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Who's the Legislator Anyway? How the Fatf's Global Norms Reshape Australian Counter Terrorist Financing Laws

Published online by Cambridge University Press:  01 January 2025

Doron Goldbarsht
Doron Goldbarsht*
Affiliation:
PhD (candidate), University of New South Wales Law School
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Abstract

This article focuses on the Australian implementation of the Financial Action Task Force (FATF) Recommendations, so-called ‘soft law’ instruments, which represent the international standards in Counter Terrorist Financing (CTF) but which force legislators to conform. The article will fill the gaps existing in the literature today by focusing on the origins and motives of broad CTF legislation in Australia, then detailing each of the FATF's CTF Recommendations and the ways in which they are implemented in Australia. This approach differs significantly from other literature in the field, which deals solely with Australian implementation of one of the FATF's components. The current paper's examination will reveal the CTF regime in Australia, a decade after the FATF's first CTF Mutual Evaluation Report on Australia, and its decisive influence.

Type
Article
Information
Federal Law Review , Volume 45 , Issue 1 , March 2017 , pp. 127 - 151
Copyright
Copyright © 2017 The Australian National University

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Footnotes

The author wishes to thank Professor Rosalind Dixon, Professor David Kinley, Professor Jackie Harvey, Mrs Hayley Greenhalgh and the two anonymous commentators for their comments on an earlier draft.

References

1 Measures to Eliminate International Terrorism, GA Res 51/210, UN GAOR, 51st sess, 88th plen mtg, UN Doc A/RES/51/210 (17 December 1996).

2 International Convention for the Suppression of the Financing of Terrorism, opened for signature 10 January 2000, 2178 UNTS 197 (entered into force 10 April 2002).

3 Mark, Pieth, ‘Criminalizing the Financing of Terrorism’ (2006) 4(5) Journal of International Criminal Justice 1074Google Scholar.

4 Kenneth, S. Blazejewski, ‘The FATF and Its Institutional Partners: Improving the Effectiveness and Accountability of Transgovernmental Networks’ (2008) 22 Temple International and Comparative Law Journal 1, 10Google Scholar; Kenneth, W. Abbott, Duncan, Snidal and Bernhard, Zangl (eds), International Organizations as Orchestrators (Cambridge University Press, 2015) 289Google Scholar (‘Abbott’); See also Kenneth, W. Abbott and Duncan, Snidal, ‘Hard and Soft Law in International Governance’ (2000) 54(3) International Organization 421Google Scholar (‘Abbott and Snidal’); Daniel, W eDreznerDerzner, All Politics is Global: Explaining International Regulatory Regimes (Princeton University Press, 2007)Google Scholar.

5 Financial Action Task Force, Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems (February 2013) 2; Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (February 2012, Updated June 2016) (‘FATF Recommendation’).

6 Gregory, C. Shaffer and Mark, A. Pollack, ‘Hard vs Soft Law: Alternatives, Complements and Antagonists in International Governance’ (2010) 94 Minnesota Law Review 706, 707Google Scholar (‘Shaffer & Pollack’); See also Dinah, L Shelton, Commitment and Compliance: The Role of Non-Binding Norms in the International Legal System (Oxford University Press, 2003)Google Scholar; Jan, Klabbers, ‘The Redundancy of Soft Law’ (1996) 65(2) Nordic Journal of International Law 167, 168Google Scholar.

7 Shaffer & Pollack, above n 6, 707; See also Charles, Lipson, ‘Why Are Some International Agreements Informal?’ (1991) 45 International Organization 495, 508Google Scholar; Andrew, Guzman, How International Law Works: A Rational Choice Theory (Oxford University Press, 2008) 71–111Google Scholar.

8 Shaffer & Pollack, above n 6, 708; See also David, M. Trubek, Patrick, Cottrell and Mark, Nance ‘“Soft Law,” “Hard Law,” and EU Integration’, in Grainne, De Burca and Joanne, Scott (eds), Law and New Governance in The EU and the US (Bloomsbury Publishing, 2006) 65, 67Google Scholar.

