Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 - Commentary on Ministerial Responses [2019] AUSStaCSBSD 170 (5 December 2019)

• Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019
• Reversal of the evidential burden of proof 4

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Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019

Purpose	This bill seeks to amend Acts in relation to combatting of money laundering and financing of terrorism and the Australian Federal Police to: • expand the circumstances in which reporting entities may rely on customer identification and verification procedures undertaken by a third party; • prohibit reporting entities from providing a designated service if customer identification procedures cannot be performed; • increase protections around correspondent banking; • expand exceptions to the prohibition on tipping off to permit reporting entities to share suspicious matter reports and related information with external auditors, and foreign members of corporate and designated business groups; • provide a simplified and flexible framework for the use and disclosure of financial intelligence; • create a single reporting requirement for the cross-border movement of monetary instruments including physical currency and bearer negotiable instruments; • amend the Criminal Code to clarify that sash used in undercover operations is considered 'proceeds of crims' for the purpose of Commonwealth money laundering offences; • expand the rule-making powers of the Chief Executive Officer of AUSTRAC; • make it an offence for a person to dishonestly represent that a police award has been conferred on them
Portfolio	Home Affairs
Introduced	House of Representatives on 17 October 2019
Bill status	Before the House of Representatives

Reversal of the evidential burden of proof ^[4]

2.7 In Scrutiny Digest 8 of 2019 the committee requested the minister's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in this instance. The committee's consideration of the appropriateness of each provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences.^[5]

Minister's response^[6]

2.8 The minister advised:

As set out in the Committee's Scrutiny Digest No. 8 of 2019 (p. 5-7), the Committee has identified that the Bill creates a number of offence-specific defences which require a defendant to establish one or more matters. I have considered the comments made by the Committee and will be tabling an Addendum to the Bill's Explanatory Memorandum to address the Committee's concerns (see enclosed).
As identified by the Committee, it is ordinarily the duty of the prosecution to prove all of the elements of an offence. However, the Guide to Framing Commonwealth Offences (the Guide) (at p. 50) provides that including a matter as an offence specific defence may be appropriate where:

• the matter is peculiarly within the knowledge of the defendant; and

• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.

The Guide also indicates that it may also be appropriate to include a matter as an offence-specific defence where only one of the above tests can be satisfied (see p. 51 of the Guide).
The offence-specific defences in the Bill allow Australian Transaction and Reports Analysis Centre information to be recorded, disclosed or otherwise used for specific purposes. The purpose of a defendant in recording, disclosing or otherwise using this information is a matter that is peculiarly within their knowledge. While external circumstances may be used as evidence of the existence of this underlying purpose, the defendant is the only person who can state with certainty their purpose in recording, disclosing or using that information.
Noting this, it would be significantly more difficult and costly for the prosecution to prove that the defendant did not record, disclose or otherwise use the information for a permitted purpose, than it would be for the defendant to point to the permitted purpose underpinning their conduct.
For example, if an official of the Australian Transaction and Reports Analysis Centre disclosed information to a lawyer in breach of the offence provision at subsection 126(1) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the prosecution would be required to prove beyond reasonable doubt that the official did not disclose the information for a permitted purpose under subsections 126(2) or (3).
As the official's purpose for making the disclosure was only known to themselves, this would often be impossible to prove in practice. The official, on the other hand, should be readily able to point to the purpose underpinning the disclosure. If this is done, the prosecution must refute the defence beyond reasonable doubt.
As such, the offence-specific defence provisions in the Bill are consistent with Commonwealth criminal law policy and are necessary in order to preserve the integrity of Australia's anti-money laundering and counter-terrorism financing regime. The provisions will ensure agencies are empowered to better investigate and prosecute offenders.

Committee comment

2.9 The committee thanks the minister for this response. The committee notes the minister's advice that the defendant's purpose for recording, disclosing or otherwise using information that is collected by Australian Transaction and Reports Analysis Centre would be peculiarly within the knowledge of the defendant. The committee further notes the minister's advice that while external circumstances may be used as evidence of the existence of this underlying purpose, the defendant is the only person who can state with certainty their purpose in recording, disclosing or using that information.

2.10 The committee also notes the minister's advice that it would be significantly more difficult and costly for the prosecution to prove that the defendant did not record, disclose or otherwise use information for a permitted purpose, than it would be for the defendant to raise evidence they had a permitted purpose.

2.11 The committee welcomes the minister's undertaking to table an addendum to the bill's explanatory memorandum to include further information about the use of offence-specific defences in response to the committee's comments. Noting the importance of explanatory materials as a point of access to understanding the law and, if needed, as extrinsic material to assist in interpretation, the committee looks forward to an addendum being tabled as soon as is practicable.

2.12 In light of the minister's undertaking and the explanation provided by the minister, the committee makes no further comment on this matter.

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[4] Items 24, 26, 50, 51, 55 and 75 of Schedule 1, proposed subsections 123(5B), 126(7), 126(7AB), 50A(2), 121(2), 121(3), 126(2), 126(3), 126(5), 129(2) and 53(6). The committee draws senators attention to these provision pursuant to Senate Standing Order 24(1)(a)(i).

[5] Senate Scrutiny of Bills Committee, Scrutiny Digest 8 of 2019, pp. 5-7.

[6] The minister responded to the committee's comments in a letter dated 27 November 2019. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 10 of 2019 available at: www.aph.gov.au/senate_scrutiny_digest