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Check the Balance: Is the Doctrine of Separation of Powers Sufficient in the Context of Intergovernmental Organisations? A Case Study of Australia’s AML/CTF Financing Framework

Published online by Cambridge University Press:  01 January 2025

Doron Goldbarsht Open the ORCID record for Doron Goldbarsht [Opens in a new window]  and
Hannah Harris
Doron Goldbarsht*
Affiliation:
Macquarie Law School
Hannah Harris*
Affiliation:
Macquarie Law School
*
The author may be contacted at doron.goldbarsht@mq.edu.au
The author may be contacted at doron.goldbarsht@mq.edu.au
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Abstract

This article demonstrates the pressing need to rethink the doctrine of separation of powers in Australia in light of the increasing influence of intergovernmental organisations such as the Financial Action Task Force (‘FATF’), which are shaping domestic lawmaking. The article documents the influence of the FATF on Australia’s anti-money laundering and counter-terrorism financing framework, showing how FATF ‘recommendations’ are in fact decrees that Australia and other nation states integrate into their domestic legal systems — even when the legislative branch of government does not support such actions. The article suggests that Australia should consider implementing a fourth arm of government — an integrity arm — to strengthen the nation against the influence of intergovernmental organisations.

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Articles
Information
Federal Law Review , Volume 50 , Issue 4 , December 2022 , pp. 527 - 557
Copyright
Copyright © 2022 The Author(s)

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Footnotes

The authors wish to thank Ms Vrinda Jain for excellent research assistance.

References

1. The traditional approach to analysis of international governance in the realm of international law commonly takes Article 38(1) of the Statute of the International Court of Justice (‘ICJ Statute’) as a starting point. This article identifies three main sources of international law: (a) treaties between states; (b) customary international law derived from the practice of states and (c) general principles of law recognised by civilised nations. In addition, Article 38(1) refers to judicial decisions and the ‘teachings of the most highly qualified publicists’ as subsidiary means for the determination of rules of international law. Strictly speaking, the ICJ Statute, as an international treaty, is only binding for those states that have ratified it. However, because 193 states have ratified the ICJ Statute as an annex to the Charter of the United Nations (‘UN Charter’), Article 38 is generally considered to provide an authoritative list of sources of international law. At the same time, it has been questioned whether this list continues to provide an adequate reflection of applicable norms and standards in contemporary international governance. For example, this traditional framework does not account for resolutions of the UNSC, which, although related to an international treaty (the UN Charter), constitute administrative acts by an organ of an international organisation. As such, these resolutions do not readily fall within the ambit of Article 38 of the ICJ Statute. Yet, Article 25 of the UN Charter stipulates that UNSC resolutions are binding by requiring the members of the United Nations ‘to accept and carry out the decisions of the Security Council in accordance with the present Charter’. Indeed, resolutions of the UNSC, particularly those adopted under Chapter VII of the UN Charter, play a significant role in contemporary international governance. See Doron Goldbarsht and Christopher Michaelson, ‘International Legal and Quasi-Legal Approaches to Combatting Money Laundering: An Australian Perspective on Norm-Development’ in Petrus C van Duyne et al (eds), The Many Faces of Crime for Profit and Ways of Tackling It (Wolf Legal Publishers, 2017) 197; see generally Alan Boyle and Christine Chinkin, The Making of International Law (Oxford University Press, 2007).

2. Ben Hayes, for example, has called the FATF a ‘powerful yet unaccountable global standard-setting body [which] is helping repressive civil society regulations to spread and flourish across the globe’: Ben Hayes, ‘From Countering Financial Crime to Criminalizing Civil Society: How the FATF Overstepped the Mark’, Open Society Foundations (Web Page, 8 May 2013) <https://www.opensocietyfoundations.org/voices/countering-financial-crime-criminalizing-civil-society-how-fatf-overstepped-mark>.

3. Benedict Kingsbury, Nico Krisch and Richard B Stewart, ‘The Emergence of Global Administrative Law’ (2005) 68(3–4) Law and Contemporary Problems 15; For the influence of international norms on national administrative law, see Daphne Barak-Erez and Oren Perez, ‘Whose Administrative Law Is It Anyway? How Global Norms Reshape the Administrative State’ (2013) 46(3) Cornell International Law Journal 456.

4. Anne-Marie Slaughter, ‘The Real New World Order’ (1997) 76(5) Foreign Affairs 183, 184–5.

5. Joel P Trachtman, ‘International Regulatory Competition, Externalization, and Jurisdiction’ (1993) 34 Harvard International Law Journal 47, 66–7.

6. David Schneiderman, Constitutionalizing Economic Globalization: Investment Rules and Democracy’s Promise (Cambridge University Press, 2008).