9 Shaffer & Pollack, above n 6, 708.

10 Cf Kenneth, W Abbott et al, ‘The Concept of Legalization’ (2000) 54(3) International Organization 401, 401Google Scholar (Abbott and Snidal's approach goes beyond the binding/nonbinding distinction to classify laws as ‘hard’ or ‘soft’ in accordance with these three criteria: obligations, precise and delegate authority).

11 See FATF Recommendation, Recommendation 37 asks countries to rapidly, constructively and effectively provide the widest possible range of mutual legal assistance (broad implementation); yet according to Recommendation 5, countries should criminalise not only the financing of terrorist acts but also the financing of terrorist organisations and individual terrorists (precise implementation).

12 Petrus, van Duyne, Jackie, Harvey and Liliya, Gelemerova ‘The Monty Python Flying Circus of Money Laundering and the Question of Proportionality’ in Georgios, A. Antonopoulos (ed), Illegal Entrepreneurship, Organized Crime and Social Control: Essays in Honor of Professor Dick Hobbs (Springer, 2016) 161, 170Google Scholar; Todd, Doyle, ‘Cleaning Up Anti-Money Laundering Strategies: Current FATF Tactics Needlessly Violate International Law’ (2002) 24(2) Houston Journal of International Law 279, 296–7Google Scholar; Guy, Stessens, Money Laundering: A New International Law Enforcement Model (Cambridge University Press, 2000)Google Scholar.

13 Abbott and Snidal, above n 4, 423; Shaffer & Pollack, above n 6, 719.

14 At the international level CTF consists of three pillars, of which the FATF is one. The other pillars are the UNSC Resolutions under chapter VII (mainly, Res 1267 and Res 1373), and the Terrorist Financing Convention. This article focuses on the FATF Recommendations dealing with CTF which are non-binding norms (as opposed to the binding norms produced by the other two pillars). The FATF Recommendations include, refer to, and complement the binding norms of the other two pillars. Examining the implementation of the Recommendations consists of examining the binding norms of the other two pillars. There is, allegedly, an inherent difficulty in diagnosing whether implementation of some FATF Recommendations stems from the Recommendations, or from the binding norms. The CTF Regime in Australia does follow the Recommendations however, as evidenced by: the dates of updated rules, justifications during the revision of rules, and the fact that the rules continue to be revised from time to time, in accordance with the latest Recommendations as well.

15 Ben, Saul, ‘The Emerging International Law of Terrorism’, Indian Yearbook of International Law and Policy 2009 (October 29, 2010) 163Google Scholar.

16 James, Thuo Gathii, ‘The Financial Action Task Force and Global Administrative Law’ (2010) Journal of the Professional Lawyer (forthcoming), 197Google Scholar (‘Gathii’).

17 Ben, Hayes, ‘Counter-Terrorism, Policy Laundering, and the FATF’ (2012) 14 International Journal of Not-for-Profit Law 5, 6Google Scholar (‘Hayes’).

18 Ibid.

19 Financial Action Task Force, Third Mutual Evaluation Report on Anti-Money Laundering and Combating the Financing of Terrorism Australia (October 2005) (‘MER 2005’).

20 Financial Action Task Force, Anti-Money Laundering and Counter-Terrorist Financing Measures—Australia (April 2015) (‘MER 2015’).

21 G7 Summit, Economic Declaration (Paris, 16 July 1989) G7 Information Centre, 52–3 <http://www.g8.utoronto.ca/summit/1989paris/communique/index.html>; Financial Action Task Force, ‘Annual Report’ (Annual Report, Financial Action Task Force, (2009–2010) 6; Louis, De Koker and Mark, Turkington, ‘Anti-Money Laundering Measures and the Effectiveness Question’ in Barry, Rider (ed), Research Handbook on International Financial Crime (Edward Elgar Publishing, 2015) 520, 520–1Google Scholar. (‘De Koker and Turkington’).

