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The need for national harmonisation
Current domestic schemes and the Commonwealth
Unexplained wealth or similar laws currently exist in six Australian
jurisdictions: Western Australia, the Northern Territory, New South Wales, Queensland,
South Australia and the Commonwealth. Of these, the Western Australian and
Northern Territory schemes are the longest running, having been established in
2000 and 2003 respectively. Other schemes are more recent, having been
established in 2009 or later.
There are significant differences between the models, with these
differences broadly relating to the following aspects:
- whether a link to an offence is required (through either a
reasonable suspicion that an offence has occurred or that a person has obtained
the proceeds of an offence);
- whether a court has a discretion to make an order;
- whether unexplained wealth provisions form part of a State’s
asset confiscation legislation or are in stand-alone legislation; and
- time limits on unexplained wealth orders.
Western Australia and Northern
Western Australia introduced unexplained wealth provisions in 2000 in
the Criminal Property Confiscation Act 2000 (WA), and the Northern
Territory followed in 2003 with the Criminal Property Forfeiture Act 2002 (NT).
The laws both provide that the relevant DPP may apply to the court for
an unexplained wealth declaration against a person. Under neither law is there
a requirement to show reasonable grounds to suspect that a person committed an
Judicial discretion is limited, in that the court must make a
declaration that a respondent has unexplained wealth 'if it is more likely than
not that the total value of the person's wealth is greater than the value of
the person's lawfully acquired wealth'.
Both Acts also reverse the onus of proof.
The key aspects of the laws are:
- the requirement that courts make an order if satisfied
that a person's total wealth is greater than their lawfully acquired wealth.
Courts therefore have minimal discretion regarding the making of such orders;
- the reversal of the onus of proof in favour of the Crown,
providing that 'any property, service, advantage or benefit that is a
constituent of the respondent's wealth is presumed not to have been lawfully
acquired unless the respondent establishes the contrary';
- both Acts set out how law enforcement and prosecutors can obtain
information about criminal assets;
- provisions to ensure that property remains available for
- people have a right to object to their property being restrained
within 28 days of being served with an order restraining the property. The Acts also
allow orders to be made against 'declared drug traffickers'.
Though the WA and NT laws are broadly similar, there are a few differences
between them, including court consideration of cooperation, the process by
which a person is declared a drug trafficker and have their assets confiscated,
and Constitutional requirements arising from the Northern Territory's status as
The South Australian Serious and Organised Crime (Unexplained Wealth)
Act 2009 was proclaimed on 29 August 2010.
It provides for a scheme broadly similar to that of WA and NT. South Australia
is unique, in that unexplained wealth legislation sits independently of other
proceeds of crime legislation.
Under the South Australian legislation, the DPP may authorise the Crown
Solicitor to apply to the court for an unexplained wealth order, if the DPP
reasonably suspects that a person has wealth that has not been lawfully
acquired. Restraining orders may be made on application by the Commissioner of
Police. As with the WA and NT, there is no requirement to show reasonable
grounds to suspect that a person committed an offence.
The court has final discretion as to whether an order is made, and may
make an unexplained wealth order if it finds that any components of a person’s
wealth specified in the application have been unlawfully acquired. The onus of
proof is reversed in favour of the Crown (‘each component of a person's wealth
specified in the application will be presumed not to have been lawfully
acquired unless the person proves otherwise’).
There are limitations on the investigative powers under the South
Australian act, which can only be used:
- in relation to investigating or restraining the wealth of a
person who has been convicted of a serious offence (or declared liable to
supervision in relation to a charge of a serious offence) or is (or has been)
the subject of a restraining order; or
- where the DPP reasonably suspects the person: engages or has
engaged in serious criminal activity (ie the commission of serious offences);
associates/has regularly associated with such persons; is or has been a member
of a declared organisation; or
- has acquired property or a benefit as a gift from a person who
fits these categories.
A further safeguard was included, in that the court may also exclude
portions of a person’s wealth from an application if satisfied that it is not
reasonably possible for a person to prove that that part of their wealth was
New South Wales
The New South Wales Criminal Assets Recovery Act 1990 was amended
to include unexplained wealth provisions in September 2010.
The legislation is administered by the New South Wales Crime Commission.