7. Daniel C Esty, ‘Revitalizing Environmental Federalism’ (1996) 95(3) Michigan Law Review 570, 638.

8. Virginia A Leary, ‘“Workers’” Rights and International Trade: The Social Clause’ in Jagdish N Bhagwati and Robert E Hudec (eds), Fair Trade and Harmonization (MIT Press, 1996) vol 2, 183.

9. Richard Dale, The Regulation of International Banking (Woodhead-Faulkner, 1986) 72–85.

10. For the influence of international norms on national administrative law, see Barak-Erez and Perez (n 3) 465–6; Richard Falk and Andrew L Strauss, ‘On the Creation of a Global Peoples Assembly: Legitimacy and the Power of Popular Sovereignty’ (2000) 36(2) Stanford Journal of International Law 191, 212; Lewis Rosman, ‘Public Participation in International Pesticide Regulation: When the Codex Commission Decides, Who Will Listen?’ (1993) 12(2) Virginia Environmental Law Journal 329; Oren Perez, Yair Hamburger and Tammy Shterental, ‘The Dynamic of Corporate Self-Regulation: ISO 14001, Environmental Commitment, and Organizational Citizenship Behaviour’ (2009) 43(3) Law and Society Review 593; Adi Ayal, Oren Perez and Ronen Hareuveny, ‘Science, Politics and Transnational Regulation: Regulatory Scientific Institutions and the Dilemmas of Hybrid Authority’ (2013) 2(1) Transnational Environmental Law 45; IFRS Foundation and International Accounting Standards Board, Who We Are and What We Do (www.ifrs.org, last viewed July 2022). The Global Reporting Initiative is an international organisation that helps businesses and governments understand the impact of business on critical sustainability issues (such as climate change, human rights and corruption). The IFRS Foundation was established to develop a single set of high-quality globally accepted accounting standards and to promote and facilitate the adoption of the standards.

11. Ben Saul, ‘The Emerging International Law of Terrorism’, Indian Yearbook of International Law and Policy (2010) 1, 163, 173.

12. ‘Who We Are’, FATF (Web Page) <https://www.fatf-gafi.org/about/whoweare/>.

13. Ibid.

14. Financial Action Task Force, International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferations: The FATF Recommendations (March 2022), 12, 27, 31, 37.

15. Financial Action Task Force, The FATF Recommendations (June 2019), 7 <https://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html> (‘FATF Recommendations’).

16. ‘FATF Ministers Give FATF an Open-Ended Mandate’, FATF (Web Page, 12 April 2019) <http://www.fatf-gafi.org/publications/fatfgeneral/documents/fatf-mandate.html>.

17. In addition to the FATF, there are 11 other agencies that conduct mutual evaluation to assess compliance with the FATF 40 recommendations: the Asia/Pacific Group on Money Laundering; the Caribbean Financial Action Task Force; the Eurasian Group; the Eastern and Southern Africa Anti-Money Laundering Group; the Task Force on Money Laundering in Central Africa; the Financial Action Task Force of Latin America; the Inter-Governmental Action Group against Money Laundering in West Africa; the Middle East and North Africa Financial Action Task Force; the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism; the World Bank and the IMF.

18. ‘Find a Country’, FATF (Web Page) <https://www.fatf-gafi.org/countries/>.

19. Kenneth S Blazejewski, ‘The FATF and Its Institutional Partners: Improving the Effectiveness and Accountability of Transgovernmental Networks’ (2008) 22(1) Temple International and Comparative Law Journal 1, 8.

20. Kenneth W Abbott, Duncan Snidal and Bernhard Zangl (eds), International Organizations as Orchestrators (Cambridge University Press, 2015) 289.

21. Mark T Nance, ‘Re-Thinking FATF: An Experimentalist Interpretation of the Financial Action Task Force’ (2017) 69(2) Crime Law and Social Change 131, 133.

22. James Thuo Gathii, ‘The Financial Action Task Force and Global Administrative Law’ (Legal Studies Research Paper Series No 10 of 2010–2011, Albany Law School, 2010); Fiona de Londras, ‘The Transnational Counter-Terrorism Order: A Problématique’ (2019) 72(1) Current Legal Problems 203, 205; Usman W Chohan, ‘The FATF in the Global Financial Architecture: Challenges and Implications’ (CASS Working Papers on Economics & National Affairs, EC001UC, 14 March 2019), 8.

23. There is a substantial body of literature that emphasises that not all consultation meaningfully achieves the result of inclusive decision-making. See, eg, Michael Eitner, ‘Meaningful Consultation with Tribal Governments: A Uniform Standard to Guarantee That Federal Agencies Properly Consider Their Concerns’ (2014) 85(3) University of Colorado Law Review 867; Cary Coglianese, Heather Kilmartin and Evan Mendelson, ‘Transparency and Public Participation in the Rulemaking Process’ (2009) 77 George Washington Law Review 924; Claire A Dunlop et al, ‘Does Consultation Count for Corruption? The Causal Relations in the EU-28’ (2020) 27(11) Journal of European Public Policy 1718.

