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FINANCIAL TRANSACTION REPORTS AMENDMENT BILL 1996

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1996



THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA



HOUSE OF REPRESENTATIVES



FINANCIAL TRANSACTION REPORTS AMENDMENT BILL 1996



EXPLANATORY MEMORANDUM



(Circulated by authority of the Attorney-General and Minister for Justice
the Honourable Daryl Williams AM QC MP)

79906 Cat. No. 96 5590 5 ISBN 0644 483393


FINANCIAL TRANSACTION REPORTS AMENDMENT BILL 1996
General Outline
The principal object of these amendments is to give effect to several recommendations of ÒChecking the Cash : A Report on the Effectiveness of the Financial Transaction Reports Act 1988Ó, a report by the Senate Standing Committee on Legal and Constitutional Affairs, 1993.
Those recommendations that are being given legislative effect are :
¥ Recommendation 12 - access to FTR information by State and Territory Revenue Authorities;
¥ Recommendation 15 - definition of transaction;
¥ Recommendation 16 - inadmissibility of suspect transaction report information;
¥ Recommendation 18 - increase in the reporting threshold for imported and exported currency and definition of point at which currency transferred is considered to have been exported;
¥ Recommendation 19 - bullion sellers required to identify customers.
The other features of the Bill are:
¥ introduction of significant cash transaction reporting by solicitors;
¥ consolidation of the powers of inspection of AUSTRAC to access and examine the records and record keeping systems of persons required to keep records under the Act;
¥ updating of the penalty provisions of the Act in accordance with current drafting practices, and to align the quantum and expression of penalties with those in other Commonwealth statutes;
¥ updating other specific provisions that contain superseded terminology or are otherwise in need of modernising;
¥ the making of minor technical amendments to correct minor drafting errors.
Financial Impact
The amendments are expected to have a minor and unquantifiable financial impact on Government revenue.

Notes On Clauses
Clause 1 - Short Title
This is a formal clause which provides for the short title of the Bill.
Clause 2 - Schedules
This clause explains that the items set out in the Schedules to this Bill amend the Acts specified.
SCHEDULE 1 - AMENDMENT OF THE FINANCIAL TRANSACTION REPORTS ACT 1988
Item 1 Definition of authorised officer
Subsection 3(1) is amended by the repeal of the existing definition and the substitution of a new definition of Òauthorised officerÓ. New s 27A explains who is an authorised officer for the purposes of the Act.
Item 2 Definition of bullion seller
Subsection 3(1) is amended by the insertion of a definition of Òbullion sellerÓ. A person who carries on a business of selling bullion is a bullion seller. Bullion sellers are cash dealers by virtue of new paragraph 3(1)(j) (cf clause 5).
Item 3 Definition of business hours
Subsection 3(1) is amended by the insertion of a definition of Òbusiness hoursÓ. This definition is relevant to the exercise of inspection powers in new Part IVA. Business hours is defined as the period between the hours of 9 am and 5 pm, Monday to Friday, (excluding public holidays).
Item 4 Definition of business premises
Subsection 3(1) is amended by the insertion of a definition of Òbusiness premisesÓ. This definition is relevant to the exercise of inspection powers in new Part IVA. Business premises means the whole or part of premises used for conducting business operations. Where business operations are conducted from residential premises, it does not include that part of the premises which is used solely for residential or domestic purposes.
Item 5 Bullion seller is a cash dealer
Existing paragraph 3(1)(j) of the definition of cash dealer, which dealt with Òbullion dealersÓ is repealed and replaced by a new paragraph. A person who is a bullion seller is a cash dealer for the purposes of the Act. The amendment is made to overcome some technical difficulties with the definition of ÒdealingÓ in bullion.
Item 6 Bureau de change is a cash dealer
Existing subparagraph 3(1)(k)(i) of the definition of cash dealer is repealed and replaced with a new subparagraph. This extends the scope of cash dealers. Although the existing subparagraph is repealed, new subparagraph 3(1)(k)(i) applies in the same way as did the former subparagraph, in relation to a person who collects or holds currency collected, on behalf of another person. The amendment expands the previous definition, however, by extending it to persons who exchange, remit or otherwise negotiate currency transfers on behalf of other persons. Amongst other things, this extends the scope of cash dealers to include bureaux de change.
