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Legal and Regulatory Approaches to Counter-Terrorist Financing: The Case of Australia

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Abstract

This chapter examines Australia’s Counter-Terrorism Financing/Anti-Money Laundering (CTF/AML) measures and situates them within Australia’s broader (legislative) response to terrorism. It examines how Australian federal law criminalises the financing of terrorism and considers the key legislative changes enacted between 2002 and 2014. It then focuses on proceeds of crime legislation which plays a complementary role to the CTF/AML offences. The chapter also provides an account of the key features of Australia’s oversight and reporting mechanisms which are associated with the criminal and asset recovery regimes. It argues that Australia’s framework for criminalising the financing of terrorism is overdue for comprehensive reform.

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Notes

  1. 1.

    See Jenny Hocking, Beyond Terrorism: The Development of the Australian Security State (Allen and Unwin 1993) 123–40.

  2. 2.

    The explosion killed 2 garbage collectors and a police officer and injured 11 others. At the time of the explosion, the Hilton Hotel was hosting the first Commonwealth Heads of Government Regional Meeting. While the bombing has been attributed to the Ananda Marga, an Indian socio-spiritual organisation, there is no consensus over the identity of the perpetrators or the exact reasons for the attack.

  3. 3.

    Several have related to hostage taking: Senate Foreign Affairs, Defence and Trade References Committee, Held Hostage (2011). For a list of ‘declared’ attacks for which compensation became payable, see <www.humanservices.gov.au/customer/services/centrelink/australian-victim-terrorism-overseas-payment> accessed 9 April 2017.

  4. 4.

    See Michael Thawley and Blair Comley, Martin Place Siege (Commonwealth of Australia and State of New South Wales 2015).

  5. 5.

    Farhad Khalil Mohammad Jabar was shot dead after killing a civilian working for the police. Several persons have been charged, some with terrorism offences.

  6. 6.

    It has been recently estimated that around 110 Australians are currently fighting or engaged with terrorist groups in Syria and Iraq. Approximately 40 have returned to Australia and about 190 people in Australia actively support extremist groups in Syria and Iraq. AUSTRAC, ‘Terrorism Financing. South East Asia and Australia Regional Risk Assessment 2016’ (2016), 12 <www.austrac.gov.au/sites/default/files/regional-risk-assessment-SMALL_0.pdf> accessed 27 February 2017.

  7. 7.

    Australian Government, ‘National Terrorism Threat Advisory System’ <www.nationalsecurity.gov.au/Securityandyourcommunity/Pages/National-Terrorism-Threat-Advisory-System.aspx> accessed 27 February 2017.

  8. 8.

    Protective Security Review, Report (Unclassified Version) (1979).

  9. 9.

    Ibid. xv.

  10. 10.

    The resulting report, Counter Terrorism Capabilities in Australia, was not made public. However, subsequent reports indicate that the review reported ‘general satisfaction with co-operation between [intelligence and law enforcement] agencies in Australia’ but ‘pointed to the need for some improvement in the information flow to Commonwealth Ministers during a terrorist incident’. The Hon. Mick Young, ‘Counter Terrorism in Australia’ Ministerial Statement, House of Representatives, Debates (17 October 1986) 2295.

  11. 11.

    Attorney-General’s Department, Review of Commonwealth Criminal Law, Final Report (Australian Government Publishing Service 1991).

  12. 12.

    Michael Codd AC, ‘Review of Plans and Arrangements in Relation to Counter-Terrorism tabled 24 March 1994’ (1994) Parliamentary Paper No 151/1994.

  13. 13.

    Frank Honan and Alan Thompson, Report of the 1993 SAC-PAV Review (1994).

  14. 14.

    For an overview, see Australian Government, ‘Australia’s Counter-Terrorism Laws’ <www.ag.gov.au/NationalSecurity/Counterterrorismlaw/Pages/AustraliasCounterTerrorismLaws.aspx> accessed 9 April 2017.

  15. 15.

    For a critique from the perspective of international human rights law, see Christopher Michaelsen, ‘International Human Rights on Trial: The United Kingdom’s and Australia’s Legal Response to 9/11’ (2003) 25(3) Sydney Law Review 275.