24. See generally Anne-Marie Slaughter, A New World Order (Princeton University Press, 2005); Olaf Dilling, Martin Herberg and Gerd Winter (eds), Transnational Administrative Rule-Making: Performance, Legal Effects and Legitimacy (Hart Publishing, 2011).

25. Goldbarsht and Michaelson (n 1) 214–15.

26. Hannes Schoombee, ‘Administrative Law: Choice of Remedies’ (1995) 6 Australian Institute of Administrative Law Forum 9, 11; John McMillan, ‘Ombudsman and the Rule of Law’ (2005) 44 Australian Institute of Administrative Law Forum 1, 8.

27. George Williams, Sean Brennan and Andrew Lynch, Blackshield and Williams Australian Constitutional Law and Theory: Commentary and Materials (Federation Press, 7th ed, 2018) 25.

28. Charles de Secondat, Baron de Montesquieu, The Spirit of the Laws, tr Thomas Nugent (Hafner Press, 1949) 150–1.

29. Williams, Brennan and Lynch (n 27) 26.

30. Owen Hood Phillips and Paul Jackson, Constitutional and Administrative Law (Sweet and Maxwell, 7th ed, 1987) 12–13.

31. Under the Australian Constitution, the Commonwealth Parliament has defined subject areas in which it has power to legislate: section 51. This is different from the states, which have general law-making powers. However, where a valid Commonwealth law is inconsistent with a law of a state, the Constitution provides that the Commonwealth law prevails.

32. No High Court justice has ever been removed from office.

33. Alysia Blackham and George Williams, ‘The Appointment of Ministers from Outside of Parliament’ (2012) 40(2) Federal Law Review 253, 255.

34. Williams, Brennan and Lynch (n 27) 504.

35. The separation of judicial power assists the public perception; it is central to the Australian system of government those legal controversies are resolved by judges acting independently of the other branches of government and free from political interference. Judges must be independent of government because a significant amount of their work involves dealing with disputes between the executive and citizens and the rule of law often requires courts to uphold the rights of citizens against the executive. It is a guarantee of liberty.

36. R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 (‘Boilermakers’).

37. In Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245, the High Court held that the Human Rights and Equal Opportunity Commission could not make a determination awarding compensation for racial discrimination that was to have effect and be enforced as if it were an order made by the Federal Court. More recently, in Lane v Morrison (2009) 239 CLR 230, the High Court held that the creation of the Australian Military Court was an impermissible attempt to create a ‘legislative court’ — a court outside Chapter III that was exercising the judicial power of the Commonwealth. The other limb of Boilermakers is that an incompatible non-judicial function cannot be conferred on a federal judicial officer. An example, from Wilson v Minister for Aboriginal & Torres Strait Islander Affairs (1996) 189 CLR 1 (‘Wilson’), is that a Federal Court judge could not be appointed under Aboriginal heritage protection legislation to conduct an inquiry and prepare a report for government on the much-publicised Hindmarsh Island Bridge dispute in South Australia.

38. Wilson (n 37) 11 (Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ).

39. William Harrison Moore, The Constitution of the Commonwealth of Australia (Maxwell, 2nd ed, 1910) 322.

40. Enid Campbell and HP Lee, The Australian Judiciary (Cambridge University Press, 2001) 50.

41. Boilermakers (n 36) 276 (Dixon CJ, McTiernan, Fullagar and Kitto JJ).

42. Wilson (n 37) 10–11, 13 (Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ).

43. John McMillan, ‘Re-thinking the Separation of Powers’ (2010) 38(3) Federal Law Review 423, 425.

44. Ibid. Kerr and Williams argue that the importance of the Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 case is that it expresses the constitutional basis for judicial review of executive action: Duncan Kerr and George Williams, ‘Review of Executive Action and the Rule of Law under the Australian Constitution’ (2003) 14 Public Law Review 219. See also Ruddock v Vadarlis (2001) 110 FCR 491.

45. Katharine Gelber, ‘High Court Review 2005: The Manifestation of Separation of Powers in Australia’ (2006) 41(3) Australian Journal of Political Science 437, 439.

46. Kerr and Williams (n 44) 225.

47. Ibid.

48. Such bodies include the Australian Capital Territory Anti-Corruption and Integrity Commission, the New South Wales Independent Commission Against Corruption, the Northern Territory Independent Commission Against Corruption, the Queensland Crime and Corruption Commission, the South Australian Independent Commission Against Corruption, the Tasmanian Integrity Commission, the Victorian Independent Broad-based Anti-corruption Commission and the Western Australian Corruption and Crime Commission. See Senate Select Committee on a National Integrity Commission, Parliament of Australia, Select Committee on a National Integrity Commission (Report, 13 September 2017) ch 3. See generally Robyn Creyke, John McMillan and Rocque Reynolds, Control of Government Action: Text, Cases & Commentary (LexisNexis Butterworths, 5th ed, 2009) 272.

