Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014

Bills Digest no. 57 2013–14

PDF version  [729KB]

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.

Cat Barker
Foreign Affairs, Defence and Security Section
26 March 2014

 

Contents 

History of the Bill

Purpose of the Bill

Background

Committee consideration

Policy position of non-government parties/independents

Position of major interest groups

Financial implications

Statement of Compatibility with Human Rights

Key issues and provisions

Other provisions

Concluding comments

 

Date introduced:  5 March 2014

House:  House of Representatives

Portfolio:  Justice

Commencement: On the day after Royal Assent.

 

History of the Bill

The majority of the amendments contained in the Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014 (the 2014 Bill) were previously included in the Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 (the 2012 Bill), introduced by the former Australian Labor Party (ALP) Government into the House of Representatives on 28 November 2012. The 2012 Bill was debated in that chamber and the third reading agreed to on 5 February 2013. It was introduced into the Senate on 6 February 2013 but lapsed at the end of the 43rd Parliament.[1] The main amendments in the 2014 Bill that were not also included in the 2012 Bill are those that:

  • insert an additional object of undermining the profitability of criminal enterprises into the Proceeds of Crime Act 2002 (the Act) (item 1 of Schedule 1)[2]
  • remove the requirement for authorised officers to meet an evidence threshold test for a preliminary unexplained wealth order where the evidence threshold test for a restraining order has already been met (item 15 of Schedule 1)
  • clarify that a court may make an unexplained wealth order even if the person to whom the order relates failed to appear as required by a preliminary unexplained wealth order (item 19 of Schedule 1) and
  • allow information obtained using coercive powers under the Act to be shared with state and foreign authorities for the purposes of proceeds of crime investigations and litigation (item 31 of Schedule 1).

Purpose of the Bill

The purpose of the 2014 Bill is to amend the Act to revise the procedures and requirements for making orders relating to unexplained wealth, and to allow information obtained using coercive powers under the Act to be shared with state and foreign authorities for the purposes of proceeds of crime investigations and litigation.

Background

What is ‘unexplained wealth’?

‘Unexplained wealth’ laws enable a court to issue an order unless the subject of proceedings can establish, on the balance of probabilities, that his or her wealth was lawfully acquired. An assessment is made of the quantum of unexplained wealth (the difference between the person’s total wealth and that shown to be derived lawfully), and the subject of the order must pay the amount to the relevant jurisdiction.[3]

Unexplained wealth laws are designed to target the wealth of senior organised crime figures, who profit from crime while tending not to be directly linked to the commission of specific offences.[4]

Commonwealth unexplained wealth laws

The Act, which already provided for conviction-based and civil confiscation, was amended by the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010 (2010 Act) to include unexplained wealth laws.[5] The Act provides for three types of orders relating to unexplained wealth:

  • unexplained wealth restraining orders (under Part 2.1), which restrict a person’s ability to dispose of or otherwise deal with property
  • preliminary unexplained wealth orders (Part 2.6, section 179B), which require a person to attend court for the purpose of enabling the court to decide whether to make an unexplained wealth order and
  • unexplained wealth orders (Part 2.6, section 179E), which requires a person to pay the amount determined by the court to be the difference between the person’s total wealth and that which has been legitimately acquired.[6]

Senate amendments included in the 2010 Act

The originating Bill for the 2010 Act, which introduced Commonwealth unexplained wealth amendments, attracted significant attention and debate[7], resulting in a range of government and opposition amendments being passed by the Senate.[8] Some of those amendments will be reversed or partially reversed by the 2014 Bill at the recommendation of the Parliamentary Joint Committee on Law Enforcement. These include those that:

  • provided the court a general discretion not to make orders relating to unexplained wealth (items 2, 14 and 18 of Schedule 1) and
  • gave the court power to order that specified property otherwise subject to an unexplained wealth restraining order may be used for the purposes of meeting a person’s reasonable legal expenses arising from an application under the Act (item 3 and part of item 24 of Schedule 1).

Parliamentary Joint Committee on Law Enforcement inquiry

The Parliamentary Joint Committee on Law Enforcement (PJCLE) completed a self-initiated inquiry into Commonwealth unexplained wealth legislation and arrangements in March 2012 (the PJCLE report).

