The intended effect of Australia’s terrorism financing laws is to enable the freezing of terrorist assets and to stop funds getting to terrorists and terrorist organisations, and to impose criminal penalties on those who seek to finance terrorism. However, the INSLM’s review this year of the terrorism financing laws has shown the difficulty if not impossibility of demonstrating whether the practical application of the laws has produced this result. The INSLM’s review found the effectiveness of the laws, especially with regard to their preventive and deterrent purpose, to be compromised by the difficulties of proof associated with prosecuting terrorism financing offences. The relatively light sentences imposed in the few cases where the offences have been successfully prosecuted have not assisted in this regard. The lack of enforcement action taken under the asset freezing régime also makes the efficacy of the asset freezing laws as a counter-terrorism measure, at least so far as actual freezing of funds are concerned, doubtful.
There has been only one prosecution for terrorism financing offences under the UN Charter Act (this case involved funds and electronic components being sent to the LTTE and is
293 See Recommendation III/14 in Chapter III that category D extended geographical jurisdiction should be applied
to all offences under Australia’s terrorism financing laws.
discussed in Chapter III).295 There have been three individuals successfully prosecuted for
attempting to fund a terrorist organisation under sec 102.6 of the Criminal Code. There have been no prosecutions for the terrorism financing offences under Div 103 of the Criminal Code.296
As with other preparatory offences, the terrorism financing laws are intended to have a preventive effect by enabling authorities to take action before a terrorist act occurs and providing for the imposition of heavy penalties (from 10 years to life imprisonment) for those involved in dealing with terrorist assets, financing terrorist organisations or financing terrorist acts.
The INSLM sought information on the application of the freezing and injunction powers under the UN Charter Act and the Autonomous Sanctions Act from the AFP and DFAT.297 In
relation to terrorist assets frozen, the INSLM’s enquiries revealed only one instance of terrorist asset freezing. This was pursuant to Part 4 of the UN Charter Act and was in relation to an entity proscribed by the Minister under sec 15 of the UN Charter Act.
The INSLM was not made aware of any terrorist assets frozen under Part 3 of the UN Charter Act or the Autonomous Sanctions Act. The INSLM was not made aware of any injunctions sought for conduct contravening the UN Charter Act or the Autonomous Sanctions Act. The INSLM was not made aware of any criminal forfeiture of any property in relation to terrorism financing offences.
Of course, this may not reflect a deficiency in the legislation or its application and may simply reflect the reality that terrorist assets are not held by financial institutions within Australia’s jurisdiction. Of the 2,500 plus proscribed entities and individuals on DFAT’s Consolidated List,298 none is listed as being Australian citizens or permanent residents, none is listed as
295 There have been no prosecutions for offences under Part 3 of the UN Charter Act or the Autonomous Sanctions
Act.
296 For a list of all persons charged as well as those prosecuted for terrorism financing offences under the Criminal
Code and UN Charter Act see Appendix J.
297 DFAT administers the UN Charter Act and Autonomous sanctions régimes, and the AFP investigates terrorism
financing offences and must be notified of freezable assets. Under reg 24 of the Autonomous Sanctions Regulations
2011 (Cth) and reg 42 of the Charter of the United Nations (Dealing with Assets) Regulations 2008 (Cth), a person
holding a controlled asset is required to notify the AFP as soon as is practicable after forming an opinion that the asset is a controlled asset (that is, the asset is controlled by a proscribed person or entity, or is a listed asset).
298 Which includes all those persons, entities and assets subject to Australian sanctions under Parts 3 and 4 of the UN
being located in Australia and none is listed as being incorporated in Australia.299 While it is
not a condition of proscription that an individual or entity has any assets within Australia’s jurisdiction, if there are no or few assets within the jurisdiction, this will impact the amount of assets capable of being frozen.300
In assessing the deterrent and disruptive effect of the UK’s terrorist asset freezing régime, David Anderson QC, the UK Independent Reviewer of Terrorism Legislation, noted the UK Treasury’s submission to his Review that the centrality of London as an international financial centre coupled with the interconnectedness of global finance mean that an asset freeze in the UK is of more value than it might be elsewhere. However, the UK Independent Reviewer went on to find that the application of the UK’s asset freezing régime has shown a “remarkably small” amount of assets frozen. As in the Australian experience, this is consistent with the possibility that many of the individuals and entities proscribed have few if any assets within the jurisdiction.301 The UK Reviewer further noted that there are currently no assets frozen
in relation to Northern Ireland based terrorism.302
The fact that terrorists may not have assets in Australia does not relieve Australia of its international obligations to ensure Australia is not a safe haven for terrorist financiers. The international effort to prevent terrorism financing requires all States to “prevent and counteract movements of funds suspected to be intended for terrorist purposes”.303 As the UK
Independent Reviewer has noted “designation of a known terrorist organisation with a history of fundraising in the United Kingdom may be assumed to have useful disruptive effects, even if the group’s activities are chiefly directed abroad”.304 The LTTE case shows the application
of Australia’s terrorist asset freezing laws to further fundraising by the Tamil diaspora in Australia for the Sri-Lankan based LTTE.
299 The Consolidated List includes such information for the majority of listings (date of birth, citizenship, address, last
known location, place of incorporation etc are all details usually provided). Only one individual is listed as having assets in Australia (a property in Victoria), however, that individual is proscribed pursuant to sanctions in relation to Liberia (UN Security Council Resolution 1521) and is not proscribed for any association with terrorism.
300 Similarly, all of the 18 organisations proscribed by regulation as a “terrorist organisation” under the Criminal Code
are based overseas.
301 David Anderson QC, Independent Reviewer of Terrorism Legislation, First Report on the Operation of the
Terrorist Asset-Freezing Etc. Act 2010 (December 2011) para 2.11
302 David Anderson QC, Independent Reviewer of Terrorism Legislation, First Report on the Operation of the
Terrorist Asset-Freezing Etc. Act 2010 (December 2011) para 5.29
303 Terrorism Financing Convention, preambular clause
304 David Anderson QC, Independent Reviewer of Terrorism Legislation, First Report on the Operation of the
An unsolved problem for the INSLM is how to gauge the efficacy of the laws creating terrorism financing offences. In the abstract, one would measure the extent of terrorism financing before the laws came into effect and compare it with the extent thereafter. The empirical data able to be provided by the relevant agencies to the INSLM do not begin to render that exercise concrete. It is true that we know the numbers of charges, investigations and involved persons after enactment of these offences has been very small. We know the sums or values frozen after enactment of these laws are very small. We do not know the comparable measures before enactment of these laws.
In particular, there are virtually no data on terrorism financing involving conduct in Australia or by Australians, such as to enable an estimate of the material support for terrorism which is being provided by such conduct or citizens, against which these laws are targeted.
It follows from these unknown measures that it is not possible for the INSLM to report that the terrorism financing offences have been efficacious laws. We do not know whether their existence or rather rare enforcement has deterred anyone from doing anything.