Sharing

From the explanatory memo to the Crimes Legislation Amendment (Proceeds of Crime and Other Measures) Bill 2015 (Cth), which features provisions regarding vetting and information sharing -

1. This Bill amends the Proceeds of Crime Act 2002 (POC Act), Criminal Code Act 1995 (Criminal Code), Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), and the AusCheck Act 2007 (AusCheck Act).

2. The Bill contains a range of measures to improve and clarify Commonwealth criminal justice arrangements, including:

• · amending the POC Act to clarify the operation of the non-conviction based proceeds of crime regime in response to recent court decisions 

• · amending the Criminal Code to insert two new offences of false dealing with accounting documents ï‚· amending the serious drug offences in Part 9.1 of the Criminal Code to clarify the definitions of the terms 'drug analogue' and 'manufacture' and ensure that they capture all relevant substances and processes 

• · clarifying and addressing operational constraints identified by law enforcement agencies with the AML/CTF Act, and expanding the list of designated agencies authorised to access AUSTRAC information to include the Independent Commissioner Against Corruption of South Australia 

• · clarifying and extending the circumstances under which AusCheck can disclose AusCheck background check information to the Commonwealth and to state and territory government agencies performing law enforcement and national security functions. 

4. Schedule 1 will amend the POC Act to clarify the operation of the non-conviction based confiscation regime provided under that Act.

5. The non-conviction based forfeiture scheme is an essential tool under the POC Act, which is designed to target those who distance themselves from commission of offences, but profit as a result of illegal activity. Under the POC Act, a proceeds of crime authority (the Commissioner of the Australian Federal Police or the Commonwealth Director of Public Prosecutions) may apply to restrain property reasonably suspected of being the proceeds of crime, without requiring any person to be charged. The restrained property may later be forfeited if the court is satisfied on the balance of probabilities that the property is proceeds of crime.

6. The non-conviction based scheme operates in addition to the conviction-based forfeiture scheme. Section 319 of the POC Act provides that the fact that criminal proceedings have been instituted or have commenced (whether or not under the POC Act) is not a ground on which a court may stay proceedings under this Act that are not criminal 2 proceedings. This reflects the Parliament's intention that the non-conviction based scheme could operate even where criminal proceedings are on foot.

7. The measures in Schedule 1 of the Bill address issues relating to the non-conviction based forfeiture scheme raised in two court decisions - Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 ('Zhao and Jin') and In the matter of an application by the Commissioner of the Australian Federal Police [2015] VSC 390 ('Zhang').

8. Schedule 1 of the Bill contains amendments to the POC Act following these decisions to: ï‚· clarify the principles a court may consider when granting an application for a stay of proceedings under the POC Act, including providing grounds on which a stay is not to be granted ï‚· strengthen protections against disclosure and use of material related to the confiscation proceedings in subsequent criminal proceedings ï‚· clarify that where an exclusion application has been made pursuant to Division 3 of Part 2-1 (dealing with restraining orders) of the POC Act, this application must be heard and finalised prior to the hearing of a forfeiture application.

9. Schedule 2 will amend the Criminal Code to create two new offences of false dealing with accounting documents. These offences implement Australia's obligation as a party to the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention). Article 8 of the Convention requires parties to create offences of false accounting for the purposes of concealing or enabling bribes to a foreign public official.

10. The two new offences are inserted in a new Division of the Criminal Code titled 'Division 490-False dealing with accounting documents', in a new Part titled 'Part 10.9- Accounting records'. The first of the two new offences, at section 490.1 of the Criminal Code, applies where a person makes, alters, destroys or conceals an accounting document, or where a person fails to make or alter an accounting document that the person is under a duty to make or alter, with the intention that the person's conduct would facilitate, conceal or disguise the receiving or giving of a benefit that is not legitimately due, or a loss that is not legitimately incurred. The second offence, at section 490.2, applies in the same circumstances as the first offence, but where the person is reckless as to whether the benefit or loss would arise.

11. Schedule 2 provides for penalties proportionate to the differing fault element structure of each offence. The offence at section 490.1 imposes a maximum penalty for an individual of 10 years' imprisonment, a fine of 10 000 penalty units ($1.8 million), or both. The maximum penalty for a body corporate is the greater of: (a) 100 000 penalty units ($18 million); (b) (where the court can determine the value of the benefit) three times the value of the benefit obtained by the body corporate and any related body corporate from the offence; and (c) (where the court cannot determine the value of the benefit) 10 per cent of the annual turnover of the body corporate during the 12 months ending at the end of the month during which the conduct constituting the offence occurred. For the second offence, at section 490.2, to which the lower fault element of recklessness attaches, the penalties are half of the penalties for the offence at section 490.1. 3

12. The offences will apply both within Australia and overseas, in prescribed circumstances where constitutional power permits. Section 490.6 provides that it is necessary to seek the Attorney-General's consent to commence proceedings where the alleged conduct occurs outside Australia and where the alleged offender is not an Australian citizen, an Australian resident or a body corporate incorporated by or under a law of the Commonwealth or of a state or territory. This requirement to seek the Attorney-General's consent seeks to ensure that, in circumstances where the nexus between the offending conduct and Australia may not be obvious, the Attorney-General is given the opportunity to review relevant considerations concerning international law and comity prior to deciding at his or her discretion whether to consent to the commencement of proceedings. It is intended that the Office of International Law in the Attorney-General's Department would be consulted prior to seeking the Attorney-General's consent.