Item 7 Technical amendment to cash carriers etc
A technical amendment is made to the existing paragraph 3(1)(k) to correct a drafting error, to make it clear that the three subparagraphs ((i) - (iii)) are disjunctive and not conjunctive. This amendment achieves this by the insertion of the word ÒorÓ at the end of each of subparagraphs (i) and (ii) of paragraph 3(1)(k). The effect of the amendment is that a person who engages in any of the activities described by subparagraphs (i), (ii) or (ii) of paragraph 3(1)(k) is a cash dealer for the purposes of the Act.
Item 8 Definition of customs officer
Subsection 3(1) is amended by updating the term ÒComptroller-GeneralÓ, which is an obsolete term for the head of the Australian Customs Service. This title is substituted by ÒChief Executive OfficerÓ . This is in line with the change in title of this position as inserted in the Customs Act 1901 and effected by the Customs and Excise Amendment Act 1995. The same amendment is made by Items 31, 51 and 54 of the Schedule.
Item 9 Definition of FTR information
This is a technical amendment to the definition of ÒFTR informationÓ in ss 3(1) to take account of the repeal of ss 18(5) and (7) and the insertion of new ss 18(8A).
Item 10 Definition of futures broker
The existing definition in ss 3(1) is repealed and replaced with an updated definition. A futures broker is someone who carries on a business of dealing in futures contracts within the meaning of the Corporations Law, on behalf of other persons.
Item 11 Definition of identification record
The definition is a technical amendment to take account of the insertion of new section 24C which requires bullion sellers to obtain identification records in relation to their customers.
Item 12 Definition of paper money
This is a technical amendment made from an abundance of caution clarifying the definition of currency by inserting a definition of paper money in ss 3(1). Paper money is money comprising a note written, printed or otherwise made on paper or any other material. The definition is inserted as a consequence of the progressive replacement of paper notes with polymer notes as Australian currency. It affects the definition of ÒcurrencyÓ in ssÊ3(1) Òthe coin or paper money of AustraliaÓ so that the combined effect of the amendment is that ÒcurrencyÓ includes polymer notes.
Item 13 Definition of securities dealer
The existing definition in ss3(1) is repealed and replaced with an updated definition. A securities dealer is someone who carries on a business as a securities dealer under the Corporations Law.
Item 14 Definition of solicitor
This proposed amendment inserts a definition of solicitor in ss 3(1). A solicitor is a person who practises as a solicitor as a sole practitioner, in partnership, or where the relevant State or Territory law permits, as a solicitor body corporate. It includes a person who is employed as a solicitor in a organisation as an in-house solicitor.
It includes also a person who practices as both a barrister and solicitor, but it does not include a person who practises solely as a barrister notwithstanding that the person is admitted to practise as both a barrister and solicitor.
Item 15 Definition of transaction
The word ÒtransactionÓ, as used in Division 2 of Part II is modified by new ss 3(7).
Item 16 Preliminary negotiations to transactions
This amendment inserting new ss 3(7) is made in accordance with recommendation 15 of Checking the Cash.
The term ÒtransactionÓ has not been defined and so has its ordinary legal and commercial meaning. To a large extent, that position is not disturbed by the amendment.
The amendment makes it clear that a transaction for the purposes of Division 2 of PartÊII (suspect transaction reporting) is qualified by new ss 3(7). That is, a transaction includes preliminary, bilateral negotiations or proposals to conduct a transaction, in the same way as it refers to a completed transaction. In other words, it includes negotiations that might not ordinarily amount to a transaction.
A preliminary negotiation to or proposal for a transaction may trigger the suspect reporting procedures of Division 2 of Part II of the FTR Act (ie s 16). The amendment ensures that incomplete suspect transactions, such as transactions that are truncated or terminated prior to completion, must still be reported.
Item 17 Substitution of ÒAustralian Capital Territory Òfor ÒNorthern Territory Ò in s 5
This is a technical amendment. The definition of ÒStateÓ in ss 3(1) currently includes the Northern Territory. Therefore, the reference to ÒStateÓ in ss 5(1) and (2) includes the Northern Territory causing the phrase Òand the Northern TerritoryÓ to be superfluous. The proposed amendment removes this superfluity.
The amendment also takes account of the advent of self government in the Australian Capital Territory (ACT) by bringing the ACT within the operation of section 5.
Item 18 Heading to Division 1 of Part II
The existing heading is repealed and replaced by ÒCash transaction reports by cash dealersÓ. The change is made to distinguish the reporting by cash dealers from the reporting by solicitors in Division 1B.
Item 19 Paragraph 8A(2)(a)
This is a technical amendment to correct a drafting error in paragraph 8A(2)(a) by substituting ÒparagraphÓ for ÒsubsectionÓ in the reference to paragraph 20A(1)(b).