Under the New South Wales provisions, the New South Wales Crime
Commission may apply to the Supreme Court for an unexplained wealth order
against a person. It may apply for a restraining order on the basis that an authorised
officer has a reasonable suspicion that a person has engaged in serious crime
related activities, a person has acquired serious crime derived property, or that
property is serious crime derived property or illegally acquired property.
The court must make an unexplained wealth order if there is a reasonable
suspicion that the person has, at any time, engaged in a serious crime related activity
or acquired serious crime derived property from another person’s serious crime-related
The New South Wales unexplained wealth provisions require a finding that
a person has engaged in, or acquired property from, serious crime-related
activity, but need not be based on a reasonable suspicion as to the commission
of a particular offence.
While the Commissioner must satisfy the court that a person has engaged
in, or acquired property from, serious crime-related activity, the onus is on
the person to prove that his or her current or previous wealth is not or was
not illegally acquired property or the proceeds of an illegal activity. Though
the provisions require a finding that a person has engaged in, or acquired
property from, serious crime-related activity, this need not be based on a
reasonable suspicion as to the commission of a particular offence.
The New South Wales provisions contain an additional safeguard, in that
the court may refuse to make an unexplained wealth order if it finds that it is
not in the public interest to do so, or may reduce the amount that would
otherwise be payable.
While Queensland does not have unexplained wealth laws along the lines
of the states above, it does have laws that allow for the making of ‘proceeds
assessment orders’, which require a person to pay to the State the value of
proceeds derived from the person’s illegal activity.
Under the Criminal Proceeds Confiscation Act 2002, the State DPP
may apply to the Supreme Court for a proceeds assessment order against a person
requiring a person to pay to the State the value of proceeds derived from the
person’s illegal activity that took place in the 6 years prior to the application
for the order being made. The State must bring evidence to establish the value
of property (or expenditure) over the previous 6 years.
The court must make an order if satisfied that it is more probable than
not that a person engaged in serious crime related activity within the last 6
years, but this does not require a finding that any particular offence has been
The Queensland provisions, while not generally regarded as unexplained
wealth laws, instead create a statutory presumption that the unexplained
portion of a person's wealth is derived from illegal activity, subject to a
finding that the person engaged in 'serious crime-related activity' and
evidence being led that they have unexplained wealth. The onus then falls upon
the respondent to rebut that presumption by satisfying the court that the
increase in wealth was not related to illegal activity.
As with New South Wales, the court may refuse to make a proceeds
assessment order if it finds that it is not in the public interest to make the
Issues arising from inconsistency
Even between those states that have established unexplained wealth laws,
there are significant differences in the operation of the provisions.
Furthermore, several states have not sought to introduce unexplained wealth
laws, giving rise to a potentially uneven application of law enforcement
efforts across Australia.
Targeting the weakest link
Inconsistency in Commonwealth, state and territory approaches to address
serious and organised crime risks introducing vulnerability to the national
organised crime strategy. As Mr Tony Negus, Commissioner of the AFP and Chair
of the ACC Board observed:
It is agreed across the board of the Australian Crime
Commission that criminals will exploit any weaknesses that they can identify,
and that includes weaknesses in legislation across jurisdictions or the weakest
link, if you like, in the way that legislative processes have been constructed.
One concern arising from the significant differences between
jurisdictions is the risk that serious and organised criminal networks may
relocate some or all of their activities to states and territories with a more
favourable legislative framework. For example, the committee has obtained some
evidence that crime groups in the Northern Territory have relocated across the
border to avoid the provisions in that jurisdiction. In evidence to the
committee in an earlier inquiry, Commander Colleen Gwynne, NT Police, explained:
We have had a couple of cases where people have chosen to
move. We had an unexplained wealth case in Alice Springs where we restrained
$2.2 million worth of assets and cash. That matter has now finalised. At the
end of the day, nearly $1 million was forfeited. In a lot of these cases,
people also have to pay their debts off. If they have $2.2 million worth of
assets, they may owe a bank or a financial institution half of that, so part of
the assets pays the debt off before the government sees the end amount. People
involved in that couple of cases, who are quite significant in trafficking
illegal drugs within Central Australia, have since moved interstate. There have
been other cases that I could talk about where people have chosen to move
The committee is also understands that a similar phenomenon has occurred
in Ireland, where the activities of the Criminal Asset Bureau has led to the
relocation of organised crime activity to foreign jurisdictions.