13. Schedule 3 will amend the serious drug offences in Part 9.1 of the Criminal Code to clarify the definitions of the terms 'drug analogue' and 'manufacture' and ensure that they capture all relevant substances and processes. The Schedule makes make two amendments to the definition of 'drug analogue' in section 301.9 of the Criminal Code.

14. First, it clarifies that the terms 'addition' and 'replacement' have their ordinary meaning, not their scientific meaning. This change is necessary to remove ambiguity in the section and ensure that it operates to capture all substances that are structurally similar to listed controlled and border controlled drugs.

15. Secondly, the Schedule clarifies that a substance will be a drug analogue of a listed controlled drug even if that substance is also listed as a border controlled drug (and vice versa). These amendments are necessary to remove ambiguities in the section, highlighted by the decision of the ACT Supreme Court in R v Poulakis (No. 3) [2015] ACTSC 191.

16. The Schedule also amends the definition of the term 'manufacture' in section 305.1 to ensure that it applies to processes where a substance is converted from one form into another, but which do not necessarily create a new substance or change the chemical structure of the substance. These changes are necessary to remove ambiguities in the definition, highlighted by the decision of the Victorian Court of Appeal in Beqiri v R (2013) 37 VR 219.

17. Schedule 4 will amend the AML/CTF Act to clarify and address operational constraints identified by law enforcement agencies, and enable a wider range of designated officials and agencies to access and share information obtained under the AML/CTF Act. These amendments will:

• · list the Independent Commissioner Against Corruption of South Australia (ICAC SA) as a 'designated agency' under section 5 of the AML/CTF Act, which will enable it to access AUSTRAC information (subject to the requirements of section 126 of that Act) 

• · enable the AFP and the ACC to share AUSTRAC information with the International Criminal Police Organisation (INTERPOL) and the European Police Office (Europol), and provide for a regulation-making power to enable additional international bodies to be prescribed in future 

• · clarify the circumstances in which entrusted investigating officials of the Australian Federal Police (AFP), the Australian Crime Commission (ACC), the Department of  Immigration and Border Protection (DIBP), and the Australian Commission for Law Enforcement Integrity (ACLEI) may disclose information obtained under section 49 of the AML/CTF Act.

The AusCheck amendments are described thus -

18. Schedule 5 will make amendments to Part 1 and Division 1 of Part 3 of the AusCheck Act to clarify and extend the circumstances under which AusCheck can share AusCheck scheme personal information. Specifically, the amendments in Schedule 5 will enable AusCheck to directly share AusCheck scheme personal information with a broader range of Commonwealth agencies and with state and territory government agencies performing law enforcement and national security functions.

19. AusCheck scheme personal information is defined in subsection 4(1) of the AusCheck Act and includes information relating to an individual's identity and information obtained as a result of an AusCheck national security background check. The purpose of these amendments is to support Commonwealth and state and territory agencies performing law enforcement and national security functions by providing access to AusCheck scheme personal information, as appropriate.

20. AusCheck is a branch within the Attorney-General's Department (AGD) that provides national security background checking services for the Aviation Security Identification Card (ASIC), Maritime Security Identification Card (MSIC), and National Health Security (NHS) check regimes. This background check is intended to identify individuals who should not be allowed access to secure areas of Australia's airports or seaports or to security sensitive biological agents (SSBA). A background check, defined in section 5 of the AusCheck Act, is an assessment relating to an individual's identity, criminal history, security assessment, and citizenship status, residency status or entitlement to work in Australia. Background checks are conducted under the Aviation Transport Security Act 2004 (ATSA), the Maritime Transport and Offshore Facilities Security Act 2003 (MTOFSA), or other primary legislation or legislative instruments.

21. AusCheck undertakes background checking activities within a legislative framework comprising the AusCheck Act and the AusCheck Regulations 2007 (AusCheck Regulations). This framework is supported by Guidelines for Accessing Information on the AusCheck Database (AusCheck Guidelines).

