The Unexplained Wealth Legislation Amendment Bill 2018 was introduced into the Lower House on 20 June 2018 and was referred to the Senate Legal and Constitutional Affairs Legislation Committee on 28 June 2018, for inquiry and report by 6 August 2018 (the Bill is still before the House of Reps).

It proposes to amend the Proceeds of Crime Act 2002 (POC Act) to give effect to the legislative framework for a national cooperative scheme on unexplained wealth. Unexplained wealth, whether in a criminal context or not, is also a target area of the ATO, and has featured in many assessments and disputes.

Currently, Commonwealth unexplained wealth orders can only be used in relation to a person or property that is linked to a Commonwealth offence, foreign offence or State offence with a federal aspect. With serious and organised crime groups constantly working across jurisdictions, national law enforcement efforts are being increasingly frustrated. As a result, the States have referred their powers to allow the Federal Act to cover breaches of state laws (without any Federal aspect). This was the result of the Intergovernmental Agreement on the National Cooperative Scheme on Unexplained Wealth.

To facilitate a national scheme allowing federal unexplained wealth orders, and the operation of other provisions of the POC Act as they relate to unexplained wealth, to extend to State matters (rather than only those matters already within Commonwealth constitutional power) States must agree to either refer power to the Commonwealth or adopt the text of Commonwealth laws under paragraph 51(xxxvii) of the Commonwealth Constitution, and refer the ‘amendment reference’ (at subsection 14C(4) of the Bill). Each State will retain the discretion under their legislation as to the particular State offences to be included within the scope of the referral or adoption.

This Bill would give effect to the National Cooperative Scheme on Unexplained Wealth by amending the: Proceeds of Crime Act 2002 to:

  • extend the scope of Commonwealth unexplained wealth restraining orders and unexplained wealth orders to territory and state offences;
  • enable state and territory law enforcement entities to apply for production orders and issue notices to financial institutions; ensure the continued operation of state and territory confiscation regimes;
  • provide for the equitable sharing of recovered proceeds between Commonwealth, state, territory and foreign law enforcement entities; and
  • provide for a review after the fourth anniversary of the commencement of the national scheme;

It would also amend :

  • the Telecommunications (Interception and Access) Act 1979 to facilitate information-sharing in relation to unexplained wealth investigations and proceedings between Commonwealth, territory and state law enforcement agencies; and
  • The Proceeds of Crime Regulations 2002 to clarify that the definition of ‘unexplained wealth legislation’ extends to particular provisions of the Criminal Assets Recovery Act 1990 (NSW) and the Criminal Property Forfeiture Act (NT).

FJM 19.7.18

[APH website: Bills Tracker, Bill, EM, Senate Committee Inquiry; LTN 122, 28/6/18; Tax Month – July 2018]

 

Comprehension questions (answers available)

  1. Is the central need for this legislation, to give effect to the National Cooperative Scheme on Unexplained Wealth?
  2. Could the Commonwealth Proceeds of Crime Act be used to issue ‘unexplained wealth orders’ over assets thought to be the proceeds of offences under State Acts, with no constitutional basis for Federal involvement?
  3. Was the answer to get States to refer their powers, to allow this centralised and co-operative approach?
  4. Will the Scheme allow for the equitable sharing of proceeds between the Commonwealth, the States and Territories?
  5. Will the Bill also allow information to be shared between Federal, State and Territory boundaries?

[answers:1.yes;2.no(thatWasExactlyTheProblem);3.yes;4.yes;5.yes]

 

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