In an earlier inquiry by the committee, it heard from Detective
Superintendent Hollowood from Victoria Police, who gave evidence about the
difficulties that Australian law enforcement agencies have in identifying and
confiscating assets which may be located in, or moved between, various jurisdictions. Some of these problems could potentially be
overcome if there was nationally consistent unexplained wealth legislation, a
point discussed further below.
Enhancing a preventative culture
As described in Chapter 2, unexplained wealth legislation represents a
new approach to law enforcement, adding to a developing the law enforcement
crime prevention culture. Heads of law enforcement agencies that attended the
committee's roundtable on unexplained wealth in March 2012 agreed that the
successful use of unexplained wealth provisions required a shift in thinking
from the traditional focus on prosecution.
For example, Victoria Police, which currently does not have access to
state unexplained wealth provisions, noted that their introduction may require
cultural development in some areas of the organisation. As Mr Graham Ashton,
Deputy Commissioner, Victoria Police noted:
We have work to do around shaping our culture within the
detective cohort towards tackling unexplained wealth if we get those powers or
access to another scheme in Victoria. The current mindset is very much around
investigating a particular criminal offence, getting it before the courts and
then presenting a worthwhile prosecution...We will have to do some education on
thinking about the unexplained wealth rather than the criminal offence; but, as
the Northern Territory has already shown, it is possible to do that.
Commissioner Mal Hyde observed that this shift in thinking was already
occurring in the context of adopting a proactive and preventative approach to
law enforcement, stating:
I am not sure that the cultural shift is such an impediment
as it might have been, say, 15 years ago, when police were primarily reactive
rather than proactive. There has been a big shift in policing culture to adopt
a problem-solving, preventative model. That has occurred. I think it is more
about organisational design because the reality is the work to use this form of
legislation will be highly specialised. It is how you design your legislation
to get the outcomes you seek. Most of us around the country are prepared to
change our organisations to make sure they are in line with the strategies and
tactics that we employ to get outcomes for the community. So I would be more
confident that the legislation could be effectively used. It is really more
about how you design the focus of your resources to get the outcomes you want.
Commissioner Hyde further noted that law enforcement agencies may need
to invest further in specialists such as forensic accountants and people with
highly sophisticated information and communication technology skills. In
practice, however, he noted that law enforcement agencies were used to
adjusting in this manner to counter evolving threats such as cyber
investigations or drug importation and distribution methodologies.
The committee observes that, in the development of a national approach
to unexplained wealth, the Commonwealth may be in a position to facilitate or
provide education and training to support a nationally consistent approach to
The case for harmonisation of Commonwealth and state and territory laws
There was widespread support for harmonising unexplained wealth laws
across Australia, though views diverged on which model should be adopted. Harmonisation
of the laws could potentially achieve two ends: a coordinated national approach
to serious and organised crime using unexplained wealth laws and enabling the
Commonwealth to enact a more effective regime that did not require a predicate
offence to be proven.
The Australian Federal Police argued forcefully for the creation of a
national unexplained wealth scheme, submitting:
If we are serious about providing law enforcement with an
effective tool to target those in the upper echelons of organised crime groups – who profit from crime at an arm’s length – then action needs to be taken to
address the gap in the Commonwealth’s unexplained wealth regime. What is needed
is nationally consistent unexplained wealth laws that could address the gap
that – because of constitutional limitations – the Commonwealth cannot address.
The Police Federation of Australia likewise saw the establishment of a
national scheme as means to facilitate cooperation and an effective regime, submitting:
The Police Federation of Australia...calls for a system to be
created with a view to implement a truly national scheme, one which facilitates
the cooperation of the legislature and law enforcement agencies of the
Commonwealth and all States and Territories. A national scheme should provide
the law enforcement agencies across Australia with an effective mechanism for
information sharing and collaborative investigations and taskforces, such that
there is no jurisdiction within which organised crime can hide. A national
scheme is also the solution to the constitutional problem; utilising the State
and Territory legislative powers to remove the requirement that unexplained
wealth be linked to a predicate offence completely.
The Australian Crime Commission also expressed strong support for
national consistency, noting the option of a model criminal code:
I see that there is a great working relationship between the
AFP and all the states in terms of asset forfeiture. On each occasion you are
looking for opportunities to use the best tool that you can at any particular
time. Some states have quite sophisticated unexplained wealth provisions. To
make it a far more workable regime...if you have a model criminal code or
consistency in each of the states and territories along with the Commonwealth
then you prevent the criminals from exploiting gaps in the legislation.