22 Statement of G7 Ministers of Finance (25 September 2001) G7 Information Centre <http://www.g8.utoronto.ca/finance/fm010925.htm>. This announcement came after the G8 statement, issued on 19 September 2001 (eight days after the terrorist attacks of 9/11), called for ‘expanded use of financial measures and sanctions to stop the flow of funds to terrorists’ and ‘the denial of all means of support to terrorism and the identification and removal of terrorist threat.’ See Statement by the Leaders of the G8 over last week's terrorist attacks in New York and Washington (19 September 2001) G7 Information Centre <http://www.g8.utoronto.ca/terrorism/sept192001.html>; Hayes, above n 17, 21–2.

23 Financial Action Task Force, 25 Years and Beyond The Financial Action Task Force Setting the Standards to Combat Money Laundering and the Financing of Terrorism and Proliferation (2014).

24 FATF Recommendation, above n 5, 7; See also Financial Action Task Force, Mandate (2012 –2020) (20 April 2012).

25 Abott et al (eds), above n 4, 289.

26 Financial Action Task Force, What is Money Laundering? Basic Facts about Money Laundering . The FATF defines the term ‘money laundering’ succinctly as ‘the processing of … criminal proceeds to disguise their illegal origin’ in order to ‘legitimize’ the ill-gotten gains of crime. Money laundering predicate offense is the underlying criminal activity that generated proceeds, which when laundered, results in the offense of money laundering. The techniques used to launder money are essentially the same as those used to conceal the sources of, and uses for, terrorist financing, with the difference that funds used to support terrorism may originate from legitimate sources. This is why there is a need to criminalize the financing of terrorism and designate such offenses as money laundering predicate offenses (and expanding the scope of AML framework). See also Paul, Schott, Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism, (The World Bank, 2nd ed, 2006) I-5Google Scholar.

27 Stessens, above n 12, 17.

28 Kevin, L. Shepherd, ‘Risky Business: The Gatekeeper Initiative and the Risk-Based Approach to Client Due Diligence’ (2011) 25(2) Probate & Property 83Google Scholar.

29 Financial Action Task Force, International Best Practices Detecting and Preventing the Illicit Cross-Border TTransportation of Cash and Bearer Negotiable IInstruments (19 February 2010).

30 FATF Recommendation, above n 5.

31 Ibid Recommendation 36 (old number R.35 & SR I).

32 Ibid Recommendation 5 (old number SR II).

33 SC Res 1267, UN SCOR, 54th sess, 4051st mtg, UN Doc S/RES/1267 (15 October 1999) (‘Res 1267’); SC Res 1373, UN SCOR, 56th sess, 4385th mtg, UN Doc S/RES/1373 (28 September 2001) (‘Res 1373’); FATF Recommendation, Recommendation 6 (old number SR III).

34 FATF Recommendation, above n 5, Recommendation 20 (old number R.13 & SRIV).

35 Ibid Recommendation 37 (old number R.36 & SRV).

36 Ibid Recommendation 14 (old number SRVI).

37 Ibid Recommendation 16 (old number SR VII).

38 Ibid Recommendation 8 (old number SR VIII).

39 Ibid Recommendation 32 (old number SR IX).

40 FATF Recommendation, above n 5; ‘Report to G20 Leaders By The Financial Action Task Force’ (Report, Los Cabos Summit, June 2012) 2. The Recommendation adopted on 16 February 2012, and updated in February 2013, October 2015 and June 2016.

41 The UNSC has stopped short of adopting a chapter 7 resolution ordering states to enforce the FATF's recommendations, but it has ‘strongly ‘urged’ them to do so in Resolution 1617 (SC Res 1617, UN SCOR, 60th sess, 5244th mtg, UN Doc S/RES/1617 (29 July 2005)).