Item 20 Sections 14 and 14A
Sections 14 and 14A are repealed and are replaced with the consolidated inspection powers of new Part IVA.
Item 21 New Division 1A of Part II
Section 15 concerns transfers of currency into or out of Australia. To distinguish the reporting of imported and exported currency from the other types of reporting in PartÊII, a new heading and Division is added by the insertion of the Division 1A and the heading ÒReports about transfers of currencyÓ.
Item 22 Increasing threshold for reporting of transfer of currency
This amendment implements recommendation 18 of Checking the Cash. The amendment raises the threshold for the reporting of currency being taken out of, or brought into Australia, to $10,000. That brings the threshold in line with significant transaction reporting. The proposal requires an amendment to paragraph 15(1)(b), which deals with exporting currency.
Item 23 Increasing the threshold for reporting transfer of currency
This amendment is similar to that effected by Item 22. It amends ss 15(5)(b), which deals with importation of currency, raising the threshold to $10,000.
Item 24 Penalties for non reporting
Subsection 15(6) is repealed and replaced with a new, simplified provision.
Item 25 Currency deemed to be taken out of Australia
The amendment aligns the provisions regulating the movement of currency by mail or consignment with the physical carriage of currency in the Act (ss 15(7B), 15(7C) and 15(8A)). This is in response to recommendation 18 of Checking the Cash.
The amendment inserts new subsection 15(7AA) which states that currency is to be treated as taken out of Australia for the purposes of subsection 15(7A), when it is consigned such that it is Òirrevocably committedÓ.
The precise point at which a consignment is committed in this way will vary from case to case and will be a question of fact. Generally, currency will be considered to be irrevocably committed or Òpast the point of no returnÓ when, on an objective analysis of the factual circumstances of a particular case, a person has surrendered custody or control of an article with the intention of transferring the article.
For example, if currency is transferred out of Australia via the Australian postal system, it is irrevocably committed at the point at which it is deposited into the mail system by the sender or agent of the sender, or handed over for mailing to the Australian Postal Corporation employee or agent for the purposes of mailing.
Similarly, if currency is tendered to a private commercial carrier or courier for delivery overseas, it is irrevocably committed when it is transferred to the carrier for delivery.
The significance of this amendment is that it modifies the point of time when a report under section 15 must be made. Under the amendment, for the purposes of subsection 15(7A), a report must be filed by the sender at the point at which the item is irrevocably committed for transfer.
Item 26 Cash transactions reports by solicitors
New Division 1B is inserted with the heading ÔCash transaction reports by solicitorsÕ.
New s 15A requires a solicitor to report significant cash transactions which are entered into by or on behalf of the solicitor in the course of practising as a solicitor. A person who practises exclusively as a barrister is not required to report. A significant cash transaction is a transaction of $10,000 or more in currency (that is, cash). The report must be prepared before the end of the reporting period, which is defined in ss 3(1).
New ss 15A(2) states that the report must be in the approved form, contain the reportable details of the transaction and be signed by the solicitor or otherwise authenticated by the solicitor in the approved way. This reportable details are contained in new Schedule 3A to the Act, which is inserted by the Bill.
A report must be completed where an individual solicitor, solicitor partnership or solicitor corporation is party to the transaction or where the transaction was conducted on behalf of an individual solicitor, solicitor partnership or solicitor corporation.
New ss 15A(3) also requires that a copy of the report must be given to the Director of AUSTRAC unless the Director has approved an alternative mechanism for reporting the transaction.
Under new ss 15(4), the reportable details in relation to a transaction in s 15A refers to the details required by new Schedule 3A.
Item 27 Cash dealer to give further information
The amendment inserts new subsection 16(5AA) which is similar in terms and intent to ss 16(5A) and prohibits the disclosure of the further information provided under ssÊ16(4). Where a cash dealer provides further information concerning a suspect transaction in accordance with a request under ssÊ16(4), the cash dealer must not disclose to anyone else that the information has been given or disclose any other information from which the person to whom the information is disclosed could reasonably infer that additional information had been given.
Item 28 Penalties for disclosure of information
Subsection 16(5B) is repealed and replaced with a new ss 16(5B). It is an offence to contravene either existing ss 16(5A) or new 16(5AA). The penalty for the offence is imprisonment for a maximum period of two years.
Item 29 Cash dealer may disclose information to a court
Subsection 16(5C) is repealed and replaced by new ss 16(5C). The prohibition on disclosure by a cash dealer in ss 16(5A) and 16(5AA) does not prevent a cash dealer from disclosing the information to a court. This is subject to new ss 16(5D) which prevents any information concerning a suspect transaction report from being admitted into evidence in a legal proceeding.