Federation is a great thing, but when you have criminals working across the
country and across the globe then you need a nationally consistent way in which
you approach this. My sense is that if we had that consistency between the
Commonwealth and the states, however it was achieved, that would be a great
thing in tackling serious organised crime.
South Australia Police noted that the effectiveness of the committee's
inquiry may be enhanced through acknowledging and potentially addressing the
existing inconsistencies of the current State and Commonwealth unexplained
wealth legislation and arrangements, noting in particular the opportunity for
cooperation, coordination and information sharing including the targeting of
assets. South Australia Police submitted that the ultimate aim of these
enhancements would be the development of a robust national approach.
Victoria Police informed the committee that the call for a consistent
national approach to criminal asset confiscation has been an ongoing issue for
many years, citing the Premier's Conference on Drugs in 1985, where it was
proposed that uniform legislation throughout Australia be introduced to confiscate
the proceeds of drug dealing.
Victoria Police highlighted the challenges of harmonisation, submitting:
It is a fact that in each state and territory there are
peculiar challenges to law enforcement, there are different political pressures
and there are different natures of criminality. However, the difficulties that
Australian law enforcement agencies have in identifying and confiscating assets
which may be located in, or moved between, various jurisdictions may be
significantly overcome if there was nationally consistent unexplained wealth
The Western Australian Police, noting the difficulties they had
experienced in progressing unexplained wealth matters within their own state,
expressed a desire to work closely with the AFP, using Commonwealth provisions.
As Assistant Commissioner Anticich explained:
There are a number of models that are currently operating
across the states, including ours, and I suggest that all of them have
strengths and weaknesses. I think it is a great opportunity for the
Commonwealth and this committee to show some leadership and come up with a
pragmatic model that will hopefully guide others.
Civil Liberties Australia also argued for harmonisation in principle,
although it did not lend support to the removal of predicate offence
For that reason, our No. 1 recommendation to this committee
is to refer part (e) of your terms of reference, 'the interaction of
Commonwealth, state and territory legislation and law enforcement activity in
relation to the targeting of criminal assets of serious and organised criminal
networks', to the Standing Committee on Law and Justice to produce a national
approach. We think that this type of legislation is crying out for national
consistency. Crimes are cross-border, but the laws are patchy depending on
where you live.
The Law Council of Australia encouraged national consistency in
principle, while the Queensland Law Society noted the strategic and resource
benefits of harmonisation. Nevertheless, both organisations reiterated
opposition to any unexplained wealth regimes involving a reverse onus of proof.
The AFP noted that, in 2009, all Australian jurisdictions agreed to a
nationally coordinated response to organised crime, including a coordinated
national effort to target the proceeds of crime and nationally consistent
criminal asset confiscation schemes.
As detailed in Chapter 2, however, while several states and territories have
unexplained wealth laws, these laws operate in different ways.
The committee agrees that the national response to serious and organised
crime would benefit from consistent laws on unexplained wealth, and recommends
that the Commonwealth Government take a lead role in the development of such
4.45 The committee recommends that the Commonwealth Government take the lead
in developing a nationally consistent unexplained wealth regime.
The way forward
In considering methods for the harmonisation of Commonwealth and state
and territory laws, the committee examined three main options:
- creation of model laws for adoption by each jurisdiction;
- guiding principles; and
- a referral of power from states and territories to the
In evaluating each method, the committee was mindful of the need to
enable the Commonwealth to enact an effective unexplained wealth regime that
was not forced to rely on proving the commission of a federal offence or state
offence with a federal aspect.
Model laws are one possible method for achieving nationally consistent
unexplained wealth laws and AGD informed the committee that they have been used
extensively in a number of other areas.
However, there are drawbacks to the use of model legislation. One
disadvantage of model laws is that they are susceptible to inconsistent implementation
and can tend to drift apart over time. As Mr Iain Anderson, AGD, explained:
The problem with model laws is that they do not always stay
model for very long. Jurisdictions can, of course, always depart from and introduce
minor nuances and wrinkles. So you might start with what appears to be a
consistent model, but gradually the consistency breaks down. That is the
problem with that approach. But, that said, if there were not a reference of
powers then we could take the model laws approach.