  16. 16.

    For an overview and analysis, see Jenny Hocking, Terror Laws: ASIO, Counter Terrorism and the Threat to Democracy (UNSW Press 2004); George Williams, ‘A Decade of Australian Anti-Terror Laws’ (2011) 35(3) Melbourne University Law Review 1136.

  17. 17.

    Greg Carne, ‘Gathered Intelligence or Antipodean Exceptionalism? Securing the Development of ASIO’s Detention and Questioning Regime’ (2006) 27(1) Adelaide Law Review 1.

  18. 18.

    Andrew Lynch, ‘Legislating with Urgency—The Enactment of the Anti-Terrorism Act [No. 1] 2005’ (2006) 30(3) Melbourne University Law Review 747; Clive Walker, ‘The Reshaping of Control Orders in the United Kingdom: Time for a Fairer Go, Australia!’ (2013) 37(1) Melbourne University Law Review 143; Oscar Roos, Benjamin Haywood, and John Morss, ‘Beyond the Separation of Powers: Judicial Review and the Regulatory Proscription of Terrorist Organisations’ (2010) 35(1) University of Western Australia Law Review 81.

  19. 19.

    Simon Bronitt and James Stellios, ‘Sedition, Security and Human Rights: ‘Unbalanced’ Law Reform in the ‘War on Terror” (2006) 30(3) Melbourne University Law Review 923; David Hume and George Williams, ‘Australian Censorship Policy and the Advocacy of Terrorism’ (2009) 31(3) Sydney Law Review 381.

  20. 20.

    Nicola McGarrity, ‘The Criminalisation of Terrorist Financing in Australia’ (2012) 38(3) Monash University Law Review 55.

  21. 21.

    Jude McCulloch and Bree Carlton, ‘Preempting Justice: Suppression of Financing of Terrorism and the “War on Terror”’ (2006) 17(3) Current Issues in Criminal Justice 397.

  22. 22.

    Commonwealth of Australia, ‘Parliamentary Debates’ Senate (24 June 2002) 2444 (Chris Ellison).

  23. 23.

    For further discussion, see Chap. 36 (Powell) in this collection. This broad international statement is distinct from the more specific requirements to implement sanctions under the UNSC Res 1267 regime, as described below.

  24. 24.

    Law Council of Australia, Submission to the Senate Legal and Constitutional Legislation Committee (2002) 32.

  25. 25.

    Ibid.

  26. 26.

    Ibid.

  27. 27.

    Australia ratified the UN Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances in November 1992; the International Convention for the Suppression of the Financing of Terrorism in September 2002; the UN Convention against Transnational Organized Crime in May 2004; and the UN Nations Convention against Corruption in December 2005.

  28. 28.

    The Asia/Pacific Group on money laundering is a FATF-style regional body housed by the AFP in Sydney. See also Chap. 13 (Chaikin) in this collection.

  29. 29.

    See, for instance, Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Preamble (Cth) (‘AML/CTF Act’).

  30. 30.

    Victoria—Confiscation Act 1997 (VIC); New South Wales—Criminal Assets Recovery Act 1990 (NSW); Confiscation of Proceeds of Crime Act 1989; Western Australia—Criminal Property Confiscation Act 2000 (WA); Northern Territory—Criminal Property Forfeiture Act 2002 (NT); South Australia—Criminal Assets Confiscation Act 2005 and Serious and Organised Crime (Unexplained Wealth) Act 2009 (SA); and Queensland—Criminal Proceeds Confiscation Act 2002 (QLD).

  31. 31.

    The AML/CTF Rules were made pursuant to s 229 of the AML/CTF Act.

  32. 32.

    McGarrity (n 20) 84.

  33. 33.

    Schedule 1 of the Security Legislation Amendment (Terrorism) Act 2002 (Cth) inserted the definition of ‘terrorist act’ into the Criminal Code. For critical discussion, see, for instance, Ben Golder and George Williams, ‘What is ‘Terrorism’? Problems of Legal Definition’ (2004) 27(2) University of New South Wales Law Journal 270.

