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Crimes Legislation Amendment (Organised Crime and Other Measures) Bill 2012

Introduced into the House of Representatives on 28 November 2012
Portfolio: Justice

Committee view

1.1        The committee seeks further information from the Minister as to why restraint, use and confiscation of 'unexplained wealth' should not be viewed as involving a criminal penalty for the purposes of the International Covenant on Civil and Political Rights (ICCPR).

1.2        The committee also seeks clarification as to whether there are less restrictive means available to regulate the use of proceeds for legal expenses.

Overview

1.3        This bill amends the Proceeds of Crime Act 2002 (POC Act) to:

• ensure that evidence relevant to unexplained wealth proceedings can be seized under a search warrant;
• allow the time limit for serving notice of a preliminary unexplained wealth order to be extended by a court in certain circumstances;
• harmonise provisions relating to the payment of legal expenses for unexplained wealth cases;
• allow charges to be created over restrained property to secure wealth restraining orders, preliminary unexplained wealth orders and unexplained wealth orders once relevant criteria are satisfied; and
• expand the parliamentary joint committee's oversight of unexplained wealth investigation and litigation.

1.4        The bill also amends the Criminal Code Act 1995 to:

• expand existing cross-border firearms trafficking offences to cover firearm parts;
• introduce new offences for international firearms trafficking across Australia’s national borders; and
• introduce aggravated offences with a maximum penalty of life imprisonment where 50 or more firearms or firearms parts are trafficked within a six month period.

Compatibility with human rights

1.5        The bill is accompanied by a detailed statement of compatibility, which identifies a number of rights engaged by the bill, in particular the right to a fair hearing (article 14 of the International Covenant on Civil and Political Rights (ICCPR)), the right to be presumed innocent (article 14(2) of the ICCPR), the prohibition on retrospective criminal punishment (article 15 of the ICCPR) and the right not to be subjected to unlawful or arbitrary interference with privacy (Article 17 of the ICCPR).

Right to a fair hearing

1.6        Schedule 1 of the bill makes amendments to the Proceeds of Crime Act 2002, which contains provision relating to the tracing, restraint and confiscation of the proceeds of crime.  

1.7        The statement of compatibility explains the purpose of the legislative provisions relating to ‘unexplained wealth’:

Under Commonwealth unexplained wealth legislation, if a court is satisfied that there are reasonable grounds to suspect that a person’s total wealth exceeds the value of the person’s wealth that was lawfully acquired, the court can compel the person to attend court and prove, on the balance of probabilities, that their wealth was not derived from offences with a connection to Commonwealth power. If a person cannot demonstrate this, the court may order them to pay to the Commonwealth the difference between their total wealth and their legitimate wealth.[1]

1.8        The statement of compatibility notes that proceedings under the Proceeds of Crime Act 2002 are civil proceedings heard by courts in accordance with civil procedures.

1.9        While these proceedings are designated as civil proceedings by Australian law, that is not determinative of their status for the purposes of the ICCPR, under which the concept of a ‘criminal charge’ has an autonomous international meaning. If the proceedings were to be considered ‘criminal’ for the purpose of the ICCPR, then this would have implications for the conduct of proceedings under existing proceeds of crime legislation.

1.10      The statement of compatibility notes (p 6):

The United Nations Human Rights Committee has stated that criminal charges primarily encompass acts that are declared to be punishable under domestic criminal law, but may also extend to acts that are criminal in nature with sanctions that, regardless of their qualification in domestic law, must be regarded as penal. Relevant factors in considering whether charges are criminal include whether proceedings are brought by a public authority, whether there is a punitive element to the process and whether there are potentially serious consequences such as imprisonment (see the Human Rights Committee’s General Comment 32).