42 Ilias, Bantekas, ‘The International Law on Terrorist Financing’ in Ben, Saul (ed), Research Handbook on International Law and Terrorism (Edward Elgar, 2014) 121Google Scholar; Matthew, Levitt and Michael, Jacobson, ‘The Money Trail: Finding, Following, and Freezing Terrorist Finances’ (2008) 89 Washington Institute for Near East Policy 19Google Scholar (‘Levitt and Jacobson’); Abbott et al (eds), above n 4, 286.

43 The FATF also benefitted from the membership of various financial institutions, mainly the World Bank and the International Monetary Fund, whose Financial Sector Assessment Program, and Report on the Observance of Standards and Codes processes (together with their technical assistance), extended implementation of FATF Recommendations. See De Koker and Turkington, above n 21, 522.

44 For its 4th round of MERs, the FATF has adopted complementary approaches for assessing technical compliance with the FATF Recommendations, and for assessing whether and how the AML/CFT system is effective. The effectiveness assessment is beyond the boundaries of this article. For effectiveness assessments, see Financial Action Task Force, Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CTF Systems (February 2013, updated February 2016) 5; for discussion focusing on the effectiveness question relating to AML/CTF measures, see De Koker and Turkington, above n 21.

45 Levitt and Jacobson, above n 42, 20.

46 Gathii, above n 16, 198.

47 The ‘Black List’ referred to a list of Non-Cooperative Countries and Territories (NCCT) exercise which began in 1998, and as of October 2006, there were no Non-Cooperative Countries and Territories in the context of the NCCT initiative. Since 2007, the FATF's International Co-operation Review Group (ICRG) has analysed high-risk jurisdictions and recommended specific action to address Money Laundering /Financing Terrorism risks emanating from them where initial referral to the ICRG is based primarily on the results of the jurisdiction's MER. See Financial Action Task Force, Review to Identify Non-Cooperative Countries or Territories: Increasing The World Effectiveness of Anti-Money Laundering Measures (22 June 2001) 5; See also Guy, Stessens, ‘The FATF Black List of Non-Cooperative Countries or Territories’ (2001) 14 Leiden Journal of International Law 199Google Scholar.

48 FATF Recommendations, above n 5, 19 (old number 21).

49 Ibid 19

50 Ibid 18.

51 Dmitry, Feoktistov, ‘Iran, the Black List and Russia's Upcoming FATF Presidency’ (2013) 19 Russian Journal on International Security 19, 19Google Scholar. Russia was listed on the Black List on 22 April 2000 because of lack of a comprehensive AML law and implementing regulations that meet international standards.

52 The criteria for admission as a member requires members to be fully committed at the political level, to implement the FATF Recommendations and to undergo regular mutual evaluations; See Financial Action Task Force, ‘Annual Report 2003 –2004’ (2004) 12.

53 Abbott et al (eds), above n 4, 290.

54 Anthony, Blackshield and George, Williams, Australian Constitutional Law and Theory: Commentary and Materials (Federation Press, 6th ed. Annandale, N.S.W, 2014) 885Google Scholar.

55 Joint Standing Committee on Treaties, Parliament of Australia, Time to Put on the 3-D glasses: Is There a Need to Expand JSCOT's Mandate to Cover ‘Instruments of Less than Treaty Status’? (18 March 2016) 5; Joint Standing Committee on Treaties, Parliament of Australia, Resolution of Appointment (2013).

56 European Union Committee, Parliament of the United Kingdom, Money Laundering and the Financing of Terrorism (14 July 2009) 14 [27].

57 David Chaikin, The Australian Accounting Profession's Response to Anti-Money Laundering Regulation, Chartered Accountants Australia and New-Zealand <www.charteredaccountantsanz.com>.

58 Cf Saul, above n 15, 173.

59 Department of the Prime Minister and Cabinet, Counter-Terrorism White Paper: Securing Australia, Protecting Our Community, Parl Paper No 66 (2010) 7.

