November 2006 Top Story:
**MLI ARCHIVE***
Rise in transaction reports raises privacy advocates’ suspicions
A read through the Australian Privacy Foundation’s submission to the Attorney General and Austrac – submitted during the second consultation period – gives a pretty good sense of the contempt privacy campaigners hold for the AML/CTF bill and the suspicious activity reports process which supports it.
Reporting of suspicious transactions to Austrac has jumped significantly in the past year to nearly 25,000, although the 44 per cent jump is much the same as the preceding two years, which have shown a similar growth path (as the figures below show).
Many have put down the increase – published in Austrac’s 2005-06 annual report – down to the more aggressive industry education programs, leading to increased compliance, rather than any big rise in money laundering activity.
The Austrac annual report shows reports are up from 17,212 to 24,801, a 44 per cent increase on the year before.
KPMG associate director Tony Byrne said he believed the increase had to do with people’s growing awareness of the many predicate offences related to money laundering. “We’re not a defensive regime, which some argue the US has become,” he said.
But Australian Privacy Foundation spokesman Nigel Waters warned last month that there was greater risk of wrongful reporting of customers. “We have repeatedly suggested that there should be a mechanism for telling people they have been the subject of a report if nothing comes of it,” he said.
The government is also proposing changes to tax secrecy laws which mean that intelligence agencies will be able to share tax information as part of their investigations.
They will also be able to use an individual’s tax information to crack down on money laundering, non-tax fraud, identity crime, national security and terrorist financing.
But lawyers and tax experts have criticised the changes to the secrecy provisions, warning that they could infringe on the privacy of individuals, saying the changes could lead to “over-eager” intelligence agencies misusing Australian Taxation Office information during investigations.
The Law Institute of Victoria said tax information should only be used for tax purposes. It said that while disclosing individual tax information is useful for social security purposes, it did not warrant sharing between agencies.
It would only approve of using tax information for non-tax related crimes “where court approval is obtained”.
The president of the Taxation Institute, Andrew Mills, said a person’s right to have their tax information protected was “paramount”.
Mills warned that the ability of the tax office to disclose information to intelligence agencies could stop taxpayers from fully disclosing their sources of income. “What impact the potential of such additional disclosure has on the ability of the ATO to garner information in the first place must be a serious concern, and the risk of driving more activities underground must be carefully considered,” he said.
DelMonte Publications Nov 2006
