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One of the most recent – and perhaps least noticed –measures to combat the smuggling of migrants involves the criminalisation of the financing of migrant smuggling.  In 2010, Australia’s ‘people smuggling’ offences set out in theMigration Act 1958 (Cth) and the Criminal Code (Cth) were amended and a new offence of ‘supporting people smuggling’ added, which criminalises, inter alia, financially supporting the smuggling of migrants.  Further reforms followed in 2011 with an amendment to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006(Cth) that sought to strengthen the regulation of the Australian remittance sector and, inter alia, prevent and suppress the use of alternative remittance systems to finance the smuggling of migrants.

The following sections summarise a research paper completed by the Migrant Smuggling Working Group in 2013. The paper investigates the financing of the smuggling of migrants in the Australian context and analyses the applicable criminal law and financial regulations.  The measures adopted by the Australian Government in 2010 and 2011 are assessed and discussed with regard to the applicable international guidance, including the UN Protocol against the Smuggling of Migrants by Land, Sea and Air.

The research findings have been published in Andreas Schloenhardt & Thomas Cottrell, 'Financing the Smuggling of Migrants in Australia’ (2014) 38 Criminal Law Journal (forthcoming)

Background and Context

From an economic perspective, migrant smugglers supply illegal migration services to a clientele who cannot access regular migration channels, or who seek to avoid these channels, and who may thus choose – or have no alternative - to engage a migrant smuggler.[1]   The experience of migrants who seek asylum in Australia suggests that it is the norm for smugglers to charge fees for the services they provide.[2]

Three main modes have been identified that are typically used to pay migrant smugglers:

  • Firstly, payments may be made ‘stage-by-stage’ by migrants to the smugglers and others involved as progress is made through transit countries and ultimately to the destination.[3]  Unless the smuggled migrant intends to physically carry the large quantities of cash to pay for each stage of the journey, funds are sent to the smuggled migrant when necessary from a third party in the country of origin or elsewhere.[4]
  • Secondly, money may be made available to the smuggled migrant on ‘credit’ by a smuggler or other third party.  This debt is payable upon arrival in the destination country.[5] 
  • Thirdly, full payment may be made up front prior to departure.[6]

In most cases, the funds used to pay the smugglers have to be transferred across international borders.  A report published by the United Nations Office on Drugs and Crime (UNODC) in 2013 on the financial flows relating to migrant smuggling in Asia and Europe reveals that migrant smuggling networks across the Middle East and Asia usually employ alternative remittance systems to finance the smuggling of migrants.[7]  The available evidence from Australia is consistent with this finding.  Many of the migrant smuggling ventures to Australia appear to be organised by networks that work wholly or partly from within Australia or that maintain contacts with communities in Australia that involve smuggled migrants that have settled here.[8] 

Australia’s ‘People Smuggling’ Offences

Australia’s offences relating to migrant smuggling were amended with the Anti-People Smuggling and Other Measures Act 2010 (Cth).  This Act also introduced a new offence for ‘supporting the offence of people smuggling’ in s 233D of the Migration Act 1958 (Cth).  An identical offence was inserted in s 73.3A of the Criminal Code(Cth).  According to the explanatory material, the introduction of these offences was necessary to target persons involved in ‘supporting and facilitating’ the smuggling of migrants by ‘organised criminal syndicates.’[9]

Regulatory Response to Financing the Smuggling of Migrants in Australia

In Australia, the ongoing struggle to prevent and suppress the smuggling of migrants, coupled with allegations that alternative remittance services in Australia are being utilised to facilitate further smuggling, has provided the necessary impetus for the regulation of alternative remittance services.  The idea here is to target the means of payments made to migrant smuggling networks abroad.

On this background, the Combating the Financing of People Smuggling and Other Measures Bill 2011 (Cth) was presented on 9 February 2011.  The objective of this Bill was to reduce ‘the risk of money transfers by remittance dealers being used to fund people smuggling ventures and other serious crimes by introducing a more comprehensive regulatory regime for the remittance sector.’[10]  The Combating the Financing of People Smuggling and Other Measures Act 2011 (Cth) amended the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) to comprehensively regulate the Australian remittance sector.[11].

The difficulty here is to come up with a balanced approach that recognises that alternative remittance services per se are not criminal and that global remittance flows have a significant and important impact upon the economic development of many nations.  Little can be done to dissuade settled migrants from personally remitting funds overseas for the purpose of financing a friend or relative’s transit to Australia, especially where there is currently little knowledge and understanding within migrant communities as to how the law operates in this area.[12]However, the regulatory approach has not been developed to deal with these types of financial flows, but is geared towards detecting and preventing the financial activities of criminal groups and organisations.[13] At the present time, there has been no enforcement action on the part of the Australian Transaction Reports and Analysis Centre in relation to any alternative remittance service because of ‘people smuggling’ related activities.[14]

Footnotes

[1]   Andreas Schloenhardt, ‘Organised Crime and Migrant Smuggling: Australia and the Asia-Pacific’ (Research and Public Policy Series No 44, Australian Institute of Criminology, 2002) 15; Khalid Koser, ‘Why Migrant Smuggling Pays’ (2008) 46(2) International Migration 3, 5.
[2]   Cat Barker, ‘The People Smugglers’ Business Model’ (Research Paper No 2, Parliamentary Library, Parliament of Australia, 2013) 6; UNODC, ‘A Short Introduction to Migrant Smuggling’ (Issue Paper, Anti-Human Trafficking and Migrant Smuggling Unit, 2010) 23.
[3]   UNODC, ‘A Short Introduction to Migrant Smuggling’ (Issue Paper, Anti-Human Trafficking and Migrant Smuggling Unit, 2010) 23.
[4]   UNODC, ‘Smuggling of Migrants by Sea’ (Issue Paper, Anti-Human Trafficking and Migrant Smuggling Unit, 2011) 35.
[5]   UNODC, ‘A Short Introduction to Migrant Smuggling’ (Issue Paper, Anti-Human Trafficking and Migrant Smuggling Unit, 2010) 23.
[6]   Khalid Koser, ‘Why Migrant Smuggling Pays’ (2008) 46(2) International Migration 3, 13.
[7]   UNODC, Migrant Smuggling in Asia: Comparative Research on within Asia and Europe (United Nations, 2013) 55.
[8]   Australian Broadcasting Corporation, ‘Smugglers’ Paradise – Australia’, Four Corners, 4 June 2012 (Sarah Ferguson and Deb Masters) <http://www.abc.net.au/4corners/stories/2012/05/31/3515475.htm#transcript>. See, eg, R v Pulendren [2010] NSWDC 335 (20 September 2010).
[9]   Explanatory Memorandum, Anti-People Smuggling and Other Measures Bill 2010 (Cth) 8.
[10]   Explanatory Memorandum, Combating the Financing of People Smuggling and Other Measures Bill 2011 (Cth) 1.
[11]   Combating the Financing of People Smuggling and Other Measures Act 2011 (Cth) sch 1.
[12]   David Rees, ‘Alternative Remittance Systems in Australia: Perceptions of Users and Providers’ (Trends and Issues in Criminal Justice No 393, Australian Institute of Criminology, 2010) 4.
[13]   Explanatory Memorandum, Combating the Financing of People Smuggling and Other Measures Bill 2011 (Cth) 1.
[14]   Australian Transaction Reports and Analysis Centre, Enforcement Action (2013) <http://www.austrac.gov.au/enforcement_action.html>.