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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