  34. 34.

    Financial Action Task Force, Third Mutual Evaluation Report on Anti-Money Laundering and Combating the Financing of Terrorism—Australia, 14 October 2005 (FATF/OECD 2005) 33, 91, and 138 (‘MER 2005’).

  35. 35.

    Financial Action Task Force, Anti-Money Laundering and Counter-Terrorist Financing Measures—Australia, Fourth Round Mutual Evaluation Report (FATF/OECD 2015) (‘MER 2015’).

  36. 36.

    Ibid. 141–42.

  37. 37.

    McGarrity (n 20) 63.

  38. 38.

    Ibid. 64.

  39. 39.

    George Syrota, ‘Australia’s Counter-Terrorism Offences: A Critical Study’ (2008) 34(1) University of Western Australia Law Review 103, 128–37.

  40. 40.

    Ibid.

  41. 41.

    Law Council of Australia, Anti-Terrorism Reform Project: A Consolidation of the Law Council of Australia’s Advocacy in Relation to Australia’s Anti-Terrorism Measures (2009) 30.

  42. 42.

    DPP (Cth) v Thomas [2006] VSC 120.

  43. 43.

    R v Benbrika (2009) 222 FLR 433.

  44. 44.

    Autonomous Sanctions Act 2011—Australia also imposes autonomous sanctions regimes, which may supplement UNSC sanctions regimes or be separate from them. For a full description, see Independent National Security Legislation Monitor, Annual Report 7th November 2013 (Commonwealth of Australia 2013).

  45. 45.

    SLI no 73, 2013.

  46. 46.

    SLI no 41, 2008.

  47. 47.

    UN Charter (Sanctions—The Taliban) Regulations 2013 (Cth) (Taliban Regulations) 9, 10; UN Charter (Sanctions Al-Qaida) Regulations 2008 (Cth) (Al-Qaida Regulations) 10, 11.

  48. 48.

    Charter of the United Nations Act 1945 (Cth), s 15(6).

  49. 49.

    Australian Government, ‘Australia and Sanctions: Consolidated List’. The list is publicly available on the Department of Foreign Affairs and Trade’s website <http://dfat.gov.au/international-relations/security/sanctions/pages/consolidated-list.aspx#list> accessed 27 February 2016.

  50. 50.

    Section 9.2 of the Criminal Code provides that a person is not criminally responsible for an offence that has a physical element for which there is no fault element if: (a) at or before the time of the conduct constituting the physical element, the person considered whether or not facts existed and is under a mistaken but reasonable belief about those facts and (b) had those facts existed, the conduct would not have constituted an offence.

  51. 51.

    R v Vinayagamoorthy [2010] VSC 148.

  52. 52.

    But see Andrew Goldsmith, David Gray, and Russel G Smith, ‘Criminal Asset Recovery in Australia’ in Colin King and Clive Walker (eds), Dirty Assets: Emerging Issues in the Regulation of Criminal and Terrorist Assets (Ashgate Publishing 2014).

  53. 53.

    For detailed discussion, see Lorana Bartels, A Review of Confiscation Schemes in Australia (Australian Institute of Criminology 2010).

  54. 54.

    The Proceeds of Crime Act 1987 (Cth) (POCA 1987) was the precursor to the current POCA 2002 legislation. The primary difference was the absence of civil forfeiture provisions in the POCA 1987.

  55. 55.

    In addition to forfeiture orders, there are pecuniary penalty orders (where the court orders an offender to pay an amount equal to the benefit derived by the person from the commission of an offence) and literary proceeds orders (where the court orders an offender to pay an amount calculated by reference to benefits the person has derived through commercial exploitation of his or her notoriety resulting from the commission of an offence).

  56. 56.

    Natalie Skead and Sarah Murray, ‘The Politics of Proceeds of Crime Legislation’ (2015) 38(2) University of New South Wales Law Journal 455, 468.

  57. 57.

    Anthony Gray, ‘The Compatibility of Unexplained Wealth Provisions and ‘Civil’ Forfeiture Regimes with Kable’ (2012) 12(2) Law and Justice Journal 18, 23.