49. Williams, Brennan and Lynch (n 27) 503.

50. Creyke, McMillan and Reynolds (n 48) 259–60.

51. ‘Legislation and Jurisdiction’, Administrative Appeals Tribunal (Web Page) <https://www.aat.gov.au/resources/legislation-and-jurisdiction>.

52. Dennis Pearce, ‘The Commonwealth Ombudsman: The Right Office in the Wrong Place’ in Robin Creyke and John McMillan (eds), The Kerr Vision of Australian Administrative Law: At the Twenty-Five Year Mark (Centre for International and Public Law, 1998) 65.

53. Ibid. Pearce explains that this was particularly noticeable in the early years of the Ombudsman office in Victoria.

54. Ibid 66–8.

55. Schoombee (n 26) 9–13.

56. McMillan, ‘Ombudsman and the Rule of Law’ (n 26) 8.

57. Williams, Brennan and Lynch (n 27) 974.

58. Ibid 975; Polites v Commonwealth (1945) 70 CLR 60, 69 (Latham CJ).

59. See, eg, Chow Hung Ching v The King (1948) 77 CLR 449, 478 (Dixon J); Dietrich v The Queen (1992) 177 CLR 292.

60. Kioa v West (1985) 159 CLR 550, 570 (Gibbs CJ).

61. (1945) 70 CLR 60.

62. Ibid 69 (Latham CJ). See also Horta v Commonwealth (1994) 181 CLR 183.

63. Tajjour v New South Wales (2014) 254 CLR 508, 554 (French CJ); Plaintiff S195/2016 v Minister for Immigration and Border Protection (2017) 261 CLR 622.

64. (1936) 55 CLR 608 (‘Burgess’).

65. Williams, Brennan and Lynch (n 27) 987.

66. (1996) 187 CLR 416 (‘Industrial Relations Act Case’).

67. International Labour Organization, Convention Concerning Minimum Wage Fixing with Special Reference to Developing Countries, ILO doc C131 (22 June 1970, entered into force 29 April 1972) (‘Minimum Wage Fixing Convention’).

68. Industrial Relations Act Case (n 66) 509 (Brennan CJ, Toohey, Gaudron, McHugh and Gummow JJ); Minimum Wage Fixing Convention (n 67).

69. Pape v Commissioner of Taxation (2009) 238 CLR 1, 113.

70. Victoria v Commonwealth (1996) 187 CLR 416.

71. Polyukhovic v Commonwealth (1991) 172 CLR 501, 632; cf Alqudsi v Commonwealth (2015) 91 NSWLR 92, 115 [107] (Leeming JA).

72. See, eg, XYZ v Commonwealth (2006) 227 CLR 532. See generally Sarah Murray, ‘Back to ABC after XYZ: Should We Be Concerned about “International Concern”?’ (2007) 35(2) Federal Law Review 317.

73. Elise Edson, ‘Section 51(xxix) of the Australian Constitution and “Matters of International Concern”: Is There Anything to Be Concerned About?’ (2008) 29(2) Adelaide Law Review 269, 313–14.

74. Replacement Explanatory Memorandum, Anti-Money Laundering and Counter-Terrorism Financing Bill 2006 (Cth) 21–2 (‘Replacement Explanatory Memorandum’). See also Commonwealth, Parliamentary Debates, House of Representatives, 1 November 2006, 1–2 (Philip Ruddock, Attorney General).

75. Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 3(2) (‘AML/CTF Act’). These obligations include the United Nations Convention against Corruption, 9 December 2003, GA Res 58/4, UN Doc A/58/422 (entered into force 14 December 2005); the United Nations Convention against Transnational Organised Crime, 8 January 2001, A/RES/55/25; the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, 16 May 2005, CETS No 198 (entered into force 1 May 2008) and the International Convention for the Suppression of the Financing of Terrorism, 9 December 1999, entered into force 10 April 2002, UN Doc A/54/49 (Vol. I) (1999).

76. Replacement Explanatory Memorandum (n 74) 22.

77. AML/CTF Act (n 75) sch 1.

78. Ibid; Replacement Explanatory Memorandum (n 74) 27, 201.

79. Replacement Explanatory Memorandum (n 7474) 201.

80. Convention on the Organisation for Economic Co-operation and Development, and Supplementary Protocols 1 and 2, opened for signature 14 December 1960, 888 UNTS 179 (entered into force 30 September 1961); ‘Declaration by Certain Member Countries Relating to the Convention on the OECD’, Organisation for Economic Co-operation and Development (Web Page) <https://www.oecd.org/general/declarationsbycertainmembercountriesrelatingtotheconventionontheoecd.htm>.