60 There is a debate whether these attacks can be classified as acts of terrorism. See Michael Wesley, ‘Sydney Siege: Welcome to Jihad 3.0, the Third Wave of Terrorism and the Most Unpredictable’ The Australian (Sydney), 20 December 2014. It is worth noting that the Australian government (Treasurer Joe Hockey) declared the siege in Sydney's Martin Place a terrorist incident for the purposes of the Terrorism Insurance Act 2003 (Cth). David Wroe and Gareth Hutchens, ‘Government declares Martin Place siege ‘terrorism’ for insurance’ The Sydney Morning Herald (Sydney), 15 January 2015.

61 Cameron Houston et al, ‘Terror Suspect Shot Dead after Two Police Officers Stabbed in Endeavour Hills’, The Age (Melbourne), 24 September 2014; Rachel Massola and James Olding, ‘Someone is going to die today: Man charged with committing terrorist act and attempted murder’ The Sydney Morning Herald (Sydney), 11 September 2016.

62 Christopher, Michaelsen, ‘The Triviality of Terrorism’ (2012) 66(4) Australian Journal of International Affairs 431, 437Google Scholar. For a different opinion, that finds Australia under terrorist target, and links the risk to the proximity to a number of Muslim countries that may enhance Australia's vulnerability, see Russell, G Smith, Rob, McCusker and Julie, Walters, ‘Financing of Terrorism: Risks for Australia’ (2010) 1 Trends & Issues in Crime and Criminal Justice 2Google Scholar.

63 George, Williams, ‘A Decade of Australian Anti-Terror Laws’ (2011) 35(3) Melbourne University Law Review 1136, 1139Google Scholar (‘Williams’); George, Williams, ‘Anti-Terror Legislation in Australia and NZ’ in Victor, V Ramraj et al (eds), Global Anti-Terrorism Law and Policy . (Cambridge University Press, 2nd ed, 2012) 541, 546Google Scholar (‘Williams in Ramraj’). For the history of terrorism laws in Australia, see Jenny, Hocking, Terror Laws: ASIO, Counter-Terrorism and the Threat to Democracy (UNSW Press, 2004)Google Scholar; for the influence of anti-money laundering measures on Australian CTF, see Nicholas, Ryder, The Financial War on Terrorism: A Review of Counter-Terrorist Financing Strategies Since 2001 (Taylor and Francis, 2005) 25Google Scholar.

64 Crimes (Foreign Incursions and Recruitment) Act 1978 (Cth) s 7, as repealed by Counter-Terrorism Legislation Amendment (Foreign Fighters) Act 2014 (Cth) s 144.

65 Criminal Code Act 1983 (NT) s 55(1).

66 Williams, above n 63, 1161.

67 Williams in Ramraj, above n 63, 547.

68 Neil, Jensen, ‘Creating an Environment in Australia Hostile to Money Laundering and Terrorism Financing: A Changing Role for AUSTRAC’ (2008) 5 Macquarie Journal of Business Law 93, 99Google Scholar.

69 Australian Transaction Reports and Analysis Centre, ‘Australia Endorses Global Anti-Money Laundering Standards’, (Media Release, E176/03, 8 December 2003); See also ‘Terrorism Financing in Australia 2014’ (Report, Australian Transaction Reports and Analysis Centre, 2014) 11.

70 MER 2005, above n 19.

71 Alison Deitz, ‘Anti-Money Laundering and Counter-Terrorism Financing Act 2006’ (Seminar Paper No 07/32, College of Law Sydney, 9 March 2007), 1-2; Stuart, Ross and Michelle, Hannan, ‘Australia's New Anti-Money Laundering Strategy’ (2007) 19 Current Issues in Criminal Justice 135, 140Google Scholar.

72 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (‘AML/CTF Act’). One of the objects of the AML/CTF Act is to address matters of international concern, including: the FATF Recommendations. See s 3(3)(a).

73 MER 2015, above n 20. See also David Rees, ‘Money Laundering and Terrorism Financing Risks Posed by Alternative Remittance in Australia’ (Research and Public Policy Series Report No 106, Australian Institute of Criminology, 2010) (‘Rees’).