Unexplained wealth proceedings and other proceedings under the POC Act are brought by a public authority and have the punishment and deterrence of breaches of Commonwealth law as one of their stated objects. However, these proceedings are civil proceedings only and are not criminal in nature – proceeds of crime proceedings cannot create any criminal liability, do not result in any finding of criminal guilt and do not expose people to any criminal sanctions. [2]

1.11      International human rights bodies have come to different conclusions as to whether such procedures are ‘criminal’, where the confiscation of property is involved on the basis that is has been derived (or is presumed to derive) from unlawful activities such as drug trafficking or other forms of serious crime. A penalty may be characterised as ‘criminal’ for the purposes of international human rights law, even if it does not involve imprisonment. Here significant amounts of property may be the subject of restraining orders or confiscation.

1.12             The committee intends to write to the Minister to seek clarification as to why, in the light of international human rights case law and other relevant jurisprudence, the provision relating to the restraint of, use of, and confiscation of ‘unexplained wealth’, should not be viewed as involving a ‘criminal’ penalty for the purposes of the ICCPR. 

Right to legal representation

1.13      The bill proposes to extend limitations on the use of proceeds to pay for legal expenses in certain proceedings under the Proceeds of Crime Act 2002 to unrestrained wealth proceedings. At present persons who are subject to unexplained wealth proceedings may use certain restrained assets, or assets subject to their effective control, to meet their legal fees. The Proceeds of Crime Act 2002 does not permit this in relation to other types of proceedings under that Act; in such cases a person may be represented by legal aid, with relevant legal aid costs to be paid by the Commonwealth using confiscated assets held in the Confiscated Assets Account. The statement of compatibility explains  the rationale for the current situation and the extension to unexplained wealth proceedings:

The POC Act takes this approach to the use of restrained assets so as to prevent the practice of dissipating wealth on legal expenses to frustrate any potential proceeds of crime order.  As noted, people who are subject to POC Act proceedings may seek legal representation through legal aid if their unrestrained assets are not sufficient to meet legal costs, to ensure that they are appropriately represented, are not disadvantaged and continue to be equal before courts and tribunals. To the extent that Schedule 1 may limit a person’s right to legal representation, such limitations are necessary and reasonable in ensuring that wealth is not dissipated on legal expenses to frustrate potential unexplained wealth orders and that the Commonwealth’s unexplained wealth laws operate effectively.[3]

1.14      Although the statement of compatibility and explanatory memorandum refer to review of the law and policy in relation to this issue, neither provides any information to suggest that the extent to which concerns about the possible dissipation of relevant sums by being used to pay legal fees have been borne out in practice. The fact that it appears possible to control legal expenses when legal aid costs are paid by the Commonwealth suggests that it might be possible for there to be supervision of the payment of legitimate costs out of sums subject to proceedings. As the statement of compatibility notes, under the Proceeds of Crimes Act 2002, courts already have a general discretion for various expenses to be met out of property covered by a restraining order, including reasonable living expenses of the person whose property is restrained or their dependants, reasonable business expenses, and specific debts incurred in good faith.[4] However, the main concern of the bill appears to be to harmonise the treatment of defendants in proceedings under the Proceeds of Crime Act 2002 rather than to explore whether there may be a less restrictive alternative of achieving the goal of avoiding the dissipation of assets through the payment of legal costs.

1.15             The committee intends to write to the Minister to seek clarification as to whether there are less restrictive means available to avoid the dissipation of assets through payment of legal fees than simply prohibiting this, for example, by supervision by a court of the amounts that may be paid in the same way as courts play a role in relation to the taxation of costs in litigation, or in the exercise of a discretion in relation to living and other expenses under the Proceeds of Crime Act 2002.