81. Financial Action Task Force on Money Laundering, Report (Report, 1990).

82. Parliament of Australia, A History of the Joint Standing Committee on Treaties: 20 Years (Report 60, March 2016) 8 [2.13] <https://www.aph.gov.au/∼/media/02ParliamentaryBusiness/24Committees/244JointCommittees/JSCT/2016/Seminar/PDF/Report160/FinalReport.pdf>.

83. Andrew Byrnes, ‘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”?’ (Joint Standing Committee on Treaties, Parliament of Australia, Twentieth Anniversary Seminar, 18 March 2016) 5; Joint Standing Committee on Treaties, Parliament of Australia, Resolution of Appointment (2013).

84. Cf ‘Australia’s Treaty-Making Process’, Department of Foreign Affairs and Trade (Web Page) <https://www.dfat.gov.au/international-relations/treaties/treaty-making-process>.

85. Doron Goldbarsht, ‘Who’s the Legislator Anyway? How the FATF’s Global Norms Reshape Australian Counter Terrorist Financing Laws’ (2017) 45(1) Federal Law Review 127, 136.

86. Petrus C Van Duyne, Jackie H Harvey and Liliya Y Gelemerova, The Critical Handbook of Money Laundering: Policy, Analysis and Myths (Palgrave Macmillan, 2018) 144.

87. Statement by FATF President Bjørn S Aamo (EU Conference, Fighting Money Laundering and Terrorist Financing — New Framework, Future Challenges, 15 March 2013).

88. Goldbarsht and Michaelson, ‘International Legal and Quasi-Legal Approaches’ (n 1) 206.

89. Van Duyne, Harvey and Gelemerova, The Critical Handbook of Money Laundering (n 86) 124.

90. Financial Action Task Force, Money Laundering, Annual Report 1991–1992 (25 June 1992) 18.

91. International organisations use one or a combination of three types of decision-making rules for most non-judicial action: ‘majoritarian’ (decisions are taken by a majority vote of member states, and each member has one vote); ‘weighted voting’ (decisions are taken by a majority or super-majority, with each state assigned votes or other procedural powers in proportion to its population, financial contribution to the organisation or other factors) or ‘sovereign equality’. Organisations with these latter rules offer equal representation and voting power. See Richard H Steinberg, ‘In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the GATT/WTO’ (2020) 56(2) International Organization 339; see also G White, ‘Book Review: International Regimes, edited by Stephen D Krasner’ (1984) 33(3) International and Comparative Law Quarterly 746.

92. Steinberg (n 91) 340.

93. Todd Doyle, ‘Cleaning Up Anti-Money Laundering Strategies: Current FATF Tactics Needlessly Violate International Law’ (2002) 24(2) Houston Journal of International Law 279, 300; see generally Karl R Popper, The Logic of Scientific Discovery (Hutchinson, 1959); Goldbarsht, ‘Who’s the Legislator Anyway?’ (n 85).

94. Goldbarsht, ‘Who’s the Legislator Anyway?’ (n 85) 129–30.

95. Goldbarsht and Michaelson, ‘International Legal and Quasi-Legal Approaches’ (n 1) 197.

96. Gathii (n 22); see also Dinah L Shelton, Commitment and Compliance: The Role of Non-Binding Norms in the International Legal System (Oxford University Press, 2003).

97. Financial Action Task Force, Mandate 2012–2020 (2012) 2 para 3(f); see, eg, UNSC Resolution 1617, which endorses the FATF’s 40+9 Recommendations. FATF’s mandate is now formally incorporated in the agenda of the G20, as well as in the work of the IMF and the UNSC.

98. Ben Hayes, ‘Counter-Terrorism, Policy Laundering, and the FATF’ (2012) 14(1–2) International Journal of Not-for-Profit Law 5, 6.

99. Van Duyne, Harvey and Gelemerova, The Critical Handbook of Money Laundering (n 86) 125.

100. Ibid.

101. Ibid. The issue of compliance is of fundamental importance in international law. There is no single theory that satisfactorily explains why states choose to comply. In fact, there are four dominant theories that attempt to analyse the phenomenon; however, such analysis is beyond the scope of this article. For the managerial theory, see Abram Chayes and Antonia H Chayes, ‘On Compliance’ (1993) 47(2) International Organization 175, 176; for consent theory, see John K Setear, ‘An Iterative Perspective on Treaties: A Synthesis of International Relations Theory and International Law’ (1996) 37(1) Harvard International Law Journal 139, 156; for the legitimacy theory, see Thomas M Franck, ‘Legitimacy in the International System’ (1998) 82(4) American Journal of International Law 705, 705 and for the transnational legal process theory, see Harold H Koh, ‘Transnational Legal Process’ (1994) 75(1) Nebraska Law Review 181, 183.