AGD also informed the committee that the development of model laws would
not remove the need for Commonwealth laws to require a link to an offence
within Commonwealth power. Consequently, for the Commonwealth to adopt model
laws, the model laws would need to have some connection to an offence with a
link to a Commonwealth head of power, or the Commonwealth would need to include
such a link when implementing them.
The AFP described a typical model legislation process, noting that some
work had previously been done with the states and territories over proceeds of
[T]he normal process with the model legislation ... would be
for us to work at an officials level with our counterparts in the states and
territories to see what the ideal elements of a particular process would be—in
this case it would be unexplained wealth—and get ministerial approval for that
through either the police ministers council or the Standing Committee of
That is what we have done in the past but I guess one of the
experiences we have learnt from in that is...that if we have consistency across
the jurisdictions we can talk about models and look at [the] principles. In a
sense we did some work around this when SCAG last dealt with organised crime
matters. I think that was about two years ago, and that was when there was a
bit of activity around proceeds generally. On the back of that the Commonwealth
introduced its unexplained wealth provisions. It is about talking to the states
and territories and seeing whether they agree that this is the best way to deal
with the problem in their jurisdictions.
The Attorney-General and Minister for Justice of New South Wales, the
Hon Greg Smith, SC, was of the view that sufficient harmonisation could be
achieved through a model legislation process. The Attorney-General referred to
similar processes around outlaw motorcycle gang legislation, stating that a
similar harmony could be achieved in relation to unexplained wealth.
The committee notes that many national schemes have been created through
model laws. In practice, model laws may easier to negotiate, relative to
obtaining a referral of powers. However, the committee is aware of criticism of
the use of model legislation, such as in the establishment of the National
Classification Scheme, under which significant differences remain between
states and territories. While model laws may serve to improve upon the status
quo, the committee notes that the Commonwealth would remain limited in its ability
to enact an effective unexplained wealth regime.
The Attorney-General's Department informed the committee that another
option for achieving nationally consistent unexplained wealth laws could be the
development of guiding principles in relation to unexplained wealth.
The development of guiding principles would be a simpler option than a
referral of powers or the development of model laws, as it would not require
all jurisdictions to agree on specific legislative text for referral or
implementation. However, guiding principles may result in inconsistencies
between jurisdictions in the detail of legislation, undermining the desired
outcome of national consistency.
Furthermore, the committee notes that the development of guiding principles
would not remove the need for Commonwealth laws to require a link to an offence
within Commonwealth power. As a result, the use of guiding principles would not
enable the establishment of the type of national unexplained wealth laws
envisioned by the committee, although they may serve to inform negotiations in
the pursuit of a stronger, national scheme.
Referral of powers
As described in Chapter 3 of this report, the Australian Constitution
includes a means by which states can refer power to the Commonwealth to enable
them to legislate in a particular are. In this case, a referral of power would
involve the states and territories formally agreeing to allow the Commonwealth
to legislate in relation to unexplained wealth.
AGD advised the committee that there are a number of different types of
- subject referrals, whereby a general subject matter is referred
to the Commonwealth, without any specification as to how the Commonwealth is to
deal with it;
- text referrals, whereby the Commonwealth is given the necessary
power to enact the text of a particular Bill; and
hybrid referrals, generally referring to a situation where a lead
state refers power to the Commonwealth to create relevant legislation, and
other states subsequently adopt the Commonwealth law and simultaneously give an
amendment referral to the Commonwealth.
The AFP noted that referral of powers from the States to the
Commonwealth could provide a means to establish an unexplained wealth regime
that did not require a link to a Commonwealth offence, stating:
There are a number of ways of that being overcome. One is a
referral of powers from the states to the Commonwealth...What we have put in
our submission is the need for consistent legislation. We have legislation in
Western Australia and the Northern Territory, and then we have the Commonwealth
legislation. We believe there is a gap that exists because of the
constitutional issue, but there is also a gap that exists because of criminals
living in other states.
The ACC indicated it might be possible to look at referral of powers, or
possibly the expansion of the taxation or money-laundering legislation.
The Attorney-General's Department saw referral of powers as a preferred
Our preferred approach, if it were possible—in an ideal world—would
be a reference of powers. I think a reference of powers so that there could be
a single law would be the best way to have the nationally consistent approach.