  58. 58.

    Skead and Murray (n 56) 464. See also Christopher Croke, ‘Civil Forfeiture: Forfeiting Civil Liberties? A Critical Analysis of the Crimes Legislation Amendment (Serious and Organised Crime) Act 2010(Cth)’ (2010) 22(1) Current Issues in Criminal Justice 149.

  59. 59.

    Proceeds of Crime Act 2002 (Cth), s 20(1)(d).

  60. 60.

    Christopher Michaelsen, ‘Why Everybody Should Hear Habib’s Story’ The Canberra Times (Canberra, 3 February 2005).

  61. 61.

    Australia’s Federal Prosecution Service, ‘Statement in the Matter of David Hicks’ (24 July 2012) <www.cdpp.gov.au/news/statement-matter-david-hicks> accessed 27 February 2017. Hicks subsequently won his appeal before the US Military Commission Review (David Hicks v USA CMCR 13–004 (2015)) and the Australian government was found to have breached his right to liberty from his imprisonment and the imposition of a control order after transfer from Guantanamo (Hicks v Australia CCPR/C/115/D/2005/2010 (2016)).

  62. 62.

    Crimes (Confiscation of Profits) Act 1985 (NSW); Crimes (Confiscation of Profits Act) 1986 (Vic); Crimes (Confiscation of Profits) Act 1986 (SA); Crimes (Confiscation of Profits) Act 1988 (WA); Crimes (Forfeiture of Proceeds) Act 1988 (NT); Crimes (Confiscation of Profits) Act 1989 (Qld); Proceeds of Crime Act 1991 (ACT); and Crimes (Confiscation of Profits) Act 1993 (Tas).

  63. 63.

    Criminal Assets Recovery Act 1990 (NSW), s 22.

  64. 64.

    In practice, it would seem likely that the matter would be referred to the Commonwealth DPP.

  65. 65.

    For further discussion, see Chap. 13 (Chaikin) in this collection.

  66. 66.

    The TFIU comprises representatives from the AFP, State police, AUSTRAC and receives input from the Australian intelligence community. It is modelled after similar groups such as the National Terrorist Financial Investigation Unit operating in the United Kingdom.

  67. 67.

    Financial Transactions Reporting Act 1988 (Cth), s 16(1)(b)(i).

  68. 68.

    Ibid. s 16(1)(b)(ii).

  69. 69.

    Ibid. ss 16(1)(b)(iii) and (iv). In 2014–2015, 536 STRs were filed, see AUSTRAC (n 6) 14.

  70. 70.

    Financial Transactions Reporting Act 1988 (Cth), ss 16(1A)(b)(i) and (ii).

  71. 71.

    FATF (n 34) 145.

  72. 72.

    Ibid. 91.

  73. 73.

    FATF (n 35) 166.

  74. 74.

    For further discussion of MVTSs see Chap. 42 (Cooper) in this collection.

  75. 75.

    FATF (n 34) 109.

  76. 76.

    Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No 1).

  77. 77.

    Suspension of registration: 2014 (2); 2015 (3); 2016 (8); refusal to renew the registration: 2015 (1); 2016 (2); cancellation of registration: 2014 (6); 2015 (5); 2016 (11); see AUSTRAC, ‘Remittance Registration Actions’ <www.austrac.gov.au/enforcement-action/remittance-registration-actions> accessed 27 February 2017.

  78. 78.

    For a detailed discussion on the Australian experience of alternative remittance services, see David Rees, Money Laundering and Terrorism Financing Risks Posed by Alternative Remittance in Australia (Australian Institute of Criminology 2010).

  79. 79.

    FATF (n 35) 161.

  80. 80.

    Ibid.

  81. 81.

    FATF, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (FATF/OECD 2016), Recommendation 16 and Special Recommendation VII.

  82. 82.

    Financial Transactions Reporting Act 1988 (Cth), s 3.

  83. 83.

    Ibid. s 17B.

  84. 84.

    Financial Transaction Reports Regulations 1990, regg 2 (definition) and 11AA.

  85. 85.

    FATF (n 34) 152.

  86. 86.