102. Ibid 125–6.

103. Financial Action Task Force, Annual Report 1990–1991 (Report, 1991) 16.

104. Few scholars have commented on this shortcoming: see, eg, Petrus C Van Duyne, ‘Money-Laundering: Estimates in Fog’ (1994) 2(1) Journal of Financial Crime 58; Mark Pieth, ‘The Harmonization of Law against Economic Crime’ (1999) 4(2) European Journal of Law Reform 527; Michael Levi and Lisa Osofsky, ‘Investigating, Seizing and Confiscating the Proceeds of Crime’ (Police Research Group, Crime Detection and Prevention Series Paper No 61, Home Office Police Department, London, 1995).

105. Financial Action Task Force, Annual Report 1995–1996 (Report, 1996) 17.

106. Ibid.

107. Van Duyne, Harvey and Gelemerova, The Critical Handbook of Money Laundering (n 86) 23–4.

108. Charter of the United Nations art 2(1) (‘UN Charter’).

109. Leland M Goodrich et al, Charter of the United Nations Commentary and Documents (Columbia University Press, 3rd ed, 1969) 37.

110. Doyle (n 93) 299.

111. Declaration on the Inadmissibility of Intervention in the Domestic Affairs of States and the Protection of Their Independence and Sovereignty, GA Res 2131, UN GAOR, 20th sess, UN Doc A/6220 (21 December 1965) 3.

112. Financial Action Task Force, The FATF Recommendations: International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (2012) Recommendations 1, 4.

113. Ibid paras 26–32.

114. Ibid rec 3.

115. UN Charter (n 108) art 2(1).

116. United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, opened for signature 20 December 1988, 1582 UNTS 95 (entered into force 11 November 1990) (‘Vienna Convention 1988’).

117. Financial Action Task Force, The Forty Recommendations of the Financial Action Task Force on Money Laundering (1990) para A.1.

118. Van Duyne, Harvey and Gelemerova, The Critical Handbook of Money Laundering (n 86) 128.

119. Vienna Convention 1988 (n 116) art 2(2).

120. Barak-Erez and Perez (n 3) 455.

121. Ibid 460.

122. Gerald E Frug, ‘The Ideology of Bureaucracy in American Law’ (1984) 97(6) Harvard Law Review 1276, 1300–1.

123. Barak-Erez and Perez (n 3) 460.

124. Financial Action Task Force and Asia/Pacific Group on Money Laundering, Anti-Money Laundering and Counter-Terrorist Financing Measures: Australia (Fourth Round Mutual Evaluation Report, April 2015) 11.

125. Ibid 10.

126. Ibid 11.

127. See below n 124–6.

128. Financial Action Task Force, Third Mutual Evaluation Report on Anti-Money Laundering and Combating the Financing of Terrorism Australia (October 2005) 17–19, 33 (‘MER 2005’).

129. Ibid 6.

130. Ibid 33.

131. Ibid 17.

132. Ibid 33.

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

134. House of Representatives Security Legislation Review Committee, Parliament of Australia, Report of the Security Legislation Review Committee (Parliamentary Paper No 137, June 2006) 160.

135. Ibid 162.

136. Bret Walker, Independent National Security Legislation Monitor: Annual Report (Report, March 2014) 76.

137. Andrew Lynch, Nicola McGarrity and George Williams, Inside Australia’s Anti-Terrorism Laws and Trials (New South Publishing, 2015) 67.

138. Ibid. For clarification, section 103.1 made it an offence for a person to intentionally provide or collect funds in circumstances where he or she is reckless as to whether the funds will be used to facilitate or engage in a terrorist act. Section 103.2 made it an offence to intentionally make funds available to, or to collect funds for, or on behalf of, another person (whether directly or indirectly) in circumstances where the first-mentioned person is reckless as to whether the other person will use the funds to facilitate or engage in a terrorist act. It is highly probable that the section 103.1 offence would have covered situations where funds were provided to, made available to, or collected for, or on behalf of, an ‘individual terrorist’. For further discussion regarding the terms ‘individual terrorist’, requested by the FATF, and ‘a person’, adopted by the Australian government, see Nicola McGarrity, ‘The Criminalisation of Terrorist Financing in Australia’ (2012) 38(3) Monash University Law Review 55, 63.

139. Doron Goldbarsht, Global Counter-Terrorist Financing and Soft Law: Multi-Layered Approaches (Edward Elgar, 2020) 128.

140. MER 2005 (n 128) 91.

141. 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, 94; Mark Sidel, ‘Counter-Terrorism and the Enabling Legal and Political Environment for Civil Society: A Comparative Analysis of “War on Terror” States’ (2008) 10 International Journal of Not-for-Profit Law 7, 41.

142. Arun Srivastava, Mark Simpson and Nina Moffat (eds), International Guide to Money Laundering Law and Practice (Bloomsbury, 2013) 255.

143. Explanatory Memorandum (n 133) discussing Sch 9 of the Bill.

144. MER 2005 (n 127) 133.

145. Financial Action Task Force (n 124) 185.

146. MER 2005 (n 128) 109.

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

148. 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, 1 April 2010) 64; AML/CTF Act (n 74) s 74.