References of powers could be approached in a range of
different ways, obviously. The intended outcome would be a situation where, by
referring powers, the Commonwealth had a broader ability and would not
necessarily need a connection to a Commonwealth offence in the laws. But, of
course, states and territories would still be able to act themselves under that
That would usually be the way. I should say, just as a matter
of caution, that each of the different referral of powers schemes has had some
slight differences. 
The committee is of the view that a referral of power from states and
territories would provide the most effective framework for establishing
effective and consistent national unexplained wealth provisions.
Specifically, a referral of powers provides the best mechanism for
surmounting Constitutional issues discussed in Chapter 3, whereby a head of
power is not available to support unexplained wealth provisions that do not
rely on proving that an a person of interest has committed an federal offence
or state offence with a federal aspect.
The difficulties in securing a referral of powers should not be
underestimated. The committee understands that some states and territories may
fear any amendment of existing effective unexplained wealth regimes. For
example, the NSW Attorney-General informed the committee that:
I do not think referral is the best way to deal with it. I am
not bragging but I think our state is doing well in this area and it would be
very difficult to convince us that we should refer the power when it is working
well. But, just as with the outlaw bikie legislation and other laws to do with
organised crime, I think there has to be as much consistency as we can possibly
Similarly, achieving an agreement on the appropriate balance between law
enforcement outcomes and the protection of civil rights across jurisdictions
may not be easy. Despite these difficulties, the committee recognises that an
effective national approach to unexplained wealth would be best achieved
through a referral of powers to the Commonwealth, facilitating the development
of a truly national approach.
The committee therefore recommends that the Australian Government seek a
referral of powers from states and territories for the purpose of establishing
a national unexplained wealth provisions that do not require a link to a predicate
offence. In practice, the committee notes that the simplest course of action
may be to seek a 'hybrid' referral, commencing with one state or territory. As
Mr Iain Anderson, AGD, explained:
The hybrid referral is the more common way of dealing with references
at the moment. One possible approach would be to have a reference of power to
adopt the Northern Territory model. Then the other states and territories would
join in...I indicated last time that I gave evidence to the committee that no
reference of powers is straightforward. There are a number of matters of detail
to work through...
On the other hand, we have a number of very successful models
of references as well. The detail is not a reason not to go down that path. We
believe that a reference of powers is strongly desirable. It is a fairly common
model to have one jurisdiction on side at the time that the Commonwealth
legislates, for example, under the hybrid model.
The committee notes that a subject referral would be the most effective
form of referral, but political realities may necessitate other forms, such as
a text or hybrid referral.
4.67 The committee recommends 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 by having to prove a predicate offence.
Using state legislation
In addition to a referral of powers to the Commonwealth from the states,
it may also be possible for Commonwealth officers to instead cooperate with
state jurisdictions to use state-based legislation. When put to AGD, Mr Iain
That would certainly be a reasonable way of doing it as well.
An issue that would need to be addressed then would be making sure that each
state had the ability to share proceeds. Not all states currently have the
ability to share proceeds in their legislation. If we went down the path of having
states with the legislation and the Commonwealth assisting them, say, then we
would want to make sure that at least some of the proceeds could flow back.
The committee notes that this could be a useful mechanism to adopt prior
to the achievement of a national scheme or if the Commonwealth failed to obtain
a referral of powers and instead led the establishment of model legislation.
Equitable sharing program
A subsidiary issue relating to cooperation between state and federal law
enforcement agencies, and international partners, is the sharing of seized
assets between the jurisdictions. In its submission to the inquiry, the AFP noted
the importance of international cooperation, submitting:
The United Nations Convention Against Corruption (to which
Australia is a party) obliges parties to the Convention to share profits of
crime where assistance in the recovery of those profits contributes to legal
enforcement cooperation. Part 4-3 of PoCA provides for the making of payments
to foreign countries under the ‘equitable sharing program’. The equitable
sharing program refers to arrangements under which the Commonwealth shares,
with a foreign country, a proportion of any proceeds of any unlawful activity
recovered under a Commonwealth law if, in the Minister’s opinion, the foreign
country has made a significant contribution to the recovery of those proceeds
or to the investigation or prosecution of the unlawful activity.
There have been a number of successful examples of sharing
under the program. Countries with which equitable sharing has occurred include
China, Indonesia and Singapore.