74 Criminal Code Act 1995 (Cth) (‘Criminal Code’).

75 Daryl Williams, ‘Upgrading Australia's Counter-Terrorism Capabilities’ (News Release, 1080, 18 December 2001); Letter Dated 21 December 2001 from the Permanent Mission of Australia to the United Nations Addressed to the Chairman of the Security Council Committee Established Pursuant to Resolution 1373 (2001) Concerning Counter-Terrorism, UN Doc S/2001/1247 (21 December 2001), 4.

76 Security Legislation Amendment (Terrorism) Act 2002 (Cth). The other legislations in this package were the Suppression of the Financing of Terrorism Act 2002 (Cth) (‘Suppression of the Financing of Terrorism Act’); Criminal Code Amendment (Suppression of Terrorist Bombing) Bill 2002 (Cth); Border Security Code Legislation Amendment Bill 2002 (Cth); Telecommunication Interception Legislation Amendment Bill 2002 (Cth).) See Williams in Ramraj, above n 63, 547.

77 Suppression of the Financing of Terrorism Act .

78 Charter of the United Nations Act 1945 (Cth) (‘CotUN Act’).

79 Extradition Act 1988 (Cth).

80 Financial Transaction Reports Act 1988 (Cth) (‘FTR Act’).

81 MER 2005, above n 19, 129. Required under s 18 to the Terrorist F inancing Convention.

82 Charter of the United Nations (Dealing with Assets) Regulations 2008 (Cth) (‘Dealing with Assets Regulations’). These regulations replaced the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 (Cth), which replaced the Charter of the United Nation (Anti-Terrorism Measures) Regulations 2001 (Cth). Cl 10(1), to the Charter of the United Nations (Anti-Terrorism Measures) Regulations, made it an offence to directly or indirectly, make an asset available to a person or entity listed by the minister for Foreign Affairs in the Commonwealth Gazette for being a person or entity mentioned in paragraph 1(c) or Res 1373. See Letter Dated 21 December 2001 from the Permanent Mission of Australia to the UN Addressed to the Chairman of the Security Council Committee Established Pursuant to Resolution 1373 (2001) Concerning Counter-Terrorism, UN Doc S/2001/1247 (21 December 2001), 6.

83 Criminal Code Amendment (Terrorist Organisations) Act 2004 (Cth).

84 MER 2005, above n 19, 130; Williams, above n 63, 550.

85 Mutual Assistance in Criminal Matters Act 1987 (Cth) (‘MA Act’).

86 Criminal Code s 102.6.

87 Ibid s 100.1.

88 Ibid pt 2.4.

89 Ibid s 102.1.

90 Ibid s 103.1.

91 Ibid s 103.1(1)(b).

92 MER 2005, above n 19, 33.

93 Ibid 17.

94 Ibid 33.

95 Explanatory Memorandum, Anti-Terrorism Bill (No 2) 2005 (Cth) sch 3 item 3.

96 House of Representatives Security Legislation Review Committee, Parliament of Australia, Report of the Security Legislation Review Committee (2006) 160.

97 Ibid 162.

98 Brett Walker, ‘Annual Report’ (Report, Independent National Security Legislation Monitor, 7 November 2013) 76.

99 Andrew, Lynch, Nicola, McGarrity and George, Williams, Inside Australia's Anti-Terrorism Laws and Trials (New South Publishing, 2015) 67Google Scholar; For further discussion regarding the wording “individual terrorist” requested by the FATF and “a person” that was adapted by the Australian Government, see Nicola, McGarrity, ‘The Criminalisation of Terrorist Financing in Australia’ (2012) 38(3) Monash University Law Review 55, 63Google Scholar (‘McGarrity’).