Item 30 Prohibition of disclosure of certain information to a court
The basic object of the provision is to make suspect transaction reports inadmissible in evidence, in any legal proceeding, (other than a prosecution for an offence against ss 29(1) or ss 30(1) of the FTR Act) and thereby prevent the examination in a legal proceeding of the circumstances relating to the making of the report. It is intended to address some of the concerns expressed by the Senate Committee in recommendation 16 of Checking the Cash.
Under new paragraph 16(5D)(a), suspect transaction reports, copies of such reports, documents purporting to set out information contained in suspect transaction reports and documents given under ss 16(4) setting out further information in relation to suspect transaction reports, are not admissible in evidence in a legal proceeding. A legal proceeding refers to a judicial proceeding.
In addition to making the suspect transaction reports or information contained in a report inadmissible in evidence, the amendments also make any evidence regarding the making of such a report inadmissible. Under new paragraph 16(5D)(b), evidence is not admissible as to whether a suspect transaction report has been made or whether a copy of such a report or a document purporting to set out information in such a report was provided to the Director of AUSTRAC, or whether particular information was contained in a suspect transaction report or whether further information has been provided under ssÊ16(4) in relation to a suspect transaction report.
The effect of new ss 16(5D) is that a suspect transaction report or any other document relating to information in a suspect transaction report or any other evidence relating to a particular suspect transaction report, is not admissible in evidence in a legal proceeding (other than for a prosecution for an offence against ss 29(1) or ss 30(1) of the FTR Act). The intention of this amendment is to reduce the potential for staff of cash dealers (such as bank tellers) being examined concerning the making of a particular suspect transaction report. The amendment restricts or quarantines the testimony that a person can give in proceedings. Suspect transaction reports are used as intelligence by law enforcement agencies for the investigation of serious crime. There is little scope for the reports to be called into evidence in the prosecution of an offence. For that reason, the inadmissibility of the reports should have no adverse impact or prejudicial effect on defending a charge.
Item 31 CEO of Customs
The term ÒComptroller-GeneralÓ is updated to ÒChief Executive OfficerÓ.
Item 32 Repeal of s 17A
Section 17A is repealed and is replaced with the centralised inspection powers of new Part IVA.
Item 33 Repeal of s 17G
Similarly, section 17G is repealed and is replaced with the consolidated inspection powers of new Part IVA.
Item 34 Repeal of ss 18(5)
The subsection is repealed due to the insertion of new ss 18(8A).
Item 35 Penalties for cash dealers vis-a-vis account blocking
Subsection 18(6) is repealed and replaced by an updated penalty provision.
Item 36 Repeal of ss 18(7)
The subsection is repealed due to the insertion of new ss 18(8A).
Item37 Account blocking reporting - new s 18(8A)
New ss 18(8A) streamlines the reporting obligations of cash dealers in relation to blocked accounts. Under ss 18(5), a cash dealer had to advise the Director of AUSTRAC that an account had become blocked within 28 days of it becoming blocked. That requirement has been removed. Under ss 18(7), a cash dealer had to advise AUSTRAC that an account had become unblocked within 14 days of obtaining the identification information in respect of the account. That requirement has been removed also.
Subsection 18(8) is preserved, which requires a cash dealer to advise the Director of AUSTRAC that an account has been blocked for 12 months. However, new ssÊ18(8A), requires a cash dealer to advise the Director of AUSTRAC that an account has become unblocked only where the account has previously been blocked for 12 months. The cash dealer must advise of the unblocking of the account within fourteen days from the time that the cash dealer obtained the account information.
Item 38 Account blocking penalties
Subsection 19(9) is repealed and replaced by an updated provision. The penalty applies to a breach of ss 18(8) or (8A) only.
Item 39 Acceptable referee false statement penalty
This is technical amendment. The penalty for breaching ss 21(3A) is repealed and replaced by an updated provision.
Item 40 Change of name false statement penalty
This is technical amendment. The penalty for breaching ss 21A(3) is repealed and replaced by an updated provision.
Item 41 Failure of cash dealer to advise Director: penalty
This is technical amendment. The penalty for contravening ss 22(1) is repealed and replaced by an updated provision.
Item 42 Repeal of ss 23(3)
This is technical amendment. The penalty for contravening ss 23(1) is repealed and replaced by an updated provision which appears at the foot of the section, after sÊ23(8).