    Financial Transactions Reporting Act 1988 (Cth), s 28.

  87. 87.

    FATF (n 35) 162.

  88. 88.

    Financial Transactions Reporting Act 1988 (Cth), ss 15(6) and 29(3).

  89. 89.

    Crimes Act 1914 (Cth), s 3 W; Criminal Code Act 1995 (Cth), ss 400.3–400.9, 102.6 and 103.1.

  90. 90.

    FATF (n 34) 64.

  91. 91.

    Ibid.

  92. 92.

    Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), ss 53 and 55.

  93. 93.

    Ibid. s 53. This ‘disclosure-when-asked’ system enables more targeted use of customs and police resources. For example, officers may request disclosure by particular persons about whom they might already have some relevant intelligence information. See, Anti-Terrorism Bill (no 2) 2005, ‘Explanatory Memorandum’ item 9.

  94. 94.

    Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), ss 53 and 55.

  95. 95.

    Ibid. s 186.

  96. 96.

    Ibid. ss 136 and 137.

  97. 97.

    The AML/CTF Act allows the competent authorities to seize physical currency, where there is suspicion that it may afford evidence of a false declaration or to seize BNIs, where a person has made a false disclosure, see ss 199(5), 199(10), 200(12) and 200(13).

  98. 98.

    FATF (n 35) 139.

  99. 99.

    Ibid. 138.

  100. 100.

    For further discussion of NPOs, see Chaps. 44 (Walker), 45 (Hamin) in this collection.

  101. 101.

    A suspicious financial transaction activity involving an NPO should, in principle, be identified by the providers of other designated services the NPO uses to deposit and transfer funds. For example, banks may report suspicious transactions involving NPOs to AUSTRAC in certain circumstances. For a detailed discussion, see Samantha Bricknell and others, ‘Money Laundering and Terrorism Financing Risks to Australian Non-profit Organisations’ (2011) <www.aic.gov.au/media_library/publications/rpp/rpp114.pdf> accessed 27 February 2017.

  102. 102.

    AUSTRAC (n 6) 14.

  103. 103.

    Ibid.

  104. 104.

    Australian Charities and Not-for-profits Commission Act 2012, as augmented by the Charities Act 2013 (Cth) which introduces a statutory definition of charity.

  105. 105.

    ACNC Act 55–5(1)—55-1(4).

  106. 106.

    FATF (n 35) 146.

  107. 107.

    Ibid. 145.

  108. 108.

    INSLM (n 44); Council of Australian Governments (COAG), Review of Counter-Terrorism Legislation (2013). Earlier reviews of Australian counter-terrorism legislation which touched on CTF aspects include the Report of the Security Legislation Review Committee (‘Sheller Report’) (2006) and the Report of the Parliamentary Joint Committee on Intelligence and Security, Review of Security and Counter Terrorism Legislation (2006).

  109. 109.

    INSLM (n 44) 41–44.

  110. 110.

    Ibid. 44.

  111. 111.

    COAG (n 108) 39–41. The INSLM report of 2013 contains a similar recommendation, see INSLM (n 44) 76.

  112. 112.

    For further discussion, see Chap. 15 (van Duyne, Harvey, and Gelemerova) in this collection.

  113. 113.

    The INSLM has questioned, for example, whether the prosecution burden for terrorism financing offences under the Charter of the UN Act is too high. See INSLM (n 44) 45.

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  1. Faculty of Law, University of New South Wales (UNSW), Sydney, NSW, Australia

    Christopher Michaelsen & Doron Goldbarsht

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  1. Christopher Michaelsen
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Editors and Affiliations

  1. University of Sussex, Falmer, United Kingdom

    Colin King

  2. University of Leeds, Leeds, United Kingdom

    Clive Walker

  3. Notre Dame Law School, Notre Dame, IN, USA

    Jimmy Gurulé

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Michaelsen, C., Goldbarsht, D. (2018). Legal and Regulatory Approaches to Counter-Terrorist Financing: The Case of Australia. In: King, C., Walker, C., Gurulé, J. (eds) The Palgrave Handbook of Criminal and Terrorism Financing Law. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64498-1_33

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