100 Ibid.

101 MER 2005, above n 19, 40.

102 Charter of the United Nations (Sanctions—The Taliban) Regulation 2013 (Cth) regs 9-, 10 (‘Taliban Regulations’).

103 Charter of the United Nations (Sanctions—Al-Qaida) Regulations 2008 (Cth) regs 10-11 (‘Al-Qaida Regulations’).

104 Taliban Regulations reg 3; Al-Qaida Regulations reg 4.

105 CotUN Act s 15(6).

106 Al-Qaida Regulations reg 4; Taliban Regulations reg 3.

107 CotUN Act s 15.

108 Ibid s 14.

109 Al-Qaida Regulations reg 10; Taliban Regulations reg 9; CotUN Act s 21.

110 Al-Qaida Regulations reg 11; Taliban Regulations reg 10; CotUN Act s 20.

111 Al-Qaida Regulations reg 12; Taliban Regulations reg 11; CotUN Act s 22.

112 CotUN Act ss 20-21 (until March 2008 was 5 years imprisonment). See also Julie Walters et al, ‘Anti-Money Laundering and Counter-Terrorism Financing Regime in Australia: Perceptions of Regulated Businesses in Australia’ (Research and Public Policy Series Report No 117, Australian Institute of Criminology, 2012) 83.

113 Dealing with Assets Regulations reg 40.

114 The list is publicly available on the Department of Foreign Affairs and Trade's website, Department of Foreign Affairs and Trade, Consolidated List (10 March 2017) <http://dfat.gov.au/international-relations/security/sanctions/pages/consolidated-list.aspx#list>.

115 This listing will cease to have effect 3 years after listing, unless extended in accordance with CotUN Act s 15A.

116 MER 2015, above n 20, 145.

117 FTR Act s 3(1).

118 Ibid.

119 Ibid s 16(1)(b)(i).

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

121 Ibid s 16(1)(b)(iii)–(iv).

122 Ibid s 16(1A)(b)(i)–(ii).

123 MER 2005, above n 19, 91.

124 Mark, Sidel, ‘Counter-Terrorism and the Enabling Legal and Political Environment for Civil Society: A Comparative Analysis of “War on Terror” States’ (2008) 10(3) International Journal of Not-for-Profit Law 7, 41Google Scholar.

125 Arun, Srivastava, Mark, Simpson and Nina, Moffatt, International Guide to Money Laundering Law and Practice (Bloomsbury Professional, 3rd ed, 2010) 255Google Scholar.

126 Explanatory Memorandum, Anti-Terrorism Bill (No 2) 2005 (Cth) 97.

127 AML/CTF Act s 3(1).

128 Ibid s 3(2).

129 Ibid.

130 Australian Transaction Reports and Analysis Centre, ‘‘Anti-Money Laundering and Counter-Terrorism’ Financing Reporting Obligations of Legal Practitioners’ (2011) 33(7) Bulletin of the Law Society of South Australia 26Google Scholar.

131 AML/CTF Act s 212(4). See also Department of the Prime Minister and Cabinet, Review of Australia's Counter-Terrorism Machinery (January 2015) <https://www.dpmc.gov.au/sites/default/files/publications/190215_CT_Review_0.pdf>.

132 MER 2015, above n 20, 166.

133 MA Act .

134 MER 2005, above n 19, 133.

135 Department of the Prime Minister and Cabinet, above n 59, 50.

136 MER 2015, above n 20, 185.

137 Corporations Act 2001 (Cth) s 911A.

138 Alison, Deitz and John, Buttle, The Anti-Money Laundering Handbook: A Business Guide to Complying with the AML/CTF Legislation (Lawbook, 2007)Google Scholar.

139 Rees, above n 73, 26.

140 MER 2005, above n 19, 109.

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

142 Rees, above n 73, 64.

143 AML/ CTF Act s 74.

144 Ibid s 74(2).

145 Ibid s 75.

146 Ibid s 75C.

147 MER 2015, above n 20, 152.

148 FTR Act s 3.

149 Ibid s 17B.

150 Financial Transaction Reports Regulations 1990 (Cth) regs 2, 11AA.

151 FTR Act s 28. Pursuant to s 31 of the FTR Act, a person commits an offence if he is a party to cash transactions involving less than $10,000 and it would be reasonable to conclude that the person conducted the transactions in a particular manner as to avoid the transactions being reported. See, eg, Ansari v R (2007) 70 NSWLR 89 and Ansari v R (2010) 241 CLR 299.