Furthermore, the AFP noted that Part 4-3 of PoCA also provides for the
making of payments to States and Territories under the equitable sharing
program. Participating States and Territories share proceeds with the
Commonwealth where Commonwealth agencies have made a significant contribution
to the recovery of those proceeds. Mr Tony Negus, Commissioner of the AFP,
explained that the sharing of proceeds was also an issue commonly addressed in
the creation of joint taskforces, stating:
The law enforcement methodology of this century is very much
one of joint partnerships. At the very beginning of any of these investigations
we sign a joint agency agreement in which the issues of proceeds and asset
confiscation are discussed and agreed to. The appropriate sharing of those
assets between Commonwealth and state regimes is also settled and agreed.
However, the AFP informed the committee that some Australian
jurisdictions do not have reciprocal sharing provisions in their legislation
and are currently unable to share proceeds that they recover.
The AFP therefore proposes some improvements to equitable sharing arrangements
[T]he AFP considers that current equitable sharing processes
could benefit from non-participating States and Territories developing
legislative provisions to enable the sharing of confiscated proceeds with
State, Territory, Commonwealth and international jurisdictions. Ensuring that
all jurisdictions can share proceeds with each other would enhance cooperation
on criminal asset confiscation matters.
The committee encourages equitable sharing programs to be put in place
where possible, to make joint work on proceeds of crime matters easier. The
development of effective sharing programs could be further negotiated in the
course of establishing a national unexplained wealth regime.
Mutual assistance reforms
'Mutual assistance' describes the process by which jurisdictions provide
and obtain formal government-to-government assistance in criminal
investigations and prosecutions, and some criminal asset confiscation matters.
For example, the AFP informed the committee that under the Mutual
Assistance in Criminal Matters Act 1987 (MA Act), Australia can register
and enforce both conviction and non-conviction based foreign forfeiture and
pecuniary orders (a foreign proceeds of crime order). Once registered, a
foreign proceeds of crime order can be enforced as if it were an Australian
proceeds of crime order.
However, because unexplained wealth investigations and proceedings are
non-conviction based and do not necessarily contain a link to a criminal
offence, they fall outside the scope of the mutual assistance regime. The AFP may
therefore find it difficult to refute a claim by an individual that their
wealth was derived from legitimate overseas sources due to an inability to
obtain evidence from foreign jurisdictions in relation to unexplained wealth
Similar issues may arise in the mutual assistance agreements between
Australian jurisdictions. As such agreements are based on the use of
traditional conviction-based or civil offence proceedings, it is possible that
information could not be shared and orders could not be enforced in the case of
unexplained wealth proceedings.
Negotiations over the creation of a national unexplained wealth scheme
may therefore require analysis and reform of domestic law enforcement
In the case of international impediments, the AFP proposed that the MA
Act be amended to allow Australia to request assistance of, and provide
assistance to, foreign countries in relation to unexplained wealth matters.
This was a view echoed by Commissioner Mal Hyde, South Australia Police,
who informed the committee that a substantial amount of criminal assets were
remitted overseas stating:
...[T]he committee would be well aware of money laundering and
the scale on which that occurs. So any scheme should be looking at how that can
be recouped or frozen and retrieved. That, of course, is a very complex
environment in which to operate. I would suggest—and this is without any
detailed information—that, from a state or territory point of view, that would
be a big limitation for the capacity of the states and territories to trace the
funds in that way, and it may well be that the Commonwealth would need to have
some legislation because of the international treaties that would be involved
and that states and territories might be able to tap into. Eventually, whatever
happens on the type of scheme we get, if the states and territories still have
their own schemes in place then it may well be that they can link up with a
Commonwealth arrangement which is going to be able to reach out and retrieve
funds that have gone offshore.
AGD informed the committee that it is considering legislative options of
this nature, noting that:
- Australia is at the forefront of implementing and developing
unexplained wealth laws, which are relatively new internationally. As a result,
some countries may initially be reluctant to provide information relating to
unexplained wealth proceedings, particularly in situations where there is no
link to an offence.
- AGD is also working to increase awareness of unexplained wealth
laws in its law and justice capacity building programs in the region.
- AGD is open to consideration of other options for improving
The committee is not aware of any international treaties or conventions
which specifically address unexplained wealth. There are, however, conventions
to which Australia is a signatory that address the importance of pursuing the
proceeds of crime.