149. MER 2005 (n 128) 64.

150. AML/CTF Act (n 75) s 17.

151. FATF Recommendations (n 15) 117.

152. First the Financial Transaction Reports Act was updated, and later the AML/CTF Act.

153. Money laundering offences constitute Division 400 of the Criminal Code.

154. MER 2005 (n 127) 6.

155. Goldbarsht and Michaelson, ‘International Legal and Quasi-Legal Approaches’ (n 1), discussing Australian Institute of Criminology, ‘Charges and Offences of Money Laundering’ (Transnational Crime Brief No 4, 2009); Commonwealth Director of Public Prosecutions, Annual Report 2003–2004 (Report, 1 July 2004); Commonwealth Director of Public Prosecutions, Annual Report 2004–2005 (Report, 4 June 2005); Commonwealth Director of Public Prosecutions, Annual Report 2005–2006 (Report, 1 July 2006).

156. Financial Action Task Force, Third Follow Up Report: Australia (2018) 2–3 <http://www.fatf-gafi.org/media/fatf/documents/reports/fur/FUR-Australia-2018.pdf>.

157. Ibid 2.

158. Senate Legal and Constitutional Affairs References Committee, Parliament of Australia, Inquiry into the Adequacy and Efficacy of Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Regime (Discussion Paper, August 2021).

159. Goldbarsht, ‘Who’s the Legislator Anyway?’ (n 85) 129.

160. The FATF has identified ‘core’ recommendations that should be the priority areas for sequenced implementation in all countries. The core FATF recommendations include the criminalisation of money laundering and terrorist financing; customer due diligence and record keeping and suspicious transaction reporting. These recommendations are most relevant when looking at the key principles for follow-up procedures: follow-up requires evaluating members to rectify the deficiencies identified in the MER and to implement the recommendations made, focusing on the core and key FATF recommendations rated Partly Compliant (PC) or Non-Compliant (NC). Members with more robust AML/CFT systems and fewer PC/NC ratings for the core FATF recommendations in their MERs are subject to less onerous processes that exert less pressure, and vice-versa. Regular follow-up applies where the MER shows significant deficiencies in the member’s AML/CFT system and where any of the six core FATF recommendations are rated either PC or NC. See Financial Action Task Force, Guidance on Capacity Building for Mutual Evaluations and Implementation of the FATF Standards within Low Capacity Countries (February 2008) 5. For a study examining the extent to which different selected jurisdictions (including Australia) have implemented the FATF core recommendations, and how compliance with those recommendations is affected by local cultural and economic factors, see Ali Alkaabi et al, ‘Money Laundering and FATF Compliance by the International Community’ in Jacques J Berleur, Magda David Hercheui and Lorenz M Hilty (eds), What Kind of Information Society? Governance, Virtuality, Surveillance, Sustainability, Resilience (Springer, 2010) 86.

161. Doron Goldbarsht, ‘Reverse Engineering Legal Professional Privilege in a Globalising World — the Australian Case’ (2020) 23(3) Journal of Money Laundering Control 677, 687–8.

162. Doron Goldbarsht, ‘Who’s the Legislator Anyway? How the FATF’s Global Norms Reshape Australian Counter Terrorist Financing Laws’ (2017) 45(1) Federal Law Review 127.

163. Letter Dated 15 February 2005 from the Permanent Representative of Australia to the United Nations addressed to the Chairman of the Counter-Terrorism Committee (S/2005/90) 3; Letter Dated 11 October 2005 from the Permanent Representative of Australia to the United Nations addressed to the Chairman of the Counter-Terrorism Committee (S/2005/671) 3.

164. For an analysis of how the FATF recommendations influence the domestic AML/CTF regime in the United Kingdom, India, Thailand, Israel and Malaysia, see Goldbarsht, Global Counter-Terrorist Financing and Soft Law (n 138).

165. The Basel Committee on Banking Supervision is a good example. This organisation was created by a simple agreement among the 12 central bank governors of its original member states. The members meet quarterly and follow their own rules. Decisions are made by consensus and are not formally binding; however, members implement the decisions within their own systems. See Slaughter, ‘The Real New World Order’ (n 4) 119.

166. Customary international law does not form a part of this analysis, given that it mainly impacts limited areas such as human rights and war. See Barak-Erez and Perez (n 3).

167. The institutional structure of these organisations varies. Some are controlled by private entities, while others are controlled jointly by governments and private entities.

168. Barak-Erez and Perez (n 3) 465; Christine Overdevest and Jonathan Zeitlin, ‘Assembling an Experimentalist Regime: Transnational Governance Interactions in the Forest Sector’ (2012) 8(1) Regulation & Governance 22.

