Bills Digest No. 70 2002-03
Charter of the United Nations Amendment Bill
2002
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Charter of the United Nations
Amendment Bill 2002
Date Introduced:
14 November 2002
House: House of Representatives
Portfolio: Foreign Affairs
Commencement:
Formal provisions on
Royal Assent and the effective provisions immediately after the
commencement of Part 4 of the Charter of the United Nations Act
1945 (which will either be on 6 January 2003 or when
regulations are made under section 22A of that Act).
Purpose
To amend the
Charter of the United Nations Act 1945 so that new
provisions dealing with terrorism and finances will cover the
'holder', as well as the 'owner' of assets that are regulated under
the new provisions, and to ensure that a Minister issuing a notice
allowing dealings with a frozen asset may do so either on an
application by a relevant person/body or on his/her own
initiative.
This Bill seeks to amend the Charter of the
United Nations Act 1945, as amended by the Suppression of
the Financing of Terrorism Act 2002(1). The Bills
Digest which was prepared for the primary amending Act (i.e. the
Suppression of the Financing of Terrorism Act 2002)
provides the relevant background for this Bill, which does not
alter the policy approach of that Bill (now an Act).
In brief that legislation was aimed at
restricting the financial resources that are available to support
the activities of terrorist organisations. It explicitly made the
financing of terrorism a criminal offence and substantially
increased the penalties that apply where a person deals with
suspected terrorist assets that have been frozen. The legislation
also enhanced the collection and use of financial intelligence by
requiring cash dealers to report suspected terrorist financing
transactions to the Australian Transaction Reports and Analysis
Centre and relaxed restrictions on the sharing of information
regarding such transactions with the relevant foreign
authorities.
These measures addressed commitments Australia
had made, or will assume, under United Nations Security Council
Resolution 1373(2) and the International
Convention for the Suppression of the Financing of
Terrorism.(3)
The primary amending legislation was part of a
package of counter-terrorism legislation introduced by the Howard
Government on 12 March 2002. The other legislation in the package
was the Security Legislation Amendment (Terrorism) Bill 2002
[No.2], the Criminal Code Amendment (Suppression of
Terrorist Bombings) Bill 2002, and the Border Security
Legislation Amendment Bill 2002. There were also other
components of the anti-terrorism package which can be read about
further in the relevant Bills Digest, No. 127, 2001-02
Suppression of the Financing of Terrorism Bill 2002.
The Department of Foreign Affairs and Trade have
a web-site which provides further information on the International
Coalition against Terrorism and in particular, Australia's
implementation of United Nations Security Council Resolution 1373
(2001). The site is at http://www.dfat.gov.au/icat/
The primary legislation creates offences of
dealing with freezable assets and of giving an asset to a
proscribed person or entity. A proscribed person or entity is one
the Minister (currently the Minister for Foreign Affairs) is
satisfied is a terrorist entity. There can, however, be authorised
dealings with such assets. This Bill seeks to ensure that not only
the owners of assets, but also the holders of assets can apply to
the Minister for permission to use or deal with the asset in
particular ways. Three of the amendments (items 1, 2
and 4) simply add to the pre-existing regulation of
someone who is the 'owner' of an asset, by inserting the term
'holder' as well. The final amendment ensures that the Minister can
issue notices permitting such dealings either on their own
initiative or on an application made by an owner or holder of an
asset.
Given the passage of the Suppression of the
Financing of Terrorism Bill 2002 this subsequent amendment is
not in itself particularly significant it simply consolidates the
pre-existing approach. However the questions which were raised by
that original Bill remain, and the wisdom of an approach which
relies so comprehensively on administrative fiat, without any
recourse to judicial (or other) review, is yet to be seen. The
legislative schema provides almost no guidelines regarding the
appropriate criteria to be used by the Minister in the exercise of
his or her prerogative, while the consequences for those caught
within the legislative framework are potentially significant.
For the ease of the reader the original
questions regarding the legislation posed in the previous Bills
Digest are reproduced here:
The [legislation] provides a mechanism for
freezing terrorist assets once they have been identified. The
effectiveness of the [legislation], however, will depend upon
whether intelligence and law enforcement agencies are able to
identify the right people and entities.
It would appear that to date very few terrorist
assets with Australian institutions have been frozen as a result of
the measures taken by the Government since September
11.(4) This outcome may be surprising in view of claims
of fundraising activity by terrorist organisations in Australia and
gives rise to a number of questions. For example, is it really
likely that there are no terrorist assets in Australia? Are
institutions adequately complying with instructions to block
accounts? Is excessive reliance being placed on lists complied by
the UN or the US government rather than seeking out Australian
operatives? What measures are being taken against alternative
remittance systems operating in Australia?
If, as is probable, the list of suspect persons
and entities presently being used by the authorities are
incomplete, what measures can be taken to complete those lists? For
example do we need legislation to identify the beneficial owners of
interests in trusts or partnerships?(5)
It is possible that more resources will need to
be allocated to investigative agencies to ensure that the
mechanisms for restricting the flow of funds to terrorist
organisations contained in this Bill are deployed to full
effect.
-
- http://scaleplus.law.gov.au/html/pasteact/3/3496/top.htm
- The full text of UN Security Council Resolution 1373 is
available at the following link: http://www.un.org/Docs/scres/2001/res1373e.pdf.
- The text of the convention is available at http://www.un.org/law/cod/finterr.htm
- For an account of an exercise of powers under the legislation
see ''Terror' group's assets frozen', The Australian, Wed
18 Sept. 2002.
- There is no requirement for trusts and partnerships to be
registered with a public authority under as companies are obliged
to do under the Corporations Act 2001. The magnitude of the problem
of identifying beneficiaries of trusts for taxation purposes was
highlighted by the Australian National Audit Office (ANAO) in its
report, Managing Tax File Numbers, April 1999. It states that 45
percent of the 430,572 trust tax returns for 1997 did not include
the tax file numbers (TFNs) of the beneficiaries of trust
distributions. Further, TFNs were not provided for 370,764
beneficiaries of trusts in 1997. See N. Hancock (ed), Terrorism and
the Law in Australia: Legislation, Commentary and Constraints ,
Research Paper No.12 2001-02, p. 33/34.
Kirsty Magarey
2 December 2002
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2002
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