Welcome to the latest update from Gilbert + Tobin's Corporate Advisory team. The update provides a summary of key recent legal developments, particularly relevant to in-house counsel.
Legislation and proposed legislation
A round up of key relevant legislation, enacted or proposed, over the last month including the latest on competition reforms, anti-money laundering and counter-terrorism financing reforms, the modernisation of business registers and the alignment of tax reporting thresholds for public and private corporate entities.
In this issue, you will find:
- The latest on competition reforms
- Crackdown on money laundering and terrorism financing
- The modernisation of business registers
- Alignment of tax reporting thresholds for public and private corporate entities
- Senate Economics Legislation Committee supports safe harbour and ipso facto insolvency reforms
- Groundhog day: inquiries commence into open banking and competition in financial services
The Competition and Consumer (Misuse of Market Power) Act 2017 (Act) was assented to on 23 August 2017.
The Act principally amends section 46 of the Competition and Consumer Act 2010 (Cth) (CCA) to include in the prohibition against misuse of market power a consideration of the effect or likely effect on competition of the conduct. It also removes provisions in relation to telecommunications-specific anti-competitive conduct and the competition notices and exemption order regime.
The Act will commence at the same time as the Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Bill) commences. The Bill had its third reading agreed to in the House of Representatives on 5 September 2017.
For further details on both the Act and the Bill, see G+T Insight dated 12 April 2017.
Treasury has also released the exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Regulations 2017. The Regulations will make consequential amendments to the Competition and Consumer Regulations 2010 following the amendments to the CCA that will be made by the Bills referred to above. Submissions on the exposure draft were due by 22 August 2017.
In early August, Nippon Yusen Kabushiki Kaisha was fined $25 million for its involvement in criminal cartel conduct in connection with the transportation of vehicles, including cars, trucks, and buses, to Australia over a three year period. The fine is the second-highest imposed for cartel conduct in Australia, and the first successful prosecution under the criminal cartel provisions of the CCA.
Finally, ACCC Chairman Rod Sims has also recently addressed the Law Council of Australia’s Competition and Consumer Workshop to shed some light on the ACCC’s current focus on cartel investigations and a new approach to information gathering in merger analysis. For further details see G+T Insight dated 9 August 2017 and the ACCC website.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Bill 2017 (Cth) (Bill) proposes to implement the first phase of reforms to strengthen Australia's capabilities to address money laundering and terrorism financing risks, and generate regulatory efficiencies.
Specifically, the Bill will amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) and the Financial Transaction Reports Act 1988 (Cth) to:
- expand the objects of the AML/CTF Act to reflect the domestic objectives of AML/CTF regulation;
- close a regulatory gap by regulating digital currency exchange providers (and bringing them within the remit of AUSTRAC);
- strengthen AUSTRAC’s investigation and enforcement powers by giving the AUSTRAC CEO the power to issue infringement notices for a greater range of regulatory offences and issue a remedial direction to a reporting entity to retrospectively comply with an obligation that has been breached;
- give police and customs officers broader search and seizure powers and establish civil penalties for failure to comply with questioning and search powers; and
- provide regulatory relief to industry by:
- clarifying due diligence obligations relating to correspondent banking relationships and broadening the scope of these relationships;
- de-regulating the cash-in-transit sector, insurance intermediaries and general insurance providers;
- qualifying the term ‘in the course of carrying on a business’; and
- allowing related bodies corporate to share information.
The Bill has been referred to the Senate Legal and Constitutional Affairs Legislation Committee for inquiry and report by 16 October 2017.
See also Minister for Justice, The Hon Michael Keenan MP’s media release dated 17 August 2017.
As part of the National Business Simplification Initiative, the Government has released a discussion paper Modernising Business Registry Services on ways to modernise business registers to improve registry services, reduce complexity for business and enable better access to registry data in line with the Government’s open data policy to facilitate greater use and innovation.
As a first step, the Government is considering options to improve 31 registers managed by ASIC (including the Companies Register and the Business Names Register) and the Australian Business Register. In particular, the Government is interested in understanding the potential impacts of bringing the ASIC registers and the Australian Business Register together.
Stakeholders are encouraged to provide their views on aspects of the operation of business registries including:
- user experience;
- opportunities to deliver improved business services;
- open data;
- governance; and
Submissions are due by 6 September 2017.
The Taxation Administration Amendment (Corporate Tax Entity Information) Bill 2017 (Cth) (Bill) (which was introduced into the Senate by Senator Katy Gallagher on 14 August 2017) proposes to amend section 3C of the Taxation Administration Act 1953 (Cth) which details the type of income and tax information that the Commissioner of Taxation in required to make publicly available annually for corporate entities.
The Bill proposes to reduce the public reporting threshold for private corporate entities from $200 million to $100 million so that all public and private corporate entities with total income of $100 million or more would be subject to public reporting.
The Senate Economics Legislation Committee has released a report (Report) regarding its inquiry into the provisions of the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 (Bill) which amends:
- the Corporations Act 2001 (Cth) (Corporations Act) to create a safe harbour for company directors from personal liability for insolvent trading if the company is undertaking a restructure outside formal insolvency; and
- both the Corporations Act and Payment Systems and Netting Act 1998 (Cth) to make certain contractual rights unenforceable while a company is restructuring under certain formal insolvency processes.
In recommending that the Bill be passed, the Committee noted that the majority of the 19 submissions received were broadly supportive of the Bill and encouraged its passage through Parliament. The Committee also considered that a number of the matters raised in the submissions would be best clarified in regulations accompanying the Bill.
Competition in Australia’s financial system is again subject to review and inquiry. As part of the 2017-18 Budget, following the release of a Productivity Commission report, the Government announced a plan to introduce an open banking regime in Australia beginning with an inquiry into implementation of such a regime. In the Budget, the Government also announced that the Productivity Commission would commence an inquiry into competition in Australian financial services.
For further details, see G+T Insight dated 9 August 2017.