Victoria Police informed the committee that the notion of confiscation
of unexplained wealth in international agreements can be traced back as far as
the United Nations Convention against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances (1988). The Convention stated that 'each party consider
ensuring that the onus of proof be reversed regarding the lawful origin of
alleged proceeds or other property liable to confiscation.'
The recommendations in that convention were reinforced through the
United Nations Convention Against Transnational Organised Crime (2000) and the
United Nations Convention Against Corruption (2003).
Similarly, in 2003, the Financial Action Task Force on Money Laundering
recommended that countries adopt measures laid out in the conventions above,
including confiscation without conviction and requiring persons to demonstrate
the lawful origins of property.
Victoria Police informed the committee that, given the differing
constitutional requirements of parties to these conventions, state parties are
only required to consider implementing such measures to the extent that they
are consistent with the fundamental principles of their law, complicating any
attempt to harmonise laws internationally.
The committee recommends that the Commonwealth Government actively
participate in efforts to establish international agreements relating to
unexplained wealth, noting that crime is an increasingly globalised phenomenon
requiring close international cooperation.
4.88 The committee recommends that the Commonwealth Government actively
participate in efforts to establish international agreements relating to
Developing a plan for a national scheme
The committee notes that the harmonisation of unexplained wealth laws
across Australia will require the investment of political effort by all
concerned. The committee encourages the Commonwealth Government to develop a
plan for undertaking the negotiations, drawing on the various observations and
recommendations in this chapter.
The creation of a plan will provide substance to efforts to create a
national scheme, promoting engagement of the states and territories and
providing accountability in relation to progress. The discussion within this
chapter provides a starting point for such a plan.
The committee considers that immediate steps could be taken to better
coordinate unexplained wealth actions with those states that have enacted
relevant legislation. For example, taskforces including state law enforcement
agencies could be formed, perhaps based on the Criminal Assets Confiscation
Taskforce, to secure cooperation using existing Commonwealth, state and
Negotiations over mutual assistance and equitable sharing programs could
also improve the situation prior to reform of Commonwealth unexplained wealth
The development of national guiding principles on unexplained wealth
could serve as a good starting point in achieving nationally consistent
unexplained wealth laws.
As the committee has recommended, the goal for any plan to harmonise
unexplained wealth laws should be to achieve a referral of power to the
Commonwealth so that it can legislate for a truly effective, nationally
consistent unexplained wealth scheme.
Though achieving this result may take time and effort, the committee
encourages the government to commence this undertaking as soon as possible.
Unexplained wealth laws represent a new form of policing with the potential to
seriously undermine the incentive to become involved in serious and organised
crime. For this reason, the committee wholeheartedly endorses the creation of
an effective national scheme.
4.96 The committee recommends that the Commonwealth Government create and
commit to a plan for the development of national unexplained wealth scheme
including the following elements:
identification and implementation of short-term measures
including cooperation with states with existing unexplained wealth legislation;
- negotiation with States and Territories to create or improve
supporting mechanisms such an equitable sharing programs and mutual assistance
- development of agreed guiding principles around unexplained wealth;
- a final objective of achieving a referral of powers from States
and Territories to enable the Commonwealth to legislate for an effective and
nationally consistent unexplained wealth scheme.
The committee recognises that the Standing Committee on Law and Justice
(formerly the Standing Committee of Attorneys-General) will play a key part in
these developments. The committee therefore recommends that the Commonwealth
Attorney-General immediately place the issue of harmonisation of unexplained
wealth laws on the agenda of the Standing Committee on Law and Justice, in
order to commence discussion of this subject in a timely fashion.
4.98 The committee recommends that the Commonwealth Attorney-General
immediately place the issue of harmonisation of unexplained wealth laws on the
agenda of the Standing Committee on Law and Justice.
Unexplained wealth laws are a relatively new way to protect the
community from the debilitating effects of serious and organised crime, through
disruption of its underlying business model. Effective unexplained wealth
provisions have the potential to fill a gap in traditional law enforcement
models. In cases where it is not possible to catch the ringleaders of organised
crime through traditional techniques, unexplained wealth provisions offer a way
to remove the incentive to participate in criminal activity, to the benefit of
the wider community.
Nationally consistent unexplained wealth provisions would be a powerful
new tool supporting the national response to serious and organised crime. The
committee encourages all Australian jurisdictions to work together to deliver
the tools needed to ensure that crime does not pay.
Mr Chris Hayes MP
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