22. AusCheck uses information provided by an applicant for an ASIC, MSIC or NHS clearance to request a security assessment from the Australian Security Intelligence Agency (ASIO), a criminal history check from CrimTrac (which accesses all state and territory criminal convictions) and, if necessary, a citizenship status check from the Department of Immigration and Border Protection. Providing a centralised government background checking mechanism for these sectors means that private organisations and industry bodies do not need to deal with sensitive information, including personal and criminal history information. The vast majority of AusCheck activities relate to the ASIC and MSIC schemes, which are established under the Aviation Transport Security Act 2004 and Maritime Transport and Offshore Facilities Security Act 2003. The Department of Infrastructure and Regional Development (Infrastructure) administers these schemes.

23. The information handling provisions in AusCheck's legislative framework are primarily addressed at obtaining, using and disclosing information for purposes connected to background checking. There is some scope for information sharing for other purposes-- section 14(2)(b)(ii) and (iii) allow AusCheck to use or disclose information in responding to a 5 national security incident and for law enforcement or security intelligence purposes by the Commonwealth, or by Commonwealth authorities with law enforcement or national security functions.

24. AusCheck is limited in its ability to share AusCheck Scheme personal information. Currently, AusCheck can share with Commonwealth and relevant Commonwealth authorities (bodies incorporated) with functions relating to law enforcement or national security. These restrictions limit the flow of relevant information to other Commonwealth agencies dealing with national security and crime threats. They also prevent AusCheck from sharing relevant information with Commonwealth agencies which are not traditionally considered to be law enforcement agencies but which may require access to the information for law enforcement or national security purposes. AusCheck is also unable to directly share information with state and territory agencies with functions relating to law enforcement or national security, including state and territory police. These restrictions are at odds with the significant role these agencies play in law enforcement and national security, and the collaborative approach that is necessary to combat the cross-border threats of terrorism and serious crime. This also causes particular challenges for agencies that undertake law enforcement and national security operations at secure airport and maritime port areas, such as state and territory led police taskforces targeting drug importation.

25. In order to address these challenges and support the efforts of agencies performing law enforcement and national security functions, Schedule 5 to the Bill amends the AusCheck Act to enable AusCheck to directly share information with state and territory authorities and with a broader range of Commonwealth authorities. This sharing will continue to be limited to the performance of functions relating to law enforcement or national security, and be subjected to strong safeguards.

Safeguards

26. Appropriate safeguards are in place to protect the disclosure of AusCheck scheme personal information under the AusCheck Act.

27. Criminal offences are included in section 15 of the AusCheck Act which makes it an offence to unlawfully disclose AusCheck scheme personal information. An offence under this section is punishable by up to two years' imprisonment. These offences provide additional protections for information obtained by AusCheck and create an obligation on AusCheck staff to ensure information is shared appropriately at all times.

28. AusCheck issues privacy notices to applicants advising them how their information will be used and to acquire consent for the collection and disclosure of their personal information. Each applicant receives a privacy notice and the privacy policy is also published on the AusCheck web page of the AGD website.

29. The Secretary of the AGD issues the AusCheck Guidelines under regulation 15 of the AusCheck Regulations which establish a compulsory framework for AusCheck staff to consider in determining the legality of requests for personal information under subparagraph 14(2)(b)(iii) of the AusCheck Act. The AusCheck Guidelines implement recommendation 46 of the AusCheck Privacy Impact Assessment for the development of a protocol relating to the disclosure of AusCheck scheme personal information.

30. The AusCheck Guidelines are developed in consultation with agencies that will be receiving information, to ensure appropriate contact officers and authorisations are in place. The AusCheck Guidelines are published on the AusCheck webpage. They require Commonwealth agencies seeking access to AusCheck scheme personal information to be a 'recognised Commonwealth authority' or accredited as an 'authority to use information for law enforcement and national security purposes'. In order to be accredited, agencies must provide information to AusCheck establishing its law enforcement or national security functions and legislative or other authority supporting this function. Information is only shared with nominated Senior Executives, and written undertakings outline the law enforcement or national security purposes for the information.

31. The AusCheck Guidelines will continue to apply how information is shared with Commonwealth authorities under subparagraph 14(2)(b)(iii).

32. To ensure appropriate accreditation and protections for information shared with state and territory authorities under new subparagraph 14(2)(b)(iiia), state and territory authorities will also be subject to AusCheck Guidelines established under regulation 15 of the AusCheck Regulations.

33. AusCheck has memoranda of understandings (MOUs) in place with relevant authorities that set out the key principles and obligations relating to the sharing of AusCheck scheme personal information. The MOUs outline the purposes for which AusCheck information may be shared, and place obligations on receiving agencies to manage and control access to AusCheck information at all times so as to protect the privacy of individuals and the confidentiality of the information received.

34. These safeguards will continue to apply to information disclosed under new subparagraphs 14(2)(b)(iii) and (iiia) to ensure AusCheck scheme personal information is only accessed by Commonwealth, state and territory agencies performing law enforcement or national security functions, and this information is dealt with appropriately within these receiving agencies. Agencies that receive AusCheck scheme personal information are also required to comply with all relevant privacy, recordkeeping, records disposal, auditing and reporting requirements.