honourable member: 'Captain Underpants' was Senator Conroy!

Dr ALY: I'll take the member's interjection. It was something about 'Captain Underpants'. But, either way, you cannot be a government that talks strongly about national security and not follow it up with action, particularly when that action is really quite simple. It's really as simple as implementing a number of recommendations to close gaps and address deficiencies that you have been aware of for five years.

Other countries have strengthened their defences against the proceeds of criminal and corrupt business practices. But, in Australia, our door is left wide open. Serious and sustained breaches of FATF standards and obligations can result in jurisdictions being greylisted or blacklisted, increase the cost of doing international business and restrict access to international finance. So, if you don't want to listen to the national security argument, listen to the economic argument. There are ripple effects to not addressing the deficiencies in this legislation.

An ongoing NSW Independent Liquor & Gaming Authority inquiry into Crown casino, as I mentioned earlier, revealed some shocking noncompliance with money-laundering laws by several Australian casinos and junket operators. And, as I mentioned earlier, we had the case with Commonwealth Bank and Westpac—can you believe it? They breached the anti-money-laundering counterterrorism financing laws an astounding 23 million times. I can understand one mistake, but 23 million mistakes? I think it's very, very hard to argue that our laws are sufficient when a bank can overlook 23 million breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act. The government's own regulator, AUSTRAC, gave risky casino operations its tick of approval only three years ago, so they continue to operate under this government.

Those who spoke before me spoke at length about the implications of not strengthening this act, and I stand to reiterate that point here today. This government has an opportunity to do more in this space. They have an opportunity to walk the walk, so to speak, on national and international security. You cannot claim to be tough on national security and allow a law like this to continue. You cannot possibly be tough on national security and allow this to continue.