The PJCLE found that the unexplained wealth provisions had not been operating as it had intended when it recommended them in 2009, or as in the originating Bill as first introduced the same year, and made 18 recommendations for improvement:

  • recommendations 1, 5 and 8–13 were for specific amendments to the Act
  • recommendations 2, 3 and 4 concerned the Australian Crime Commission’s potential role in supporting unexplained wealth proceedings
  • recommendations 6 and 7 related to improving information sharing between law enforcement agencies and the Australian Taxation Office and
  • recommendations 14–18 related to development of a national unexplained wealth scheme and international agreements relating to unexplained wealth.[9]

Coalition commitment to implement recommendations

The Coalition committed to implementing the recommendations in the PJCLE report in the lead up to the 2013 federal election, stating:

We will strengthen unexplained wealth legislation to strike at the heart of organised crime by taking away the profits and assets of criminal syndicates and thereby undermine their business model.

We will ensure the Australian Crime Commission and other relevant law enforcement agencies have appropriate powers to investigate unexplained wealth.

The Coalition will immediately move to implement the recommendations made by the Parliamentary Joint Committee on Law Enforcement to strengthen unexplained wealth legislation and arrangements, including those which have not been actioned by the Rudd-Gillard Government. These recommendations include mandatory freezing orders and increased surveillance and investigatory powers.[10]

The 2014 Bill would implement eight of the PJCLE’s 18 recommendations in full or in part, in particular those concerning specific amendments to the Act (1, 5 and 8–13).[11]

A national unexplained wealth scheme

While the Bill would implement several of the PJCLE report recommendations, it will not address a more fundamental problem with the Commonwealth unexplained wealth laws, on which the PJCLE made recommendations for significant reform.

As noted above, unexplained wealth laws are particularly valuable in the context of organised crime, where those who derive the greatest profits are not directly involved in the commission of offences. Unexplained wealth laws provide an alternative avenue where senior figures cannot be pursued effectively through prosecution or traditional confiscation action:

Unlike existing confiscation orders, unexplained wealth orders will not require proof of a link to the commission of a specific offence and in that sense they represent a quantum leap in terms of law enforcement strategy.[12]

However, due to the need for a connection with a constitutional head of power, the application of the Commonwealth unexplained wealth regime is limited to instances where a court is satisfied that there are reasonable grounds to suspect that:

  • the person has committed an offence against a law of the Commonwealth, a foreign indictable offence or a state offence that has a federal aspect or
  • part of the person’s wealth was derived from an offence against a law of the Commonwealth, a foreign indictable offence or a state offence that has a federal aspect.[13]

This undermines the key advantage of unexplained wealth laws over prosecution or traditional confiscation as, in practice, a connection must be made to a specific offence or fairly specific type of offence in order to satisfy the jurisdictional requirement.

In order to remedy this, the PJCLE recommended that the Commonwealth lead development of a nationally consistent unexplained wealth regime. Further, it accepted the view of the Attorney-General’s Department on the best way to achieve that aim, recommending that ‘the Australian Government seek a referral of powers from the states and territories for the purpose of legislating for a national unexplained wealth scheme, where unexplained wealth provisions are not limited to having to prove a predicate offence’.[14]

Despite assurances they would still retain proceeds seized under their own laws, the states and territories rejected such a proposal on several occasions.[15] In June 2013, former police commissioners Mick Palmer and Ken Moroney were appointed to negotiate with jurisdictions and ‘break the deadlock’. The Australian Federal Police (AFP) Commissioner told the PJCLE on 26 February 2014 that there were some ‘very encouraging signs’ from the states and territories and that a report from Mr Palmer and Mr Moroney was ‘either with the Minister for Justice or very close to being with him’.[16] The Minister for Justice stated on 5 March 2014 that the Government was ‘continuing to pursue a national scheme with our state and territory colleagues to crackdown on criminals flaunting illegitimate wealth’.[17]

Committee consideration

Senate Standing Committee on Legal and Constitutional Affairs

The 2014 Bill has been referred to the Senate Standing Committee on Legal and Constitutional Affairs for inquiry and report by 15 May 2014. Details of the inquiry are at the inquiry home page.[18]

As noted above, most of the amendments contained in the 2014 Bill were previously included in the 2012 Bill. The same committee inquired into the 2012 Bill and in its majority report of March 2013 made the single recommendation that the Senate pass the Bill.[19]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) has stated that:

  • item 3 of Schedule 1 (which would remove the court’s discretion to allow a person subject to unexplained wealth proceedings to pay his or her legal expenses using restrained assets) may unduly trespass on the right to a fair hearing and
  • item 34 of Schedule 1 (which concerns application of the amendments in Schedule 1) may unduly trespass on personal rights and liberties by applying the amendments in the 2014 Bill regardless of when the wealth at issue was acquired, or any offence from which wealth was derived was committed.[20]