Item 43 , 44 Penalty for non-compliance with s 23
A failure to comply with any provision of s 23 renders the person liable to a maximum penalty of imprisonment for one year. Subsection 23(9), which prescribes the penalty for breaching ss 23(7) and 23(8) is repealed and replaced by an updated penalty which appears at the foot of the section.
Item 45 Note on penalty
A note is added to the end of ss 23A(3) clarifying the penalty, in accordance with current drafting practice and ssÊ4B(2) of the Crimes Act 1914.
Item 46 Operating an account that is in a false name
As the law currently stands, it is an offence to open an account or become a signatory to an account, using a false name (ss 24(1)). A name is false if it is a name other than one by which the person is commonly known (paragraph 24(7)(a)).
It is also an offence to operate an account using a false name (ss 24(2)). That is, to operate an account using a name other than one by which the person is commonly known (paragraph 24(7)(b)).
New ss24(2A) creates a new offence of operating, or authorising the operation of an account with a cash dealer if the account had previously been opened in a false name. A person could operate that account eg deposit monies into it, using a name that is not a false name. Under existing s 24, this would not be an offence. New ss 24(2A) will make it an offence to use an account in this way, even though the operator of the account (eg a depositor) is not using a false name.
Item 47 False name account penalties
This is technical amendment. The existing penalty is repealed and replaced by an updated provision. The maximum penalty for contravening ss (1), (2), (2A), (3), (4) or (5) of section 24 is a term of imprisonment of not more than two years.
Item 48 Definition of an account that is a false name
New paragraph 24(7)(c) qualifies ss (2A). An account is in a false name if it was opened by a person in a false name.

Item 49 Part IIIA - Bullion Sellers
New Part IIIA is inserted with the heading ÒBullion SellersÓ.
Definitions - Meaning of bullion transaction & exempt transaction
New s 24A inserts definitions of Òbullion transactionÓ and Òexempt transactionÓ into the Act. The basis for this proposed amendment is recommendation 19 of Checking the Cash.
A bullion transaction is a transaction that involves bullion. ÒBullionÓ is not defined in the Act and so it adopts its ordinary, commercial meaning.
An exempt transaction refers to a transaction involving bullion that is exempted from the application of new Part IIIA by virtue of new section 24B.
New s 24B - Exempt Bullion Transactions
Under new s 24B, the Director of AUSTRAC may exempt from the application of PartÊIIIA all transactions or a particular class of transactions in relation to bullion that may be entered into by a particular bullion seller.
New s 24C - Bullion Sellers and Identification Records
Bullion sellers are already included within the definition of cash dealers under the Act. However, because bullion sellers generally do not hold accounts for their clients as financial institutions do, they are not subject to the stringent account opening and signatory identification procedures of the Act.
The amendment will require bullion sellers to obtain an identification record of their customers before entering into a bullion transaction with them. Bullion sellers will be required to verify the identity of their customers.
A bullion seller must not enter into a bullion transaction unless the seller has an identification record for the other party or parties to the transaction (new ss 24C(1)).
A bullion seller will be considered to have an identification record if, in accordance with new ss 24C(2), the seller is an identifying cash dealer and has carried out and kept a record of the prescribed verification procedure to identify the other party to the transaction or alternatively, has carried out and kept a record of the verification procedure that the Director has approved for the bullion seller.
New s 24D - Bullion Sellers to Keep Records and Documents
If a bullion seller makes or obtains a record of any information in the course of obtaining information identifying a party to a bullion transaction, the seller must retain those records, for a period of seven years after the day the transaction first occurred (new ss 24D(1)). Where information identifying a customer is referable to more than one bullion transaction, the seven year retention period runs from the day on which the last transaction to which the record of information refers, occurred (new ss 24D(2)).
Those documents or records that are required to be made and retained must be retained in such a way that retrieval is reasonably practicable (new ss 24D(3)). The retention period of ss 24D(1) does not limit any other obligation to retain the document (new ss 24D(4)) eg an obligation under a tax law.
If a seller is required under a law to release a document, the seller must retain a copy of the document until such time as the document is returned or seven years from the date upon which the transaction to which the document relates, whichever occurs first (new ss 24D(5)). A bullion seller must also keep a register of documents that have been released under ss 24D(6).
A failure to comply with any provision of new s 24D is an offence punishable by a maximum penalty of one year imprisonment.
Item 50 Penalty for unlawful disclosure of information
This is technical amendment. The penalty for breaching ss 25(2) is repealed and replaced by an updated provision.
Item 51 CEO Customs
The term ÒComptroller-GeneralÓ is updated to ÒChief Executive OfficerÓ.