169. Barak-Erez and Perez (n 3) 466.

170. See William F Wechsler, ‘Follow the Money’ (2001) 80(4) Foreign Affairs 40, 55; Guy Stessens, ‘The FATF “Black List” of Non-Cooperative Countries or Territories’ (2001) 14(1) Leiden Journal of International Law 199, 204.

171. Christopher Michaelson and Doron Goldbarsht, ‘Legal and Regulatory Approaches to Counter-Terrorist Financing: The Case of Australia’ in Colin King, Clive Walker and Jimmy Gurulé (eds), The Palgrave Handbook of Criminal and Terrorism Financing Law (Palgrave, 2018) 825.

172. Petrus C van Duyne, Jackie H Harvey and Liliya Y Gelemerova, ‘Learning More about the FATF: Knowing the Tree by Its Fruits’ in PC Van Duyne et al (eds), The Many Faces of Crime for Profit and Ways of Tackling It (Wolf Legal Publishers, 2017) 9.

173. James J Spigelman, ‘The Integrity Branch of Government’ (2004) 78(11) Australian Law Journal 724, 726.

174. Boilermakers (n 36).

175. Spigelman (n 174) 726.

176. An express provision that authorises the amendment of either the empowering legislation or any other legislation by means of delegated legislation is called a ‘Henry VIII’ clause. The Macquarie Dictionary of Modern Law defines a Henry VIII clause as ‘a clause in an enabling Act providing that the delegated legislation under it overrides earlier Acts or the enabling Act itself; so, named because of its autocratic flavour’. DC Pearce, Delegated Legislation in Australia and New Zealand (Butterworths, 1977). ‘The original Henry VIII clause was contained in the Statute of Sewers in 1531, which gave the Commissioner of Sewers powers to make rules which had the force of legislation (legislative power), powers to impose taxation rates and powers to impose penalties for non-compliance’: Rule of Law Institute of Australia, ‘Henry VIII Clauses & the Rule of Law’ (Draft) <https://www.ruleoflaw.org.au/wp-content/uploads/2012/08/Reports-and-Pres-4-11-Henry-VIII-Clauses-the-rule-of-law1.pdf>.

177. Spigelman (n 174) 726.

178. See especially Anthony Mason, ‘The Judge as Law-Maker’ (1996) 3 James Cook University Law Review 1, 2.

179. Spigelman (n 174) 726.

180. AJ Brown, ‘The Fourth, Integrity Branch of Government: Resolving a Contested Idea’ (Presidential Address, International Political Science Association World Congress, July 2018) <https://auspsa.org.au/wp-content/uploads/2020/09/Brown-A-J-2018-Fourth-Integrity-Branch-of-Government-APSA-Presidential-Paper.pdf>.

181. Bruce Ackerman, ‘The New Separation of Powers’ (2000) 113(3) Harvard Law Review 633, 691–3.

182. Spigelman (n 174).

183. See generally Williams, Brennan and Lynch (n 27) 28.

184. Cat Barker, ‘What Might a National Integrity Commission Look Like?’ Parliament of Australia (Web Page, 18 April 2019) <https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2019/April/National_integrity_commission>; Transparency International, Australia's National Integrity System: A Blueprint for Action (2020) <https://transparency.org.au/wpcontent/uploads/2020/11/NIS_FULL_REPORT_Web.pdf>.

185. Cf Brown, ‘The Fourth, Integrity Branch of Government’ (n 180); AJ Brown, ‘The Integrity Branch: A “System”, an “Industry”, or a Sensible Emerging Fourth Arm of Government?’ in Matthew Groves (ed), Modern Administrative Law in Australia: Concepts and Context (Cambridge, 2014) 301.

186. Cf Spigelman (n 174).

187. Spigelman (n 174) 725.

188. Ibid 726; Robin Creyke, ‘Administrative Justice: Towards Integrity in Government’ (2007) 31(3) Melbourne University Law Review 705, 723.

189. Spigelman (n 174) 728.

190. Chris Field, ‘The Fourth Branch of Government: The Evolution of Integrity Agencies and Enhanced Government Accountability’ (Forum Paper, AIAL Forum No 72, 2013) 28.

191. Key Centre for Ethics, Law, Justice and Governance, Griffith University and Transparency International Australia, Chaos or Coherence? Strengths, Opportunities and Challenges for Australia’s Integrity Systems: National Integrity Systems Assessment (NISA) Final Report (Report, 2005).

192. Ibid i.

193. Ibid 110.

194. Ibid 17.

195. Ibid.

196. Ibid 15.

197. Ibid 18.

198. Ibid.

199. Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report 89, 2000) [2.225].

200. Brown (n 185), 6.

201. Ackerman (n 1822) 694. Chris Field argues that there is no need for any constitutional contortions to identify, and critically analyse, an integrity framework of government: Field (n 190) 28.

202. Brown (n 185), 34.

203. Michaelson and Goldbarsht (n 172) 825.