However, in each case it notes the detailed explanation provided in the Explanatory Memorandum and leaves the question of the appropriateness of those provisions to the Senate as a whole.[21]

The Committee was more concerned about proposed table item 2C of section 266A (item 31 of Schedule 1), which would allow information obtained using coercive powers under the Act to be shared with foreign authorities for the purposes of proceeds of crime investigations and litigation. It noted that the sharing of information would be subject to the equivalent of a dual criminality requirement, but was concerned that foreign authorities would apparently not be prevented from making secondary disclosures of such information.[22] The Committee has sought the Minister for Justice’s advice on this matter and on whether consideration was given to including a threshold requirement that would limit disclosure to more serious matters.[23]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights examined the 2012 Bill and raised several concerns in its First Report of 2013, the main ones being:

  • despite unexplained wealth laws being characterised as civil under domestic law, they may be viewed as involving a criminal penalty for the purposes of the International Covenant on Civil and Political Rights (ICCPR), a distinction that has implications for the application for a range of rights and freedoms and
  • no practical evidence had been provided demonstrating the requirement for the amendments to prevent restrained assets being used to meet legal expenses (items 3 and 24 of Schedule 1 in the 2014 Bill), and there appeared to have been insufficient consideration given to whether there was a less restrictive alternative to achieving the aim of preventing the dissipation of assets through payment of legal costs.[24]

The Committee was not satisfied by the then Minister for Justice’s response on the first point, which argued that unexplained wealth action makes no determination of a person’s guilt or innocence and that the relevant proceedings ‘cannot in themselves create any criminal liability, do not result in any finding of criminal guilt and do not expose people to any criminal sanction’.[25] It noted that the Minister’s response referred to the punishment and deterrence of breaches of Commonwealth laws, and that such goals are ‘generally seen as something that would lead to characterisation of a measure as “criminal”’.[26] Further, it considered that the presumption of unlawful conduct on which the unexplained wealth regime is premised is a significant encroachment on the right to a fair hearing for which sufficient justification had not been provided in the Statement of Compatibility or the Minister’s response.[27]

In its report on the 2014 Bill, the Committee draws attention to its earlier reports on the 2012 Bill and restates the same concerns in relation to the 2014 Bill and the lack of justification in the accompanying Statement of Compatibility.[28] It also raises concerns about item 19 of Schedule 1, which would clarify that a court may make an unexplained wealth order even if the person to whom the order relates failed to appear as required by a preliminary unexplained wealth order, in the context of the right to a fair hearing. The Committee states that it intends to seek an explanation from the Minister for Justice as to why the amendment is required, ‘including evidence or examples of where preventing the court from [making an unexplained wealth order] has frustrated the objectives of the scheme’.[29]

Policy position of non-government parties/independents

None of the non-government parties or independents appeared to have made a public statement on the Bill as at the time of writing. However, given most of the amendments were included in the 2012 Bill, the ALP can be expected to provide its support. The Bill retains amendments included in the 2012 Bill that the Australian Greens objected to, in particular those that would remove the court’s discretion to allow a person subject to unexplained wealth proceedings to pay his or her legal expenses using restrained assets (items 3 and 24 of Schedule 1 in the 2014 Bill). The Australian Greens were not convinced of the need for the amendments and were ‘concerned that it will unduly compromise an individual’s ability to defend an unexplained wealth action’.[30]

Position of major interest groups

At the time of writing, no submissions to the Senate Standing Committee on Legal and Constitutional Affairs had been made available on the inquiry page. However, the positions of several organisations may be anticipated on the basis of their submissions to the inquiry into the 2012 Bill.