Item 52 Access to FTR information by State Revenue Authorities
Section 27 of the Act authorises certain agencies and persons to access information (FTR information). Under new paragraph 27(1)(ca), a revenue authority of a State or Territory may have access to FTR information for the purposes of performing its functions.
However, the State or Territory revenue authority will be provided access to FTR information only upon undertaking to comply with the Information Privacy Principles that are set out in section 14 of the Privacy Act 1988 (Commonwealth) in respect of the FTR information to which it is given access. The Privacy Principles are intended to safeguard the privacy of individuals.
It is expected that revenue authorities will enter into a memorandum of understanding or similar agreement with the Director of AUSTRAC as a means by which they will demonstrate their undertaking to comply with the Information Privacy Principles in the Privacy Act.
Item53 Authorisation to state class of FTR information etc.
Subsection 27(2) and (3) are repealed and replaced with amended subsections as a consequence of the amendment to provide State and Territory revenue authorities access to FTR information.
Item 54 CEO Customs
The term ÒComptroller-GeneralÓ is updated to ÒChief Executive OfficerÓ.
Item 55 Prohibition on disclosing suspect transaction reports
Existing ss 27(9) is repealed and replaced with an amended subsection. The amendment prohibits the NCA, a law enforcement officer, a customs officer or an officer of a revenue authority, from communicating FTR information obtained under sÊ16 ie suspect transaction report information. This is a technical amendment which corrects a drafting error. That error permitted information concerning a suspect transaction report to be disclosed to the person who is the subject of the report.
Item 56 Penalty for divulging FTR information
This is technical amendment. The penalty for contravening s 27 is repealed and replaced by an updated ss 27(13).
Item 57 Note on penalty in ss 27(13)
In accordance with current drafting practice, a note on the penalty in 27(13) is inserted (cf ss 4B(2) of the Crimes Act 1914.
Item 58 New ss 27(18) and 27(19)
Under ss 27(18), a reference to a revenue authority of a State or Territory in s 27 is a reference to an authority or agency that has the responsibility of collecting or receiving State or Territory revenue.
Under ss 27(19), a reference in s 27 to an approved senior officer of a revenue authority of a State or Territory is a reference to an officer or employee of the authority who is declared by Director of AUSTRAC, in writing, to be an approved senior officer underÊs 27.
Item 59 New Part IVA
Clause 59 inserts new Part IVA to the Act which deals with AUSTRACÕs powers of inspection . Authorised officers of AUSTRAC have always had power to access the premises of cash dealers who are required to keep records under the Act, for the purposes of monitoring compliance with the Act.
The access and inspection powers are largely unchanged under the amendments inserted by new Part IVA. Whereas the access and inspection powers of AUSTRAC are presently located in separate sections of the Act, (s 13, s 14, s 14A, s 17A and s17G), Part IVA consolidates the access and inspection powers provisions contained in the Act.
New s 27A - Authorised Officers
Under new s 27A, the Director of AUSTRAC may, by signed writing, appoint a member of AUSTRACÕs staff, to be an authorised officer for the purposes of the Act.
New s 27B - Identity Cards
Each authorised officer must be issued with an identity card bearing a recent photograph of the person (new ss 27B(1)). A person who ceases to be an authorised officer must return the identity card as soon as is practicable (new ss 27B(2)) and it is an offence not to do so (new 27B(3)), which incurs a maximum penalty of one penalty unit (new ss 27B(4), currently not more than $100).
New s 27C - Powers of Inspection of Premises of a Cash Dealer
New s 27C prescribes the inspection powers of an authorised officer who has been given access to a cash dealerÕs premises by virtue of a notice issued in accordance with s 27E.
For the purposes of monitoring a cash dealerÕs compliance with s 7 (significant cash transaction reporting), s 16 (suspect transaction reporting) or s 17B (international funds transfer instruction reporting), the authorised officer who is named in the notice issued under s 27E may inspect
¥ records (new paragraph 27C(2)(a));
¥ systems for keeping those records (new paragraph 27C(2)(b));
¥ transaction reports relating to s 7, 16 or 17B (new paragraph 27C(2)(c)); and
¥ any system used by the cash dealer in connection with preparing, sending or retaining reports under sections 7, 17 or 17B (new paragraph 27C(2)(d)).
For the purposes of monitoring a cash dealerÕs compliance with section 20 (maintenance of account and signatory information) and any undertaking given under s 8A (identifying cash dealers), new ss 27C(3) permits an authorised officer to inspect
¥ records of account information and signatory information; and
¥ systems used by the dealer for keeping those records.
