Transnational organised crime

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Cat Barker, Foreign Affairs, Defence and Security

Key issue 
Organised crime represents significant and persistent risks to Australian governments, businesses and individuals. Domestic and international collaboration is improving, but there are legislative and capability gaps.

Transnational organised crime has been estimated to generate US$870 billion each year globally. Illicit drugs account for around half of the total, with significant funds also derived from trafficking in persons, firearms, natural resources and wildlife, people smuggling, counterfeit goods and cybercrime. Only a small portion of these funds—estimated at around 0.2%—are recovered.

The Australian Crime Commission (ACC), Australia’s lead agency for combating nationally significant organised crime, assesses the overall risk to Australia of organised crime as high, and conservatively estimates the annual cost in this country to be $15 billion. This cost represents a range of harms and losses to governments, businesses and individuals in Australia—some obvious, such as public violence—some less so, such as market distortion. Serious and organised crime was also listed as one of seven key national security risks in the 2013 National Security Strategy.

The increasingly transnational nature of organised criminal activity impacting Australia is evident. Two-thirds of Australia’s nationally significant targets are linked to at least one other country. When law enforcement representatives from the United States, United Kingdom, Canada, New Zealand and Australia compared their top 20 targets, there were substantial overlaps.

Many of the same threats and trends noted in the ACC’s latest report on organised crime in Australia were also highlighted in Europol’s latest threat assessment. These include:

  • the increasingly fluid and networked nature of organised criminal groups (a trend that has been evident for some time)
  • increasing sophistication, including the exploitation of complex legal business structures and professional expertise and
  • the important role of enabler activities such as money laundering, identity crime and corruption.

Two of the three critical risks identified by the ACC in its 2011 assessment—money laundering and identity crime—were enabler activities (the third was amphetamine-type stimulants; the latest assessment does not rate the risks). While enabler activities can present high risks because they facilitate a broad range of crimes, they also present opportunities as the effects of successful interventions against enabler activities are felt across all illicit markets.

Recent responses

The 2009 Organised Crime Strategic Framework (OCSF) was based around three key elements—an Organised Crime Threat Assessment (OCTA) prepared by the ACC, an Organised Crime Response Plan (OCRP) developed on the basis of the OCTA, and multi-agency responses. The Commonwealth OCRP was launched in November 2010 and the National OCRP in December 2010. A 2012 evaluation of the OCSF found it had improved cooperation and information sharing between agencies, but that stronger partnerships were required beyond government, including with private industry.

The ACC-led National Criminal Intelligence Fusion Capability, launched in 2010, expanded the Financial Intelligence Assessment Team established in 2003. It brings together analysts, investigators and technical experts from a range of federal law enforcement, intelligence and regulatory agencies and state law enforcement, and combines their respective information holdings. By September 2012, the Fusion Capability had identified 70 high threat criminal targets not previously known to national law enforcement, some of whom were identified as laundering over $100 million annually in suspected criminal proceeds.

The Criminal Assets Confiscation Taskforce was established in 2010 (permanent since 2012) to facilitate a more coordinated and integrated approach to federal criminal asset confiscation. The Taskforce is led by the Australian Federal Police (AFP) and includes officers from the ACC and the Australian Taxation Office. It both investigates and litigates proceeds of crime matters. In 2011–12, $97 million in criminal assets was restrained, more than double the previous year, an increase the AFP states was assisted by the creation of the Taskforce.

Significant legislation passed in the 43rd Parliament included reforms to prevent and detect organised crime infiltration of law enforcement and the private sector supply chain. The reforms included the introduction of integrity testing of AFP, ACC and Customs employees; expanding the Australian Commission for Law Enforcement Integrity’s jurisdiction; and changes to strengthen the aviation and maritime security card regimes and security obligations of some private sector organisations. Other amendments improved the ACC’s ability to share information, including with the private sector, increased regulation of the alternative remittance sector to better prevent money laundering, and enhanced investigative powers and international cooperation in relation to cybercrime and electronic evidence.

Unfinished business and future challenges

Unexplained wealth laws are a powerful tool against organised crime. They allow authorities to restrain assets that appear to exceed a person’s legitimate wealth, and if that person cannot demonstrate the assets were in fact acquired legitimately, to confiscate them. This enables targeting of those who profit from crime without being directly involved in the commission of an offence. Commonwealth unexplained wealth laws have been in place since 2010. However, due to the need for a connection with a constitutional head of power, their application is limited to instances where a connection can be established to a Commonwealth or foreign offence, or a state offence with a Commonwealth aspect. This has hampered the operation of the provisions to the extent that a parliamentary committee recommended in March 2012 that the Commonwealth seek a referral of powers from the states and territories in order to legislate for a broader based national unexplained wealth scheme. Despite assurances they would still retain proceeds seized under their own laws, the states and territories have consistently rejected this proposal. In June 2013, former police commissioners Mick Palmer and Ken Moroney were appointed to negotiate with jurisdictions and ‘break the deadlock’, something yet to be achieved.

Draft legislation to extend the coverage of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) to designated non-financial businesses and professions was released for public consultation in 2007. However, the process was put on hold to allow time for recovery from the Global Financial Crisis and appears not to have recommenced. While other improvements have been made in the meantime, these outstanding reforms represent a significant gap in Australia’s AML/CTF regime. These businesses and professions are being exploited in Australia to launder criminal proceeds. Further, international standards to which Australia has committed require such professions to be regulated by member countries, and Australia’s compliance will be assessed in the next round of country evaluations due to begin in late 2013.

While organised criminal activity has increased in both scope and sophistication, law enforcement agencies have been operating in a fiscally constrained environment. This resource imbalance deserves consideration by the new Parliament in the face of the persistent and evolving threat presented by transnational organised crime.

Further reading

Australian Crime Commission (ACC), Organised crime in Australia 2013, ACC, Canberra, 2013.

United Nations Office on Drugs and Crime (UNODC), The globalization of crime: a transnational organized crime threat assessment, UNODC, Vienna, 2010.

 

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© Commonwealth of Australia

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