The Police Federation of Australia and Australian Federal Police Association (joint submission), Australian Crime Commission, and Australian Customs and Border Protection Service were supportive of the unexplained wealth amendments in the 2012 Bill.[31]

In their submissions on the 2012 Bill the Queensland Council for Civil Liberties and the Law Society of South Australia reiterated their opposition to civil forfeiture schemes in general and objected to amendments to remove a court’s discretion to make orders relating to unexplained wealth once relevant criteria are satisfied (items 2, 14 and 18 of Schedule 1 in the 2014 Bill) and prevent restrained assets being used to meet legal expenses (items 3 and 24 of Schedule 1 in the 2014 Bill).[32]

Liberty Victoria was generally supportive of the 2012 Bill ‘as a reasonable and necessary amendment to the legislative regime’, but considered the amendments to prevent restrained assets being used to meet legal expenses were unnecessary.[33]

In its submission on the 2012 Bill, the Law Council of Australia (LCA) objected to the amendments to prevent restrained assets being used to meet legal expenses, arguing that there had been no evidence that the current provisions had been abused and that access to legal aid does not sufficiently offset the disadvantages of the amendments.[34] The LCA also expressed concern about amendments to enable seizure of things relevant to unexplained wealth proceedings under the Act’s warrant regime (items 27 and 28 of Schedule 1 in the 2014 Bill) because of the breadth of material that might be captured.[35]

Concerns raised by stakeholders are outlined in more detail in the ‘Key issues and provisions’ section of this Digest where relevant.

Financial implications

The Bill does not have any direct financial implications. The Explanatory Memorandum states that the Bill will ‘improve the Commonwealth’s ability to confiscate unexplained wealth’.[36]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the Government has assessed the Bill's compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[37] The Government notes that the Bill engages:

  • the right to a fair hearing
  • minimum guarantees in criminal proceedings
  • protection against arbitrary or unlawful interference with privacy and
  • the prohibition on retrospective punishment.

The Government considers that the Bill is compatible with human rights and freedoms because, to the extent that it may limit those rights and freedoms, ‘such limitations are reasonable, necessary and proportionate in achieving the intended outcomes of the Bill’.[38]

As outlined in the ‘Committee consideration’ section of this Digest, the Parliamentary Joint Committee on Human Rights has identified several concerns with the Bill and the Statement of Compatibility.

Key issues and provisions

This section of the Digest, and that below on ‘Other provisions’ cover amendments in the 2014 Bill that were either not covered by the Bills Digest for the 2012 Bill or that were covered, but upon which committees or other stakeholders have since expressed a view. For a description of the remaining amendments (specifically items 7–12, 23, 26 and part of 24 of Schedule 1), the reader is referred to the Bills Digest for the 2012 Bill.[39]

Removing the court’s general discretion

Section 20A of the Act provides for the making of unexplained wealth restraining orders. Item 2 of Schedule 1 will amend subsection 20A(1) with the effect of removing the general discretion of the court to not make a restraining order over property that is suspected to be unexplained wealth. However, the court will retain discretion not to make an order if it is satisfied that it is not in the public interest to do so (under subsection 20A(4)). In addition, item 4 will amend subsection 20A(4) to enable the court not to make an order if it is satisfied that there are not reasonable grounds to suspect that the amount of unexplained wealth is $100,000 or more. These changes were recommended in the PJCLE report.[40]

Section 179B of the Act provides for the making of preliminary unexplained wealth orders. Item 14 of Schedule 1 will amend subsection 179B(1) to remove the court’s discretion not to make a preliminary unexplained wealth order where the unexplained wealth is suspected to be $100,000 or more. Item 17 will insert proposed subsection 179B(4), which will have the effect of retaining the court’s discretion not to make an order if it is satisfied that there are not reasonable grounds to suspect that the amount of unexplained wealth is $100,000 or more. These changes were recommended in the PJCLE report.[41]

Section 179E of the Act provides for the making of (final) unexplained wealth orders. Item 18 of Schedule 1 will amend subsection 179E(1) with the effect of removing the general discretion of the court to not make an unexplained wealth order. However, the court will retain discretion not to make an order if it is satisfied that it is not in the public interest to do so (under subsection 179E(6)). In addition, item 20 will amend subsection 179E(6) to enable the court not to make an order if it is satisfied that there are not reasonable grounds to suspect that the amount of unexplained wealth is $100,000 or more. These changes were recommended in the PJCLE report.[42]

A court may also refuse to make a restraining order, a preliminary unexplained wealth order or an unexplained wealth order if the Commonwealth refuses to give an appropriate undertaking with respect to the payment of damages or costs, or both, for the making and operation of the order (see existing sections 21 and 179EA).