For the purposes of monitoring compliance by bullion seller with s 24C and s 24D, the authorised officer may inspect
¥ records of information compiled or obtained in the course of obtaining an identification record for a party to a bullion transaction; and
¥ systems used by the bullion seller to keep those records.
Under new s 27C(5), where an officer is empowered under s 27C to inspect records or reports of a cash dealer, the officer is also permitted to receive, make copies, or take extracts from those records or reports.
New s 27D - Inspection of Premises of Solicitor
New s 27D prescribes the inspection powers of an authorised officer who has been given access to a solicitorÕs premises by virtue of a notice issued in accordance with sÊ27E.
For the purposes of monitoring a solicitorÕs compliance with s 15A (significant transaction reporting), the authorised officer who is named in the notice issued under sÊ27E may inspect

¥ records (new paragraph 27D(2)(a));
¥ systems for keeping those records (new paragraph 27D(2)(b));
¥ transaction reports relating to s 15A (new paragraph 27D(2)(c)); and
¥ any system used by the solicitor in connection with preparing, sending or retaining reports under section 15A (new paragraph 27D(2)(d)).
Where an officer is empowered under s 27D to inspect records or reports of a solicitor, the officer is also permitted to receive, make copies, or take extracts from those records or reports (new s 27D(3)).
New s 27E - Notice to Give Access to Business Premises
The Director of AUSTRAC may issue a notice to a cash dealer or a solicitor, requiring the cash dealer or solicitor to give access to an authorised officer to business premises for the purposes of exercising the inspection powers, as described by new sections 27C and 27D.
The cash dealer or solicitor is not required to give access to an authorised officer unless a valid notice under new s 27E has been issued. Amongst other things, the notice must name the authorised officer to whom access is granted and the business premises that the authorised officer may inspect. Access is only permissible during the hours stated in the notice (ss 27E(2)), which may be only during business hours. A cash dealer or solicitor must comply with a notice requiring access under s 27E (ssÊ27E(3)). If an authorised officer is given access to business premises pursuant to a sÊ27E notice, the officer may be accompanied by a consultant engaged under s 40A for the purpose of receiving advice from the consultant in connection with the exercise of the officerÕs inspection powers (ss 27E(4)). The purpose of that provision is to enable authorised officers to utilise the expertise of specialists for example, consultants with technical expertise. The authorised officer will remain the person responsible for exercising the inspection powers. Any s 40A consultant accompanying the authorised officer will be under the direction and responsibility of the authorised officer.
Item 60 Failure by cash dealer to report or comply with notice
Existing paragraph 28(1)(b) is repealed as a consequence of the repeal of sections 14A, 17A and 17G and the insertion of new Part IVA. A new paragraph 28(1)(b) is inserted that makes it an offence for a cash dealer to fail to comply with a notice under s 27E as required by new ss 27E(3).
Item 61 Failure by solicitor to comply with s 27E notice
Subsection 28(3) is repealed and replaced by a new subsection which makes it an offence for a solicitor to fail to report under s 15A or comply with a notice under sÊ27E as required by new ssÊ27E(3).
Under new ss 28(4), an offence against s 28 is punishable by a maximum term of imprisonment of two years.
Item 62 False or misleading information by solicitor
New ss 29(2A) makes it an offence for a solicitor reporting pursuant to new s 15A, knowingly to make a false or misleading statement, or to omit anything from a statement without which, the statement is misleading in a material particular.
Item 63 False or misleading information generally
A technical amendment is made to ss 29(4) by the insertion of the word ÒorÓ following paragraphs 29(4)(aa) and (a) to make it clear that the paragraphs in ss 29(4) are disjunctive.
Item 64 Misleading a bullion seller vis-s-vis identification
New paragraph 29(4)(ab) creates an offence of misleading a bullion seller in the carrying out of a verification procedure under paragraph 24C(2)(a) or (b). For example, it would be an offence to represent oneself using a false name or identification.
Item 65 Cash transactions and international funds transfer instructions
An amendment is made to paragraph 29(4)(b). A person must not cause a cash dealer to make a report of an international funds transfer instruction out of or into Australia, which is false or misleading in a material particular.
Item 66 False or misleading information: penalties
Subsection 29(5) is repealed and replaced by new subsection. This is a technical amendment that updates the penalty provision.
Item 67 Incomplete information by solicitors
Existing ss 30(3) is repealed and replaced by a new ss 30(3) and a new penalty in ssÊ30(4). Under new ss 30(3), it is an offence for a solicitor knowingly to communicate information to the Director of AUSTRAC as required by new ss 15A that is incomplete in relation to the transaction.