Right to a hearing before an independent an impartial tribunal

1.16      The bill proposes the removal of the courts’ general discretion to decline to make various orders in relation to unexplained wealth, even if all relevant criteria for making the orders have been satisfied. This will mean that the provision in relation to unrestrained wealth orders will be aligned with other proceeds of crime orders. A complete removal of judicial discretion in such cases might impermissibly encroach upon the right to a fair hearing before an independent and impartial tribunal. However, the statement of compatibility notes that courts still retain a discretion to decline to make orders if they consider it in the interests of justice to do so.[5]

Right to privacy and to protection of families and children

1.17      The statement of compatibility notes (p 8) that the legislation permits the making of a wide range of orders in relation to property that may have an impact on the person’s property, including their home and business, and that this may have an impact on members of their family including dependants.[6] The statement also notes:

However, the Act serves the legitimate and important objective of ensuring that criminals are not able to profit from their crimes and are deterred from further criminal activity, and provides for a range of safeguards and procedures to ensure that it is not more restrictive than necessary in achieving this end.[7]

1.18      The statement also refers to the discretion of the courts to allow payments to be made to alleviate the impact of restraining orders on individuals and their families. No information is provided about the practical experience under such schemes, which would be of assistance in assessing whether the operation of such schemes (including the safeguards referred to) could be considered to have a disproportionate impact.

Retrospectivity

1.19      The statement of compatibility argues that the prohibition on retrospective criminal penalties is inapplicable to unexplained wealth orders and other orders under the Proceeds of Crime Act 2002 are purely civil proceedings and not criminal, and that accordingly the prohibition on retrospective operation in article 15 of the ICCPR has no application.[8] This issue has been discussed above, where it was noted that there are conflicting international views on this matter and that unexplained wealth orders might be seen as ‘criminal’ for the purposes of article 15. If that were so, then any retrospective application brought about by the bill would appear to be inconsistent with that article.

Presumption of innocence

1.20      Schedule 2 of the bill makes a number of amendments to existing firearms offences contained in Part 9.4 of the Criminal Code Act 1995. The maximum penalties that may be imposed in relation to a number of these offences include life imprisonment (with or without a significant fine in addition).

1.21      The new offences provide that there will be absolute liability and strict liability in relation to certain elements of the offences. Where absolute liability applies to an offence or element of an offence, there is no defence of honest and reasonable mistake; in the case of a strict liability offence (or element of an offence), that defence is available.[9]

1.22      The imposition of strict liability in offences for which a term of imprisonment may be imposed gives rise to human rights concerns, insofar as the right to be presumed innocent (article 14(2) of the ICCPR), and also the right not to be subjected to arbitrary detention (article 9(1) of the ICCPR). These concerns are heightened where absolute liability applies to an offence or an element of an offence. In such case there must be a clear justification offered that the imposition of absolute or strict liability is in pursuit of a legitimate objective, and is reasonable and proportionate measure to achieve that goal. The question of whether there are less restrictive means to achieve the legitimate objective will be relevant to the assessment of reasonableness and proportionality.   

1.23      The statement of compatibility provides a helpful table of the elements of the offences to which absolute liability is proposed to be applied, and also lists the offences in relation to which strict liability applies.

1.24      The statement maintains that the prevention of illegal trafficking in firearms or firearm parts is an important and legitimate objective. In relation to the application of absolute liability, the statement analyses the different elements of the offences that are the subject of absolute liability, and notes that the prosecution has to prove these beyond reasonable doubt, that a number of elements are jurisdictional, that others relate to the time period over which the relevant actions have occurred or that the import or export of a firearm or firearm part was prohibited under the Customs Act unless an approval had been obtained.

1.25      In relation to strict liability elements, the statement notes that in each case the strict liability element relates to matters (such as the obtaining of approval) which the defendant should be expected to know and to comply with. The defence of honest and reasonable mistake of fact is available in such cases, and new section 361.4 provides for a defence that the person had a mistaken but reasonable belief that the conduct was justified or excused by or under a relevant law and the conduct would have been lawful if that had been so (the defendant bears an evidential burden in relation to this). 

1.26      The committee notes that it is concerned where any offence for which imprisonment can be imposed includes elements which are subject to absolute liability or strict liability, but considers that a case has been made in relation to the individual elements of the offences included in the bill that any encroachment on the presumption of innocence is justified.

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