The Law Society of South Australia (LSSA) and the Queensland Council for Civil Liberties (QCCL) have objected to these amendments, and the LCA expressed some misgivings in evidence to the inquiry into the 2012 Bill.[43] LSSA and QCCL consider the court should retain a general discretion and that the safeguards outlined above do not sufficiently compensate for its removal, with the latter also pointing out that the concept of ‘public interest’ is not defined. The Senate Standing Committee on Legal and Constitutional Affairs disagreed in its report on the 2012 Bill:

… the committee considers that the safeguards retained in the Bill are sufficient to warrant this measure's inclusion in the POC Act. These safeguards include the court's initial function in determining whether the relevant criteria have been satisfied to make an order, as well as the ability of a court to refuse to make an unexplained wealth order or restraining order where it is not in the public interest, and to revoke a restraining order or preliminary unexplained wealth order if it is in the interests of justice to do so.[44]

Preventing use of restrained assets for legal costs

Under subsection 20A(1) of the Act, an unexplained wealth restraining order may require that:

(a)     property must not be disposed of or otherwise dealt with by any person; or

(b)     property must not be disposed of or otherwise dealt with by any person except in the manner and circumstances specified in the order.

Subsection 20A(3A) of the Act provides that, without limiting paragraph 20A(1)(b), the court may order that specified property otherwise subject to an unexplained wealth restraining order may be used for the purposes of meeting a person’s reasonable legal expenses arising from an application under the Act. Subsections 20A(3B) and (3C) cover related matters, including the ability of the court to require that a costs assessor certify such expenses have been properly incurred. Item 3 of Schedule 1 will repeal subsections 20A(3A), (3B) and (3C), implementing recommendation 10 of the PJCLE report. The PJCLE agreed with law enforcement agencies’ concerns that these provisions could be deliberately exploited to frustrate the objectives of the unexplained wealth regime and dissipate property that might otherwise be subject to confiscation through protracted litigation, as had occurred under the Proceeds of Crime Act 1987.[45]

Item 24 of Schedule 1 will repeal section 179SA, which contained equivalent legal expense provisions relating to the use of property restrained because it is found to be subject to the effective control of a person subject to an unexplained wealth order.

The Proceeds of Crime Act 1987, which has largely been replaced by the Act, contained provisions enabling access to restrained assets for the purposes of meeting legal expenses. When the Act was introduced, those provisions were not replicated; this accorded with the conclusions of the Australian Law Reform Commission in its 1999 review of the Proceeds of Crime Act 1987.[46] They currently exist only in relation to the unexplained wealth provisions.

People facing unexplained wealth action may apply for legal aid, and legal aid commissions are entitled under section 293 of the Act to be reimbursed for legal costs incurred in representing people whose property is covered by a restraining order under the Act.

The LCA, LSSA and QCCL have objected to the above amendments on the following grounds:

  • there is no evidence of the existing provisions being exploited in practice
  • the current provision for independent assessment of expenses is sufficient to safeguard against such abuse
  • the nature of the unexplained wealth laws is fundamentally different to other proceeds of crime matters, justifying specific provision for access to restrained assets for legal expenses and
  • access to legal aid does not sufficiently compensate the disadvantage caused by repeal of these provisions.[47]

While there may not have been any cases of these provisions being exploited in the context of unexplained wealth, the PJCLE and the Senate Standing Committee on Legal and Constitutional Affairs have been satisfied that instances that occurred under the Proceeds of Crime Act 1987 justify the amendments proposed in the Bill.[48]

Search amendments

Section 227 of the Act sets out the matters that must be included in a search warrant issued by a magistrate under section 225 (including the things that may be seized). Section 228 of the Act sets out the things that are authorised by a search warrant (again including the things that may be seized). While the current provisions allow for seizure of some evidence relevant to unexplained wealth proceedings, there are some limitations. Items 27 and 28 of Schedule 1 will insert proposed paragraphs 227(1)(ha) and 228(1)(da) to allow the seizure of ‘other things found at the premises in the course of the search that the executing officer or a person assisting believes on reasonable grounds to be things relevant to unexplained wealth proceedings’.

Section 256 of the Act provides for evidential material seized under a search warrant to be returned once the reason for the seizure no longer exists or it is decided the thing is not to be used in evidence. Items 29 and 30 of Schedule 1 will amend paragraph 256(1)(b) to apply the same rules to things seized because they are reasonably believed to be relevant to unexplained wealth proceedings.

Item 33 of Schedule 1 will insert the following definition into the dictionary in section 338 of the Act for the purposes of these provisions:

thing relevant to unexplained wealth proceedings means a thing (including a thing in electronic form) as to which there are reasonable grounds for suspecting that it may be relevant for the purposes of initiating or conducting proceedings under section 20A or Part 2‑6.