New ss 30(4) prescribes the penalty for this offence, which is a fine not exceeding 10 penalty units.
Item 68 Penalties for seeking to avoiding the reporting requirements
This is a technical amendment that repeals ss 31(3) and replaces it with an updated penalty.
Item 69 Question and search powers - penalties
This is a technical amendment that repeals ss 33(9) and replaces it with an updated penalty for offences against ss 33(1) or (2).
Item 70 Penalties for resisting arrest
This is a technical amendment that repeals ss 33A(3) and replaces it with an updated penalty for offences of resisting, obstructing or preventing the arrest of any person under ss 33A.
Item 71 Defence of reasonable corporate precaution for bodies corporate
Offences against the Act may be committed by bodies corporate. Where an offence was committed by a director, servant or agent of the body corporate, acting within the scope of his or her actual or apparent authority, or by any person at the direction of a director, servant or agent of the company, the conduct of the person is imputed to the company and the company is deemed to have engaged in the proscribed conduct.
A body corporate is therefore vicariously liable for the criminal conduct of its directors, servants or agents in certain circumstances Other Commonwealth legislation establishes liability similarly, but at the same time provides a defence for the company of Ôreasonable corporate precautionÕ, for example, ss 65(2) of the Ozone Protection Act 1989.
Subsection 34(2) is amended to include a defence of reasonable precaution that prevents the criminal conduct of directors, servants or agents from being imputed to the body corporate where the body corporate can demonstrate that it took reasonable precautions and exercised due diligence to avoid such conduct of its directors servants and agents.
Item 72 Defence of reasonable precaution for other persons
Similarly, the conduct of the servants or agents of entities which are not bodies corporate can be imputed to the non-corporate entity (for example a partnership) where the servants or agents engaged in the proscribed conduct.
Subsection 34(4) is amended to include a defence of reasonable precaution that prevents the criminal conduct of a non-corporate entityÕs servants or agents from being imputed to it where the non-corporate business entity can demonstrate that it took reasonable precautions and exercised due diligence to avoid such conduct of its servants and agents.
Item 73 Delegation power
This proposed amendment is a technical amendment of a drafting nature only, and simplifies the wording of the existing delegation in s 39. The substance of the delegation power is unchanged.
Item 74 Amendment of schedules
Section 42A is amended by the insertion of schedule 3A which governs cash transactions reports by solicitors.
Item 75 Schedule 3A Reportable details under s 15A
Subsection 15A(1) concerns the reportable details of a significant cash transaction that a solicitor, a solicitor corporation or a solicitor partnership must include in a report.
When a solicitor reports a significant transaction, the solicitor must include various information in that report. There are five broad categories (items) of information that must be included.

Item 1 concerns details of the significant cash transaction. That item requires
¥ the nature of the transaction (item 1.1);
¥ the date of the transaction (item 1.2);
¥ the total amount of currency involved in the transaction (item 1.3);
¥ the total monetary amount of the transaction (item 1.4);
¥ the foreign currency (if any) involved in the transaction (item 1.5).
Item 2 requires details of the solicitor, corporation or partnership, namely :
¥ the solicitorÕs name (item 2.1);
¥ the address of the solicitorÕs principal office (item 2.2);
¥ the address of the place where the transaction was conducted (item 2.3);
Item 3 requires details of each other person who is party to the transaction, namely :
¥ the name or names of the person (item 3.1);
¥ the business or residential address of the person (item 3.2);
¥ the occupation, business or principal activity of the person (item 3.3);
¥ the date of birth of the person (item 3.4).
Where the transaction was conducted on behalf of a principal, item 4 requires the details of the principal, namely :
¥ the principalÕs name (item 4.1);
¥ an address for the principal (item 4.2);
¥ the principalÕs occupation or business (item 4.3).
Where a cheque or bankerÕs draft is involved in the transaction, item 5 requires
¥ the name of the drawer of the cheque or draft (item 5.1);
¥ the name of the payee, favouree or beneficiary of the cheque or draft (if any) (item 5.2);
¥ the name and branch of the financial institution or foreign financial institution upon whom the cheque or bankerÕs draft was drawn and the country in which the branch is located (item 5.3).
Item 76 Transitional Provisions
A member of staff who was an authorised officer immediately before the commencement of these amendments to the Act continues to be an authorised officer as if he or she were appointed under new s 27A.
A delegation in force under s 39 of the Act in force immediately before the commencement of this amending Act remains in force as if it were made under new sÊ39 of the Act.

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