On 17 August 2017 the Government announced the creation of a bill to strengthen the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and increase the powers of the Australian Transactions and Reporting Analysis Centre (AUSTRAC).
This bill has been dubbed the “Bitcoin bill”, due to particular concern to enforcement agencies with the proliferation of Bitcoin and other crypto-currency transactions, which are widely considered to be used for illegal purposes. This is predominately due to the anonymity associated with Bitcoin users which makes it difficult for law enforcement agencies to identify and track them.
Nyman Gibson Miralis’ submissions to Parliament
Nyman Gibson Miralis’ submissions sought to highlight that there was a critical need to strike the appropriate balance between strengthening law enforcement agencies’ powers to detect and prevent criminal activity concerning Bitcoin users and protecting the public interest in upholding the rule of law.
The particular concerns that were raised in our submissions to Parliament related to the following areas:
- Increase of Police Powers – Search and Seizure
- Refusal to Answer Police Question – Civil Penalties
- Sharing of Information with Overseas Agencies
- Jurisdictional Issues
On October 18 2017, the Legal and Constitutional Affairs Legislation Committee published its report in response to the submissions it received from various concerned parties. The responses relating to Nyman Gibson Miralis’ submissions are explored below – click here to view the full report
To see Nyman Gibson Miralis’ full submissions please view Nyman Gibson Miralis Response to AML and CTF Amendment Bill 2017
Increase police powers – search and seizure
The proposed legislative amendments in The Bill sought to expand police powers of search and seizure where there was suspicion of money laundering, terrorism financing or another serious criminal offence, or a breach of the cross-border reporting requirements under the AML/CTF Act.
s199(3) of The Bill discusses the proposed powers of a police/customs officer to ‘examine an article’ that a person has with them in a number of scenarios, such as if they are about to leave Australia or have just arrived to Australia.
Nyman Gibson Miralis submitted that ‘article’ had been left undefined in the existing Act or The Bill. Indeed, the Legislative Committee Report recognised this where it stated [paragraphs 2.20 – 2.24):
Nyman Gibson Miralis expressed concern that the word ‘article’ used in the proposed section 199(3) is not defined either in the bill or in the AML/CTF Act.
It stated that the word ‘article’ could be broadly interpreted to include items such as laptops, smart phones, tablets or smart watches. However, this was unclear in the Explanatory Memorandum [EM] and the bill. Moreover, they noted that the bill did not clarify whether the ability to seize items such as laptops or smartphones would also include the power to compel the provision of passwords or passcodes.
Nyman Gibson Miralis recommended that the term ‘articles’ be explicitly defined, including the kinds of articles that are intended to be searched.
The report also discussed further comments from Nyman Gibson Miralis regarding the human rights implications of giving Police unlimited powers to search, seize, and force disclosure of personal information (such as passwords) without a warrant.
Civil penalties for refusing to comply with questioning and search powers
The Bill sought to enact civil penalties that would apply to suspects should they fail to answer police questions.
Undoubtedly, the inclusion of such an amendment contravenes the common law privilege against self-incrimination. This privilege entitles a person to refuse to answer any question if the answer could potentially incriminate that person.
Indeed the Legislative Committee noted our concern where it stated [paragraph 2.39]:
Nyman Gibson Miralis expressed concern that the application of a civil penalty for refusing to give certain information to police or customs officers may contravene the common law privilege against self-incrimination
Sharing of information with overseas agencies
One of the key concerns arising from the proposed legislative amendments was the sharing of and providing access to AUSTRAC information to overseas agencies.
The Legislative Committee noted our concerns [paragraph 2.57 – 2.58]
Nyman Gibson Miralis raised concerns regarding the proposed increase of AUSTRAC’s functions to share information with overseas agencies:
The Bill is silent on how the sharing of Australian citizens’ information will reconcile with the statutory protections in the Privacy Act 1988 (Cth). There is also a lack of oversight from any organisation (nationally or internationally) that controls what information can lawfully be shared. This oversight is amplified considering an accused person has an entrenched human right to privacy.
The Bill sought to provide identification of digital currency users by requiring digital currency exchange providers to register and disclose personal details on a Digital Currency Exchange Register.
The Legislative Committee noted in their report [at paragraph 2.71]:
Nyman Gibson Miralis stated in their submission that the bill is not clear on whether it will capture individuals exchanging a digital currency outside Australia. It notes in its submission that digital currencies could transcend Australian laws, and individuals may be able to circumvent the proposed amendments by seeking to exchange with a currency provider outside Australia’s jurisdiction.
The Legislative Committee made two recommendations in its report after reviewing the entirety of the submissions that were sent to Parliament. This included a recommendation based on the concerns identified by Nyman Gibson Miralis
The Committee’s Recommendations were as follows:
- The committee recommends that the government consider whether the terms ‘article’, ‘stored value card’ and ‘in the course of carrying on a business’ in the bill and Explanatory Memorandum, could be better defined with a view to addressing the uncertainty expressed by some submitters, and amendments where relevant.
- The committee recommends that the bill be passed.
Nyman Gibson Miralis specialise in all aspects of Bitcoin and digital currency & encryption law, assisting companies and individuals who are the subject of investigations by AUSTRAC, the AFP, ATO and ACIC. If you require assistance, contact one of our expert criminal defence lawyers