These amendments will implement recommendation 5 of the PJCLE report.[49]

A determination of total wealth, including that legitimately acquired, is required before the portion that is unexplained wealth can be identified. One of the limitations these amendments will address is the ability to seize material relevant to ascertaining the total wealth of a person. The LCA expressed the concern that there is ‘no aspect of a person’s income, expenditure, investments and business dealings’ that is not of possible relevance, meaning that ‘there are no practical limits placed on the type of information that may be seized in the course of executing a search warrant under the POCA’.[50] The Senate Standing Committee on Legal and Constitutional Affairs noted this concern in its report, but concluded that while the amendments ‘may enable a range of materials to be seized in some circumstances, the committee is of the view that this is appropriate due to the serious nature of the activity unexplained wealth measures are designed to target.’[51]

Information sharing

Section 266A of the Act governs disclosure of information obtained using coercive powers under the Act (as a whole, not just provisions relating to unexplained wealth). It contains a table that sets out the authorities to which such information may be disclosed, and the purposes for which it may be disclosed to those authorities. Information can currently be disclosed:

  • to authorities with functions under the Act to facilitate the performance of those functions
  • to Commonwealth, state and territory and foreign law enforcement agencies to assist in the prevention, investigation or prosecution of an offence that is (or if committed in Australia, would be) punishable by at least three years imprisonment and
  • to the Australian Taxation Office for the purpose of protecting the public revenue.

A person may only make a disclosure if he or she believes on reasonable grounds that the disclosure will serve the relevant purpose.

Item 31 of Schedule 1 would amend the table to provide for disclosure of information to:

  • state and territory authorities with proceeds of crime functions, for the purpose of engaging in related proceedings or deciding whether to institute them and
  • foreign authorities with proceeds of crime functions and/or criminal investigation or prosecution functions, to assist in identification, location, tracing, investigation or confiscation of proceeds or instruments of crime.

Disclosure to a foreign authority will only be permitted if identification, location, tracing, investigation or confiscation could take place under Australian law if the proceeds or instruments related to an offence against an Australian law (essentially a dual criminality requirement).

These amendments will address an anomaly under the Act whereby information may be shared with state and foreign authorities to assist with prevention, investigation or prosecution of offences, but not for the purposes of enforcing legislation equivalent to the Act. This appears logical and reasonable, and is supported by specific examples of limitations associated with the current provisions in the Explanatory Memorandum.[52]

Other provisions

Section 5 of the Act sets out its principal objects. Item 1 of Schedule 1 would insert proposed paragraph 5(da) to implement recommendation 1 of the PJCLE report by providing that undermining the profitability of criminal enterprises is one of the principal objects of the Act.[53]

As noted above, section 179B of the Act provides for the making of preliminary unexplained wealth orders. Subsection 179B(2) sets out the requirements for an affidavit accompanying an application for an order. Item 15 of Schedule 1 will repeal subsection 179B(2) and replace it with proposed subsections 179B(1A), (1B) and (2).

Unexplained wealth proceedings may commence with an application for a restraining order (under section 20A) or an application for a preliminary unexplained wealth order. Both applications must be accompanied by affidavits made by an authorised officer. There is currently duplication in the affidavit requirements and the matters of which the court must be satisfied in instances where proceedings commence with a restraining order, followed or accompanied by an application for a preliminary unexplained wealth order. Proposed subsections 179B(1A) and (1B) will implement recommendation 8 of the PJCLE report by removing that duplication through provision for a streamlined process in such cases.[54] In making a preliminary wealth order, the court will:

  • be able to rely on the requirements for a restraining order (for which a court must be satisfied to a higher threshold of reasonable grounds to suspect unexplained wealth exists) having been met and
  • may consider a compliant affidavit that accompanied the application for that order, along with any other material provided by an authorised officer.

Item 15 will also amend the affidavit requirements that will apply where proceedings commence with an application for a preliminary unexplained wealth order. The affidavit will no longer be required to include the identity of the person for which it is sought (which is included in the application itself) or the property the authorised officer knows or reasonably suspects was lawfully acquired and the total property the authorised officer knows or reasonably suspects is owned or under the effective control of the person. It must still state:

  • that the authorised officer suspects that the person’s total wealth exceeds the value of the wealth that was lawfully acquired and
  • the grounds on which that suspicion is held.

In practice, an affidavit could be expected to cover the matters no longer required if it is to satisfy the court to the standard required for the making of an order. Item 21 will make a consequential amendment to paragraph 179N(2)(b) that is required due to this amendment.