152 MER 2005, above n 19, 125.

153 Australian Charities and Not-for-profits Commission Act 2012 (Cth) (‘ACNC Act’). This Act sets out the objects and functions of the ACNC, as well as the framework for the registration and regulation of charities. Also see Charities Act 2013 (Cth) which introduces a statutory definition of charity that sets out more clearly the common law meaning of charity and clarifies some areas of uncertainty, and Explanatory Memorandum, Charities (Consequential Amendments and Transitional Provisions) Bill 2013 (Cth).

154 ACNC Act s 15.5.

155 Ibid s 25.5.

156 Ibid div 60.

157 For a discussion on the ‘chilling effect’ upon the willingness of Australian Muslims to carry out their religious obligations and make charitable donations, see Andrew, Lynch and Nicola, McGarrity, ‘How Neutral Laws Create Fear and Anxiety in Australia's Muslim Communities’ (2008) 33(4) Alternative Law Journal 225, 226Google Scholar.

158 ACNC Act ss 55.5(1), 55.1(4).

159 MER 2015, above n 20, 148.

160 FTR Act s 15.

161 Ibid s 3(1).

162 Ibid sch 3.

163 Criminal Code div 400.

164 Proceeds of Crime Act 2002 (Cth) s 19.

165 MER 2005, above n 19, 64.

166 AML/CTF Act ss 53, 55.

167 This ‘disclosure when asked’ system enable 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 Explanatory Memorandum, Anti-Terrorism Bill (No 2) 2005 (Cth) 7.

168 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 53.

169 Ibid ss 199–200.

170 AML/CTF Act s 17.

171 FATF Recommendations, above n 5, 110.

172 First the FTR was updated and later the AML/CTF Act .

173 MER 2015, above n 20, 139.

174 As seen with regard to the implementation of different CTF Recommendations. Moreover, in 2006 the Australian government passed the 1st tranche of legislation establishing a new regime to combat money laundering/terrorist financing and to meet Australia's international obligations as a member of FATF. The full implementation of the AML/CTF regime, which will impact accountants as well as lawyers, jewellers and real estate agents, has been delayed for different reasons. In April 2016, the Attorney-General's Department report on the statutory review of the AML/CTF regime identified the ‘tranche two’ laws as a priority area for action, and it is very likely that the government will take action to address the shortcomings identified by the FATF's MER in the near future. See Thomson Reuters, ‘State of Regulatory Reform 2016: A Special Report’ (August 2016) 32; Michael Keenan, ‘Address at the 2016 Counter-Terrorism Financing Summit’ (Speech delivered at the 2016 Counter-Terrorism Financing Summit, Bali, 10 August 2016 <https://www.ministerjustice.gov.au/Speeches/Pages/2016/ThirdQuarter/Address-at-the-2016-Counter-Terrorism-Financing-Summit.aspx/>.

175 The rating of compliance with FATF Recommendations of both MER 2005 and MER 2015, attached in appendices A and B respectively. Support for this suggestion can be found in the Attorney-General's Department, Statutory Review of the Anti-Money Laundering and Counter Terrorism Financing Act 2006 and Associated Rules and Regulations (2016). This report was made under s 251 of the AML/CTF Act, which required a review of the operation of the AML/CTF Act, and also took into account the relevant findings in the MER 2015 on Australia, and states that ‘[t]he MER identified a number of deficiencies in the scope of Australia's AML/CTF regime and the preventive measures that apply to regulated entities. These deficiencies have been considered and options explored to improve compliance’: at 2.

* The ‘old number’ column refers to the corresponding 2003 FATF Recommendation.