As noted above, section 179E of the Act provides for the making of (final) unexplained wealth orders. Item 19 of Schedule 1 will insert proposed paragraph 4(b) to expressly provide that a court may make an unexplained wealth order in relation to a person even if the person failed to appear as required by a preliminary unexplained wealth order. An unexplained wealth order cannot be made under section 179E unless a court has made a preliminary unexplained wealth order in relation to a person (and other grounds are satisfied). The amendment is intended to prevent people from deliberately frustrating unexplained wealth proceedings by failing to comply with a preliminary unexplained wealth order.[55]

Section 179N sets out the notice requirements that apply where an authority has applied for an unexplained wealth order. Item 22 of Schedule 1 will implement recommendation 9 of the PJCLE report by inserting proposed sections 179N(2A) and (2B) to allow the court to grant an extension of time in which to comply with the notice requirements on application by the authority. [56] The period of any single extension must not exceed 28 days, but there may be more than one extension.

Concluding comments

The amendments proposed in the 2014 Bill will implement a number of committee recommendations and should improve the operation of the Act by increasing clarity, streamlining processes and making some provisions more consistent with the objectives of the unexplained wealth regime. However, they will not address more fundamental difficulties with the unexplained wealth provisions, for which the cooperation of state and territory governments will be required.

 

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.



[1].     Parliament of Australia, ‘Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 homepage', Australian Parliament website, accessed 6 March 2014. The 2012 Bill also contained amendments to firearms trafficking offences in the Criminal Code Act 1995. Those amendments were supported by the Coalition, which also made further commitments to tackling firearms crime in the lead up to the 2013 federal election, but the new Government has yet to introduce any legislation on firearms crime as at the time of writing: M Keenan, ‘Second reading speech: Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012’, House of Representatives, Debates, 5 February 2013, accessed 24 March 2014; Liberal Party of Australia and the Nationals, The Coalition’s policy to tackle crime, Coalition policy document, Election 2013, pp. 8–9, accessed 19 March 2014.

[2].     Proceeds of Crime Act 2002, accessed 25 March 2014.

[3].     Attorney-General’s Department (AGD), Inquiry into the legislative arrangements to outlaw serious and organised crime groups: additional questions, AGD, Canberra, 23 December 2008, p. 2, accessed 6 March 2014.

[4].     R McClelland, ‘Second reading speech: Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009’, House of Representatives, Debates, 24 June 2009, pp. 6964–7, accessed 6 March 2014; Parliamentary Joint Committee on Law Enforcement (PJCLE), Inquiry into Commonwealth unexplained wealth legislation and arrangements, March 2012, pp. 6–9, accessed 6 March 2014.

[5].     For details of the originating Bill, see M Biddington, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009, Bills digest, 31, 2009–10, Parliamentary Library, Canberra, 2009, accessed 6 March 2014.

[6].     For further background to the Commonwealth’s unexplained wealth laws, see M Biddington and C Barker, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012, Bills digest, 64, 2012–13, Parliamentary Library, Canberra, 2013, accessed 6 March 2014. For general background on unexplained wealth laws, see PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements, op. cit. and Parliamentary Joint Committee on the Australian Crime Commission (now the PJCLE), Inquiry into the legislative arrangements to outlaw serious and organised crime groups, The Senate, Canberra, August 2009, accessed 21 March 2014.

[7].     M Biddington, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009, op. cit.; Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into the Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009 [Provisions], The Senate, Canberra, September 2009, accessed 22 March 2014.

[8].     The Senate, Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009: Schedule of the amendments made by the Senate, The Senate, Canberra, 4 February 2010, accessed 22 March 2014.

[9].     PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. vii, xiii-xvi. The PJCLE recommended the enactment of Commonwealth unexplained wealth provisions in its report, Inquiry into the legislative arrangements to outlaw serious and organised crime groups, op. cit., pp. 101–117.

[10].  Liberal Party of Australia and the Nationals, The Coalition’s policy to tackle crime, op. cit., p. 10.

[11].  The former Labor Government implemented recommendation 6 (to prescribe the Criminal Assets Confiscation Taskforce for the purposes of subsection 355-70(12) of Schedule 1 to the Taxation Administration Act 1953) through the Taxation Administration Amendment Regulations 2011 (No. 5), accessed 25 March 2014.

[12].  R McClelland, ‘Second reading speech: Crimes Legislation Amendment (Serious and Organised Crime) Bill 2009’, op. cit.

[13].  See sections 20A, 179B and 179E of the Act. For definitions of ‘foreign indictable offence’ and ‘state offence that has a federal aspect’ see section 337A and 338 of the Act and section 3AA of the Crimes Act 1914, accessed 25 March 2014.

[14].  PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 71–79 (quote from p. 79).

[15].  J Clare (Minister for Home Affairs and Justice), Mick Palmer and Ken Moroney appointed to break deadlock on national unexplained wealth laws, media release, 24 June 2013, accessed 7 March 2014.

[16].  PJCLE, Official committee Hansard (proof copy), 26 February 2014, p. 4, accessed 7 March 2014.

[17].  M Keenan (Minister for Justice), Tighter laws to capture spoils of criminal activities, media release, 5 March 2014, accessed 7 March 2014.

[18].  Senate Standing Committee on Legal and Constitutional Affairs, ‘Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014’, Australian Parliament website, accessed 19 March 2014.

[19].  Senate Standing Committee on Legal and Constitutional Affairs, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 [Provisions], The Senate, March 2013, accessed 7 March 2014. The Australian Greens representative generally agreed with the majority report, but provided additional comments as outlined in the ‘Policy position of non-government parties/independents’ section of this Digest. Submissions and hearing transcripts can be accessed from the inquiry homepage, accessed 25 March 2014.

[20].  Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 3 of 2014, The Senate, Canberra, 19 March 2014, pp. 4–9, accessed 20 March 2014.

[21].  Ibid.

[22].  The principle of dual criminality is satisfied where the conduct constituting the offence for which international cooperation is sought would amount to an offence in both countries concerned.

[23].  Ibid., pp. 7–8.

[24].  Parliamentary Joint Committee on Human Rights (PJCHR), First report of 2013, The Senate, Canberra, February 2013, pp. 1–5, accessed 20 March 2014.

[25].  J Clare in PJCHR, Sixth report of 2013, The Senate, Canberra, May 2013, p. 194, accessed 20 March 2014.

[26].  Ibid., p. 191.

[27].  Ibid.

[28].  PJCHR, Fourth report of the 44th Parliament, The Senate, Canberra, March 2014, pp. 4–5, accessed 20 March 2014.

[29].  Ibid., p. 6–7.

[30].  Senate Standing Committee on Legal and Constitutional Affairs, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 [Provisions], op. cit., p. 21.

[35].  Ibid., p. 8.

[36].  Explanatory Memorandum, Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014, p. 4, accessed 19 March 2014.

[37].  The Statement of Compatibility with Human Rights can be found at page 6 of the Explanatory Memorandum to the Bill.

[38].  Explanatory Memorandum, Crimes Legislation Amendment (Unexplained Wealth and Other Measures) Bill 2014, op. cit., p. 14.

[39].  See M Biddington and C Barker in footnote 6.

[40].  See recommendation 12, PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 60–63.

[41].  Ibid. (also recommendation 12).

[42].  See recommendation 13, PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 63–64.

[43].  Law Society of South Australia, op. cit., p. 3; Queensland Council for Civil Liberties, op. cit.; Senate Standing Committee on Legal and Constitutional Affairs, Official committee Hansard, 7 February 2013, p. 1, accessed 20 March 2014.

[44].  Senate Standing Committee on Legal and Constitutional Affairs, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 [Provisions], op. cit., p. 18.

[45].  PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 56–59.

[46].  Australian Law Reform Commission, Confiscation that counts: a review of the Proceeds of Crime Act 1987, ALRC report 87, 1999, Appendix C, pp. 12–14, accessed 21 March 2014.

[47].  LCA, op. cit., pp. 4–8; QCCL, op. cit.; LSSA, op. cit., p. 3.

[48].  For the position of the PJCLE see footnote 45; Senate Standing Committee on Legal and Constitutional Affairs, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 [Provisions], op. cit., p. 11–15, 18.

[49].  PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 43–45.

[50].  LCA, op. cit., p. 8.

[51].  Senate Standing Committee on Legal and Constitutional Affairs, Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012 [Provisions], op. cit., pp. 15, 18.

[52].  See pp. 36–38 of the Explanatory Memorandum.

[53].  PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 26–27.

[54].  Ibid., pp. 51–52.

[55].  Explanatory Memorandum, p. 29.

[56].  PJCLE, Inquiry into Commonwealth unexplained wealth legislation and arrangements., op. cit., pp. 52–54. 

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